Designing Workers’ Compensation Medical Fee Schedules, 2022

By Olesya Fomenko, Te-Chun Liu

June 28, 2022 Related Topics: Fee Schedules

As policymakers seek to implement or change price controls in their state workers’ compensation system with a fee schedule, this study highlights the important design choices faced in adopting, reforming, and updating them.

The construction of a medical fee schedule in workers’ compensation involves a delicate balance. Setting rates too low may make treating workers uneconomical for providers and jeopardizes workers’ access to quality care. Conversely, if rates are set too high, savings will be negligible and the fee schedule will not achieve its cost containment goal.

The study shows how the 44 states with fee schedules and the District of Columbia have resolved these fee schedule design choices, as of March 31, 2022. The study also includes a discussion of the substantial fee schedule changes for professional medical services since February 2019. 

Designing Workers’ Compensation Medical Fee Schedules, 2022. Olesya Fomenko and Te-Chun Liu. June 2022. WC-22-21.

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Research Questions:

• How high or low should the fee schedule level be set?
• How frequently should fee schedules be updated (e.g., relative values, list of procedures, etc.)?
• Should the fee schedule be based on the relative value units of different professional medical services, or based on some other metric (e.g., historical charges or usual and customary charges)?
• If based on relative value units, should the fee schedule for physician services use the relative values developed for the Medicare program or some other relative value scale?

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