CA: Orthopedist Payment Data by Claims Admin - Part 2

July 11, 2024 8 min read

By: the daisyNews Team

CA: Orthopedist Payment Data by Claims Admin - Part 2

While all providers who agree to treat injured workers are essential, in this series, daisyBill focuses on orthopedic reimbursement to expose how California’s Medical Provider Networks (MPNs) are merely mechanisms for siphoning money from healthcare providers.

Claims administrators use Medical Provider Networks (MPNs) to coerce doctors into discount reimbursement contracts with Preferred Provider Organizations (PPOs), effectively subverting the intent of state legislators who set workers’ comp rates higher than Medicare for well-documented reasons.

Today, we publish data showing that MPN/PPO discount reimbursements vary significantly among claims administrators. To highlight the broader impact, we present reimbursement data from 117 claims administrators, illustrating just how insufficiently many reimburse orthopedic surgeons.

As a single example, the State Compensation Insurance Fund (CA) collectively paid orthopedists only 67% of the OMFS. For perspective, this large claims administrator reimburses orthopedist surgeons at rates equivalent to 90% of the Medicare rates for the treatment provided to injured workers.

As repeatedly documented (for example, here and here), neither state legislators nor regulators will act to rein in this MPN/PPO payment pilfering. Today’s reimbursement data underscores the urgent need for California orthopedists to take collective action to protect themselves (and injured workers) from these financially damaging MPN/PPO schemes.

Claims Administrators and Private Equity Rake in Profits

The California Physician/Non-Physician Practitioner portion of the Official Medical Fee Schedule (OMFS) set orthopedic reimbursement rates at 134% of Medicare in 2022, 143% of Medicare in 2023, and increasing to 146% in 2024. However, daisyData reveals that daisyBill orthopedists collectively received reimbursements equal to 109% of Medicare rates from 2022 to 2024.

By tying MPN membership to PPO participation, claims administrators force providers into unfavorable reimbursement agreements to remain eligible to treat injured workers restricted by MPNs.

This convoluted MPN system benefits claims administrators and their private equity owners by enabling them to profit from the PPO reimbursement discounts taken from providers. Once a PPO ensnares a provider into a contractual discount, the PPO leases, sells, or transfers the discount to other payers and entities, compounding providers' financial losses.

These discounts, extracted under the threat of MPN exclusion, allow claims administrators to reduce their payment obligations while preventing doctors who refuse discounted reimbursements from treating injured workers.

Claims administrators and their private equity owners profit from this MPN/PPO exploitation, which erodes the economic stability of medical practices and also compromises the quality of care available to injured workers as physicians struggle to sustain their practices under such punitive financial conditions.

Ortho Reimbursement Data by Claims Admin

Below, we present the payment data from 117 claims administrators, the amount paid to daisyBiIl orthopedists totaling $10,000 or more since 1/1/2022.

daisyBill collected this reimbursement data from

285 orthopedists (identified by taxonomy code)
155 practices (identified by FEIN)
639,927 line-item services provided to injured workers
Dates of service 1/1/2022 through 6/30/2024

The first table lists the 15 claims administrators who paid orthopedists less than 70% of the OMFS.

Rather than reimbursing orthopedists at the state fee schedule rates (134%, 143%, and 146% of Medicare reimbursements), these claims administrators paid orthopedic surgeons less than Medicare reimbursements to treat California’s injured workers.

1. Orthopedic Reimbursement Less than 70% of OMFS

Claims Administrator	OMFS Reimbursement Due	Amount Paid	OMFS Balance Due	OMFS % Paid	% of Medicare Reimbursement Paid
City of San Diego (CA)	$1,843,195	$1,153,315	$689,879	63%	84%
Applied Underwriters	$70,187	$45,116	$25,072	64%	90%
ARGO - Argonaut Insurance Company	$25,177	$16,426	$8,751	65%	87%
Tristar Risk Management	$555,054	$358,487	$196,567	65%	87%
The Zenith	$723,313	$475,201	$248,112	66%	88%
Workers' Compensation Administrators, LLC	$23,179	$15,502	$7,676	67%	92%
Pacific Gas & Electric	$47,197	$31,614	$15,583	67%	91%
State Compensation Insurance Fund (CA)	$6,229,574	$4,157,609	$2,071,966	67%	90%
California Insurance Guarantee Association	$222,694	$151,864	$70,830	68%	93%
Sempra Energy Employee Care Services	$240,544	$163,971	$76,574	68%	95%
Keenan & Associates	$1,591,564	$1,083,613	$507,951	68%	91%
City of Sacramento (CA)	$22,276	$15,437	$6,839	69%	95%
Core Specialty	$44,009	$30,519	$13,489	69%	92%
WCF Insurance	$54,334	$37,309	$17,025	69%	83%
Elite Claims Management, Inc.	$169,517	$116,867	$52,649	69%	94%

The second table lists the 16 claims administrators reimbursed orthopedists at 90% of the OMFS or higher. These claims administrators paid orthopedic surgeons more than Medicare reimbursements for treating California’s injured workers.

Although none of the claims administrators reimbursed providers 100% of the OMFS amount due, Albertsons / Safeway / Vons came the closest, achieving a 98% OMFS reimbursement rate.

2. Orthopedic Reimbursement 90% of OMFS or Greater

Claims Administrator	OMFS Reimbursement Due	Amount Paid	OMFS Balance Due	OMFS % Paid	% of Medicare Reimbursement Paid
Albertsons / Safeway / Vons	$284,645	$277,756	$6,890	98%	136%
Self-Insured Schools of California (CA)	$146,919	$141,863	$5,055	97%	134%
The Walt Disney Company	$292,418	$283,018	$9,400	97%	136%
City of Glendale (CA)	$28,256	$26,876	$1,380	95%	130%
Innovative Claim Solutions	$81,821	$77,851	$3,970	95%	133%
North American Risk Services	$10,828	$10,194	$634	94%	117%
City and County of San Francisco (CA)	$541,692	$495,956	$45,736	92%	126%
North Bay Schools Insurance Authority (CA)	$22,837	$20,786	$2,051	91%	124%
Creative Risk Solutions	$29,913	$27,212	$2,702	91%	115%
QBE North American	$66,491	$60,189	$6,302	91%	124%
Nassco / General Dynamics	$225,934	$204,502	$21,432	91%	125%
Benchmark Administrators	$421,419	$385,180	$36,239	91%	129%
Midwestern Insurance Alliance	$30,204	$27,289	$2,915	90%	126%
National Interstate Insurance	$134,044	$120,634	$13,410	90%	125%
County of San Diego (CA)	$567,959	$510,027	$57,932	90%	129%
Travelers	$2,380,950	$2,136,999	$243,951	90%	126%

The third table lists 117 claims administrators who have reimbursed daisyBill orthopedists $10,000 or more since January 1, 2022. The list is sorted in descending order based on the OMFS Reimbursement Due.

Notably, the State Compensation Insurance Fund (CA) reimbursed orthopedists only 67% of the OMFS, equivalent to 90% of the Medicare reimbursement for the same services.

3. All Claims Administrators Where Amount Paid Is Greater than $10,000

Claims Administrator	OMFS Reimbursement Due	Amount Paid	OMFS Balance Due	OMFS % Paid	% of Medicare Reimbursement Paid
Sedgwick Claims Management Services, Inc.	$22,894,958	$19,728,246	$3,166,711	86%	119%
Gallagher Bassett Services Inc.	$6,586,041	$5,312,572	$1,273,469	81%	109%
State Compensation Insurance Fund (CA)	$6,229,574	$4,157,609	$2,071,966	67%	90%
CorVel	$4,121,918	$3,143,984	$977,934	76%	106%
Liberty Mutual Insurance	$3,458,880	$2,669,412	$789,468	77%	103%
Intercare Holdings Insurance Services, Inc.	$3,394,423	$2,654,979	$739,444	78%	108%
ESIS, Inc.	$3,003,295	$2,307,044	$696,250	77%	104%
Travelers	$2,380,950	$2,136,999	$243,951	90%	126%
Athens Administrators	$2,077,266	$1,637,889	$439,377	79%	106%
Insurance Company of the West	$1,862,886	$1,358,244	$504,642	73%	100%
City of San Diego (CA)	$1,843,195	$1,153,315	$689,879	63%	84%
Broadspire Services, Inc.	$1,796,975	$1,369,529	$427,446	76%	101%
Zurich Insurance North America	$1,741,465	$1,413,046	$328,419	81%	111%
Berkshire Hathaway Homestate Companies	$1,604,033	$1,190,957	$413,076	74%	106%
Keenan & Associates	$1,591,564	$1,083,613	$507,951	68%	91%
Adminsure, Inc.	$1,469,582	$1,308,167	$161,415	89%	121%
AmTrust North America, Inc.	$1,405,035	$992,358	$412,678	71%	94%
Cannon Cochran Management Services, Inc.	$1,306,642	$1,120,062	$186,579	86%	119%
Helmsman Management Services LLC	$957,011	$722,154	$234,858	75%	100%
Pacific Compensation Insurance Company	$884,622	$631,846	$252,775	71%	94%
Sentry Insurance	$863,111	$723,786	$139,325	84%	115%
The Zenith	$723,313	$475,201	$248,112	66%	88%
Republic Indemnity	$722,954	$621,677	$101,277	86%	118%
City of Los Angeles (CA)	$670,982	$471,495	$199,487	70%	96%
The Hartford	$622,200	$481,765	$140,435	77%	103%
CompWest Insurance Company	$589,359	$414,276	$175,084	70%	96%
Employers Compensation Insurance Company	$586,367	$415,447	$170,920	71%	96%
County of San Diego (CA)	$567,959	$510,027	$57,932	90%	129%
Chubb Group of Insurance Companies	$564,750	$428,371	$136,379	76%	108%
Tristar Risk Management	$555,054	$358,487	$196,567	65%	87%
City and County of San Francisco (CA)	$541,692	$495,956	$45,736	92%	126%
Next Level Administrators	$515,346	$401,865	$113,480	78%	106%
LWP Claims Solutions, Inc.	$501,378	$435,920	$65,459	87%	122%
Farmers Insurance	$462,113	$329,731	$132,382	71%	93%
Los Angeles County Metropolitan Transit Authority (CA)	$434,685	$344,691	$89,994	79%	104%
Preferred Employers Insurance Company	$428,379	$369,916	$58,464	86%	119%
Benchmark Administrators	$421,419	$385,180	$36,239	91%	129%
Alaska National Insurance	$406,692	$326,641	$80,051	80%	116%
City of Los Angeles Department of Water and Power (CA)	$367,677	$278,331	$89,347	76%	107%
Acclamation Insurance Management Services	$331,437	$243,422	$88,015	73%	101%
Guard Insurance Group	$327,241	$240,558	$86,684	74%	96%
The Walt Disney Company	$292,418	$283,018	$9,400	97%	136%
Beta Healthcare Group Risk Management Authority	$291,609	$240,892	$50,717	83%	111%
Albertsons / Safeway / Vons	$284,645	$277,756	$6,890	98%	136%
CopperPoint Mutual	$242,132	$179,993	$62,139	74%	103%
CNA Insurance	$241,237	$208,513	$32,724	86%	121%
Sempra Energy Employee Care Services	$240,544	$163,971	$76,574	68%	95%
Midwest Insurance	$233,892	$171,527	$62,365	73%	100%
Nassco / General Dynamics	$225,934	$204,502	$21,432	91%	125%
California Insurance Guarantee Association	$222,694	$151,864	$70,830	68%	93%
County of Riverside (CA)	$205,136	$157,410	$47,725	77%	105%
American Claims Management, Inc	$196,854	$154,614	$42,240	79%	104%
Sutter Health	$186,570	$142,664	$43,907	76%	106%
Barrett Business Services Inc.	$179,263	$134,303	$44,959	75%	104%
Elite Claims Management, Inc.	$169,517	$116,867	$52,649	69%	94%
Omaha National Group	$163,973	$125,714	$38,259	77%	110%
Berkley Net Underwriters, LLC	$159,793	$131,859	$27,933	83%	114%
Southern California Edison	$155,019	$132,233	$22,786	85%	118%
Protective Insurance	$149,138	$120,568	$28,570	81%	114%
Self-Insured Schools of California (CA)	$146,919	$141,863	$5,055	97%	134%
Strategic Comp	$146,195	$108,665	$37,530	74%	111%
Allianz	$143,784	$118,111	$25,674	82%	114%
Crum & Forster	$142,711	$105,360	$37,351	74%	103%
AmeriTrust Group, Inc.	$138,676	$122,318	$16,358	88%	126%
National Interstate Insurance	$134,044	$120,634	$13,410	90%	125%
Markel First Comp Insurance	$128,269	$99,580	$28,689	78%	104%
Hanover Insurance Company	$123,666	$87,196	$36,470	71%	96%
GuideOne Insurance	$119,108	$93,808	$25,300	79%	116%
AIG Claims, Inc.	$108,805	$94,091	$14,714	86%	116%
City of Long Beach (CA)	$101,236	$87,463	$13,773	86%	115%
County of Santa Clara (CA)	$88,432	$78,568	$9,864	89%	127%
Mitsui Sumitomo Marine Management (U.S.A), Inc.	$86,438	$70,862	$15,576	82%	116%
Charles Taylor, TPA	$83,353	$71,984	$11,369	86%	120%
Innovative Claim Solutions	$81,821	$77,851	$3,970	95%	133%
Nordstrom Workers' Compensation	$72,436	$61,774	$10,662	85%	117%
Applied Underwriters	$70,187	$45,116	$25,072	64%	90%
Cottingham & Butler Claims Services, Inc.	$70,176	$61,034	$9,142	87%	126%
American Equity Underwriters	$69,345	$53,851	$15,495	78%	102%
QBE North American	$66,491	$60,189	$6,302	91%	124%
National Liability and Fire Insurance Company	$56,369	$40,025	$16,344	71%	94%
Nationwide Insurance Companies	$54,396	$42,238	$12,158	78%	103%
WCF Insurance	$54,334	$37,309	$17,025	69%	83%
Pacific Gas & Electric	$47,197	$31,614	$15,583	67%	91%
Contra Costa County Schools Insurance Group (CA)	$47,071	$41,356	$5,716	88%	121%
United Heartland	$45,454	$31,666	$13,788	70%	99%
Core Specialty	$44,009	$30,519	$13,489	69%	92%
Tokio Marine Management, Inc.	$37,563	$26,714	$10,849	71%	97%
Redwood Empire Schools Insurance Group (CA)	$35,620	$30,802	$4,818	86%	121%
Nationwide Agribusiness Companies	$33,423	$23,353	$10,070	70%	89%
City of Torrance (CA)	$32,953	$23,444	$9,509	71%	100%
Constitution State Services LLC	$32,638	$27,350	$5,288	84%	117%
AccidentFund	$32,513	$24,302	$8,210	75%	99%
Midwestern Insurance Alliance	$30,204	$27,289	$2,915	90%	126%
Creative Risk Solutions	$29,913	$27,212	$2,702	91%	115%
Schools Insurance Authority (CA)	$29,495	$23,364	$6,131	79%	110%
JT2 Integrated Resources	$28,977	$21,746	$7,232	75%	106%
MedRisk Network	$28,300	$21,150	$7,150	75%	102%
City of Glendale (CA)	$28,256	$26,876	$1,380	95%	130%
ARGO - Argonaut Insurance Company	$25,177	$16,426	$8,751	65%	87%
National Casualty Company	$24,825	$18,365	$6,460	74%	96%
Contra Costa County Risk Management (CA)	$24,581	$21,329	$3,252	87%	120%
Workers' Compensation Administrators, LLC	$23,179	$15,502	$7,676	67%	92%
North Bay Schools Insurance Authority (CA)	$22,837	$20,786	$2,051	91%	124%
City of Sacramento (CA)	$22,276	$15,437	$6,839	69%	95%
Ryder Services Corp	$22,161	$16,106	$6,054	73%	97%
Amerisure	$21,298	$19,023	$2,275	89%	123%
Salus	$21,139	$17,531	$3,608	83%	116%
Pegasus Risk Management, Inc.	$19,129	$16,266	$2,863	85%	119%
Murphy and Beane Inc.	$18,239	$15,897	$2,342	87%	122%
Marriott Claims Service Corp	$16,516	$11,623	$4,893	70%	106%
Maine Employers Mutual Indemnity Company	$16,514	$12,920	$3,593	78%	119%
Berkley Entertainment	$15,655	$13,226	$2,430	84%	117%
Care West Insurance Company	$15,637	$11,803	$3,834	75%	111%
Innovative Risk Management	$15,586	$12,930	$2,656	83%	113%
Florists Mutual Insurance Company	$15,334	$12,942	$2,391	84%	117%
Brotherhood Mutual Insurance	$13,638	$11,316	$2,322	83%	238%
North American Risk Services	$10,828	$10,194	$634	94%	117%

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1 Reader Comments

John Hill

What law allows these reductions? Is this a lawful action? The Statutes state that physician SHALL be reimbursed the OMFS, NOT a discount. If it is a Regulation, the Statute is superseding.

Published 08:41AM July 15, 2024

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