WCRI Releases Medical Price Index Data for Three States

The Workers Compensation Research Institute (WCRI) recently released medical price index data geared toward thee specific states. Regardless of where you are based, we all can learn from them.
They are:
 
 
In the Virginia study, WCRI found the 2010 price for non-hospital services was nearly 30 percent higher than the median price in states with fee schedules. The original nine-year study, Medical Price Index for Workers’ Compensation, Third Edition (MPI-WC), showed prices grew much faster than the typical growth rate of 11 percent in states with fee schedules.

The study further showed in Wisconsin, their system had the highest prices and fastest growth in their WCRI’s Medical Price Index. “The price for non-hospital services in Wisconsin in 2010 was the highest of the 25 study states, more than twice the prices in the 25-state median, and nearly 50 percent higher than the median of the 6 states with no fee schedules,” the study says.

A WCRI press release indicated, “The prices in Wisconsin increased 42 percent, much faster compared to median growth rate of 11 percent of the states with fee schedules, also faster than the 28 percent typical growth rate of the states without fee schedules.”(WCxKit)


Lastly, the Indiana portion of the larger study indicated the 2010 price for non-hospital services in that state was the third highest of the 25 study states, more than 50 percent higher than typical prices paid in the study states with fee schedule regulation. The nearly 30 percent growth in Indiana was much faster than the typical growth rate of 11 percent in states with fee schedules, according to a WCRI press release.


ABOUT WCRI:
The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Since 1983, WCRI has been a catalyst for significant improvements in workers’ compensation systems around the world with its objective, credible, and high-quality research. WCRI’s members include employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia and New Zealand.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20-50% www.WCManual.com. Contact: RShafer@ReduceYourWorkersComp.com.

CLUES TO WORK COMP COST REDUCTION:  www.WCManual.com
 
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

Fee Schedule Revision Gives Medical Providers a 3 Percent Increase

Now we can all sleep soundly at night… The OHIO fee schedule setting reimbursement rates for the more than 64,000 certified medical providers was updated (October 25, 2010) for professional provider and medical services according to the Board of Directors for the Ohio Bureau of Workers Compensation (BWC). The new schedule is projected to increase reimbursement to providers serving Ohio’s injured workers by nearly 3%.
 
New codes used to identify medical services and procedures will make certain injured workers receive appropriate care; ease the reimbursement process; and bring more clarity to the benefits covered under BWC’s plan.
 
The total investment portfolio of the BWC experienced a significant gain over the past fiscal year.
 
A report for fiscal year 2010, presented by Chief Investment Officer Bruce Dunn to the BWC Board of Directors, showed an unaudited portfolio net return of 12%, less management fees. BWC’s investment portfolio is passively invested in bonds and equities and includes the large State Insurance Fund, which funds medical and indemnity claims for Ohio injured workers. The total portfolio return was achieved through a 13% net return for bonds and 12.3% net return for equities over the period. (WCxKit)
 
“These impressive gains are a direct result of careful research and analysis by our professional investment staff and consultants,” said BWC Administrator Marsha Ryan. “They are employing best practices and working closely with the Board to make thoughtful investments that are producing profits at a time when similar funds are struggling.”
 
The solid returns follow several actions taken by the Board’s Investment Committee over the last two years, which are intended to maintain a strong portfolio.
 
These actions included implementation of a strategy to diversify fixed and equity investments within the State Insurance Fund; a comprehensive update to the Fund’s investment policy statement; and selection of passive-investment managers to execute BWC’s new investment strategy.
 
Also on the agenda, the Board was given an update on the implementation of recommendations within the comprehensive study of Ohio’s workers comp system, ordered by the 127th General Assembly in House Bill 100. The 900-page study includes 146 recommendations which are being analyzed and implemented. (WCxKit)
 
In FY10, 59 recommendations were addressed with 46 implemented. BWC’s internal team reached 84% of its implementation goal for the fiscal year.
 
“The comprehensive study continues to serve as a valuable tool, providing direction toward the fundamental improvements that were necessary for BWC’s long-term strength,” added Ryan. “Each recommendation we put into action increases the quality of our operations and our service to Ohio businesses and injured workers.” 
 
 Author Rebecca Shafer,  executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing.  Contact: Info@ReduceYourWorkersComp.com  or 860-553-6604.  
WC Calculator:  http://www.LowerWC.com/calculator.php
TD Calculator:  http://www.LowerWC.com/transitional-duty-cost-calculator.php 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
  
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
 Info@ReduceYourWorkersComp.com 

Learn the Basics of Workers Comp Medical Bill Repricing Cost Containment

Medical bill repricing is often thought of as a mundane, boring, and difficult area of workers’ compensation claims, and it’s true.  Risk managers need to be very alert when medical bill repricing is discussed as these discussions are very beneficial.

 

Medical bill repricing is one area where the insurer or self-insured is able to control some of the medical cost of the work comp claim.  Medical bill repricing reduces the amount paid to the medical provider without reducing the medical care provided to the employee.

 

Most jurisdictions either have a state mandated workers’ compensation fee schedule or allow the insurers/self-insureds to join provider networks able to negotiate their own fee schedule to obtain provider discounts.  The fee schedules have a maximum amount  or cap that can be a charged for each service provided by the medical provider.  A few of the states with a state fee schedule also allow insurers and self-insureds to join negotiated fee schedule/ provider networks with payments to medical providers lower than the state fee schedule.

 

Medical bill repricing is simply correcting the amount billed by the medical provider to match the amount allowed by the state mandated fee schedule or the provider network fee schedule.

 

The problem with both state mandated fee schedules and network fee schedules is their complexity. The fee schedules become long and complex because of the numerous parts to a human body multiplied by the various medical treatment(s)  each body part can receive.

 

In the “good ole days” before computers, you had an army of medical bill reviewers matching up the medical bill with the work comp claim, comparing each line of the medical provider’s bill to the fee schedule and correcting any deviations above the fee schedule (deviations below the fee schedule were accepted just as they are today).  A revised statement showing the medical provider what was paid for each service was produced and sent with the payment.  The insurer or self-insured could either have its own army of medical bill reviewers or subcontract the medical bill repricing out to a company specializing in this service.

 

Today  with scanners, optical character recognition and electronic data interchange, the manual process has mostly been eliminated, but the results are the same — the medical provider’s bill is corrected to the fee schedule amount.  Even with computers there is the occasional bill which has to be reviewed by a human being because it does not fit anywhere on the fee schedule.

 

Medical providers who treat work comp claimants on a regular basis either (a), have the fee schedule built into their computerized billing, or (b),  [the much larger group] ignore the fee schedules and bill their regular office charge for every service knowing the medical bill repricing will correct each line of their bill.  The medical providers also know on occasion their  bill will inadvertently be paid their regular office charge by the adjuster trainee or their bill will go to a self-insured who has not joined one of the networks.

 

Negotiated provider networks reprice the bills for the insurers and self-insureds, saving the insurers and self-insureds on the cost of the medical care.  In return, either the networks are paid a percentage of the reduction in the amount billed, or they are paid a set amount per line item they reduce.  Unfortunately, it is hard to know which method provides the greater savings.  Ask your networks if they will show you comparisons of what your service fees would be using each method.

 

Negotiated network fee schedules may vary in the same jurisdiction.  Usually the larger the network, the greater their buying power and the better the fee schedule they can arrange for their members.  These discounts provide incentive for insurers and self-insured employers to join the networks.  The medical providers are willing to join the networks as they can expect a steady stream of business and prompt payment for the services they render.

 

The primary drawback of negotiated fee schedule networks is it limits the choice of medical providers to those in the network.  If the best medical providers are not in the network, the employee’s medical care and speed of recovery can be adversely affected.  Normally, the larger the network the more options for available medical care.  Prior to joining a network, the insurer or self-insured should thoroughly review the medical providers in the network to verify that it provides the types of medical care most likely needed by the employees.

 

The medical bill repricing service provides the insurer or self-insured with a statement showing the amount billed, the amount the bill was reduced to and the amount saved.  The repricing service also provides monthly, quarterly, and yearly summaries of the total dollars billed, the total of the corrected billings and the total of the amount saved, along with showing how much was billed for the repricing service.

 

Some of the medical bill repricing services will advertise they save the insurers or self-insureds 30% or more.  While savings of that magnitude are possible, the greater probability is the savings will be in the 20% to 25% range, especially after the medical bill repricing fees are taken into consideration.  Even if the savings is only 20%, it is definitely in the risk manager’s interest to be sure his/her insurer or his/her self-insured program is taking advantage of the medical bill repricing services available.

 

Insurers and self-insureds/employers in states without a mandated fee schedule can increase their savings on medical bill repricing by shopping the different networks for the best deal.  In the states allowing the employer to select the medical provider, the employer can obtain a directory of the network’s participating providers and direct all employees to doctors who agree to the fee schedule of the network. (workersxzcompxzkit)

 

Most risk managers know medical bill repricing will reduce the cost of work comp claims.  The smart risk manager will take it a step further and investigate the different provider networks to find the network providing the greatest savings to the company.

 

Author Rebecca Shafer, J.D. Consultant, 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.

Podcast: KNOW the New OSHA Recordkeeping Rules — OR Risk Fines and Criminal Penalties.
Click Here:  http://www.workerscompkit.com/gallagher/podcast/Non_Compliance_with_Recordkeeping_Standards/

WC Calculator:  
http://www.reduceyourworkerscomp.com/calculator.php

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers’ comp issues.

 

©2009 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com

 

Ten Things You Should Know About Workers Compensation Medical Fee Schedules

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.
 
Podcast/Webcast: Occupational Health Strategies
Click Here
http://www.workerscompkit.com/gallagher/podcast/Occupational_Health_Strategies/index.php

WC Calculator: http://www.reduceyourworkerscomp.com/calculator.php


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
 
© 2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.

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