The Role of Fee Schedules in Workers’ Compensation Claims Cost Management

Fee schedules are a key tool for managing and stabilizing future medical costs in workers’ compensation. By providing structure and predictability, they help ensure current medical expense reserves are accurate while also supporting more reliable long-term cost projections.

“Fee schedules can stabilize pricing for a physician or facility, which helps them decide if they will accept reimbursement before administering treatment,” said Karen Clifton, Cost Containment Director at Safety National. “Based on pricing, they will determine whether to accept the workers’ compensation rates or opt not to accept the insurance.”

Balancing Costs with Single-Case Agreements

Medical fee schedules are effective in most cases involving typical work-related injuries, where extensive data supports equitable and predictable pricing. For non-typical injuries, such as catastrophic claims or cases involving unforeseen complications, a single-case agreement with facilities or physicians is often more appropriate. Under this approach, the provider and carrier agree on a reimbursement amount in advance, ensuring pricing stability and eliminating unexpected costs for both parties. In addition, single-case agreements can strengthen collaboration between providers and carriers, facilitating more efficient cost management for future procedures or treatment, if necessary.

The Impact of State-Specific Adjustments

Certain states regularly update their fee schedules, but in others, updates are infrequent or require regulatory action. However, monitoring pricing data and adjusting reimbursements is a continued benefit for all parties involved, particularly when compared to jurisdictions without fee schedules, where pricing can be unpredictable and unstable. Pricing uncertainty can also create more billing disputes and administrative complications between providers, carriers, and employers. In several states, fee schedules continue to rely heavily on Medicare-based methodologies, with reimbursement levels reflecting changes to Medicare rates.

Overall, fee schedules are generally designed to control costs, ensure fair pricing, and prevent excessive medical bills for all parties involved. While statewide methods vary, the goal of fee schedules remains the same: to provide consistency, transparency, and predictability in workers’ compensation claims, particularly in complex or catastrophic cases.