An orthopedic practice we work with sees a steady stream of injured workers from two warehouses and a food processing plant. For years the front desk registered those patients like everyone else: name, date of birth, insurance card. Except there is no card. The staff typed "Workers Comp" into the payer field, sent a CMS-1500 to whatever address the patient remembered, and waited. Average days to payment on that book of business was 94. About one bill in five was never paid at all.
Nothing about those patients was unusual. What was unusual was treating a workers' compensation claim like a commercial claim. It is not one. The payer is an employer's carrier or a third-party administrator, the rules come from a state agency rather than a contract, the patient owes nothing, and every bill travels with a report the state prescribes. Once the practice built a separate intake and billing path, the same claims paid in about a month.
This article is an operating guide to workers' compensation billing for medical practices: what to collect before the first visit, how authorization works, how state fee schedules and filing limits differ from what your billers know, the forms that accompany the bill, and how to read the denials.
Key takeaways
- A workers' compensation (WC) claim is paid by the employer's carrier or self-insured employer under state law; the injured worker is never billed, and there is no deductible, copay or coinsurance.
- Four fields decide whether the bill will pay: the claim number, the date of injury, the accepted body parts and the adjuster's contact, and all four should be captured before the visit.
- Payment follows the state fee schedule (in most states a Medicare-based schedule with its own conversion factors and ground rules), not your commercial contracts, and the state also sets the filing deadline and the appeal path.
- Most states require a prescribed medical report with the bill, such as California's Doctor's First Report and PR-2 or New York's narrative attached to the CMS-1500, and a bill without the report is treated as incomplete.
- Treatment beyond the initial visit usually needs authorization through a state process, and a denied claim may have to be billed to the patient's health plan with the WC denial attached.
What to capture before the first visit
The intake conversation for an injured worker has nothing to do with an insurance card. The scheduler needs the employer's name, the date of injury, how it happened, the carrier or third-party administrator (TPA, the company that handles claims for a self-insured employer), the claim number if assigned, and the adjuster's name and phone number. If the patient does not know the carrier, the employer's human resources office does, and one call before the appointment saves weeks later.
Two more questions matter. First, has the claim been accepted? A carrier can accept the claim, deny it, or hold it under investigation, and several states require payment for reasonable treatment during the investigation (California makes the employer liable for up to $10,000 of treatment while the claim is under review). Second, which body parts are accepted? A claim accepted for a right shoulder does not pay for the low back pain the patient mentions at visit three unless the claim is amended.
Where the state uses provider networks, check the network before scheduling. In California, an employer with a medical provider network (MPN) can refuse to pay a physician outside it; Texas has certified networks with similar rules. Your practice management system needs a WC payer record per carrier, with the state, the network status and the billing address, rather than a single catch-all "Workers Comp" plan.
Authorization: who says yes, and how fast
In commercial insurance, prior authorization is a payer policy. In workers' compensation it is a state procedure with deadlines on both sides. California uses a Request for Authorization (DWC Form RFA) that the treating physician submits with the supporting report; the claims administrator must run utilization review and respond within five business days for a prospective request. Texas publishes a list of services that require preauthorization (surgery, most imaging beyond plain films, physical therapy beyond an initial course, and others) in its rules, and services on the list that were not preauthorized are not payable. New York routes requests through the Board's OnBoard system as a Prior Authorization Request, with response times set by regulation.
The practical consequence is that the physician's report is the authorization request. A vague progress note that does not tie the requested therapy to the accepted injury and to the state's treatment guidelines will be denied or delayed, and the appeal goes through a state dispute process, not a payer appeals unit. Practices that do well here have one person who owns WC authorizations and calls the adjuster before the request goes in.
State fee schedules, filing limits and reports
Your commercial contracts do not apply to a WC bill. Payment is set by the state fee schedule, which in most states is built on the Medicare resource-based relative value scale with state-specific conversion factors and ground rules. A few states have no physician fee schedule at all (New Jersey is the usual example) and pay on a "usual and customary" basis, which means the carrier's bill reviewer decides and you argue. Fee schedules change on the state's calendar, not January 1, and your billing system needs each one loaded to catch underpayments.
| State | Fee schedule | Required report with the bill | Filing limit | Authorization vehicle |
|---|---|---|---|---|
| California | Official Medical Fee Schedule (OMFS), RBRVS-based since 2014 | Doctor's First Report (DWC Form 5021) within 5 working days of the first visit, then PR-2 progress report at least every 45 days | 12 months from date of service | DWC Form RFA; utilization review decision within 5 business days |
| Texas | DWC medical fee guidelines tied to Medicare with state conversion factors | DWC Form-073 Work Status Report at the initial visit and when work status changes | 95 days from date of service | Preauthorization for services on the state list |
| New York | WCB medical fee schedule with regional conversion factors and ground rules | CMS-1500 with attached medical narrative (required since July 1, 2022, replacing the C-4 forms) | 120 days from date of service | Prior Authorization Request through OnBoard |
The pattern holds everywhere: a first report, a periodic progress report, a filing limit shorter than most billers assume, and a state-run authorization process. Texas's 95-day limit catches practices most often; a bill held four months for a missing claim number is dead on arrival. The reports are not paperwork for its own sake. In California the PR-2 keeps treatment authorized and carries a separate report fee under the OMFS; in New York a CMS-1500 without the narrative is returned as incomplete. Build the report into the visit: the physician completes the state form at the time of service, the biller attaches it, and the bill goes out the same week.
Filling out the CMS-1500 for a WC bill
The claim form is the same one you use for commercial payers, with different content in a few boxes. Item 10a is marked yes. Item 11 carries the WC claim number where the group number would go. Item 14 carries the date of injury with qualifier 431. Item 23 carries the authorization number when one was issued. The diagnosis list should include the injury code with the correct seventh character (A for initial encounter, D for subsequent), an external cause code describing how the injury happened (the V, W, X and Y codes), the place of occurrence code and Y99.0, which identifies the activity as civilian work for income. Bill reviewers use them to match the bill to the accepted mechanism of injury.
Electronic billing is worth setting up. California requires claims administrators to accept electronic bills and gives them a shorter payment deadline for e-bills than for paper, and Texas has required electronic medical billing for years. The practice in our opening cut its days to payment mostly by turning that on.
Reading the Explanation of Review
The WC equivalent of the remittance advice is the Explanation of Review (EOR). It shows the billed amount, the fee schedule allowance, any reduction and a reason code, and it rarely uses the CARC and RARC codes your posters know. The common reasons are: no claim on file or claim denied (bill the health plan with the EOR attached once the denial is final); body part not accepted (ask the adjuster whether the claim will be amended); service not authorized (appeal through the state process with the report); duplicate (often a paper and an electronic copy of the same bill); and fee schedule reduction (compare to the state schedule and dispute a wrong ground rule).
Underpayments deserve a real process. California gives the provider 90 days from the EOR to request a second bill review, then an Independent Bill Review with the state if the dispute is about the fee schedule amount. Other states have their own steps and clocks, which is why WC accounts should be worked from a separate queue with the deadlines written on it. If your WC volume is more than a handful of visits a month, ask whoever runs your billing to show you the WC aging by state and by carrier.
A worked example
A 41-year-old warehouse worker in Texas is seen on March 3 for a lumbar strain after lifting. Intake obtains the employer, carrier, claim number and adjuster. The physician documents a 99203 new patient visit, completes the DWC Form-073 work status report with modified duty, and prescribes home exercises. The bill goes out electronically on March 5 with S39.012A (strain of muscle of lower back, initial encounter), X50.0XXA (overexertion from strenuous movement or load) as the external cause, the place of occurrence code and Y99.0. The carrier pays at the Texas fee guideline allowance on March 28.
At the March 24 follow-up the physician wants six visits of physical therapy. Because therapy is on the Texas preauthorization list, the office submits the request with the note before the referral; approval arrives April 1 with an authorization number that goes in item 23 of each therapy bill. The practice that refers first and bills later learns in June that the visits were never authorized and are not payable.
Questions we hear
The claim was denied by the carrier. Can we bill the patient?
Not while the WC claim is pending or under appeal. Once a denial is final, most states allow you to bill the patient's group health plan with the WC denial attached. Billing the patient directly is a last resort and is prohibited in some states while a dispute is open. Ask counsel about your state before you send a statement.
Do we need to be credentialed with workers' compensation carriers?
Generally no; WC is not a contracted network in the commercial sense. But state networks (California MPNs, Texas certified networks) require enrollment, and some carriers use PPO networks with their own applications. Our credentialing team treats those as separate enrollments.
Why did the carrier pay less than our commercial rate for the same code?
Because the state fee schedule, not your contract, sets the price. Load each state's schedule and compare. An allowance below the schedule is an underpayment to dispute; one that matches is the correct payment even when it is lower than you are used to.
What to do this week
- Create a WC intake script with the seven fields: employer, date of injury, mechanism, carrier or TPA, claim number, adjuster contact and accepted body parts.
- Replace the single "Workers Comp" payer in your practice management system with one record per carrier, tagged by state.
- Load the fee schedule and filing limit for each state you bill, and write the limits on the WC work queue.
- Add the state report (first report, progress report or narrative) to the visit template so it is finished before the patient leaves.
- Pull all WC accounts over 60 days old and sort them by the EOR reason; work the unauthorized and not-accepted groups first because their clocks are shortest.
- Ask your clearinghouse to turn on electronic WC billing with attachments for your top three carriers.
