The Division of Workers’ Compensation (DWC) has created a new fee schedule for medical-legal services. The California Code of Regulations, Title 8, 9793, 9794 and 9795 are being revised. The regulations are available on the DWC website.

The new medical-legal fee 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.

In adopting a new fee schedule, the DWC explained that the 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 currently earns 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.

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 frictional 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.

Fees Under the Medical-Legal Fee Schedule

CCR § 9795 establishes the fees for medical-legal evaluations. They are:

  • Missed Appointments: $503.75. This fee includes instances in which the injured worker does not show up for the evaluation; the interpreter does not show up for the evaluation (making it impossible to proceed with the exam); the injured worker leaves the evaluation before completion; the injured worker is more than 30 minutes late for the appointment, and the QME can’t accommodate the delay; or if the appointment has been canceled within six business days of the scheduled appointment date.If the physician produces a record review report within 30 days of the date of the missed appointment, he or she is entitled to reimbursement at the rate of $3 per page for any records reviewed in excess of 200 pages. Any pages reviewed for this record review report must be excluded later from the page count for reimbursement when the face-to-face or supplemental evaluation takes place.If fees for failed appointments and for late cancellations are incurred through the fault or neglect of the injured worker or his or her representative, the employer may seek to credit those charges against the worker’s award.
  • Comprehensive Medical-Legal Evaluation: $2,015. This covers all medical-legal evaluations that do not qualify as follow-up or supplemental medical-legal evaluations. The fee includes review of 200 pages of records. Review of records in excess of 200 pages will be reimbursed at the rate of $3 per page.
  • Follow-up Medical-Legal Evaluation: $1,316.25. This is defined as a follow-up medical-legal evaluation by a physician that occurs within 18 months of the date on which a prior comprehensive medical-legal evaluation was performed by the same physician. The fee includes review of 200 pages of records that were not reviewed as part of the initial comprehensive medical-legal evaluation or as part of any intervening supplemental medical-legal evaluations. Review of records in excess of 200 pages will be reimbursed at the rate of $3 per page.
  • Supplemental Medical-Legal Evaluations: $650. The fee includes services for writing a report after receiving a request for a supplemental report from a party or receiving records that were not available at the time of the initial or follow-up comprehensive medical-legal evaluation. The fee includes review of 50 pages of records. Review of records in excess of 50 pages that were received as part of the request for the supplemental report will be reimbursed at the rate of $3 per page.Fees will not be allowed for supplemental reports: (1) for a physician’s review of information that was available in the physician’s office for review or was included in the medical record provided to the physician prior to preparing a comprehensive medical-legal report or a follow-up medical-legal report; or (2) addressing an issue that was requested by a party to the action to be addressed in a prior comprehensive medical-legal evaluation, a prior follow-up medical-legal evaluation or a prior supplemental medical-legal evaluation.Failure to issue a supplemental report on request because of an inability to bill for the report under this code would constitute grounds for discipline by the administrative director or his or her designee.
  • Medical-Legal Testimony: $455 per hour. The physician will be reimbursed at $455/hour, or his or her usual and customary fee, whichever is less, for each quarter hour or portion thereof, rounded to the nearest quarter hour. The physician is entitled to fees for all itemized reasonable and necessary time spent related to the testimony, including reasonable preparation and travel time. The physician shall be paid a minimum of two hours for a deposition. If a deposition is canceled fewer than eight calendar days before the scheduled deposition date, the physician shall be paid a minimum of one hour for the scheduled deposition.
  • Review of Sub Rosa Recordings: $325 per hour. The physician will be reimbursed at $325/hour, or his or her usual and customary hourly fee, whichever is less, for each quarter hour or portion thereof, rounded to the nearest quarter hour, for time spent reviewing sub rosa recordings. The physician must include in his or her report verification, under penalty of perjury, of time spent reviewing sub rosa recordings. The fee for reviewing such recordings may be allowed in addition to any fee for any single report written by the physician as a result of the review of the sub rosa recordings. If these recordings are received by a physician prior to the issuance of a pending report related to a medical-legal evaluation, he or she may not also bill a supplemental report fee in connection with the review of the sub rosa material.

Modifications for Interpreters and Specified Physicians

The medical-legal fee schedule contains several modifiers related to interpreters and the type/specialty of physician performing the evaluation.

  • Interpreter: If an interpreter is needed at time of examination, or other circumstances that impair communication between the physician and the injured worker significantly increase the time needed to conduct the examination, the value of services at an evaluation is increased by 10 percent.
  • Agreed Medical Evaluator: For evaluations performed by an agreed medical evaluator (AME), the value of services is increased by 35 percent. If an interpreter is needed for an evaluation performed by an AME, the value is increased by 45 percent.
  • Psychiatrist or Psychologist: When a psychiatric or psychological evaluation is the primary focus of the medical-legal evaluation, the value of services is increased by 100 percent, or doubled. If an interpreter is needed for an evaluation, the value is increased by 110 percent. If the psychiatrist or psychologist is also an AME, the value is increased by 135 percent. If an interpreter is needed for an evaluation and the evaluator is an AME, the value is increased by 145 percent.
  • Toxicologist: When toxicology is the primary focus of the medical-legal examination, a physician who is certified as a QME in the specialty of internal medicine or a physician who is board certified in internal medicine the value of services is increased by 50 percent. If an interpreter is needed for an evaluation, the value is increased by 60 percent. If the evaluator is also an AME, the value is increased by 85 percent. If an interpreter is needed for an evaluation and the evaluator is an AME, the value is increased by 95 percent.
  • Oncologist: When an oncology evaluation is the primary focus of the medical-legal evaluation, a physician who is certified as a QME in the specialty of internal medicine or a physician who is board certified in internal medicine will increase the value of services by 50 percent. If an interpreter is needed for an evaluation, the value is increased by 60 percent. If the evaluator is also an AME, the value is increased by 85 percent. If an interpreter is needed for an evaluation and the evaluator is an AME, the value is increased by 95 percent.
  • Evaluations Ordered by the Court: If a medical-legal evaluation is ordered by an administrative law judge or court of competent jurisdiction, the judge has the authority to apply the appropriate modifier to that medical-legal evaluation for purposes of billing.

Required Verifications/Declarations

Because the medical-legal fee schedule changes the billing for medical-legal reports from one based on hourly billing to one based on a flat fee with additional sums for record review, the regulations require physicians to include in the report a verification under penalty of perjury of the total number of pages of records they reviewed as part of the medical-legal evaluation and preparation of the report.

In addition, parties must issue declarations prior to sending records to a physician for review. CCR 9793(n) requires a party to attach a declaration under penalty of perjury to any document sent to a physician for review declaring that it has complied with the provisions of Labor Code § 4062.3 before providing the documents to the physician. LC 4062.3 establishes the rules for communicating and providing information to AMEs and QMEs. Furthermore, a party’s declaration must contain an attestation of the total page count of the documents provided.

A physician may not bill for review of documents that are not provided with this declaration from the document provider. Any documents or records sent to the physician without the required declaration and attestation must not be considered available to the physician or received by the physician for purposes of any regulatory or statutory duty regarding records and report writing.

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 nonmedical 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.