ICYMI
Those familiar with workers’ compensation know that fee schedules make a difference in costs — and certainty regarding them. So, it’s probably not surprising that 43 jurisdictions have nonhospital fee schedules.
But what happens when there isn’t a fee schedule and how does that affect expenditures? In a recent WCRI webinar, economist Dr. Olesya Fomenko covered findings from her research on what’s been happening since 2019 in workers’ comp across the country when devices and services aren’t included in a fee schedule.
Here a few key takeaways.
DMEs
In Dr. Fomenko’s research, half of the durable medical equipment devices did not have an assigned fee schedule rates, and use of DME services outside fee schedules increased between 2019 and 2025 to the point where, by 2025, 63% of payments for DMEs were without fee schedules.
What made up most of the DMEs without fee schedules? Dr. Fomenko reported that a small number of codes accounted for much of the expenditure and utilization, with E1399 (durable medical equipment, miscellaneous) account for 44% and 36% of each, respectively.
Dr. Fomenko noted that a main driver for fee schedule gaps occurs when there is no Medicare coverage of the device or service and where fee schedules haven’t been updated
State Variations
Digging into individual states shows that not all states share the same experience when it comes to DME payments. For example, Dr. Fomenko noted that Arizona, Florida, Massachusetts, and New York had decreases over 20 percentage points in payments outside of fee schedules from 2019 to 2025 because:
(1) Arizona and Florida had fee schedule updates for many DME codes.
(2) Massachusetts established a fee schedule rate for E1399, the most commonly billed DME code, which is intended to be a catch-all for when no other code applies.
(3) New York established a prior authorization requirement for DME devices without a fee schedule rate, which led to a “sharp reduction” in frequency of E1399 utilization.
Professional Services
In addition to equipment, Dr. Fomenko explained that professional services also show what happens when there is a lack of fee schedule rates, with Rhode Island leading the country for services without fee schedule rates at a 38% share.
Regarding what services lead the way, in 2025, Fomenko’s research showed that the leading expenditures came from:
(1) Neurological/neuromuscular testing
(2) Pain management injections
(3) Physical medicine
(4) Major surgery
The bottom line is two-fold: (1) non-fee schedule services are, on average, more expensive than
services with fee schedule rates; and (2) use of and payments for these services have increased from 2019 to 2025, contributing to the recent growth in workers’ compensation medical payments.
Lesson
Ultimately, what falls outside the fee schedule matters just as much as what falls within it. WCRI’s findings suggest that growing utilization of unpriced devices and services is contributing to rising workers’ compensation medical costs, while states that address fee schedule gaps are seeing measurable results.
