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Physical medicine utilization rises under California’s new fee schedule


Changes to California’s workers compensation fee schedule has led to increased average payments for physical medicine services and a reduction in special services and overall claim volume, according to a study released Wednesday by the California Workers Compensation Institute.

In 2012, California legislative reforms mandated the transition to a resource-based relative value scale fee schedule, which replaced the Official Medical Fee Schedule and stipulated that estimated aggregate fees could not exceed 120% of Medicare for the same service class, excluding conversion and geographic factors for physician payments.

The Oakland, California-based institute studied changes in the utilization and reimbursement of California workers’ comp physician and non-physician medical services from 2013 through 2018, examining data from 35.9 million medical services provided to injured workers in the state to measure changes in the mix of services and payments across nine medical service categories from 2013, the last year under the old fee schedule, across 2014 through 2017, the 4-year period during which the state transitioned into the RBRVS schedule, and into 2018, the first year after the new schedule took full effect.

Overall claim volume fell 5.2% from 2013 to 2018, but total service counts, identified by billing codes, declined 28.4%, with reductions ranging from a 17.2% decline in physical medicine services to a 71.8% drop in pathology and laboratory services.

Physical medicine services and valuation and management and accounted for 68.3% of primary care delivered to injured workers in 2018, increasing by 30.6% and 9.3% respectively, while total payments for the seven other service categories all declined. One of the goals of the revised fee schedule was to encourage physicians to provide more “hands on” care, said CWCI in the report.

The CWCI noted that the some of the disparities between the utilization and total payment trends in the different service categories reflected changes in the average payment per service code. For example, despite the reductions in the volume of services between 2013 and 2018, average amounts paid to providers increased by 2.1% for surgery services, 28.5% for medicine services, 35.9% for durable medical equipment, prosthetics, orthotics and supplies, 39.4% for evaluation and management, and 57.6% for physical medicine. However, average payments for pathology and lab services, radiology and special services declined, primarily due to the RBRVS schedule’s elimination of separate fees for consultation services and associated reports.






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