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California medical review data 'too green' to predict effect on comp costs

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It's too early to tell whether California independent medical reviews, established in a round of workers compensation reforms passed in 2012, will reverse a trend of rising medical-legal claim costs in the state, according to the California Workers' Compensation Institute.

The Oakland, California-based institute said in a report Monday that medical-legal service costs averaged $1,628 per California comp claim in 2014, up 66% from $979 in 2007.

The CWCI's study included an analysis of workers comp billing codes for medical-legal services, which are used to evaluate injured workers and determine the extent of their impairments. Codes studied by CWCI included comprehensive evaluations, follow-up evaluations provided within nine months of a prior medical-legal evaluation, evaluations involving “extraordinary circumstances” and instances in which medical providers give medical-legal testimony.

The study found that there was a significant jump in average costs for certain medical-legal services.

For instance, the average cost per workers comp claim was $1,365 in 2014 for follow-up evaluations provided within nine months of a prior evaluation, according to Oakland, California-based CWCI. That's up 136.4% from $577 in 2007.

The average payment for supplemental evaluations increased 86.1% to $721 in 2014 vs. 2007, while the average payment for comprehensive evaluations involving extraordinary circumstances increased 66.2% to $3,342 in 2014, the CWCI said.

The CWCI noted that California workers comp reforms implemented in 2013 allowed employers to request independent medical reviews to resolve disputes about medical treatment of injured workers. Injuries that occurred on or after Jan. 1, 2013, now are adjudicated using the IMR process rather than medical-legal processes, the CWCI said.

Analysis by the California Workers' Compensation Insurance Rating Bureau at the end of 2014 found no reduction in the volume or cost of medical-legal reports after the independent medical reviews were estab;osjed, the CWCI said.

CWCI said Monday that “the data is still too green to reach any final conclusions regarding the impact of the IMR process on medical-legal reports.”

“The implementation of the IMR process mandated by the 2012 reform bill did not affect claims with dates of injury prior to Jan. 1, 2013, until July 1, 2013, so the data is too immature to determine the impact that IMR has had on the medical-legal process,” according to the report. “The analyses of data from accident years 2007 through 2012 and service years 2007 through 2014 will, however, provide benchmark statistics to enable future analysis of the IMR process on medical-legal reporting.”