Designing Workers’ Compensation Medical Fee Schedules, 2016

By Olesya Fomenko, Te-Chun Liu

November 1, 2016 Related Topics: Fee Schedules, Fee Schedule Benchmarks

The purpose of this report is to highlight some of the most important design choices that public officials face in adopting, reforming, and updating a fee schedule for physicians and to show how the 43 states with fee schedules and the District of Columbia have resolved these choices, as of March 2016. This study also includes a discussion of the substantial fee schedule changes for professional medical services since July 2011, which was covered by the previous edition of the study.

These choices include the following:

  • Should the fee schedule be based on the relative value units of different professional medical services, or based on some other metric (e.g., historical charges or usual and customary charges)?
  • If based on relative value units, should the fee schedule for physician services use the relative values developed for the Medicare program or some other relative value scale?
  • Should the state use a single conversion factor (monetizing factor) for all services, or implement different conversion factors for different groups of services (e.g., surgery, radiology, etc.)?
  • If multiple conversion factors are adopted, how large should the disparity be between different service groups?
  • Should the state use a single fee schedule for the entire state, or have different fee schedules for different regions?
  • How high or low should the fee schedule level be set?
  • How frequently should fee schedules be updated (e.g., relative values, list of procedures, etc.)?
  • How should medical services without assigned maximum allowable reimbursement rates be reimbursed?

Additionally, the state- and service group-level comparisons of the workers’ compensation fee schedules answer a common question that policymakers and stakeholders ask: “How does my state compare with other states?”

Designing Workers' Compensation Medical Fee Schedules, 2016. Olesya Fomenko and Te-Chun Liu. November 2016. WC-16-71.

Copyright: WCRI

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