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Medical-Legal costs likely to skyrocket under proposed changes to CA Medical Fee Schedule

Medical-Legal costs likely to skyrocket under proposed changes to CA Medical Fee Schedule

UPDATE: The new Fee Schedule has been approved and was effective April 1, 2021.The changes outlined hereafter are in effect for all evaluations set to take place on or after April 1, 2021.

Every claims adjuster has had at least one case in her career where it seems the medical file would require its own building; hundreds or even thousands of reports and subpoenaed records documenting a long history of lumbar spine complaints. New changes in the California Medical Fee Schedule are likely coming and those changes could require defendants to pay thousands of dollars for a doctor to review those records. Specifically, every page after page 201, at $3.00 per page. Yes, you read that right– $3.00 per page.

The Division of Workers’ Compensation (DWC) has posted proposed amendments to the Medical-Legal Fee Schedule to its online forum where members of the public may review and comment on the proposals. The DWC notes “[t]he implementation of a predominantly fixed fee for all procedure billing codes is anticipated to reduce frictional costs. Moving to a flat-fee-based schedule and removing complexity factors is contemplated to reduce the incidence of disputes over billing.” However, from a legal perspective, these new proposed regulations are troubling and although they may “reduce incidence of disputes over billing” they will pave the way for increased litigation in the form of lengthier and more costly discovery and substantial evidence disputes.

These proposed regulations add additional strategic considerations in the medical-legal process—considerations that will force defendants to weigh a cost benefit analysis of record review and billing by the medical-legal doctor and the accuracy of medical histories and medical reports that are “bullet proof” as substantial evidence.

What are some of the proposed changes?

There are a few changes being proposed but this article will discuss what RTGR considers the most immediate and instrumental.

  • The proposed Regulations will substitute a flat fee based system for the current hourly based system. The current system has “complexity modifiers” which adjust the hourly rate. However, under the new rules, the compensation for the medical-legal evaluator will start at a flat fee for the first 201 pages for a comprehensive evaluation. That 201 pages will fly by in a claim with multiple body parts, dates of injuries and/or a history of prior claims/injuries. After the 201st page, it is a $3.00 per page

In response to forum comments, the DWC noted: “The requirement to pay $3 per page for record review should incentivize carriers and attorneys to carefully select and count the records that are provided to the physician.”

Although the intent in this policy is noble, the effect will inevitably create more litigation around whether reports are substantial evidence.

  • ­Another change is the requirement of a declaration of Labor Code 4062.3 compliance in conjunction with a page attestation requirement.

Amended California Medical Legal Fee Schedule, California Regulation section 9793(n) will require that:

“Any documents sent to the physician for record review must be accompanied by declaration under penalty of perjury that the provider of the documents has complied with provisions of Labor Code section 4062.3 before providing the documents to the physician.”

Labor Code section 4062.3 is the Labor Code section requiring that information (including medical and non-medical records) which a party wants to send to a medical-legal evaluator, must first be served on the opposing party 20 days before the information is provided to the evaluator.

  • Back to a reading of the new California Medical Legal Fee Schedule, if there is no declaration that the records were sent to opposing counsel 20 days before being sent to the medical-legal evaluator, the doctor need not review the submitted records because they may not bill for them (Specifically, California Regulation section 9793(n) provides that “A physician may not bill for review of documents that are not provided with this accompanying required declaration from the document provider.”)

Section 9793(n) also requires a declaration of the pages provided, likely to prevent the doctor from having to track the amount of billable pages: “The declaration must also contain an attestation as to the total page count of the documents provided.” Further, failure to include the aforementioned attestation and declaration means the documents or records sent “shall not be considered available to the physician or received by the physician”.

If a declaration is not provided, and the doctor doesn’t review the medicals, then a supplemental report would be in order. The newly proposed Regulations fee for supplemental reports includes 50 pages of record reviews in a flat fee and then, again, a billable rate of $3 per page thereafter.

Where to go from here

In the past, it served defendants well to send the medical legal evaluator with all medical records relating to a claimant. Not only was it prudent in that it gave the doctor all information necessary for apportionment, it is arguably required under case law to assure a report is “substantial evidence.” However, in cases where there are voluminous medical records, the changes to the law will potentially add exorbitant costs to the medical-legal bill. So much that defendants will have to make decisions about not sending the entire medical file. This of course seems to juxtapose with the requirement that the medical-legal evaluator obtain an “accurate” medical history which could mean all medical records; or it could be interpreted as relevant medical records. Who makes this decision? These are some of the legal questions raised. There are also questions about when these requirements are implemented. The proposed regulations are likely to be adopted April 1, 2021. The question arises: are these changes retroactive or prospective—meaning, if an evaluation was already on calendar prior to April 1, 2021, but is not to take place until after April 1, 2021, is that evaluation subject to the new regulations?

Also, does “service” mean that a defendant is receiving updated medicals from the claims adjuster and is routinely serving them on counsel as they come in, can a defendant attest to that fact and will it be complaint?

At RTGR we are digging deeper into there changes and we are making changes to how we handle medical records, advocacy letters to the medical-legal doctors and service of medicals. If you have specific questions about these changes, please feel free to reach out to your local RTGR office. Each email address is sent to the lead Partner in that local.






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