As announced in a recent Newsline, California’s Division of Workers’ Compensation (DWC) issued an update to the Physician and Non-Physician Practitioner portion of the Official Medical Fee Schedule (OMFS), effective for dates of service on or after January 1, 2022.
In addition to adding and deleting many procedure codes, the update alters a crucial element of the formula for calculating reimbursement rates: the statewide Conversion Factor.
Read on to learn how the Conversion Factor affects reimbursements for physician services in 2022.
Make calculating 2022 OMFS reimbursements easy: Try our OMFS Calculator for accurate, instant, always-updated rates (Fee Schedules: California, New York and US DOL).
Conversion Factors in CA Workers’ Comp
To understand how this impacts reimbursement rates, it’s crucial to understand the reimbursement formula California workers’ comp uses to calculate Physician Fee Schedule reimbursements.
California’s Physician Fee Schedule is based on the Centers for Medicare and Medicaid Services’ (CMS) Resource-Based Relative Value Scale (RBRVS). To determine reimbursement for a given procedure code in California workers’ comp, one must first establish the “Base Maximum Fee” which California Code of Regulations (CCR) Section 9789.12.2. defines as:
“...the maximum reasonable fee, except as otherwise provided by applicable provisions of [the] fee schedule, including but not limited to the application of ground rules and modifiers that affect reimbursement.”
The formula for calculating the Base Maximum Fee has three required components:
- Relative Value Units (RVUs) assigned to the procedure code by Medicare
- Geographic Practice Cost Index (GPCI) applicable to the place of service as determined by Medicare
- Statewide Conversion Factor (CF) as determined by the DWC (All procedure codes for physician services in California workers’ comp use a single, common Conversion Factor).
CCR § 9789.12.2 provides the formulas used to calculate the Base Maximum Fee. There are two separate formulas, based on whether the place of service is a facility or non-facility, as shown below.
Once the Base Maximum Fee is calculated, dozens of fee-affecting regulations (often referred to as “Billing Ground Rules”) may increase or decrease the final reimbursement amount.
As healthcare inflation roils, the 1.3% increase in 2022 reimbursements represents a minimal rise in payments for treating injured workers.