California’s fee schedule for workers’ comp treatment pays physicians more than Medicare rates (currently 55% more) to account for the extraordinary time, work, and administrative expense required to treat injured workers.

Yet, Keenan & Associates, the Third-Party Administrator (TPA) for Alisal Union School District, just paid a doctor less than the Medicare rate for treating one of the district’s injured employees.

By incorrectly applying the wrong rates for non-facility telehealth treatment and using an Anthem Preferred Provider Organization (PPO) discount, Keenan & Associates paid the doctor at roughly 94% of the Medicare rate allowed for the treatment.

This should concern Alisal schools.

Reimbursements below Medicare rates inevitably result in fewer providers willing to navigate complex regulations, tackle mountainous paperwork, and fight extended battles for correct payment while their revenue waits in limbo. When TPAs pay doctors less than the fee schedule (and Medicare) rates for treating teachers, bus drivers, custodians, and other employees, providers refuse to treat those injured workers.

Below, see the math on the treatment in question, a telehealth visit on January 20, 2026. Keenan’s first erroneous payment to the provider was only 64.6% of the fee schedule, or 94% of the Medicare-allowed reimbursement, despite the state fee schedule being set to pay 146% of the Medicare rate for the date of service.

The next time an Alisal teacher or staff member gets injured and struggles to find a doctor willing to treat them, endures prolonged waits for treatment, and potentially ends up in a dispute with the district, this reimbursement arithmetic helps explain why.

Financially, providers cannot sustainably do workers’ comp work for Medicare rates. When TPAs short-change doctors, and PPOs further reduce reimbursement, it becomes impossible to justify the administrative combat required to treat injured workers.

Notice that even after the provider invested the time and resources to draft and submit a Second Review appeal (including finding an Independent Bill Review (IBR) case to cite precedent) to dispute the initial underpayment, Keenan & Associates still paid only 93% of the fee schedule rate, about 136% of the Medicare rate.

The Provider Bills Correctly

As the bill below shows, the provider strictly adhered to the fee schedule and regulations governing how to bill for telehealth services when the patient (in this case, the Alisal Schools employee) was at home. The bill included:

• Place of Service (POS) Code 10, the correct POS for "Telehealth Provided in Patient's Home" under California Code of Regulations (CCR) Section 9789.12.2, effective for dates of service on or after February 15, 2024.
• Modifier 95, which the provider correctly appended to indicate two-way real-time audio-video telehealth treatment, as required by the CA DWC since 2025.
• Supporting medical documentation: a visit note explicitly titled "Telemedicine Video Visit," confirmed that the patient was at home and in the state of California at the time of service.

There is no ambiguity; the bill makes it clear in multiple ways that this was non-facility telehealth treatment, which, crucially, carries a higher reimbursement rate than facility-based telehealth treatment.

Keenan Pays Facility Rate for Non-Facility Treatment

Despite the provider’s pitch-perfect bill, Keenan improperly reduced the reimbursement. As Keenan’s EOR below shows, the TPA justified the cut by citing (emphasis ours):

"REIMBURSEMENT IS CALCULATED BASED ON THE PROFESSIONAL FEE SCHEDULE FACILITY SITE OF SERVICE VALUE."

Had the provider accepted this reimbursement without closely examining the EOR (as many workers’ comp providers and practice staff, drowning in administrative work, understandably do), the practice would have collected less than the Medicare rate for a workers’ comp service.

This error (reimbursing at facility rates for non-facility telehealth treatment) is not uncommon. Extrapolate this underpayment across months’ worth of bills, and the impact on a practice’s revenue can be significant.

In this case, the provider submitted a Second Review appeal (below), where the language patiently explains to Keenan that “Place of Service 10 warrants reimbursement at the Non-Facility rate.” Crucially, the provider cited a previous IBR decision to bolster their case.

The appeal was successful. Keenan responded with the final EOR below, indicating additional reimbursement to honor non-facility rates.

The Cost of Getting Paid

To recover (most of) the missing reimbursement, the provider had to:

1. Audit the EOR and catch the improper reduction.
2. Confirm the facility-vs-non-facility distinction under current state regulations.
3. Locate an applicable IBR precedent.
4. Draft a Second Review appeal citing the regulation, the EOR's reduction code, and the IBR case.
5. Complete and submit DWC Form SBR-1 by the statutory deadline.
6. Wait for Keenan to reprocess.

All of this required hours of staff time, just to collect (close to) what the fee schedule required Keenan to pay. The practice’s time and resources are not reimbursable; the provider simply absorbs it, and must accept the loss of time and resources they could have otherwise devoted to patients.  

The fee schedule exists because the state legislature determined that workers' comp providers should be paid above Medicare. Yet on a bill that was submitted perfectly, processed incorrectly, appealed successfully, and supported with precedent, the provider still collected only 93% of what the state deemed appropriate for the care.

Anthem profited by cutting the reimbursement by 7%, despite providing zero treatment and arguably zero administrative value, contributing nothing to the injured Alisal employee's recovery.

Keenan's error was not isolated. Multiple payers reduce telehealth bills to facility rates despite correct billing and clear documentation. Providers, pay close attention to your EORs, and submit timely appeals. If necessary, request IBR.

It shouldn’t be your responsibility to enforce the fee schedule, but this is the reality of California comp.

Alisal (and All Employers), Pay Attention

For employers like Alisal Union School District, this story matters.

Alisal pays Keenan to administer its employees’ claims. When Keenan underpays providers, whether through honest errors or calculated games of “IBR Chicken,” the TPA helps create the conditions under which providers stop accepting Alisal employees as patients.

For the custodian who slips on a wet floor, the bus driver involved in an accident, or the kindergarten teacher who hurts her back lifting kids, the consequences can be real and painful. A lack of willing providers already contributes to California’s extraordinary claim durations, delays in care, and high disability costs.

Demand better from your TPA.

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