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New CWCI Study Produces Benchmark Data on Physician Reporting in California WC

A new CWCI study finds that the average number of first-year medical reports per claim provided by California workers’ comp treating physicians to claims administrators rose by 123% in the 12 years leading up to the adoption of the new physician fee schedule, fueled in part by increases in evaluation and management (E/M) services used to treat injured workers and in the number of physician reports per E/M service, but claims organizations note that reports still do not always meet regulatory requirements or include all of the medical information needed for effective claims management.    

California’s new workers’ comp physician fee schedule, which took effect in January, includes 2 changes that will affect physician reporting. First, it incorporates fees for consulting physician reports into the underlying evaluation service fee, so these reports are no longer separately reimbursable unless requested by the DWC Administrative Director, the Appeals Board or a Qualified Medical Evaluator in the context of a med-legal evaluation. Second, it no longer provides for separate reimbursement for a primary treating physician’s review of medical records outside the context of a face-to-face E/M service. The extent to which these changes will impact reporting is unknown, so CWCI Senior Research Analyst Stacy Jones conducted the study to compile benchmark data that can be used to measure future changes, using data from nearly 10 million medical report bills from accident year (AY) 2000 to 2013 claims. The analysis tracks growth trends for medical reports, measuring both the average number of reports per indemnity claim, and the proportion of workers’ comp medical services and medical payments accounted for by medical reports. The findings show that the average number of reports per claim rose steadily for more than a decade (e.g., the average number of first-year reports jumped by 123%, from 4.3 in AY 2000 to 9.6 in AY 2011 while the average number of reports at 36 months increased by 154% from 5.9 to 15.0 between AY 2000 to 2010), which helped push reports up from 7.2% to 12.2% of all workers’ comp medical services in the 10 years leading up to the adoption of the new fee schedule, though report payments fell from 3.7% of workers’ comp medical reimbursements in 2004 to 3.0% in 2008 before leveling off and holding at about 3% through mid-2013.

The study also examined the relationship between the volume of E/M services and progress reports, noting that growth in the average number of E/M services per indemnity claim from 2000-2011 (ranging from a 49% increase at 12 months post injury to an 83% increase at 48 months) are associated with more physician reporting. That, however, was not the only factor as the average number of reports per E/M service was also up, with increases ranging from 31% at 48 months post injury to 47% at both the 12- and 24-month valuation points.

To assess qualitative aspects of reporting, the study included results of a survey of claims administrators to evaluate both the content and the timeliness of the reports they receive. Even though state law requires a primary treating physician (PTP) to incorporate findings of secondary physicians into their reports, 1 in 4 survey respondents said such findings are rarely included in a PTP’s report, while half said they are “sometimes” included. On the issue of timeliness, two-thirds of the respondents said that reports are usually or always on time (within 20 days of a triggering event) which tracks with the finding that first-year services were billed an average of every 24 days. Similarly, half the respondents said that more than 50% of reports are submitted to meet the mandate that a PTP report every 45-days (barring another triggering event), which tracks with the finding that reports for services beyond the first year were billed every 44 days.

CWCI plans to continue to research the issue of physician reporting in workers’ comp, using data from the current study as a baseline to gauge changing patterns. In the meantime, the Institute has published additional details and graphics from the study in a Research Note, “The Price of Progress: Progress Reports in the California Workers’ Compensation System,” which is available to CWCI members and subscribers in the Research section at http://www.cwci.org/.