CA: Orthopedists Payment Data - Part 1

July 10, 2024 7 min read

By: the daisyNews Team

Orthopedic providers are vital to workers’ compensation. daisyData reveals that since January 1, 2022, Preferred Provider Organization (PPO) entities have diverted over $18 million from orthopedic providers using daisyBill.

At a recent California Division of Workers’ Compensation (DWC) meeting discussing proposed changes to Medical Provider Network (MPN) regulations, both providers and payers lamented the shortage of orthopedic specialists. However, the DWC did not address how PPOs, primarily through MPNs, have reduced orthopedists’ reimbursements to rates significantly below those established by the Official Medical Fee Schedule (OMFS).

Below, we present reimbursement data from 285 California orthopedists across 155 practices. This data shows these orthopedists received only 79% of the OMFS rates, equating to 109% of Medicare reimbursements. Additionally, reimbursement rates vary significantly among orthopedic practices.

For orthopedists treating California’s injured workers, reimbursement is a financial gamble. Payments can range from 90% of OMFS rates to as low as 70% or less, depending on how entangled the practice is in the PPO/MPN system. The only certain way to avoid the financial losses caused by PPO/MPN schemes is to stop treating injured workers.

PPOs Cost California Orthopedists Millions

To account for the substantial administrative burdens of treating injured workers, California's state workers’ comp fee schedules (OMFS) establish reimbursement rates that make such treatments financially viable for a practice. The DWC adjusts the Physician Fee Schedule annually to rates generally much higher than Medicare reimbursements due to the higher administrative costs associated with treating injured workers.

For instance, the latest 2024 update to the California Physician/Non-Physician Practitioner portion of the OMFS sets reimbursement rates for physician services at 146% of Medicare rates. However, PPOs have undermined the OMFS by forcing providers to join under the threat of exclusion from MPNs. Providers enter discount reimbursement contracts with PPOs out of fear of losing MPN eligibility.

After agreeing to these PPO discounts, the PPO often sells or leases the discount to numerous claims administrators, bill review companies, other PPOs, and various other intermediaries. The table below demonstrates how much PPOs are taking from orthopedists treating California’s injured workers. This data was collected from:

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

Metric	Value
Total reimbursement due per the OMFS	$88,966,548
Amount paid collectively by all claims administrators	$70,635,660
Total Balance due per OMFS rates	$18,330,888
Percentage of OMFS rates paid	79%
Percentage of Medicare reimbursement paid	109%
Average loss per orthopedist	$64,319

This data is sourced from electronic Explanations of Review (e-EORs) sent by 140 claims administrators in response to e-bills from the 285 daisyBill orthopedists. It does not include instances where a claims administrator denied payment ($0) for a service.

Different Rates for Different Orthopedists

Under the “pay to treat” PPO/MPN schemes, providers enter discount reimbursement contracts with PPOs, leading to widely varying reimbursements among practices. daisyData shows that these contract reimbursements vary widely from practice to practice.

daisyData shows that the percentage of OMFS rates paid to each billing provider ranges from 100% (indicating no PPO contracts) to as low as 31% of OMFS rates (equivalent to 37% of Medicare rates for the same services).

For each of the 155 billing providers (identified by distinct FEINs), the table aggregates the following payment data:

OMFS amount owed for all service line items
Amount paid by claims administrators to the billing provider
Difference between the amount owed per OMFS and the amount paid
Percentage of OMFS paid to each billing provider
Percentage of Medicare reimbursement paid to each billing provider

The table below illustrates orthopedists' substantial financial losses under the current PPO/MPN system, compromising their ability to treat injured workers effectively.

*Each billing provider may employ multiple rendering providers. Each billing provider’s Federal Employer Identification Number (FEIN) has been masked to protect privacy.

**The DWC establishes a different Physician Fee Schedule reimbursement rate at least annually.

FEIN (Masked)	OMFS Reimbursement Due	Amount Paid	OMFS Balance Due	OMFS % Paid	% of Medicare Reimbursement
e0d0c1a0	$9,889,345	$7,337,985	$2,551,360	74%	103%
cb0c3488	$9,409,566	$6,943,609	$2,465,957	74%	100%
e861e83b	$5,335,268	$4,094,812	$1,240,457	77%	105%
6643ba4b	$5,502,935	$4,486,394	$1,016,541	82%	113%
dd5629cc	$3,047,991	$2,128,191	$919,800	70%	95%
b099ea86	$3,131,110	$2,490,458	$640,652	80%	110%
6e975c37	$2,283,686	$1,741,382	$542,304	76%	101%
2793bd79	$3,582,065	$3,051,920	$530,145	85%	113%
3d029a97	$6,518,002	$6,028,058	$489,944	92%	129%
ae009551	$3,352,529	$2,939,901	$412,628	88%	123%
1e553e66	$1,324,976	$920,441	$404,534	69%	93%
7b84f773	$1,040,813	$662,314	$378,498	64%	88%
93a484bc	$1,444,048	$1,132,949	$311,099	78%	107%
34c0b08b	$862,603	$577,511	$285,092	67%	90%
d15cc95d	$952,739	$682,673	$270,066	72%	100%
2d8460e4	$852,540	$598,595	$253,945	70%	95%
8bd3fdb4	$1,414,115	$1,168,892	$245,224	83%	119%
0166cb44	$1,242,598	$1,000,389	$242,209	81%	108%
d797432f	$800,603	$566,238	$234,365	71%	95%
9bc33a6d	$764,852	$538,153	$226,699	70%	94%
d289e3de	$433,568	$266,893	$166,675	62%	83%
b3edb0c9	$1,268,492	$1,102,491	$166,001	87%	122%
84999e6e	$698,687	$535,060	$163,627	77%	105%
045e715d	$1,590,573	$1,427,170	$163,403	90%	112%
d5076c8b	$1,741,639	$1,579,689	$161,951	91%	127%
85141510	$744,989	$583,337	$161,652	78%	107%
3347e15c	$883,450	$735,115	$148,335	83%	116%
297e05f3	$495,839	$352,314	$143,525	71%	98%
6cf55c07	$1,070,494	$929,888	$140,605	87%	123%
15d10585	$391,436	$250,956	$140,480	64%	89%
0d81e0e3	$492,077	$358,990	$133,087	73%	97%
aaff945e	$429,705	$305,210	$124,495	71%	100%
b167850b	$719,144	$597,279	$121,866	83%	117%
09a71ea4	$818,829	$704,984	$113,844	86%	122%
6583f88e	$298,926	$193,743	$105,183	65%	87%
2b144c75	$642,785	$540,635	$102,150	84%	113%
fb15cbfd	$354,020	$256,229	$97,790	72%	99%
75ab8be9	$641,777	$545,430	$96,347	85%	117%
54b00441	$486,825	$393,255	$93,571	81%	113%
d35d23bc	$774,165	$685,382	$88,783	89%	123%
5310fefd	$300,886	$213,672	$87,214	71%	52%
688febe0	$428,672	$344,540	$84,132	80%	115%
3ecbac66	$187,171	$110,732	$76,439	59%	80%
9cf1cb6a	$303,107	$226,879	$76,227	75%	103%
3d239a65	$255,655	$184,913	$70,743	72%	99%
ffb8ea52	$229,879	$162,195	$67,684	71%	96%
8f0b0a64	$328,741	$262,886	$65,855	80%	110%
cbad17d1	$330,816	$265,251	$65,565	80%	117%
2defac9a	$407,416	$347,377	$60,040	85%	124%
0aec497e	$592,633	$532,678	$59,955	90%	122%
c2e5ce93	$307,891	$249,553	$58,338	81%	112%
17b954af	$205,813	$149,335	$56,478	73%	104%
c2bef596	$378,368	$327,115	$51,253	86%	124%
19affa79	$228,922	$178,047	$50,875	78%	106%
c57edc7c	$185,924	$136,086	$49,838	73%	100%
05bf4210	$162,020	$114,390	$47,630	71%	96%
faeba29b	$249,396	$203,190	$46,206	81%	113%
e4c7e39d	$270,114	$223,949	$46,165	83%	118%
fd18b288	$193,858	$148,834	$45,025	77%	106%
31f6b898	$176,239	$133,285	$42,954	76%	111%
8fff9618	$138,307	$95,727	$42,580	69%	96%
7817164a	$201,502	$159,020	$42,483	79%	112%
e6c52417	$288,856	$247,796	$41,060	86%	118%
9d7b8085	$163,362	$126,516	$36,846	77%	114%
bd0bccd6	$131,105	$97,693	$33,412	75%	101%
3e034d9a	$151,090	$118,045	$33,045	78%	112%
55cfddd9	$85,371	$52,758	$32,613	62%	80%
389e84ce	$436,729	$404,523	$32,206	93%	108%
4b719a62	$112,733	$81,039	$31,694	72%	103%
18acba89	$369,234	$337,576	$31,658	91%	127%
6a9d47d8	$113,572	$82,888	$30,684	73%	103%
78451637	$152,932	$123,330	$29,602	81%	114%
1f86ab40	$453,962	$428,090	$25,873	94%	134%
02a679b7	$97,700	$75,568	$22,132	77%	103%
240cb873	$99,480	$77,927	$21,553	78%	108%
30579bbb	$81,709	$61,752	$19,958	76%	105%
8895b98f	$76,500	$56,675	$19,826	74%	105%
221dd8f3	$359,283	$339,655	$19,628	95%	135%
2fb8ebe5	$134,834	$116,464	$18,370	86%	120%
d3f99167	$46,567	$28,539	$18,028	61%	85%
1256a269	$54,131	$37,113	$17,018	69%	95%
933b244e	$55,311	$39,942	$15,369	72%	99%
9f70f0f1	$58,572	$43,315	$15,257	74%	103%
2ad2a3d6	$46,455	$31,344	$15,111	67%	92%
5c8770f8	$68,090	$53,547	$14,543	79%	108%
ae1402ed	$55,331	$42,066	$13,265	76%	103%
93234580	$50,460	$38,645	$11,815	77%	94%
32743ff8	$85,878	$74,764	$11,114	87%	120%
0b187c89	$37,994	$26,989	$11,005	71%	98%
2883f239	$44,193	$35,013	$9,180	79%	115%
9352d549	$31,204	$24,446	$6,758	78%	83%
c03c396c	$80,347	$73,980	$6,367	92%	129%
d63b1d87	$23,142	$17,098	$6,044	74%	101%
454738a5	$27,865	$22,252	$5,613	80%	117%
52fda4df	$30,743	$25,176	$5,568	82%	112%
97170cf4	$23,479	$18,013	$5,466	77%	119%
09a6303b	$120,597	$115,250	$5,347	96%	115%
dca610d0	$17,384	$12,194	$5,190	70%	94%
7bb9edeb	$26,978	$22,098	$4,880	82%	117%
9bfa6298	$17,855	$13,526	$4,329	76%	110%
3eef0804	$54,437	$50,340	$4,097	92%	142%
598d82f9	$22,232	$18,571	$3,661	84%
bd48c095	$29,249	$25,696	$3,553	88%	121%
4f329570	$33,961	$30,622	$3,340	90%	122%
668191b9	$356,221	$352,952	$3,269	99%	120%
a8fce6a0	$52,175	$49,212	$2,963	94%	132%
1084ebea	$12,996	$10,249	$2,747	79%	116%
ed1380af	$12,764	$10,082	$2,682	79%	106%
04b54eb4	$14,638	$12,233	$2,405	84%	115%
46a7113f	$13,857	$11,467	$2,389	83%	112%
592dd3ca	$42,007	$39,790	$2,217	95%	129%
5604cd53	$6,341	$4,299	$2,042	68%	95%
14664ced	$11,144	$9,425	$1,719	85%	113%
df22942d	$6,415	$4,753	$1,661	74%	101%
19096e66	$14,047	$12,650	$1,397	90%	124%
bc88011c	$5,715	$4,322	$1,394	76%	101%
9dc6e65c	$10,640	$9,407	$1,233	88%	185%
44793c52	$4,268	$3,050	$1,218	71%	100%
3049ff4c	$3,121	$2,077	$1,043	67%	91%
6ff14f8e	$6,779	$5,833	$946	86%	120%
25bd1c5c	$27,195	$26,399	$796	97%	133%
3421b29e	$4,624	$3,913	$710	85%	113%
f3261083	$2,680	$1,998	$682	75%	103%
558d1b79	$3,938	$3,267	$671	83%	100%
bc38404d	$4,183	$3,531	$651	84%	153%
87bc1503	$14,249	$13,614	$635	96%	132%
b79bade0	$4,354	$3,763	$591	86%	119%
5a6b19ea	$7,326	$6,740	$586	92%	132%
93829389	$2,744	$2,179	$565	79%	115%
2b9e88c9	$3,423	$2,915	$508	85%	114%
552ee17f	$1,231	$731	$501	59%	79%
ed9cdde3	$1,259	$884	$375	70%	94%
f739c4a2	$1,685	$1,324	$361	79%	106%
fe27d6d2	$7,644	$7,343	$301	96%	140%
eff4bd5f	$2,696	$2,432	$265	90%	143%
80bb2a4d	$280	$87	$192	31%	37%
8dd604b1	$970	$873	$97	90%	153%
1db67962	$597	$532	$65	89%	122%
6d5d118e	$3,587	$3,530	$57	98%	137%
d1856667	$234	$178	$55	76%	103%
9cfa6fd1	$1,080	$1,026	$54	95%	132%
e3d85cd7	$1,391	$1,344	$47	97%	130%
d7245e3a	$185	$140	$45	76%	102%
d5b154dd	$882	$839	$43	95%	133%
3358fafe	$620	$591	$30	95%	205%
c17ea2d3	$34,767	$34,746	$21	100%	137%
4523e9e1	$500	$490	$10	98%	134%
0ce81188	$15	$14	$2	90%
4667fdaa	$617	$617	$0	100%	137%
e303c465	$10,775	$10,775	$0	100%
6a5cdb1f	$99	$99	$0	100%	210%
837fba1f	$659	$659	$0	100%	134%
1e34000a	$324	$324	$0	100%	146%
f4fc83a7	$1,947	$1,947	$0	100%	134%
3a3ae694	$609	$609	$0	100%	134%
Totals	$88,966,548	$70,635,660	$18,330,888	79%	109%

What do these numbers mean for California orthopedic providers?

If you treat injured workers, your revenue is essentially impossible to predict, because it’s subject to the whims and wild swings of the vast, lucrative PPO discount industry. It’s a market that exists solely to create profit by leaching it from you—and the numbers indicate they’re doing a bang-up job.

daisyBill makes treating injured workers easier, faster, and less costly. Request a free demonstration below.

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1 Reader Comments

lawrence W.

This ain't good- what do we do though?

Published 08:42AM July 15, 2024

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