Medicare increases from 2017-24 drive comp costs in California: report

The California Workers’ Compensation Institute on Monday reported that the Official Medical Fee Schedule conversion factor as a percentage of Medicare for professional services increased a little more than 17% from 2017 to 2024, driving up the cost to treat injured workers.

Each section of the fee schedule uses rules to calculate payment and different inflation factors to update reimbursement rates under California’s comp system.

Fee schedules for inpatient services, outpatient and ambulatory surgery centers, ambulance services and durable medical equipment use Medicare’s inflationary factors and inflationary factors for these sections has been lower than general economic inflation, the report said.

But adjustments to the conversation factors used to calculate fees for professional services, which CWCI said account for 53% of medical payments in the state’s comp system, have not aligned with Medicare.

While Medicare suspended the use of the Medicare Economic Index as a measure of inflation in 2015 and adopted statutory changes set by Congress, California uses the Medicare Economic Index as mandated by statute.

WorkCompCentral is a sister publication of Business Insurance. More stories here.