The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) recently held a webinar to review findings from their Medical Service Cost Trends Through 2025 report. Healthesystems attended the webinar to capture key insights.

Medical costs in the California workers’ comp system are increasing due to a shift in spend towards medical-legal services, cumulative trauma (CT) claims, interpreter services, home health, and unlisted physician services These areas are all growing and are much harder to manage through traditional reimbursement controls, as they are often not controlled by fee schedules. The WCIRB has flagged these services as an area for further research and monitoring.

Medical-legal services now account for about 17% of all medical payments, and the recent growth is being driven more by utilization than reimbursement rates. Drivers include:

• More medical-legal evaluations per claim
• More cumulative trauma claims
• More CT claims involving medical-legal evaluations
• More record review charges tied to those evaluations

The presenters described medical-legal as one of the biggest workers’ compensation medical cost drivers right now. Medical-legal activity is a strong indicator that a claim is getting more complex and may need earlier clinical intervention, pharmacy coordination

Cumulative Trauma (CT) claims are increasingly driving system costs CT claims came up repeatedly as a driver of several cost trends. CT claims are driving:

• Medical-legal utilization
• Interpreter utilization
• Overall claim complexity
• Cost growth in Southern California

Interpreter services are still a relatively small share of total medical payments, but they are one of the fastest-growing categories. Costs have increased about 141% since 2020. Contributing factors include:

• Utilization nearly doubled
• Interpreter appointments are lasting longer
• There is no fee schedule cap
• Growth in CT claims is adding pressure

Home health costs have been increasing steadily since 2022, with workers over age 60 now accounting for more than half of all home health payments. Growth is occurring across multiple categories:

• Home health aides and skilled nursing
• Physical, speech, and occupational therapy

Several contributing factors were identified, include the aging workforce, a lack of fee schedule caps, workforce shortages and increasing utilization on a per claim basis.

Physician services are still the largest medical category, making up nearly half of all medical payments. One area to watch is procedure code 97799, which is used for unlisted physical medicine procedures, making up 20% of all physical medical payments, making it the main driver of physical medicine costs and growth.

These findings indicate that fee schedule management alone is not going to address the categories that are growing the fastest. This points to the need for predictive analytics, clinical review, ancillary oversight, and a more coordinated view of the whole claim.