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WC Payment Issues - HB 1141

Representative Stan Saylor (R, York) introduced HB 1141 in early February 2016. The bill resides in the House Labor and Industry Committee. The legislation would:

  • Mandate insurers to accept electronic billing by January 1, 2017, thereby reducing costs and increasing the timely processing of transactions between providers and insurers.
  • Impose financial penalties on insurers and their third party administrators (TPA’s) who fail to implement the updated Workers’ Compensation fee schedule by January 10 of each year
  • Impose financial penalties on insurers who fail to pay claims within 30 days of receipt
  • Eliminate the practice of “silent discounting” by requiring the establishment of a bona fide provider network agreement between physicians/insurers/employers and third parties and requiring that physicians receive notice when such a contractual agreement is made between an insurer/employer and a third party.
  • Prohibit insurers and their agents from using threats or coercion in their solicitations for discounted reimbursements
  • Allow providers access to relevant and appropriate claim information (i.e. the description of injury for which the insurer has accepted liability)

On September 13, 2016, the House Labor and Industry Committee held an information hearing on HB 1141. The PAOrtho staff and lobbyists are diligently working toward a Spring 2017 public hearing on this important legislation. PAOrtho’s WC Chair James McGlynn, MD testified on behalf of the Society. The PAOrtho anticipates no more action this session, but bill will be reintroduced in January 2017.

Read Dr. McGlynn’s testimony

WC Treatment Guidelines - HB 1800

Representative Ryan Mackenzie (R, Berks) introduced HB 1800 on December 18, 2015. The bill remains in the House Labor and Industry Committee following a vote to table the bill on June 14, 2016. HB 1800 would require WC disputes to be resolved through the use of nationally recognized treatment guidelines and would shift the burden of filing for utilization review to the injured worker as opposed to the employer or insurer. The PAOrtho anticipates no more action on HB 1800 this legislative session. It will likely be reintroduced in 2017.

PAOrtho’s goals in regard to treatment guidelines are three-fold:

  • Lawmakers must understand that treatment guidelines are merely that, guidelines. PAOrtho will not agree to legislation that imposes treatments and procedures upon patients and orthopedic surgeons.
  • Treatment guidelines should be specific to Pennsylvania. National guidelines may be instructive, but tend to be too broad to be of real value to practicing physicians.
  • Treatment guidelines must be flexible enough to incorporate new or merging techniques, procedures and technology. With innovation a constant in orthopaedics, treatment guidelines cannot be static.


Help With Workers' Compensation Payment and Billing

The Notice of Compensation Payable Poster is intended for the physician waiting and exam rooms and has been designed with the physician and patient in mind. It urges workers' compensation patients to provide the physician with a copy of their Notice of Compensation Payable (NCP).

Physicians benefit from obtaining the patient's NCP because its information enables the billing staff to distinguish between what injuries are truly WC liabilities versus those which should be billed to a patient's regular health plan. The result is more accurate payment and billing. (See About the NCP below by Tom Cook, Esquire)

The Pennsylvania Orthopaedic Society makes these 11 x 17 posters available to you at cost. They are sold in packs of 10 at $12.50 per pack.

Questions? Email [email protected]

About the NCP

The Notice of Compensation Payable is the single most important document for billing purposes in any workers' compensation file; yet, most doctors and billing staff are unfamiliar with it. Once issued, it is a unilateral contract binding on the insurance company or self-insured employer to pay all reasonable and necessary medical bills on a timely basis. Second, the Notice of Compensation Payable contains a "description of injury" which creates the universe of billing for which the insurance company has accepted liability.

Example: John Jones is injured at work when he trips on a tire and injures his left lower extremity. The workers' compensation insurance company issues a Notice of Compensation Payable containing a description of the injury as follows: "Contusion to left foot". The treating physician determines that John needs arthroscopic surgery to the left knee and corrective surgery to the left foot as a result of the injury. The insurance company must pay for the surgery to the left foot because it is reasonably related upon its face to the injury as described on the Notice of Compensation Payable. The insurance company does not have to automatically pay for the arthroscopic surgery to the left knee because the description of injury discusses only the left foot and not the knee.

Once an employee reports a lost time injury to his employer, the workers' compensation insurance company has twenty-one (21) days to either issue a Notice of Compensation Payable, or a denial. The Notice of Compensation Payable is sent to the Commonwealth of Pennsylvania, Bureau of Workers' Compensation, and a copy is given to the employee.

How to Calculate Workers' Compensation Fees

The Workers' Compensation Fee schedule is equal to the product of the 1994 Medicare fee schedule times a factor which changes annually. Let's use 2007 as an example:

The workers' comp increase for 2007 is 4.6%. Fees for workers' comp services performed on or after January 1, 2007 are calculated and paid in the following manner:

2007 WC Fee = 1994 Medicare Fee Schedule X 1.784
Example:
2007 WC Fee for Knee arthoroscopy surgery w/ meniscectomy (29881) for Medicare Area 3
= $714.40 X 1.784

2007 WC Fee for 29881 in Area 3
= $1274.49
NOTE: Fees will differ according to which of the four Medicare areas you are located within.

SEE BELOW TO ORDER A WORKER'S COMP FEE SCHEDULE WHERE ALL THESE CALCULATIONS ARE DONE FOR YOU.

VERY IMPORTANT!
Insurers will be advised of the 1.6% increase for 2014 by January 1, by notice from the Department of Labor and Industry. To assist you with your claims processing, contact PAOrtho for a hard copy of this notice.

You are aware that effective January 1, 1998, Pennsylvania is transitioned to just 2 payment areas for Medicare (01 and 99**). This change does NOT apply to workers' comp claims! Workers' comp claims continue to be calculated using the 1994 Medicare fees (see above), which maintain the "old" payment areas (1, 2, 3, and 4). There is one exception to this and that is for truly new codes. Payments for REVISED CODES or CODES THAT HAVE NOT CHANGED ARE STILL BASED ON 1994 Medicare which maintains four payment areas.

**01 includes Philadelphia, Bucks, Chester, Montgomery, and Delaware counties; 99 represents the remainder of the state.

Importance of the Notice of Compensation Payable

by Thomas S. Cook, Esquire

A reasonable and necessary medical bill, which is on its face, related to an accepted workers' compensation claim, is payable within thirty (30) days assuming that the proper paperwork has been filed. A workers' compensation claim is not accepted unless a Notice of Compensation Payable has been issued in a lost time claim or an Agreement to pay workers' compensation benefits is issued in a "medical only" claim.

The Notice of Compensation Payable is the single most important document for billing purposes in any workers' compensation file; yet, most doctors and billing staff are unfamiliar with it. Once issued, it is a unilateral contract binding on the insurance company or self-insured employer to pay all reasonable and necessary medical bills on a timely basis. Second, the Notice of Compensation Payable contains a "description of injury" which creates the universe of billing for which the insurance company has accepted liability.

Example: John Jones is injured at work when he trips on a tire and injures his left lower extremity. The workers' compensation insurance company issues a Notice of Compensation Payable containing a description of the injury as follows: "Contusion to left foot". The treating physician determines that John needs arthroscopic surgery to the left knee and corrective surgery to the left foot as a result of the injury. The insurance company must pay for the surgery to the left foot because it is reasonably related upon its face to the injury as described on the Notice of Compensation Payable. The insurance company does not have to automatically pay for the arthroscopic surgery to the left knee because the description of injury discusses only the left foot and not the knee.

Once an employee reports a lost time injury to his employer, the workers' compensation insurance company has twenty-one (21) days to either issue a Notice of Compensation Payable, or a denial. The Notice of Compensation Payable is sent to the Commonwealth of Pennsylvania, Bureau of Workers' Compensation, and a copy is given to the employee. The issuance of the Notice of Compensation Payable, means the claim is accepted, and medical bills must be paid assuming the following conditions are met:

  1. If the employer has a posted list of six (6) providers', the patient is treated by one (1) or more of these providers for the first ninety (90) days of treatment.
  2. If the employee wishes to change doctors, five (5) days notice is given to the insurance company.
  3. Bureau of Workers' Compensation Form LIBC9, is filled out by the treating physician within ten (10) days of the first date of treatment, and thirty (30) days thereafter. 
    (We will be discussing these issues in greater detail in future articles.)

Insurance companies frequently do not give the Notice of Compensation Payable to the patient, or provide it late. Though the law says that the Notice of Compensation Payable is to be provided within twenty-one (21) days of the notice of disability to the employer, frequently, it takes fifty (50) days or more for the issuance of the Notice of Compensation Payable to the denial.

I recently audited twenty-five (25) workers' compensation files in the office of a busy orthopaedic surgeon. None of the files contained the Notice of Compensation Payable; thus, the billing staff had no idea of what condition to bill for. Here's what the wanted to know:

Q: Who issues the Notice of Compensation Payable?
A: The Notice of Compensation Payable is completed by an adjuster working for the workers' compensation insurance company, or a self-insured employer. They may rely on your intake form and office notes to fill out the description of injury. Your intake form and routine documentation should, if possible, contain a clear diagnosis in relationship to work activities, as well as a complete description of the parts of the body involved.

Q: How can a provider obtain a copy of the Notice of Compensation if the patient doesn't have it?
A: The patient can write to the Bureau of Workers' Compensation in Harrisburg although it may take many weeks to get a response. A better approach is to write to the workers' compensation insurance company.

Practice Tips:

Keep a copy of a form letter to the insurance company requesting the Notice of Compensation Payable. Such letters can be useful later in a Fee Review Application or Petition before a workers' compensation judge.

Intake and billing staff should always ask a patient with a work related injury to bring in any document they receive from the insurance company for review.

Q: You say that the Notice of Compensation Payable should be filled out within twenty-one (21) days, and frequently is not filled out for fifty (50) days or more. Who does the doctor bill in the meantime?

A: A workers' compensation is not primary, and any subsidiary insurance covering the patient or his/her family may be billed. Under the regulations, a patient may not be held responsible for medical bills resulting from a compensable injury.

Finally, both doctors and patients are often confused by a document called an Employer's Report of Occupational Injury or Disease. Do not confuse this document with the Notice of Compensation Payable. The Employer's Report of Occupational Injury or Disease is filled out only so that the Bureau of Workers' Compensation can tabulate the type and number of injuries occurring in Pennsylvania. It has no legal significance; it does not mean that the employer/insurance company has admitted liability for the injury, and it does not mean that the workers' compensation benefits will be paid. For our purposes, its only value is to show the name of the current workers' compensation insurance company for a particular employer.

Cook's Q & A

An informative workers' comp column by Thomas Cook, Esq.

Q: My first application for fee review was denied for technical reasons. Can I file a second one?

A: Yes. In the case if Harborg Medical Sales Co. v. Bureau of Workers' Compensation, No. 209 C.D. 2002 (October 18, 2001), the Commonwealth Court found that the provider can resubmit the bill since the provider has 30 days following notification of denial of the resubmitted bill to seek review of the fee dispute.

Q: The insurance carrier won't pay for my medical services because they say too much time has gone by, and the case is stale. Is that right?

A: Probably not. In the recent case of Kurtz v. WCAB, the Commonwealth Court of Pennsylvania says that once a claim is accepted, the burden of proof is on the employer to show that the Claimant's symptoms were unrelated to the original injury unless a reasonable person would conclude that they weren't related.

Q: Our office is treating a workers' compensation recipient. He has injured his lower back. We have workers' compensation paperwork showing this. As part of our treatment, we are also providing medical treatment to the shoulder, which was also injured in the same accident. The insurance company is refusing to pay for the shoulder, although they are paying bills for the back. Aren't they required to pay our bills for the shoulder?

A: No. First, you need to specify what "workers' compensation paperwork" you have. The Employer's Report of Occupational Injury or Disease, while official looking, is of no use in a workers' compensation case, except perhaps to show the name and address of the insurance company. It is not a legal admission that the case has been accepted or that bills are payable The document you are looking for the is the Notice of Compensation Payable (NCP)*, which not only shows the claim is accepted but contains the Description of Injury. The insurance company is only responsible for paying medical/healing arts bills which are, on their face, related to the injury as described in the Description of Injury portion of the NCP.

The NCP is usually filled out early in the case by an insurance adjuster who is not yet medically trained and may deliberately be trying to be vague. Also, the true diagnosis may not yet be clear. If you wish to be sure of payment for the shoulder, the claimant needs to negotiate with the insurance company for an admitted NCP, or a Petition for Review needs to be filed before a workers' compensation Judge to litigate the issue. * A sample copy of the NCP may be obtained by contacting [email protected].

Q: We are treating an injured worker for a work-related injury. He has lost six days from work. Because of our conservative treatment, he has been able to go back to his regular job at no loss of wages, although he is continuing to see us for appropriate treatment and physical therapy. We contacted both the employer and the insurance company about payment; we are told that the bill may or may not be paid "in due course." We asked for the NCP and were told that the insurance company was under no obligation to issue one because the claimant had not lost enough time from work. Help!

A: Workers' compensation benefits to injured workers are payable after seven calendar days have been lost from work. On the eighth day, the claimant is entitled to payment of workers' compensation benefits if the claim has been accepted. Once the claimant has lost 14 days from work, he or she is then paid the "waiting week" for days one through seven.

Reasonable and necessary medical benefits related to the work injury are payable as of day one if the claim is accepted. It has always been a controversy in workers' compensation as to whether or not a NCP of Agreement has to be issued in a case where less than seven calendar days have been lost from work. In workers' compensation slang, this is known as a "no lost time" case. It is now clear from case law that appropriate workers' compensation documentation must be issued in cases where the employer/insurance company is accepting liability for either payments to the injured worker or payment of medical benefits to the provider. The documentation could be either the NCP discussed above or an Agreement, which is another Bureau of Workers' Compensation form. Note that reasonable and necessary medical benefits are payable by law once: a) The claim has been accepted. b) The provider files the appropriate paperwork. c) No other workers' compensation paperwork exists which changes the situation, such as a Supplemental Agreement or Judge's Order.

Q: My patient is already involved in worker's compensation litigation and is represented by an attorney. We wish to use the existing litigation to ask the Judge to approve surgery. Can we do this?

A: No. A new decision by the Commonwealth Court says that the worker's compensation Judge does not have the power to determine whether medical treatment was reasonable and necessary, even though the parties agreed to have the Judge decide the issue. Utilization Review must be filed first before the matter can be brought to the attention of the worker's compensation Judge.

Q: Can we bill a patient directly for a worker's compensation claim?

A: The basic answer is No. The law says "A provider shall not hold an employee liable for costs related to care or service rendered under a compensable injury under this Act…" The term "compensable" is not defined by Act 44 or Act 57 and, thus, is a gray area. It seems to be that a provider may bill a patient during the first 90 days if the provider is not a panel doctor or the patient has not been referred by a panel doctor because the first 90 days of treatment is excluded from coverage of the Worker's Compensation Act where the employer provides a proper list of providers.

Another gray area is where the patient has not yet filed a worker's compensation claim or tells the provider that he doesn't intend to file a claim. The problem is whether or not "compensable" means a claim which has been recognized or which could be recognized as work related. If the courts eventually decide on the former interpretation of the word "compensable", then a claim not presented or recognized as being a worker's compensation claim could be billed directly to the patient. If the court views the latter definition, any claim which could be a worker's compensation claim is subject to Act 44 and Act 57, and the patient may not be billed.

If specific care is determined to be unreasonable or unnecessary through Utilization Review, Section 121.211 of the Regulations provides that a provider may not hold an employee liable for costs related to care or services rendered in connection with a compensable injury.

Q: What is the penalty if we improperly bill a patient for a work-related injury?

A: This is an excellent question. It is possible that a Penalty Petition could be brought against the provider but this seems far-fetched for two reasons. First, the provider is not a "party" under the worker's compensation law, and I don't think a worker's compensation Judge would allow such a petition to proceed. Second, only a patient could file such a petition, and, in my experience, most patients like their doctors.

It is possible that a violation of the Worker's Compensation Act through the improper billing of a patient could be the basis of a complaint to the Medical Society, a Medical Review Board or some other regulatory agency.

Q: We saw a patient through workers' compensation. He then settled his claim by Compromise and Release and received $40,000 for past and future medical expenses related to his work injury, in addition to another sum for wage loss. We sent him a bill for current treatment at our regular rate which he has refused to pay, and he insists that we submit it to his private insurance. Should we do this?

A: Because the case has been resolved by Compromise and Release, the workers' compensation law does not apply. You can bill Mr. X at your regular rate. Whether or not he pays you is a contractual matter between you and Mr. X. He has two options. He can pay you with the funds he received from the Compromise and Release. You also can bill the private carrier.

Q: I want to take a patient off work and put him into intensive therapy. What do I need to do?

A: If the claim is open and accepted through means of a Notice of Compensation Payable, you should make your medical recommendation part of your monthly LIBC-9 filing. Hopefully, you have laid a "paper trail" through your office notes. There is no specific reporting requirement for this action. The problem is that Pennsylvania lacks a pre-certification device; thus, there is no guarantee that the bill will be paid or that your patient will be paid workers' compensation benefits while he is undergoing the therapy. Your documentation is, thus, the key if there is a dispute. It certainly might be tactful for you to notify the insurance company, but it isn't required.

Q: We are treating a patient who is 64 years old with neck pain radiating to both arms and numbness in the hand. He has cervical spondylosis, with stenosis at all levels. We have an Agreement for workers' compensation, which provides the patient was hurt in 1997, with the description of injury being "cervical radiculopathy of the right upper extremity." Benefits were suspended in 1998. Our doctor feels that the shoulder injury irritated the degeneration. We submitted LIBC-9, HCFA-1500, and office notes. The insurance adjuster wrote us a letter denying benefits because "treatment for degenerative condition."
What do we do?

A: A Fee Review should be filed with the Bureau of Workers' Compensation where the issue is timeliness or amount of payment. Here, the claim is being denied because your billing is allegedly not related to the work injury. A Fee Review won't work, and a Petition for Penalties must then be filed.

The case is technically still in payment status, since benefits were suspended, rather than terminated. Your paper trail showing a connection between your treatment and current diagnosis and the accepted diagnosis contained in the Agreement will be very important in the hearing before the Judge.

If the patient doesn't have an attorney or if the attorney is not interested, you arguably have the right to file a Petition for Penalties yourself. You may want to hire a qualified workers' compensation attorney to do this.

You can submit this to the patient's other insurance should they have coverage.

Q: The workers' compensation insurance company is telling me that our treatment won't be paid for because we are simply providing an injured worker with relief from pain and not curing her. Are they correct?

A: No. An employer bears the burden of proving that a provider's physical therapy is neither reasonable nor necessary, even though the treatment is essentially palliative in nature. This is true so long as the treatment is reasonable and necessary, is related to the work injury and provides the Claimant with relief from pain.

Q: Can I file an Application for Fee Review now even though my bill was denied a long time ago?

A: Yes. Workers' compensation regulations allow you to file a Fee Review application no more than 30 days following the notification of the disputed treatment or 90 days following the original billing date of treatment. If you fail to file the proper paperwork and then re-submit the bill, you have a new denial date, and thus can file for Fee Review. See Harburg Medical Sales Co. v. Bureau of Workers' Compensation -- Pennsylvania Commonwealth Court, October 18, 2001.

Workers' Comp Tips

Pennsylvania workers' compensation regulations require that the health care provider need only supply one copy of their bill and that is to the payor. Other parties such as the rehab nurse or the employer, may request copies of the bill or ask the physician to complete return-to-work forms, forms for a third party administrator, etc. There are no regulations, which define what a practice may charge for these services. Completion, search and copying fees are the business decision of the individual practice.This applies not only to work generated by a case manager consult or employer, but also to any situation where extraordinary staff time and copying are required, such as copying a file for an attorney's office.

As you know, fees assigned to NEW Medicare codes will not be available until March 1 (e.g., certain shoulder arthroscopy codes). As with all workers' compensation bills, you should bill the carrier your usual charges for these services. Because Medicare (and therefore workers' compensation) fees are not available for these new services if performed in January and February, Section 127.103(c) of Act 57 regulations will apply if these cases are submitted for fee review.

Section 127.103(c) reads as follows: If a Medicare allowance does not exist for a reported HCPCS code, or successor codes, the provider shall be paid either 80% of the usual and customary charge or the actual charge, whichever is lower.

To avoid peer review by a non-orthopaedic surgeon, an orthopaedic surgeon who is subject to a utilization review under workers' comp, must prove that he/she is an orthopaedic surgeon. Do not assume that the utilization review organization (URO) will trust that you are a board certified orthopaedic surgeon. Send a copy of your board certification and CV along with the records to the URO. Otherwise, you may automatically be reviewed by a non-orthopaedic surgeon.