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SELECTED INDICATORS IN WORKERS’ COMPENSATION:   A REPORT CARD FOR CALIFORNIANS

Another possible explanation for the differing trends in the average cost per report and the increasing frequency of the most complex examinations in Southern California is that psychiatric evaluations are more common in Southern California, although there has been a decrease in frequency for this region of 23 percent between 2001 and 2003.  Psychiatric examinations are nearly always billed under the ML-104 code that is the most expensive.

Medical-Legal Cost Calculation

Total medical-legal costs are calculated by multiplying the number of PPD claims by the average number of medical-legal examinations per claim and by the average cost per medical-legal examination.

Total Medical-Legal Cost

Number of PPD Claims * Average Number of Exams/Claim * Average Cost/Exam

Medical-Legal Costs

During the 1990s, the cost of medical-legal examinations improved dramatically. For the insured community, the total cost of medical-legal examinations performed on PPD claims by 40 months after the beginning of the accident year has declined from a high of $419 million in 1990 to an estimated $58.0 million for injuries occurring in 2003.  This is an 86 percent decline since the beginning of the decade.

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