Designing Workers’ Compensation Medical Fee Schedules, 2019

By Olesya Fomenko, Te-Chun Liu

May 9, 2019 Related Topics: Fee Schedules

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 44 states with fee schedules and the District of Columbia have resolved these choices, as of February 2019. This study also includes a discussion of the substantial fee schedule changes for professional medical services since March 2016, which was covered by the previous edition of the study.

According to the study, the fee schedule level is very important. If fee schedule rates are set too high, savings will be negligible and the fee schedule will not achieve its cost containment goal. Conversely, setting rates too low makes treating injured workers uneconomical for providers and jeopardizes workers’ access to quality care. 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, 2019. Olesya Fomenko and Te-Chun Liu. May 2019. WC-19-23.

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Research Questions:

  • 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.)?
  • 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?

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