Report: Workers’ Comp Medical Payments Fell by $100M in 2014
Medical payments in California's workers' compensation program fell by $100 million between 2013 and 2014, according to a report released Tuesday by the Workers' Compensation Insurance Rating Bureau of California, Business Insurance reports.
The report was based on payment data representing more than 90% of California's workers' compensation market.
According to the report, medical payments dropped by 3.7% to $2.5 billion in 2014.
The savings could be attributed in part to a new fee schedule adopted under a 2012 law (SB 863) aimed at reforming the workers' compensation system. According to the report, the new fee schedule, implemented in January 2014, covered about 41% of all costs, or about $1 billion annually.
Under the new fee schedule, the share of payments among:
- Primary care increased from 16.7% in 2013 to 19.5% in 2014; and
- Specialist categories fell from 20.9% in 2013 to 18.5% in 2014.
Meanwhile, medical payments also declined among services that were not affected by the new fee schedule. For example, the share of:
- Inpatient and outpatient hospital payments fell from 22.4% in 2013 to 18.5% in 2014; and
- Pharmaceutical payments fell by 1.6%.
According to the report, the decline in medical payments was partly offset by an increase in legal and lien costs. For example, medical legal reports accounted for more than 10% of medical payments in 2014, up by 1.4% from 2013.
However, the report noted, "The increase in lien payments may in large part be due to improved reporting of this information rather than an actual increase in lien payments (Gonzalez, Business Insurance, 8/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.