Controlling the cost of medical care for workers' compensation is an on-going issue. Most states have now adopted a medical fee schedule to set limits on the amounts that can be paid to medical providers for the services they furnish. The medical fee schedules will also cover the cost of medical equipment and medical supplies. The medical fee schedules vary in complexity and services covered but also have many similarities.
1- All jurisdictions using a medical fee schedule will attempt to apply it to all work comp injuries. Issues arise as to which medical fee schedule will apply when employees, like truck drivers and traveling sales people, are based in one state and have an injury in a different state. Normally, the fee schedule of the state where the employee receives medical treatment applies. However, some jurisdictions require their medical fee schedule to be used if the employee is claiming indemnity benefits in their jurisdiction.
2- The date of medical service determines the medical fee schedule used. This allows the medical providers to be paid the current value of their medical services. (If the medical providers had to keep track of the medical fee schedules to be used for each employee's date of injury it would be a nightmare of billing problems for both the medical providers and the work comp insurance companies, especially on older claims.)
3- Normally the medical fee schedules starts with the existing medical coding of the American Medical Association. The Current Procedural Terminology (CPT) code is universally used — hence it provides a format that can be adopted for use in workers' compensation. In conjunction with the CPT code, the medical provider will use a diagnosis code, the International Classification of Diseases (ICD-9) from the World Health Organization. (Most jurisdictions used ICD-9, but some jurisdictions have adopted the expanded/updated ICD-10 version).
4- In addition to the CPT codes and the ICD-9 codes, the medical fee schedules will include National Drug Code (NDC) for medications, Relative Value Units (RVUs) and in some jurisdictions HPCPS codes from the Health Care Financing Administration Common Procedure Coding System. [If you want an in-depth review of the coding systems, the Centers for Medicare and Medicaid Services (CMS) has a lot of information available at http://www.cms.hhs.gov/ ].
5- The medical fee schedules will combine the various coding with the terminology “usual and customary” which means what the medical providers of a general type would normally charge for the service. The medical fee schedules of some jurisdictions will cover 100% of usual and customary, while other jurisdictions may limit the amount paid for medical services to 75% or 80% of usual and customary.
6- Some jurisdictions will have a set amount in their work comp medical fee schedules that can be paid for every combination of CPT and ICD-9 codes. Other jurisdictions will have a maximum amount that can be paid, but will allow payment of a lower amount. This allows the work comp insurance companies to negotiate with and contract with the medical providers for payment amounts below the maximum.
Even with all the CPT codes and the ICD-9 codes, there will still be occasions when the medical care provided does not fit the coding system. The medical fee schedules will address this by either referring to usual and customary or they will utilize the amounts that would be paid by CMS for such services.
7-Some of the medical fee schedules will have exceptions for unusual or severe injuries like severe burns, brain injuries, major amputations, etc. These exceptions normally require the injured employee to be treated in an intensive care situation. But even these exceptions may have a cap of 125% or 150% of the normal medical fee schedule amount.
8-Due to the complexity and variety of medical services available, the medical fee schedules have been expanded to cover cost of almost every type of medical service including injections, anesthesia services, dentistry, skilled nursing facilitates, home healthcare, radiology services, pathology services, physical therapy, chiropractic services, prosthetic devices, speech therapy, hearing aids, etc.
9- Penalties and/or fines can be accessed to medical providers who intentionally bill more than what is called for in the medical fee schedule. However, often there will be more than one CPT code or ICD-9 code that could apply to a service, which normally results in the higher paying code combination being billed by the medical provider.
This has been the basis for the development of medical bill review companies in ever jurisdiction, who will review and adjust the medical bills for a percentage of the savings over what the insurance company would have otherwise paid. The medical fee schedules will also not allow the medical providers to bill the injured employee for any reduction in their charges by the medical bill review company. Most jurisdictions will have a state office that will attempt to resolve disputes between the medical providers and the medical bill review companies (or insurance company) as to the correct amount to be paid per the medical fee schedule.
10- As medical bill review companies have impacted what the medical providers can charge for medical services, the medical providers have looked at other ways of being compensated. Physicians and other medical providers will charge for medical reports, for completion of state required workers’ compensation form, for copying of medical records, for depositions, for missed appointments and for independent medical evaluations. Of course this has resulted in the medical fee schedules being expanded to cover the cost of these other charges. (workersxzcompxzkit)
Medical fee schedules are a necessary evil. They provide some measure of cost control in workers' compensation but also complicate the medical bill process. Employers should have an understanding of what the medical fee schedules are and how they operate.
Author Rebecca Shafer, J.D. President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
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