WCRI: Medical Payment Per Claim in California Fell Following Reforms

April 30, 2015

The average medical payment per claim for treating injured workers fell by 5 percent in California in 2013, according to a study by the Workers Compensation Research Institute.

The findings could reflect some early impact of the state’s reform legislation, Senate Bill 863, according to WCRI.

The WCRI study, CompScope Benchmarks for California 15th Edition, monitored changes over time in the state for income benefits, medical benefits other metrics. It also compared California’s performance with workers’ comp systems in 16 other states.

workers_compUsing data through March 2014, WCRI looked at the average medical payment per claim for 2013 claims with more than seven days of lost time. This measure fell 5 percent in 2013, after a couple of years of moderate growth between 2010 and 2012 and a period of rapid increase from 2006 to 2009, the report shows. By contrast, in many other study states, medical payments per claim grew in 2013, according to the report.

California underwent reforms of its workers’ comp system effective Jan. 1, 2013 thanks to reform legislation SB 863, which had multiple goals: to increase permanent disability benefits for injured workers, to create cost savings where possible, to improve the quality of and access to medical care and to make the workers’ comp process more efficient.

Several provisions of SB 863 may have been part of the reason for the results WCRI found, according to Ramona Tanabe, WCRI’s executive vice president and counsel.

“For example, one provision reduced fee schedule rates for services provided in ambulatory surgery centers from 120 percent of Medicare to 80 percent of Medicare. This may be related to the decrease in medical payments per claim in 2013,” Tanabe said in a statement. “SB 863 also eliminated separate reimbursement for implantable medical devices, hardware, and instruments for spinal surgeries. This could be another factor underlying the decrease reported.”

The average indemnity benefit per claim in California grew moderately at 3 percent per year in 2012 and 2013, in part because of small increases in wages and the duration of temporary disability benefits, the study showed.

The study also found expenses for delivering benefits to injured workers in California had moderate growth for 2013 claims with experience through the first quarter of 2014. This indicates the decrease in these measures anticipated by the passage of SB 863 has yet to be observed, according to WCRI.

WCRI is an independent, not-for-profit research organization based in Cambridge, Mass.

Topics California Claims Workers' Compensation

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