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Workers comp study shows cuts to California's surgery center costs

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Recent California workers compensation reforms have lowered payments to ambulatory surgery centers for workers comp medical procedures by 29%, according to a study by the California Workers’ Compensation Information Rating Bureau and the California Workers’ Compensation Institute.

Ambulatory surgery centers, which perform outpatient surgical services, have contributed to rising workers comp medical costs for California in the last several years, WCIRB and CWCI said in a study released Wednesday. California S.B. 863, passed in 2012, reduced a fee schedule for outpatient surgical services to 80% of Medicare rates for such procedures, down from 120% of Medicare rates.

WCIRB and CWCI, both based in Oakland, California, found that the average fee paid per procedure at California ambulatory surgery centers was $1,123 in 2013 and 2014, after S.B. 863 began to be implemented. That’s down 29% from an average of $1,571 paid per procedure at ambulatory surgery centers in 2012, before the new fee schedule was put in place.

The study also showed that the average fee paid for ambulatory surgical care per workers comp episode was $1,524 in 2013 and 2014, down 27% from $2,074 paid per episode in 2012. WCIRB and CWCI defined episodes as “all procedures and ancillary services” delivered by ambulatory surgery centers or hospital outpatient departments “on a specific claim, a specific bill and a specific date of service.”

WCIRB and CWCI said Wednesday that the fee reductions went beyond the estimated 25% cost savings that expected the ambulatory surgery center fee schedule to produce when S.B. 863 was first passed.

“These findings provide important benchmarks for measuring the impact of S.B. 863 and point to the type of legislative reform that may be successful in curbing California workers’ compensation medical costs,” the study said.