Overall, there was a cumulative 8% reduction in medical payments per claim from CY2015 through CY2017, comparable to the cumulative two-year reduction (10%) from CY2014 to CY2016 (Table 1). The decline in paid per claim was largely driven by the declines in utilization (e.g., paid transactions per claim declined by 8%).
The downward trend reflects a continuation of the savings generated by the reforms to the medical care delivery enacted by Senate Bill No. SB 863 in 2012, anti-fraud efforts and the continued sharp decline in pharmaceutical costs.
There were sharp declines in the average paid per transaction for pharmaceuticals (24%), pharmacies (28%) and pharmacists (27%) since 2015. This continues to be a result of reductions in the prescribing of controlled substances, reduced physician office dispensing, implementation of the Federal Upper Limits on prescription drug prices, as well as the continued shift from brand to generic drugs. (These reductions pre-date the implementation of the new drug formulary implemented in January 2018 pursuant to Assembly Bill No. 1124).
There were sharp decreases in the share of workers' compensation claims with any opioid prescription from 18.2% in 2015 to 11.6% in 2017. The medical payments on the claims with at least one opioid prescription were, on average, more than three times higher than those on the claims without opioid prescriptions.
Common non-opiate analgesics and topicals, Topical Corticosteroids, and other medications sometimes used to relieve pain such as Anticonvulsants and Central Muscle Relaxants experienced a combined increase of 4.8%. On the other hand, Opioid Agonists, Opioid Partial Agonists and Opioid Combinations totaled a 2.8% decrease in their share of pharmaceutical payments from CY2016 to CY2017.
There was a significant change in the mix of Medical-Legal (ML) services in 2017. The share of ML104 (the most comprehensive and expensive service) transactions declined by 22.7%, while that for ML102 (the most basic ML evaluation) increased by 42.6%. This resulted in an 8% decline in the average cost of a medical-legal report in 2017 following a number of years of increases.
The procedure code set related to Physical Medicine and Rehabilitation was the greatest gainer between CY2016 and CY2017 and received the second largest amount of payments (21.7%). The Office or Other Outpatient Services continued to grow, and received the largest amount of payments (33.5%).