The California Division of Workers’ Compensation (CA DWC) increased the Conversion Factor providers use to determine reimbursement rates under the Physician and Non-Physician Practitioner fee schedule.

The Conversion Factor increase is part of a broader CA DWC update to the Physician fee schedule, effective for all dates of service on or after March 1, 2026.  

The update aligns the Physician fee schedule with relevant Medicare payment system changes, as required by California Labor Code Section 5307.1. The CA DWC announced the update in a Newsline and posted the adoption order on its website.

Below, we explain the Conversion Factor and exactly how it impacts rates for treating injured workers.

Previously, we covered increases to California-specific billing codes. In future articles, we’ll cover further details of the Physician fee schedule update, including altered calculations and new and deleted procedure codes. Stay tuned!

As always, daisyBillers do not need to take any action.

Our software is fully up to date with the latest 2026 fee schedules. For non-daisyBill providers who want to ensure correct reimbursement calculations, consider our Fee Schedule Calculator, available to try for free here.

CA DWC Increases Conversion Factor

Calculating reimbursement rates for physician services first requires determining the “Base Maximum Fee” before applying other fee-affecting modifiers or rules.

Under the current fee schedule, based on the Centers for Medicare and Medicaid Services (CMS) Resource-Based Relative Value Scale (RBRVS), calculating the Base Maximum Fee involves three factors:

1. Relative Value Units (RVUs) as determined by Medicare
2. Geographic Practice Cost Index (GPCI) as determined by Medicare
3. Conversion Factor (CF) as determined by the CA DWC

The Conversion Factor for calculating OMFS reimbursements for physician services is increasing from $48.79 to $51.61. With the increased conversion factor, the OMFS will pay 154.51% of the Medicare rates for the same services.

With this Conversion Factor increase, the CA DWC acknowledges that treating injured workers requires about 55% more work than treating a Medicare patient.

Unfortunately, California still allows Preferred Provider Organizations to drastically reduce reimbursement rates to well below the fee schedule (and sometimes, even below Medicare) rates.

Through aggressive “pay-to-treat” tactics, payers make Medical Provider Network (MPN) membership conditional on accepting PPO discounts. Subsequently, those discounts are leased, sold, and otherwise transferred to payers, bill review organizations, and other entities, often in violation of state law.

Moreover, payers can (and do) reduce reimbursement through wholly inapplicable or unsubstantiated PPO discounts, making it critical to keep a sharp eye on every reimbursement and Explanation of Review your practice receives.

Non-daisyBillers with fee-schedule questions can reach our experts via the pink chat icon below or email us at info@daisybill.com. To learn more about our instant Fee Schedule Calculator and sign up for a free trial, visit the daisyWizard page.

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