Report: Medical Service Costs in California Comp Rising With Payments, Utilization

Medical service costs in California workers’ compensation rose 5% last year on the back of growth in both average payments and utilization, a new report shows.

The Workers’ Compensation Insurance Rating Bureau of California released its Medical Service Cost Trends report, which looks at factors shaping medical cost growth in the state’s workers’ comp system.

Medical costs accounted for 52% of the total loss payments in the workers’ comp system.

Medical service costs rose moderately in 2025, and the WCIRB report shows emerging trends influenced costs across the system including: accelerating growth in certain services not subject to fee schedule reimbursement limits and increasing costs associated with cumulative trauma claims.

The report shows that the categories of Medical-Legal services and Medical Equipment and Other Services were the largest contributors to medical cost growth, with CT claims contributing to both categories.

Southern California continued to drive statewide medical cost trends, with medical costs per claim increasing faster than in Northern California, the report shows.

It breaks down the share of medical payments by service type. Physician Services leads with the greatest share at 48%, followed by Medical-Legal (17%) and Medical Equipment and Other Services (13%).

Medical paid per claim has increased since 2020. The rise was initially due to the pandemic, which was followed by fee schedule updates, more recently increased service utilization. In 2025, the 5% paid per claim increase was driven by a 4% increase in paid per transaction and a 1% increase in transactions per claim, the report shows.

Topics Trends California

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