California’s Division of Workers’ Compensation (DWC) issued an update increasing reimbursements for the Physician and Non-Physician Practitioner portion of the Official Medical Fee Schedule (OMFS) for workers’ compensation, effective for dates of service on or after April 1, 2024.  

STARTING TODAY: CA Physician Fee Schedule reimbursement increases by 1.66%.  The higher reimbursements are due to an increase in the Conversion Factor used to calculate OMFS physician reimbursement rates.

daisyBill providers do not need to take any action; we have uploaded the new reimbursements to our billing software effective for all dates of service on or after April 1. daisyBill automatically reports if any payments are below the most current effective fee schedule rates, and prompts providers to file (instant) Second Review appeals to dispute incorrect reimbursements.

Non-daisyBill providers are advised to adjust their systems and begin billing at the new rates for dates of services starting April 1.

All California providers should know that claims administrators may erroneously reimburse at the previous rates, requiring Second Review appeals.

DWC Newsline Issued March 25, 2024

The DWC announced the update in a recent Newsline, and posted the order adopting the updated reimbursements on its OMFS website. The update aligns the OMFS to relevant 2024 changes in the Medicare payment system, as required by California Labor Code Section 5307.1.

The updated Physician Fee Schedule contains three substantive changes:

1. Conversion Factor increase:  $48.51
2. New procedure code count: 36
3. Deleted procedure code count: 1

OMFS Increase Follows Medicare Increase

Per the Centers for Medicare and Medicaid Services (CMS), the Conversion Factor used to determine Medicare reimbursements has gone up (emphases ours):

“On March 9, 2024, President Biden signed the Consolidated Appropriations Act, 2024, which included a 2.93 percent update to the CY 2024 Physician Fee Schedule (PFS) Conversion Factor (CF) for dates of service March 9 through December 31, 2024. This replaces the 1.25 percent update provided by the Consolidated Appropriations Act, 2023, therefore the CY 2024 CF for dates of service January 1 through March 8, 2024 is $32.74. CMS has implemented the new legislation by adjusting the CY 2023 CF of $33.07 by 2.93 percent and the budget neutrality adjustment for a CY 2024 CF of $33.29 for dates of service March 9 through December 31.”

Due to the extraordinary practice expenses of treating injured workers, the DWC generally adjusts the Physician Fee Schedule to pay substantially more than Medicare for the same services. Effective for dates of service on or after April 1, the Conversion Factor for physician reimbursements increases from $47.72 to $48.51.

The increase in the Conversion Factor effectively maintains the California workers’ comp reimbursement rates relative to Medicare, with the Physician Fee Schedule reimbursing at 145.72% of Medicare rates.

With the OMFS Conversion Factor increase, the DWC acknowledges that treating injured workers requires about 45.72% more work than treating a Medicare patient — though California still allows PPOs to drastically reduce reimbursement rates to well below OMFS (and sometimes even below Medicare) rates.

The table below provides a comparison of Medicare and OMFS Conversion Factors in 2024 and the resulting difference in reimbursement rates between Medicare and the CA Physician Fee Schedule:

*Note: the Medicare Conversion Factor increase was effective for DOS on/after 3/9/2024; the OMFS Physician Fee Schedule Conversion Factor increase is effective for DOS on/after 4/1/2024.

HCPCS: 36 New Codes & 1 Deleted Code

Listed below are the 36 new Healthcare Common Procedure Coding System (HCPCS) codes adopted by the DWC (and CMS) for Q2 2024, and the single HCPCS code the DWC deleted from the Physician Fee Schedule.

Note that when Medicare fails to assign an HCPCS code a Relative Value Unit (RVU), the reimbursement is calculated “By Report” (BR).

California Code of Regulations Section 9789.12.4 provides guidelines to determine appropriate reimbursement amounts for BR codes.

36 New HCPCS Added to Physician Services Fee Schedule

1 Deleted HCPCS From Physician Services Fee Schedule

The update to the Physician Fee Schedule deletes one procedure code, as listed below.

Again, bills submitted via daisyBill will automatically reflect the most current, accurate reimbursement rates. If you have any questions regarding this fee schedule update, use the chat function at the bottom right of this screen or email our experts at info@daisybill.com.

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