California Injured Workers Medical Costs Moderated Before Reforms

May 12, 2014

A study issued by the Workers Compensation Research Institute shows medical costs for injured workers in California moderated before sweeping reforms were implemented.

WCRI looked at the potential impact of recent reform legislation on price and utilization of medical services in the California workers’ comp system.

CompScope Medical Benchmarks for California 14th Edition provides baseline data for monitoring the impact of the California’s reform legislation Senate Bill 863, which took effect on Jan. 1, 2013. Several provisions of SB 863 apply to medical reimbursement and treatment as well as the medical-legal process.

According to the study, the potential impact from the transition to a resource-based relative value scale fee schedule would likely shift payments from specialty care to primary care, based on experiences from other states WCRI has studied.

Workers Compensation Research Institute logoThe study reported that in Maryland and Georgia, the prior transition to the RBRVS-based fee schedules led to increases in prices paid for office visits and physical medicine, and decreases in prices paid for surgical services.

The study shows the growth in medical payments per claim in California had moderated to 3 percent per year in 2010 and 2011 following previous increases of 8 percent per year since 2005. That drop trend stemmed from the stabilization in utilization of nonhospital services and little change in prices paid for professional services. Hospital payments per inpatient episode continued to grow rapidly from 2006 to 2011.

The WCRI study also shows that before the reforms, medical-legal expenses per claim in California grew rapidly and were among the highest of the 16 states in the study.

Cambridge, Mass.-based is a not-for-profit research organization. Its membership includes employers insurers, governmental entities, managed care companies, health care providers, insurance regulators, state labor organizations and state administrative agencies.

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