California workers’ compensation medical costs rise 5%

Medical service costs for California workers’ compensation claims rose 5% in 2025, according to a report by the Workers’ Compensation Insurance Rating Bureau of California. This increase was driven by a 4% rise in average payments per medical transaction and a 1% increase in utilization.

Medical-legal services were a primary cost driver, representing 17% of total medical payments. Costs for these services per claim have increased 47% since 2021. Additionally, medical equipment and other services costs per claim rose 8% in 2025. While physician services remain the largest expenditure at 48% of medical payments, their cost growth slowed to 4% in 2025. Conversely, pharmaceutical costs per claim declined 30% between 2020 and 2025.

Regarding healthcare access, a Rand report prepared for the California Department of Industrial Relations found that patient-level access remains largely stable despite a decline in the number of physicians, chiropractors, and psychologists. While the statewide median wait for a first physical medicine visit was 16 days in 2024, workers in the Central Valley and Central Coast experienced longer median waits of 26 and 31 days, respectively. The report noted that travel distances for care have increased for suburban and rural workers.