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SB 863 Actually Increased California Medical Costs?

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California’s SB 863 – Unintended Consequences?

Did California’s SB 863 increase the Workers Comp medical costs for the state?

Workers Compensation Research Institute WCRI recently published a study that showed that California’s medical cost growth had slowed from 8% growth per year to 3% just before SB 863 was enacted.  When looking over WCRI’s  CompScope™ Medical Benchmarks for California, 14th Edition, the impact of the RBRVS adoption was noticeable.  

Picture Of Dollars Stethoscope SB 863 And Calculator
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According to WCRI  – “The moderating trend stemmed from the stabilization in utilization of nonhospital services and little change in prices paid for professional services. Hospital payments per inpatient episode continued to grow rapidly from 2006 to 2011.”

According to the study, the potential impact from the transition to a resource-based relative value scale (RBRVS) fee schedule would likely shift payments from specialty care to primary care, based on experiences from other states.

The study reported that in Maryland and Georgia, the prior transition to the RBRVS-based fee schedules led to increases in prices paid for office visits and physical medicine, and decreases in prices paid for surgical services.

One area that WCRI and other groups have documented is the very high level of medical-legal reviews on CA WC medical charges.   

There will be many updates in the next few months on the effect of Californias SB 863  on overall WC costs.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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