California Workers’ Comp Providers Are Overworked and, According to the WCRI, Underpaid

California pays its providers less than just about any other state for services rendered to injured workers.

With 2,300 California provider clients, DaisyBill's number one driving mission is fair and correct reimbursement for providers of workers’ comp services.

DaisyBill software manages workers’ comp bills throughout the country. From our national perspective, we know California places the largest regulatory burden on providers who treat injured workers. These extra responsibilities are why we oppose parts of SB 537, discussed further below. Despite the extraordinary complexities of California workers’ comp, a study by the Workers’ Compensation Research Institute (WCRI) shows that reimbursement to providers in that state is almost the lowest in the nation.

WCRI Reimbursement Data

In the 10th edition of its WCRI Medical Price Index for Workers’ Compensation[1], the WCRI looked at 35 states’ prices for medical professional services to identify “where medical prices are unusually high or low or are rising more or less rapidly.” In all aspects that were measured, California emerges as a particularly miserly state in its reimbursement of workers’ comp services.

In terms of how much was paid for medical professional services, California ranked second from last in 2016 and 32nd out of 35 in 2017. This in a state where the cost of living consistently ranks second or third highest in the country.[2]

Source: WCRI Medical Price Index for Workers’ Compensation, 10th ed.

Source: WCRI Medical Price Index for Workers’ Compensation, 10th ed.

In the WCRI’s ranking of 25 states that have implemented fee schedules, California ranked 24th in 2013-2016 and a slightly better but still abysmal 22nd in 2017.

SB 537 Flawed Medicare Reimbursement

I’d like to offer one final note, as a pricing framework through which to view SB 537, which we discussed here and here. SB 537 relies on a flawed analogy when referencing a Medicare reimbursement floor.

For California physicians, a work comp service actually costs a physician more to provide and to collect on than the corresponding Medicare service. So when a physician is paid Medicare rates, the physician is being underpaid since workers' comp requires substantially more work by both the physician and the physician's staff.

If, as SB 537 proposes, Medicare reimbursements were to be adopted as the floor for workers’ comp reimbursements (without modification that acknowledges the greater cost and resources required to treat workers’ comp patients), California could slip to last place compared to other states in the prices it pays for services rendered to injured workers.

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[1] Yang, Rui, & Fomenko, Olesya. (2018) WCRI Medical Price Index for Workers’ Compensation, 10th ed. Workers’ Compensation Research Institute.

[2];; and, each accessed 5-8-2019