Late last month, the California Division of Workers’ Compensation (DWC) posted an order announcing their upcoming adjustment to the Physician and Non-Physician section of the Official Medical Fee Schedule (OMFS). The move was widely expected, as it allows the DWC to conform to the Medicare payment system, as required by Section 5307.1 of the California Labor Code.

The new fee schedule is effective March 1, 2017. Until that time, the 2016 Physician and Non-Physician Fee Schedule remains in effect.

The DWC order includes the following new values used to calculate reimbursements for procedure codes for services provided by Physicians and Non-Physicians on or after March 1, 2017:

1. New Conversion Factors listed in CCR § 9789.19(d) 
2. Updated CMS Medicare National Physician Fee Schedule Relative Value Units File (File Name: RVU17A).

Effective March 1st, these two new values combine to alter all reimbursement amounts.

New Conversion Factors

You’re likely familiar with the conversion factors (CFs) used to calculate reimbursements for different kinds of procedures. In the past, there have been four separate CFs to keep track of – one for anesthesia, one for surgery, one for radiology, and one for all other services.

Senate Bill 863 requires that this system is simplified in 2017. Effective March 1, the conversion factors for surgery and radiology will roll into the CF for all other services, leaving a total of just two conversion factors – one for anesthesia, and one for all other services.

Updated RVU File                                

To manually calculate payment amounts for the 2017 Physician and Non-Physician Fee Schedule, you must use one of two formulas:

2017 Non-Facility Pricing Amount =

[(Work RVU * Work GPCI) + (Non-Facility PE RVU * PE GPCI) + (MP RVU * MP GPCI)]

* Conversion Factor (CF)

2017 Facility Pricing Amount =

[(Work RVU * Work GPCI) + (Facility PE RVU * PE GPCI) + (MP RVU * MP GPCI)]

* Conversion Factor

Each formula requires three Relative Value Units. For dates of service on or after March 1, 2017, the DWC uses Medicare’s new RVUs. You may download the 2017 Quarter 1 RVUs, or RVU17A, from the Medicare website by clicking this link.

DaisyBill’s OMFS Calculator automatically calculates reimbursements using the most recent RVU files and conversion factors.

New Reimbursements

Our developers isolated the twenty most commonly-used Physician and Non-Physician HCPCS across the DaisyBill workers’ comp community. The table below shows the degree to which these popular HCPCS will change for dates of service after March 1. As is often the case, many of these changes are minor.

The DaisyBill OMFS Calculator incorporates these fee schedule changes as of March 1, 2017. Should you ever need the old figures, we retain previous reimbursements in our historical database – simply enter a date of service prior to March 1, 2017.

For more information about this update, view the DIR Newsline 2017-06 or visit the DWC website.