Payments for Burn Patients Under California’s Official Medical Fee Schedule for Injured Workers

by Barbara O. Wynn, Giacomo Bergamo

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This study updates analyses from a 2003 RAND report examining Official Medical Fee Schedule (OMFS) payments for workers’ compensation burn discharges from acute care hospitals. Until January 1, 2004, burn cases were exempt from the OMFS maximum allowable fees for inpatient hospital care. These fees are based on 120 percent of the amount that would be payable under the Medicare prospective payment system for inpatient services. The 2003 RAND report concluded that the fees should be adequate using a Medicare-based fee schedule. SB 228 (Alarcón 2003) ended the exemption for burns cases. The California Hospital Association has raised concerns regarding losses being incurred by hospitals for workers’ compensation burn cases. Pending legislation would re-institute the OMFS exemption for inpatient stays involving extensive burns.

The research described in this report was prepared for the Commission on Health and Safety and Workers’ Compensation and the Division of Workers’ Compensation, California Department of Industrial Relations and was performed by the RAND Institute for Civil Justice and RAND Health.

This report is part of the RAND Corporation Working paper series. RAND working papers are intended to share researchers' latest findings and to solicit informal peer review. They have been approved for circulation by RAND but may not have been formally edited or peer reviewed.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.