DWC Establishes New Medical-Legal Fee Schedule - IEA Training

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DWC Establishes New Medical-Legal Fee Schedule

New Medical-Legal Fee Schedule

The Division of Workers’ Compensation (DWC) has created a new fee schedule for medical-legal services. The schedule has
been submitted to the Office of Administrative Law for approval with an effective date of April 1, 2021. Once approved, the
fee schedule applies to medical-legal evaluation reports when the examination occurs on or after April 1, 2021, medical-legal
testimony provided on or after April 1, 2021, and supplemental reports requested on or after April 1, 2021.

Fees Unchanged Since 2006

The DWC points out that fees were last changed in June 2006, and the rules relating to the fees were last amended in 2013.
It noted that since the medical-legal fee schedule was updated last, a substantial increase in the incidence of hourly billing
has occurred. One study found that the average QME currentl yearns 240 percent more from panel reports than in 2007.
The DWC did not believe the increase in hourly billing was matched by an increase in complexity of matters reviewed by
physicians. Moreover, it believed that the hourly billing system was vulnerable to abuse.

Flat Fees Increased – Hour Billing Provisions Eliminated

The purpose of the fee schedule was to increase the flat fee payments for medical-legal reports, and to eliminate the
increased hourly billing provisions. The DWC believed that a schedule based on a flat fee system would reduce fractional
costs, increase report quality and attract new physicians to the QME program.

Most often, hourly billing was driven by review of records. So, the new medical-legal fee schedule replaces hourly billing
for this task with a standard fee that includes a specified number of pages –– 200 for an evaluation or follow-up evaluation,
and an additional $3 per page above that threshold.

The medical-legal fee schedule eliminates consideration of complexity factors because the DWC believed that it led to
disputes about the proper application of them. Instead, it simply establishes fees for initial evaluations, follow-up evaluations
and supplemental reports. It establishes fees for medical-legal testimony, and review of sub rosa films. It also increases the
modifier for agreed medical evaluators from 25 percent to 35 percent, and establishes increased modifiers for psychiatrist,
psychologist, toxicologists and oncologists.

Analysis of the New Medical-Legal Fee Schedule

The new medical-legal fee schedule has the benefit of creating certainty for employers and insurers regarding the amounts
to be paid for medical-legal evaluations. Rather than relying on physicians to truthfully declare how much time they spent
reviewing records, defendants now can accurately predict the costs based on the type of report requested along with the
volume of records sent to the physician for review.

The added predictability in costs, however, has come with added responsibility for employers, insurers and their representatives.
Although one of the purposes of the medical-legal fee schedule is to contain costs, in some cases, particularly those involving
injured workers with a large volume of medical records, the costs for the evaluations could increase.

Because any significant increases in costs for medical-legal evaluations will be driven primarily by the total number of pages
reviewed, it will no longer be cost effective for defendants simply to refer all medical records to a medical-legal evaluator for
review. To keep medical-legal costs down, defendants must thoroughly review their records to determine which are actually
relevant and need to be reviewed by a medical-legal evaluator.

Also, if a defendant is driven to limit medical-legal costs, it must review any letters sent by injured workers’ attorneys to limit
the documents forwarded to a medical-legal evaluator for review. Defendants have the right to object to both medical and
non medical evidence being provided to a QME. (Suon v. California Dairies(2018) 83 CCC 1803 (WCAB en banc).) At the very
least, defendants must ensure that duplicate records are not being sent to a medical-legal evaluator for review.

Because disagreements probably will arise between the parties about documents that are relevant, defendants might need to
weigh the costs of forwarding records to a medical-legal evaluator for review against the costs of objecting to the records. So,
although the new medical-legal fee schedule provides defendants an opportunity to control medical-legal costs, it could result
in more disputes about which records should be reviewed by a medical-legal evaluator.

The regulations are available on the DWC website.