CWCI: California Workers’ Comp Med-Legal Costs Up Sharply Under New Fee Schedule
June 27 2024 - 8:54PM
Business Wire
Payments for medical-legal evaluations and reports used to
resolve medical disputes in California work injury claims have
increased more than expected since a new Med-Legal Fee Schedule
(MLFS) took effect in April 2021 according to a new CWCI study,
with the average payment for a comprehensive exam up 52%, primarily
due to new per-page fees for record review that are paid on top of
flat fees for med-legal evaluations services. In addition, 2023 saw
a 6 percent increase in Qualified Medical Evaluators (QMEs)
compared with pre-pandemic levels.
Implementation of the updated MLFS for the California workers’
compensation system three years ago led to a comprehensive overhaul
of the payment formulas for med-legal evaluations and reports.
Complexity and time-based payments that had been in effect since
2006 were replaced with flat fees and payments for record reviews
exceeding specific page thresholds were added. When the Division of
Workers’ Compensation (DWC) adopted the new schedule, it
anticipated it would result in a 25% increase in payment levels to
adequately compensate med-legal evaluators.
CWCI’s study, which updates a preliminary analysis from 2021,
uses payment data for med-legal evaluations and reports with dates
of service from January 2015 through October 2023, valued as of
December 2023, to compare the utilization and reimbursement of
med-legal services rendered before and after the new schedule’s
April 1, 2021, effective date. The study analyzed changes in
evaluation and report patterns and payments. One goal of the new
MLFS was to attract and retain Qualified Medical Evaluators (QMEs)
to conduct medical-legal evaluations to better meet demand. CWCI
used DWC data from calendar years 2019 to 2023 to track changes in
the number of registered QMEs and the number of QME panel
assignments by medical specialty.
A review of the mix of med-legal services found that between
April 2021 and 2023 there was a big shift in the use of follow-up
exams, which was anticipated as the new MLFS calls for the
follow-up evaluation code to be used for 18 months after the
preceding comprehensive exam, versus 9 months under the 2006
schedule. Other key findings include:
- There has been a 52% increase in the average reimbursement for
comprehensive evaluations, and a 29% increase for supplemental
reports since the new MLFS took effect.
- Additional charges for excess record review were found on 43.3%
of the comprehensive evaluations, 24.9% of the follow-up
evaluations, and 30.8% of the supplemental reports. For
comprehensive evaluations, the new per-page record review fee added
an average of $1,817 to the $2,015 flat fee payment for services
with page-review. Page-review payments drove nearly three quarters
of the increase in comprehensive evaluation payments under the new
schedule. In addition, the per-page record review payments added an
average of $1,338 to the flat fee for follow-up evaluations with
excess page review and $1,335 to the flat fee for supplemental
reports with excess page-review.
- The number of certified QMEs has increased 5.9% from 2,561 in
2019 to 2,712 in 2023. That improvement, however, has been offset
somewhat by a 2.9% increase in the number of panel assignments over
the same period, resulting in a net gain of about 3 percent.
- Physicians specializing in orthopedic surgery provided 44% of
the med-legal services in 2023, followed by chiropractors who
provided 11% of the services.
CWCI has published its study in a Research Update Report,
“Increased Medical-Legal Costs and Current
QME Supply – Impact of the 2021 Medical Legal Fee Schedule.”
The report is available to CWCI members and subscribers who log on
to the Research section at www.cwci.org. Others may purchase the
report from CWCI’s online store, here.
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Bob Young (510) 251-9470