Major Updated Physician Official Medical Fee Schedule Changes in California

The California Division of Workers Compensation (DWC) introduced the most comprehensive change in its Physician and Non-Physician Practitioner effective in 2026. Aligning California workers’ compensation medical reimbursements with the 2026 Medicare Physician Fee Schedule and introducing significant changes to CPT codes, RVUs, conversion factors, coding edits, anesthesia reimbursement, and telehealth coverage.

Whether you are a physician, biller, coder, claims administrator, or just somebody who is trying to make a living covering the changes in the medical billing landscape, you have likely felt overwhelmed by the volume of updates to the Official Medical Fee Schedule (OMFS), which is the heart of what medical service reimbursement looks like in California workers’ compensation.

This article walks through the major OMFS changes that occurred in 2026, what they mean, when they’re effective, and how they differ from the previous fee schedule. 

Let’s break things down in detail.

What Is the OMFS and Why Does It Matter?

First, a quick refresher: the Official Medical Fee Schedule (OMFS) is basically an official set of reimbursement rules that is used in California workers’ compensation to calculate how much medical providers, physicians, non-physician practitioners, labs, and DME vendors get paid for services that are related to injured workers. 

It is issued by the Division of Workers’ Compensation (DWC) and revised frequently to accommodate any changes in Medicare, among others. In the case of physician and non-physician practitioner services, the schedule is provided on a Relative Value Unit (RVU)-based system with a conversion factor, Current Procedural Terminology (CPT) codes of healthcare services, and various coding edits that attempt to approximate the cost of the resource used to offer medical care.

2026 OMFS Changes at a Glance

The OMFS was updated in several areas in 2026, not only on the physician services, but also pathology/labs and DME; however, the main area of interest here is physician and related services.

Below is a broad summary of the major 2026 changes you need to know:

Deep Dive: Physician & Non-Physician Practitioner Services (March 1, 2026)

This area is the biggest; it’s where most physicians and advanced practitioners will feel the impact.

1. Updated Relative Value Units (RVUs)

The RVUs are the foundation of physician compensation; they are the relative resources utilized to deliver various medical services (work, practice expense, malpractice components). In California, RVUs were revised to comply with the Medicare Physician Fee Schedule (PFS) final rule, which was released at the end of 2025. These modifications include modified complexity definitions, value of work time, and other modifications.

What that means in practice:

An increase or decrease in the relative value of various CPT codes that may raise or reduce reimbursement, respectively, when multiplied by the conversion factor.

2. Updated CPT Coding

In 2026, the DWC implemented updated Current Procedural Terminology (CPT) codes as recognized by Medicare. These codes aren’t created by the DWC; CPT codes are published by the American Medical Association (AMA), but they flow through to OMFS via the Medicare alignment process. 

This contains not only the new CPT codes that have been introduced by the AMA update in 2026, but also retiring codes. These changes are often in terms of new medical practices, new definitions, or substituted services.

Impact:

Providers must use the correct 2026 CPT codes when billing for services rendered on or after March 1, 2026.

3. Updated Conversion Factors

Conversion factors are used to convert RVUs into dollar value. For 2026, California updated conversion factors based on the Medicare Economic Index (MEI) and statutory adjustments, including a temporary 2.5% Medicare fee bump passed into federal law. 

Why it matters:

This has a direct impact on reimbursement rates for nearly all codes. When the conversion factor increases, reimbursement increases; when there is a decrease, the reimbursement decreases.

4. National Correct Coding Initiative (NCCI) and Edits

Coding edits protects those improper billing combinationsDWC implemented the revised NCCI edits published by CMS on an annual basis. The edits determine the combinations of codes that may or may not be billed, or the combinations of modifiers that can be used.

Practical note:

California workers’ compensation can also refuse or modify payment without an appropriate modifier in case a provider submits combinations that Medicare does not regard as accurate under the NCCI edits. 

5. Updated Telehealth List

California physician OMFS telehealth list is the one that varies the most with Medicare, but the 2026 revision also involves retention or modification of the payable telehealth services. 

Hint: Telehealth codes that can be obtained on Medicare are usually copied into OMFS with changes that are California-specific. Before billing, always verify the list of official workers’ compensation in telehealth.

Physician Services Changes in 2026

Pathology & Clinical Laboratory Updates (January 1, 2026)

There was also a major change in pathology and clinical lab services. These do not belong to the physician professional fee schedule per se, but they do count since lab tests and pathology procedures are often included in physician-ordered care. 

As of 2026, 23 new lab and pathology HCPCS codes were included in the OMFS list and 10 older lab codes were removed. The additions and deletions are equivalent to those revised by Medicare in the 2026 annual clinical lab fee schedule.

2026 OMFS — ADDED LAB & PATHOLOGY HCPCS CODES

2026 OMFS — DELETED LAB & PATHOLOGY CODES

Quick Interpretation

Now, Labs and physicians ordering labs must use the new code set for dates of service on or after January 1, 2026, and should not bill deleted codes. 

Deleted codes will typically result in denials or the need to bill alternate codes.

Durable Medical Equipment (DME) Changes (January 1, 2026)

DME updates are not in the category of physician services, but should be mentioned as they influence the overall care payment. 

3 additional HCPCS DME codes were introduced in 2026 (e.g., hydrophilic cath codes), and the majority of the current DMEPOS code charges were raised. 

Billing DME practices should keep these new codes and updated prices in efforts to avoid denials.

2026 OMFS — DMEPOS HCPCS CODE CHANGES 

The 2026 update did not remove catheters entirely; it split older generic codes into more specific hydrophilic codes.
Older codes are thus only a replacement for non-hydrophilic devices.

Deleted and Additional Codes

The updates of 2026 contain the deleted CPT and HCPCS codes, for which Medicare has retired codes. 

As an example, Medicare removed older telehealth codes in previous updates on telehealth lists, which were used by DWC.

Deleted codes aren’t allowed once the update is effective; billing them will cause denials.

New CPT and HCPS codes are also introduced annually to record new procedures, tests, and technology. To stay in line with Medicare, OMFS has to include those.

Where to Find the Official Details

Authoritative OMFS 2026 sources can be found best on the California Department of Industrial Relations (DIR) and the Division of Workers’ Compensation (DWC) site. 

These pages include: 

• The OMFS physician fee schedules contain PDF orders and code lists. 
• The Newsline pages contain official updates on every section of the fee schedule (physician, pathology, DMEPOS, outpatient/ASC). 
• The titles 8 and 9789 fee schedule Section of the OMFS online book of regulations. 

These resources are needed in case you desire to download complete code tables, medicare alignment files, as well as reference materials.

What You Need to Learn from the 2026 OMFS Updates

It is imperative to remember that the 2026 OMFS changes require every provider and biller to keep in mind the following: 

1. Physician fee schedule becomes effective March 1, 2026. These contain the most effective changes in RVUs, conversion factors, CPT code sets, and amendments. 
2. Pathology & clinical lab changes become effective January 1, 2026. Ensure that your lab panels and test codes are current. 
3. There were also DME updates, and they became effective January 1, 2026, with new HCPCS additions and numerous fee increases. 
4. Codes that have been deleted should not be billed after the dates of effectiveness; otherwise, there will be denials of claims or the need for alternative valid codes. 
5. Always use the official DWC OMFS webpages to have the best, most complete, and downloadable files. 

It is not only a matter of compliance that it is essential to be up to date on these updates, but to maximize appropriate reimbursement, minimize refusals, and ensure your practice or billing department is up to speed with the current cadence of fee schedule modifications.

Conclusion:

The task of keeping up with the 2026 California OMFS update is not an easy one. Among the modified RVUs, CPT, and HCPS codes, conversion factors, anesthesia tables, and telehealth regulations, physicians, billers, and clinics are melted in a tornado of changes that can lead to errors with ease, and finally, medical bills that are not paid. Anyone who missed updates or billing with old codes may lead to claim refusals, delayed payments, and increasing administrative pressure. 

This is where a professional medical billing service in California can make a world of difference. Outsourcing your billing ensures that any changes in codes, changes to the fee schedule, and compliance will be done-up correctly.

You do not have to multitask on spreadsheets, fee schedules, and Medical records of Medicare alignment files, as the professionals take care of the billing issues, and you concentrate on patient care.

With such a busy year as 2026, having a reliable billing service is not only a comfort but a protection against lost profits, managerial aggravation, and the mess of constantly changing policies.

Let the experts handle the paperwork so you never have to worry about unpaid medical bills again.