SB 668 amends Labor Code §5307.6 to make the Division of Workers’ Compensation’s (DWC) medical‑legal fee schedule a regularly updated, cost‑informed standard. The administrative director must adopt and revise the schedule when they revise the medical fee schedule under §5307.1 and, in any event, at least every two years; the bill expressly authorizes biennial adjustments driven by an evaluation of medical practice costs.
The bill also tightens payment and enforcement mechanics: providers cannot collect more than the schedule without itemizing and justifying extraordinary circumstances, employers and employees can contest charges, judges can award reasonable testimony fees under limited conditions, and providers risk disciplinary action and licensing sanctions if they accept additional compensation beyond authorized fees. For compliance officers and payers, the change creates a predictable cadence for fee updates while introducing new administrative and evidentiary requirements for out‑of‑schedule charges.
At a Glance
What It Does
SB 668 requires the administrative director to adopt and revise a medical‑legal fee schedule at the time the medical treatment fee schedule is revised and, at minimum, every two years. It explicitly authorizes biennial adjustments based on an evaluation of medical practice costs informed by the Medicare Economic Index, including conversion factor and per‑page record‑review costs.
Who It Affects
The rule targets physicians and other providers who perform medical‑legal evaluations, employers and their workers’ compensation carriers who pay those fees, and the DWC administrative director charged with setting and adjusting the schedule. Licensing boards and judges also gain specified roles in enforcement and disputes.
Why It Matters
The bill replaces ad hoc rate setting with a recurring, data‑driven review mechanism intended to align medical‑legal pay with underlying practice costs while preserving a clear limit on recoverable fees. That combination raises the stakes for fee petitions, documentation practices, and DWC resource planning.
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What This Bill Actually Does
Under SB 668, the administrative director must keep a medical‑legal fee schedule that functions as prima facie evidence of reasonable fees for evaluations used in contested workers’ compensation claims. The schedule will list procedure codes, assign relative values, and apply a conversion factor to translate value into dollars.
The bill ties the schedule’s timing to the broader medical fee schedule (Section 5307.1) so that both move together, and it requires review at least once every two years.
The bill gives the administrative director an explicit, recurring authority to adjust the schedule every two years after assessing actual medical practice costs. The statute points to specific cost inputs to consider — increases in the conversion factor and per‑page costs for record review — and directs use of the most current Medicare Economic Index as an informing data source.
That creates a formal, repeatable method for aligning fees with factors that drive physicians’ overhead when performing medical‑legal work.On payments and disputes, SB 668 limits out‑of‑schedule recoveries. Providers may charge above the schedule only if they submit an itemized justification showing the fee is reasonable and that extraordinary circumstances tied to the claimant’s condition make a higher fee necessary; even then, charges cannot exceed the provider’s usual (customary) fee.
Employers and injured workers have standing to contest excessive fees, and judges or referees may allow reasonable testimony fees if a provider is subpoenaed and the tribunal finds the charge justified by extraordinary circumstances.Finally, the bill closes off indirect compensation pathways: providers cannot accept additional remuneration (discounts, rebates, subsidies, etc.) beyond the authorized fees for medical‑legal expenses. Violations can trigger discipline under Section 139.2(k) and action by the provider’s licensing board; the statute preserves an exception for medical‑legal expenses that lack an adopted fee schedule.
Collectively, these changes standardize timing, require cost validation for upward adjustments, and sharpen enforcement tools for payers and regulators.
The Five Things You Need to Know
The administrative director must adopt and revise the medical‑legal fee schedule when they adopt/revise the medical treatment fee schedule under §5307.1 and, in any case, at least once every two years.
The fee schedule must be composed of procedure codes, relative values, and a conversion factor designed to remunerate medical‑legal work at levels comparable to similar physician work while accounting for complexity and report preparation.
Every two years the administrative director may (and, by implication, must through the review cadence) adjust the schedule based on an evaluation of medical practice costs, explicitly considering conversion‑factor changes and the per‑page cost of reviewing records using the Medicare Economic Index as a guide.
Providers may bill above the schedule only with an itemized explanation proving the fee is reasonable and justified by extraordinary circumstances; charges still cannot exceed the provider’s usual fee, and employers and employees may contest such bills.
The bill bars providers from receiving additional compensation (discounts, rebates, subsidies, etc.) tied to medical‑legal expenses and makes violations subject to disciplinary sanctions under §139.2(k) and by the applicable licensing board.
Section-by-Section Breakdown
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Mandatory, synchronized adoption and minimum cadence
This subsection requires the administrative director to adopt a medical‑legal fee schedule that serves as prima facie evidence of reasonable fees and to time that adoption with revisions to the medical treatment fee schedule under §5307.1. It also imposes a backstop: even if the medical fee schedule isn’t being revised, the medical‑legal schedule must be updated at least every two years. Practically, that forces the DWC to institutionalize a regular update cycle rather than leave adjustments to discretionary timing.
Schedule design: codes, relative values, conversion factor
This provision prescribes the construction of the schedule: a list of procedure codes paired with relative values and a conversion factor that converts those values into dollar fees. The statutory language ties reimbursement to the concept of parity — remuneration should align with similar physician work — while requiring recognition of evaluation complexity, direct patient time, and written report preparation. For compliance teams, this is the operative definition of what the schedule must reflect when DWC sets values and the conversion factor.
Biennial cost evaluation and data inputs
New language authorizes the administrative director to adjust the schedule every two years based on an evaluation of medical practice costs. The statute specifically names increases in the conversion factor and the per‑page cost of reviewing records as inputs and instructs reliance on the most current Medicare Economic Index to inform those judgments. That ties fee adjustments to an external economic index and creates a repeatable analytic frame, but it leaves room for agency judgment about how to weight different cost drivers.
Limits on out‑of‑schedule billing and contest/remedy mechanics
These subsections require providers to submit detailed itemizations and explanations to justify fees above the schedule and caps recovery at the provider’s usual fee even when justified. They also grant employers and employees standing to contest excess fees and allow tribunals to award reasonable testimony fees where a provider testifies under subpoena and the tribunal finds the charge reasonable and tied to extraordinary circumstances. Operationally, this raises the evidentiary bar for billing above the schedule and routes disputes into the workers’ compensation adjudicatory process.
Ban on additional compensation and disciplinary enforcement
This subsection forbids providers from requesting or accepting any compensation beyond the authorized fee for medical‑legal expenses — including discounts, rebates, or subsidies — and ties violations to disciplinary action under §139.2(k) and to licensing boards. It also clarifies that the ban doesn’t apply where no fee schedule exists. The practical implication is heightened exposure for providers who use indirect payment arrangements, and it gives both DWC and licensing authorities enforcement leverage.
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Who Benefits
- Employers and insurance carriers — gain predictable, time‑bound fee updates and a clear statutory ceiling, which simplifies budgeting and reduces surprise outlays for medical‑legal evaluations.
- Division of Workers’ Compensation/DWC administrative director — receives an explicit statutory framework and data sources (Medicare Economic Index) to justify fee adjustments and defend rates in stakeholder negotiations or litigation.
- Claims examiners and compliance officers — benefit from clearer criteria for approving or contesting medical‑legal bills, and from standardized requirements for itemization and evidence when fees exceed the schedule.
Who Bears the Cost
- Medical‑legal providers (physicians, evaluation clinics) — face stricter limits on out‑of‑schedule compensation, a prohibition on indirect payments, and renewed documentation burdens to justify higher fees.
- Provider licensing boards and disciplinary systems — likely to see increased enforcement obligations and casework if DWC refers or licensing boards act on alleged improper compensation arrangements.
- DWC and administrative staff — must perform biennial cost evaluations and update schedules using specific economic indices, imposing analytical, administrative, and possibly budgetary costs on the agency.
Key Issues
The Core Tension
The bill balances cost containment and predictability for employers and carriers against the need to adequately compensate physicians for complex, documentation‑heavy evaluations; it solves predictability by tying rates to a biennial, index‑informed process but risks undercompensating providers if the chosen indices and inputs fail to capture real‑world, specialty‑specific overhead — creating a trade‑off between fiscal control and provider participation/quality.
SB 668 tries to square two competing administrative goals — predictable, controllable pay rates for payers and fair compensation for physicians performing time‑intensive, report‑heavy work — by creating a recurring, index‑informed review rather than a fixed cap. That approach improves transparency but leaves several operational gaps.
The statute names the Medicare Economic Index and a couple of specific cost inputs (conversion factor and per‑page record review) but does not explain how the administrative director must weight those inputs, whether other overhead categories count, or how to handle regional cost variation for examiners who maintain multiple offices.
The bill also tightens enforcement through documentation, contest rights, and licensing sanctions, which will push more disputes into administrative hearings. The requirement that out‑of‑schedule charges be both itemized and tied to “extraordinary circumstances” is conceptually clear but practically vague: tribunals will need to develop standards for what counts as extraordinary and what an adequate itemization looks like.
That uncertainty could increase litigation and create a transitional burden on judges and referees. Finally, forbidding indirect compensation may close abusive payment channels but may also prompt providers to raise baseline fees or withdraw from medical‑legal work if the schedule’s conversion factor lags actual practice costs, a risk especially acute in high‑overhead specialties.
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