Proposed Changes to the Pennsylvania Workers’ Compensation Cost Containment Regulations

The Department of Labor and Industry recently proposed changes and additions to the Medical Cost Containment Regulations setting forth that it wished to remedy many of the uncertainties and varied interpretations the existing regulations. Overall, the proposed rulemaking does not significantly impact the forms, reporting or paperwork requirements that are already in place as the vast majority of the changes merely provide clarity in interpretation.

However, a number of proposed changes and additions are notable, especially as they relate to billing by providers, utilization review and new timeframes for providing records and making determinations with regard to utilization review. While convoluted at best, these proposed changes are best understood when broken down by subchapter including Preliminary Provisions, Medical Fees and Fee Review, Employer List of Designated Providers and Medical Treatment Review.

Subchapter A. Preliminary Provisions

The Preliminary provisions deal with computation of time and definitions used throughout Chapter 127. In sum, the proposed amendments to this section provide clarification with regard to filing and service and consistency with other Chapters of the Workers’ Compensation Act. Definitions have been updated to reflect terminology that is commonly used in the healthcare and insurance industry. Further proposed changes include amendments to allow periodic updated definitions so that the regulation’s terminology remains current.

Subchapter B. Medical Fees and Fee Review

The most important proposed changes in this section are amendments which clarify rates for services under the workers’ compensation fee schedule. Use of the term “transition fee schedule” has been eradicated secondary to changes to the Medicare system and establishment of the original workers’ compensation fee schedule. Further, amendments have been proposed to clarify the means of updating outpatient providers’ reimbursement rates including all inpatient and outpatient providers. The subchapter has been further amended to reflect that Coordinated Care Organizations are approved by the Department. The reimbursement rates are clearly set forth for each type of provider throughout the subsection and are clarified for understanding.

1. Calculations

   In breaking down the proposed changes to this subsection, several key changes stand out with respect to calculations for reimbursement. Under § 127.117, cost-reimbursed providers not subject to the Medicare fee schedule will now identify services in the charge master by reference to service descriptors rather than service codes and a means will be provided to incorporate new codes and new services. Under §127.129, the requirement that out-of-state providers cap their fees under the Pennsylvania Fee Cap Schedule has been eliminated as it has proven unenforceable and provides false assurance to those treating out-of-state. Further, §127.130 dealing with special reports provides that payment for such reports no longer be capped at 80%. When disputes arise for payments for prescription drugs, the “Drug Topics Redbook” will be now be used to resolve such disputes under §127.131.

2. Billing Transactions

   Under the proposed changes, some of the commonly used forms for medical billing will no longer be required, notably the HCFA Form 1500 and the UB92 Form, as §127.20 has been rescinded. Instead, providers will continue to submit a detailed bill including the service codes and medical documents, but will be required to seek repayment with all applicable materials within 90 days from the first treatment reflected on the bill. Failure to properly request payment within the 90 days period will result in waiver of the right to proceed against the insurer or claimant for payment of such bills.

   Under § 127.209, EOB or “Explanation of Benefits” is now referred to as EOR or “Explanation of Reimbursement” and must detail reasons for denying or downcoding a bill. Further, §127.129a is an entirely new subsection which requires any entity engaging in the business adjusting and paying medical bills on the behalf of the provider, insurer, employer or self-insurer to register with the Department under §441(c) of the Act.

3. Review of Medical Fee Disputes

   With regard to application for fee review, the proposed changes set forth that providers no longer have to submit additional copies of fee review applications with their applications for fee review. However, a copy of the first bill sent to the insurer must be included along with language consistent with §§127.203-127.208. Further, pursuant to changes to §127.256, the Bureau may summarily deny applications for fee review when not timely submitted and is no longer required to conduct an investigation. Procedure surrounding fee review hearings has also been clarified to better explain the operation of a hearing. Moreover, § 127.259a is a proposed addition to the section, setting forth the burden of proof in a fee review hearing as proof by a preponderance of the evidence that an insurer properly reimbursed the provider. Moreover, when a party alleges that procedural requirements have not been met or the provider did not timely file its application for fee review, the party making the allegation shall have the burden of proving by a preponderance of the evidence that the opposing party has failed to meet those requirements.

Subchapter D. Employer List of Designated Health Care Providers

Proposed amendments to Subsection D provide that when using a designated list of health care providers, an employer may not require the employee to report to a single point of contact before receiving treatment from a provider on the list. Further, if the list references a single point of contact or referral for more than one provider on the list, all providers associated with the point of contact or referral shall be considered a single provider.

Subchapter E. Medical Treatment Review

Subchapter E is a proposed new section which appears to revise Subsection C relating to Medical Treatment Review, although the proposed changes do not indicate that Subchapter C has been rescinded. The Department does propose rescinding §§ 127.153-127.161 which relate to medical treatment review however. In sum, Subchapter E sets forth the regulations which surround utilization review and peer review and provides a more organized framework for these rules than Subsection C. I will highlight some of the additions that could be made to this area if the rules take effect as originally proposed.

1. Precertification

   Under § 127.821, an employee or provider will be able to seek precertification of treatment that has not yet been provided. Sections §§127.822-127.825 detail the required steps that must be undertaken by all parties when such a request is made. Importantly, if the insurer denies a causal relationship between the work-related injury and the treatment or denies liability for the work injury on the Bureau prescribed form, the Bureau will not process and request for precertification. However, if an insurer improperly denies a causal relationship or liability, penalties may be assessed. If the Bureau determines that the requester is entitled to request precertification, the Bureau will assign the request to a URO. As with general UR determinations, appeal is permitted after the determination is rendered.

2. Redetermination

   Pursuant to proposed §127.842, a party to a determination that prospective treatment is unreasonable or unnecessary, may request a redetermination of the treatment upon evidence that the employee’s medical condition has changed and the treatment is now reasonable and necessary. Redetermination shall only be permitted when medical records of treatment occurring after the initial determination demonstrate that the employee’s medical condition has changed.

3. URO Operations

   Further changes have been proposed with regard to the timeframe in which providers must mail all requested medical records to the URO. Previously, providers had 30 days of the postmark date of the URO’s request to mail the records. However, pursuant to §127.851(c), the timeframe has been shortened to 15 days. As such, under §127.862, a UR request shall be deemed complete upon the URO’s receipt of the medical records or 18 days from the notice of assignment, whichever is earlier. This is shortened from the previous 35 day limit. Further, a URO now has 20 days following a completed request to render its decision and 10 days to render its determination on a UR redetermination.

   Other minor changes include §127.856 which provides that within 10 days of the date of the Notice of Assignment, the insurer may submit peer-reviewed, independently funded studies and articles and reliable medical literature which are relevant to the reasonableness and necessity of the treatment under review to the URO. Further, documentation of any actual or attempted contact with the provider under review is no longer listed as a required element to be discussed within a reviewer’s report.

Conclusion

The proposed rules were initially published on June 10, 2006 and comments were accepted thirty days thereafter. The proposed rulemaking will take effect upon final-form publication in the Pennsylvania Bulletin. Currently, the proposed changes are still in review.

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