Steep rise in medical-legal compensation costs for California workers

Payments for medical-legal services used to resolve medical disputes regarding compensation issues in California workers’ compensation claims have risen sharply under the new medical-legal fee schedule that went into effect on last year, according to a new report.

The California Workers’ Compensation Institute report shows an increase in overall medical and legal costs in the first seven months after the schedule took effect, far exceeding the 25% increase predicted by the Division of Workers’ Compensation.

Last year, the DWC introduced a new fee schedule that changed payment formulas for forensic assessments and reports for the first time since 2006.

The old MLFS provided variable lump sum payments for “basic” and “complex” comprehensive assessments, and time-based payments for assessments involving “extraordinary circumstances.”

The new schedule replaced these service levels with a single code (ML201), for which medical examiners receive a single flat rate, plus $3 per page for case reviews exceeding 200 pages (MLPRR), and payments based on time for sub rosa video reviews (ML205). The new MLFS also continued to allow additional fees for assessments by a licensed medical assessor or those involving an interpreter, and extended fee multipliers to certain medical specialists, according to the CWCI.

CWCI’s report compared utilization and reimbursement of medical-legal services rendered before and after the effective date of the new schedule of April 1, 2021, using claims data from the 2015 accident year. to 2021, with limited service dates from January to October each year to accommodate billing and payment timing.

The results show that replacing all three levels of assessment with a single comprehensive assessment reimbursed at a flat rate of $2,015 likely had the greatest impact on average payments. Basic assessments (previously billed under ML102) accounted for approximately 40% of assessments paid under the new full service code ML201, and the new package increased payment for these services by 222%. More complex assessments (previously billed under ML103) accounted for 18% of new ML201 assessments, and payments for these services increased by 115%, according to the CWCI.

Other study findings:

It was hoped that the new MLFS would lead to a redistribution of forensic services, with fewer additional reports, but these reports fell from 34.2% of forensic services in 2019 to 37.8% under the new schedule.

Compared to the same period in 2019, the average payment for a comprehensive assessment that includes an in-person examination of the injured worker increased by 52.9%, and the average payment for an additional assessment increased by 39.1%.

New per-page chart review fees also contributed to increased medical-legal payments, adding an average of $1,917 to the base fee for full assessments, $1,410 to the base fee for follow-up assessments and $1,437 towards the base fee for additional assessments. assessments.

Physicians specializing in orthopedic surgery provided 53% of medico-legal services in 2021, while internal medicine physicians were a distant second, providing 9% of services.

One of the goals of the new fee structure was to attract and retain more qualified medical assessors. A review of DWC data shows that 211 new physicians joined the certified QME pool in 2021, while only 18 became inactive, resulting in 2,554 active assessors, a 3% increase from 2020 but a decrease of 1% compared to 2019.

The CWCI has published its study in a Research Update Report, which is available to CWCI members and subscribers who log on to the Research section of the institute’s website. Others can purchase the report from CWCI’s online store.

California Trends Workers Compensation

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