Why Your Workers’ Comp Bills Are Getting Paid at 30–40% of OMFS (And How to Fix Underpayments Fast)
If your workers’ comp billing revenue feels lower than expected, the issue may not be volume — it may be underpayment.
In California Workers’ Compensation, many providers receive only 30–40% of the Official Medical Fee Schedule (OMFS) due to billing errors, PPO reductions, or missed appeals. What makes this more challenging is that most of these claims are marked as “paid,” giving a false sense of closure.
The reality is simple:
you are getting paid — just not correctly.
The Hidden Nature of Workers’ Comp Underpayments
Unlike denials, underpayments don’t trigger immediate attention.
A claim may appear resolved:
- Payment is received
- EOB is posted
- Account is closed
But when reviewed against OMFS, the reimbursement often falls short.
Over time, these small discrepancies compound into significant revenue loss, especially in high-volume practices.
Why Workers’ Comp Bills Are Underpaid
There is rarely a single cause. Most underpayments come from a combination of systemic and operational gaps.
- Incorrect PPO Reductions
Networks such as First Health or Anthem Workers’ Comp may apply discounts that do not align with OMFS or valid contractual terms.
In many cases:
- No enforceable contract exists
- Or the reduction exceeds allowed limits
This leads to payments far below expected reimbursement.
- Bundling and Downcoding
Procedures like:
- Fluoroscopy (CPT 77003)
- Sedation services
- Supplies and ancillary charges
are frequently bundled or reduced without clear justification.
Without proper review, these reductions go unchallenged.
- Payments Issued but Not Reconciled
A common issue with TPAs is payment misrouting.
For example:
- Payment issued to another vendor
- Incorrect provider mapping
- Check posted without matching the correct DOS
This creates a mismatch between payer records and your system.
- Missed SBR and IBR Timelines
Under California Workers’ Comp rules:
- Second Bill Review (SBR) must be filed within 90 days
- Independent Bill Review (IBR) follows if SBR fails
If these timelines are missed, the opportunity to recover underpaid amounts is lost — regardless of merit.
- Lack of DOS-Level Tracking
Many practices track payments at the check level instead of the date of service (DOS) level.
This results in:
- Partial payments going unnoticed
- No clear visibility into underpaid services
How to Identify Workers’ Comp Billing Underpayments
Identifying underpayments requires a structured approach, not just payment posting.
Start with the basics:
- Compare paid amounts directly against OMFS
- Review EOB adjustment codes carefully
- Track every claim by individual date of service
- Flag any discrepancies immediately
- Monitor SBR filing deadlines consistently
This process alone can uncover a significant amount of missed revenue
A Practical Example
In one recent audit, a provider’s account showed consistent payment activity and appeared stable.
However, a detailed review revealed multiple dates of service that were only partially reimbursed. These were not flagged internally because payments had already been posted.
After initiating SBR on eligible claims:
- Several underpayments were corrected
- A substantial portion of lost revenue was recovered within a short period
This is not uncommon. Most practices are not underbilling — they are under-collecting.
How to Fix Workers’ Comp Underpayments
Improving collections in workers’ comp billing does not require increasing patient volume. It requires tightening your billing process.
1. Audit Against OMFS, Not Just Payments
Always validate reimbursement against the fee schedule, not just whether a payment was received.
2. Track Claims by Date of Service
Each DOS should have a clear status:
- Paid correctly
- Underpaid
- Pending review
3. File SBR and IBR Within Deadlines
Timely action is critical. Even valid claims cannot be recovered once deadlines pass.
4. Validate PPO Contracts
Do not assume every reduction is legitimate. Confirm contract applicability and terms.
5. Strengthen Follow-Up Systems
Workers’ comp billing requires active follow-up, including escalation when necessary.
Final Thoughts
Workers’ Compensation billing is often treated as complete once payment is received.
In reality, that is only part of the process.
The difference between average and optimized collections lies in:
- Accuracy of reimbursement
- Timeliness of review
- Consistency of follow-up
For many providers, the problem is not billing — it is visibility and control after submission.
Request a Free Workers’ Comp Billing Audit
If you are unsure whether your reimbursements align with OMFS, a focused review can provide immediate clarity.
We offer a free workers’ comp billing audit to identify:
- Underpaid dates of service
- Missed SBR opportunities
- Incorrect PPO reductions
This is a practical way to understand where revenue may be slipping — and how to recover it.
About Medrina Technology Management
Medrina Technology Management specializes in workers’ compensation billing services, including denial resolution, SBR/IBR processing, and aged A/R recovery.
Our focus is simple:
maximize reimbursement while maintaining compliance and accuracy.
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This illustrates why a strong billing and collections strategy—like those discussed in our guide to mastering Work Comp billing and collections—is more vital than ever
To tighten your practice’s billing workflow, consider the enhancements we recommend to refine operations and strengthen revenue flow.
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