It may surprise medical providers to learn that, whenever they submit bills to workers’ compensation insurance companies, there are other companies that spring into action hoping to take a piece of the action.

The two primary businesses that make money from the handling of medical bills in the workers’ compensation system are PPO networks and repricing companies. These groups earn fees by helping the insurance companies to pay less than the full amount of medical charges.

I will always remember a vice president for a national insurance company admitting to me, “We don’t care what the doctor charges; we refuse to pay a bill in full no matter the charge.”  I have reviewed thousands and thousands of billings, and I can tell you that this unusually revealing statement is most definitely true.

Here is how it works:  The insurance company receives a medical provider’s bill, and sends it on to a repricing company for review and handling. The repricing company first seeks to determine whether any PPO networks have secured contracts from the provider permitting the application of discounted fee schedules to the bill. If so, those schedules are applied, and the provider will receive a payment along with an Explanation of Review that will inform the provider that its bill has been reduced in accordance with the signed PPO contract.

But if the repricing service finds no PPO contracts in effect for a particular provider, the bill is still never paid in full. Instead, the repricing service will apply certain reduction standards of their own devise, then issue partial payment along with an Explanation of Review that lists the criteria applied in that particular case.

The repricing service earns a commission or a line item audit fee based on the amount it successfully saves the insurance company off the bill. If a PPO network’s contract played a key role, the network company will also earn a commission.

In Virginia, PPO network contracts will generally be enforced. But in the absence of such contracts, many of the discounts claimed by repricing services can be defeated by medical providers if they should choose to challenge the underpayments through the Virginia Workers’ Compensation Commission’s medical provider claims process.

At Meyer, Goergen & Marrs, our experience has been that PPO network contracts in the workers compensation industry are a notoriously bad bargain for medical providers. Once “out of network”, a provider can successfully challenge repricing companies’ bill slashing and greatly improve their realization rates on their workers’ compensation billings. Let us show you how we can work with your billing staff to get you the payments to which you are entitled and improve your practice’s financial performance.

Professionals:

Rick Yannitello
Brad Marrs

Any medical providers with billing claims pending before the Virginia Worker’s Compensation Commission will want to follow closely the potential actions by Congress in dealing with CMS payment rates. That is because many workers’ compensation repricing network contracts allow the networks to base their worker’s comp reimbursements upon CMS rates for each procedure code.

Right now, Congress is considering reducing reimbursements to providers due to federal budget constraints. For many providers, participation in Medicare is a matter of professional duty, with care being provided partly as a public service, given the knowledge that payments will be woefully below true value. If reimbursement rates are cut still more, the cost of participation may rise so high that more and more providers opt out of the federal systems by declining [Medicare or Medicaid?] patients.

Each provider will need to make its own decision as to whether or not to continue participating in any system that requires the provider to work below cost. That approach has always applied to worker’s comp as well, but due to the often direct relationship between CMS rates and worker’s comp reimbursements, providers need to be alert to the possible need to make a business decision this year.

That decision need not be to stop treating worker’s comp patients.  Rather, it would merely require the provider to exit all workers’ comp networks, treating comp patients only on an “out of network” basis.  In those situations, Virginia law mandates payment according to “prevailing community rates” or PCR – rates that are determined according to statistical evidence reviewed on a case-by-case basis, without regard for CMS payment schedules.
Any medical provider needing help with its worker’s compensation network relationships, or just with getting fairly paid on worker’s compensation billings, should contact attorney Brad Marrs, or worker’s comp consultant Rick Yannitello.

Click here to read more about Revenue Solutions for Healthcare Providers

Most worker’s compensation provider networks are pretty much interchangeable.  Each has a published directory of those medical providers who have signed contracts to join the network, thereby agreeing to allow payors to take steep discounts on the providers’ billings.  The networks give no consideration to quality of care, nor to how the providers save the employers money by minimizing time lost from work and returning an employee to functional activity.

The networks sell membership by promising greater utilization by payors – an increase in patient volume that, in our experience, never materializes.  What the employers and their insurers do care about, and what influences their utilization decisions most, is getting injured workers back to work through quality care.  The “Box O’ Contracts” offered to payors by the networks is something they are happy to take advantage of if available, but seldom influences the choice of medical provider up front.

Many medical providers have no recollection of how they got into worker’s comp networks in the first place, much less what they are to be paid, or how they might go about exiting the networks.  The layers of red tape, redundancy, inefficiency, and misinformation cause medical providers to spend four times as much time on a worker’s compensation claim compared to a non-injury claim.  Frankly, the networks prey on the sheer difficulty of dealing with them to hope that the provider simply never bothers to challenge its handling of billings.

At Meyer, Goergen & Marrs, in addition to helping providers to recover just payment for their professional services, we help to identify network contracts that may date back decades as well.  This allows our clients to determine if the network is actually performing in the manner it promised, or how they can effectively terminate their network relationships for their long term benefit.  Instead of being one more contracted provider in the box, our clients can focus on providing high quality care, and then let us work effectively for them in assuring that they are paid as the law requires.

Any medical provider needing help with its worker’s compensation network relationships, or just with getting fairly paid on worker’s compensation billings, should contact attorney Brad Marrs, or worker’s comp consultant Rick Yannitello.

Click here to read more about Revenue Solutions for Healthcare Providers

I have been asked numerous times over the years, “What is the difference between all the disability programs for injured workers?”

Let’s talk first about the workers’ compensation system.

In Virginia any employer with 3 or more employees is required to carry workers compensation insurance. The policy rates are determined by the industry in which the employer operates, and its history with prior claims. When a worker is injured in the course of employment, the injured party is provided both medical benefits and reimbursement for income lost.

Virginia’s workers’ compensation system does affect the business performance of any medical practice providing treatment for work-induced injuries. Providers need to be savvy to the rules of our state’s system in order to assure that they are paid the full amounts to which they are entitled under the law.

Unlike many other states, Virginia does not specify a fee schedule for provider services. The state workers’ compensation law requires only that insurers pay either the amount billed or, if less, the “prevailing community rate.”  Unless the provider signs a contract with a workers’ compensation claims processing network that specifies particular rates of payment, the insurance company has the burden of proving that amounts billed exceed “prevailing community rates.”  In the absence of a signed contract or proof of overcharging, the Virginia Workers’ Compensation Commission commonly orders insurers to pay providers the full amount of their billings.

Sometimes a medical provider in one state may find itself treating a patient with a worker’s compensation claim pending in another state. Medical providers are to follow the compensation act in which the patient was injured. Virginia-based providers treating patients injured in accidents in other states may be surprised to learn that their charges will be compared to fee schedules adopted by law in, e.g., West Virginia, Tennessee, Maryland, Pennsylvania, or Washington DC. Some of these states even allow for management of the course of care by parties other than the treating physician.

On the other hand, out-of-state providers treating patients with claims in Virginia’s system will not face managed care decisions imposed from outside the doctor-patient relationship. Nor will they be subject to the application of rigid fee schedules; instead, they will be able to rely upon the presumptive validity of their own rates and bills.

There are other work injury programs that affect medical providers such as Longshore Harbor Workers Act, Jones Maritime Act, Federal Employers Liability Act, and Department of Labor/Office of Workers Compensation Programs. More to come; stay tuned.

Professionals:

Rick Yannitello
Brad Marrs