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Medical payments in California increase 5.5% in 2021

Posted On: Sep. 26, 2022 9:45 AM CST

medical payments

After falling in calendar year 2020, aggregate medical payments rebounded in 2021 and increased about 5.5% to $1.9 billion, according to a report by the Workers’ Compensation Insurance Rating Bureau of California.

The WCIRB attributed the increase in aggregate payments to increases in average payments per transaction last year. And the increase in payments per transaction “was largely because of the 2021 fee schedule updates to medical-legal and evaluation and management services.”

While the approximate 559,000 claim total in 2021 was unchanged from 2020 and both years included about 13 million paid medical transactions, the WCIRB reported that the average payment per claim increased 5.7% to $3,374 and the average paid per transaction increased 5.6% to $146.

“Evaluation and management services experienced the largest percentage increase (5%) in share of medical payments in 2021 compared to 2020, which was mostly driven by increases (13%) in paid per transaction,” according to the WCIRB report. “The higher paid per evaluation and management transaction was mostly due to the 2021 updates to the reimbursement allowance for evaluation and management services.”

The Division of Workers’ Compensation in March 2021 updated the evaluation and management billing section of the fee schedule to align with changes made by Medicare.

The DWC in April 2021 adopted a new Medical-Legal Fee Schedule that created a flat fee of $2,025. The payment covers review of up to 200 pages of records, with an additional payment of $3 per page thereafter. As a result, the share of medical payments for medical-legal services increased 18% in 2021 and average payments per service increased 21%.

The WCIRB reports physicians’ offices remain the leading place of service, accounting for the highest share of medical payments, 58%, and the highest share of medical transactions in 2021 with 82%. The WCIRB said this was in part the result of higher use of telemedicine services compared with previous years.

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