California Senate Bill (SB) 863 included several provisions intended to improve the efficient delivery of high-quality medical care to injured workers. This report uses data from the California Worker's Compensation Information System and interactions with subject-matter experts to evaluate several of the individual provisions and the overall impact of Senate Bill 863 on medical care utilization and spending for injured workers in California.

Evaluation of California Senate Bill 863 Medical Care Reforms

Andrew W. Mulcahy, Barbara O. Wynn, Kandice A. Kapinos, Preethi Rao, Rosalie Malsberger, Brian Phillips, Spencer R. Case

ResearchPublished Sep 28, 2020

California Senate Bill (SB) 863 included several provisions that were intended to improve the efficient delivery of high-quality medical care to injured workers. This report evaluates several of the individual provisions, including a switch to physician and other practitioner payment based on a new resource-based relative value scale system (RBRVS), other fee schedule changes, and changes to the dispute resolution process. The authors examined data from the California Worker's Compensation Information System (WCIS) and used quasi-experimental methods to evaluate the overall impact of SB 863 provisions on medical care utilization and spending. The authors also conducted interviews with a convenience sample of medical experts, and held ongoing consultations with a technical advisory group. The report also addresses medical-legal evaluations, including the independent medical review (IMR) process, and other utilization review issues. Broadly, this research found no evidence that SB 863 increased expenditures.

Key Findings

Measures of number of injuries, utilization, and spending remained fairly constant through the implementation period

  • The number of injuries per year remained constant through the SB 863 implementation period.
  • Measures of total utilization and spending remained fairly constant within the first 12 months after injury from before to after the implementation of key SB 863 provisions.

For the most part, implementation of the new RBRVS went smoothly

  • Stakeholder interviews and the technical advisory group indicated that, for the most part, implementation of the RBRVS went smoothly.
  • Analyses of WCIS data focused on changes in utilization and spending that were due to RBRVS implementation. Spending increased in some specialties and decreased in others.
  • However, there were significant changes in certain specific service categories. Some of these may be attributed to how certain kinds of services were billed in response to the RBRVS.

Overall, this research found no evidence that SB 863 increased expenditures

  • Expenditures for certain types of settings and services declined more for injured workers than for a comparison group. Certain other inpatient expenditures increased.
  • However, the number of billed claim lines decreased overall for injured workers.
  • Relative value units increased, suggesting that, even though the number of claim lines may have decreased more for injured workers, the practitioner intensity per injury increased.

Recommendations

  • For ambulatory surgery center services, consider replacing the Outpatient Prospective Payment System–based fee schedule with an ambulatory surgery center–based fee schedule.
  • For medical-legal services, consider converting the allowance for an extraordinarily complex evaluation into a flat rate based on the complexity of the issues that need to be addressed by the evaluator. Also consider establishing policies that provide incentives for completing high-quality reports for parties requesting evaluations.
  • Continue monitoring trends in utilization and spending for different medical service categories.
  • Monitor trends in work-related outcomes for injured workers.
  • Pursue additional analyses comparing changes in outcomes for California injured workers with those for comparison groups, possibly including injured workers in other states or patients in California with injures that are not work related.

Topics

Document Details

  • Copyright: State of California Department of Industrial Relations
  • Publisher: RAND Corporation
  • Availability: Web-Only
  • Year: 2020
  • Pages: 236
  • DOI: https://doi.org/10.7249/RR2045
  • Document Number: RR-2045-DIR

Citation

RAND Style Manual
Mulcahy, Andrew W., Barbara O. Wynn, Kandice A. Kapinos, Preethi Rao, Rosalie Malsberger, Brian Phillips, and Spencer R. Case, Evaluation of California Senate Bill 863 Medical Care Reforms, RAND Corporation, RR-2045-DIR, 2020. As of October 11, 2024: https://www.rand.org/pubs/research_reports/RR2045.html
Chicago Manual of Style
Mulcahy, Andrew W., Barbara O. Wynn, Kandice A. Kapinos, Preethi Rao, Rosalie Malsberger, Brian Phillips, and Spencer R. Case, Evaluation of California Senate Bill 863 Medical Care Reforms. Santa Monica, CA: RAND Corporation, 2020. https://www.rand.org/pubs/research_reports/RR2045.html.
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This research was sponsored by the California Department of Industrial Relations and was conducted in the Justice Policy Program within RAND Social and Economic Well-Being.

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