Where Were the Payers in Florida?

Monday, December 14, 2009 | 0

By Joe Paduda

The ongoing battle over the work comp hospital fee schedule in Florida continues, as challenges have been filed by two hospitals, the Florida Hospital Association, and FairPay Solutions that prevent implementation of a dramatic revision to existing fees pending further action by an administrative law court.

According to Mike Whitely's Dec. 9 piece in WorkCompCentral, the suits allege that the Florida Division of Workers Compensation "exceeded its rule-making authority and strayed into the legislative realm by abandoning the usual-and-customary charge system."

Florida Statute Section 440.13 gives the final authority for setting workers' compensation medical fees to the state's Three-Member Panel. But it specifies that all outpatient fees are to be paid at 75% of usual and customary charges, except as otherwise provided by state law. The statute separately sets the payment for outpatient surgeries at 60% of charges.

The Florida Hospital Association and FairPay argue in the filings the proposed fee plan "enlarges, modifies and contravenes" the law by shifting to a Medicare multiple fee schedule.

Fortunately for employers and insurers in the Sunshine State, the actions of FairPay and the hospitals will save them from much higher hospital costs, costs that the payers have done nothing to address.

I'm bewildered as to why payers insurers, employers, third-party administrators, self-insured groups have not vociferously protested the proposed changes. As I've noted repeatedly, the proposed changes will dramatically increase medical costs in Florida's work comp system with no concomitant increase in value, return-to-work effectiveness, quality of care, or reduction in total claims cost or duration of disability.

No, this is nothing more than a giveaway to hospitals, a big increase in their income from treating workers' comp patients. Here's how work comp payers are going to be harmed by the proposed changes.

First, this methodology means work comp will pay 174% of Medicare for surgeries and 395% for other hospital outpatient services. Does anyone, at any payer, think that it is reasonable for them to pay hospitals four times more than Medicare does?

Second, the location of services will likely change dramatically to the higher cost hospital location. Thus procedures which were being done in offices will now be billed at the much higher rates by hospitals.

Yet not a single payer filed a protest that would have delayed the implementation of this onerous and costly regulatory change.

Not one.

What does this mean for you?

Who's looking out for your interests?

Joe Paduda is principal of Health Strategy Associates in Connecticut. This column was reprinted with his permission from his blog, http://www.managedcarematters.com