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.
IEA’s CPDM1 Course Newly Updated
IEA’s has announced the launch of its newly updated CPDM1 Course.
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Covid and The Courts –
What Will it Mean for Workers Compensation?
A series of recent lawsuits might give employers a sneak peak into how the courts may handle workers’ compensation
litigation in the evolving era of the Covid-19 pandemic.
In the past three months major corporations such as Amazon, Walmart, and fast-food giant McDonalds have responded
to lawsuits stemming from alleged inadequate implementation of, and adherence to, public health directives aimed at
protecting the workforce against the spread of the virus.
In the case of Amazon, three Staten Island warehouse workers have sued the giant corporation for failing to adhere to
public health guidelines thus causing injury and death to employees and their families. Plaintiffs seek an injunction
requiring Amazon to comply with public health guidelines as well as an order that would declare the company a public
In April, a wrongful death suit was filed against Walmart by the family of a deceased employee who died from
complications of Covid-19. Plaintiffs assert that there were several employees who displayed symptoms and
that another employee died a few days later.
Fast food Giant McDonalds faces a lawsuit from a group of Chicago workers over whether the company adhered
to expert guidance on how to protect its workforce from the spread of Covid 19. The court entered a preliminary
injunction requiring McDonald’s to enforce mask wearing policies and provide social-distance training.
What Will it Mean for Workers’ Compensation?
As the courts are just beginning to respond to such lawsuits it remains to be seen how the gavel will fall in terms of
courts’ and juries’ sympathies. But given the unpredictable and potentially devastating financial impact of trial
outcomes, it seems abundantly prudent that employers take actions to ensure that public health directives such
as compulsory mask wearing, and social distancing, are stringently upheld even when states do not mandate the
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Return to Work issues in the wake of Covid-19
Back in 2010, the WCRI published a study (Recession, Fear of Job Loss, and Return to Work) which posed the question as to what the impact
of a doubling of the unemployment rate would have on longer term unemployment. For the purposes of the study, longer-term was defined as
a duration of 2.5 years after an injury. When the study was originally published, most of us could not have foreseen the Covid-19 pandemic,
or the shuddering effects of an economy that ground to a halt at breakneck speed.
The on-going impact of the pandemic has resulted in millions of vulnerable jobs and countless shuttered businesses, some of which may never
reopen. With an eye to the inevitable and immediate trickle down impact on workers’ compensation, a recent WCRI blog piece returned
to the 2010 study as a reference point to explore how recession from the economic fallout of COVID-19 can potentially affect return-to-work
programs. The study explored the effect of a doubling of the unemployment rate during a recession and its findings
indicate the following:
Long-term unemployment rate increases from 14.7 to 18.7% when the unemployment rate is doubled. Unsurprisingly, the scarcity of
work opportunities in a recession increases the likelihood of long term unemployment.
The rate of fear of job loss in injured workers increases from 35.5 to 51.3% when the unemployment rate is doubled. If an injured worker
fears the loss of employment there is a greater chance of premature return to work which in turn increases the potential for re-injury.
The WCIRB blog piece cites the biggest difference between this potential recession and prior recessions: COVID-19 resulted in a rapid
stalling of the economy following closures of bars, restaurants, concerts, sports events etc. The economy fell off a proverbial cliff causing a more
profound effect as employment possibilities become very scarce, very quickly. If the economy reboots quickly there will be a lessening effect on
long-term unemployment. The huge numbers of vulnerable jobs, the shuttering of business that may never reopen, and the uncertainty of the
timeline for a re-boot makes for challenging times ahead for workers’ compensation programs.
Ref Sources: WCRI Workers Compensation Research Institute