Ill. WC Medical Costs: The Times, they are A'Changing
Wednesday, August 24, 2011 | 0
The 2011 Amendments to the Illinois Workers' Compensation Act were passed by both houses of our Legislature in late May and the governor signed the law on June 28. Here are some thoughts on the many changes coming at our readers:
Section 8(d)(1) changes go into effect for injuries on and after Sept. 1. Wage-differential benefits shall be calculated to
the age of 67 or 5 years from when an award becomes final, whichever is longer. This reduces wage loss exposure significantly, as wage loss benefits have traditionally been calculated through a claimant's life expectancy. Reserves need to be adjusted on your new claims.
For injuries on and after Sept. 1, Section 8.1(b) implements the use of American Medical Association Guidelines to determine impairment ratings. Such ratings are to be considered by arbitrators but cannot be the exclusive factor in determining a permanent partial disability award.
Fee Schedule Changes: Effective Sept. 1, for services performed on and after Sept. 1, the charge shall be no more than 70% of the fee schedule amount. If a fee schedule amount cannot be determined, a 53.2% reimbursement rate shall apply. Prescriptions filled outside a licensed pharmacy shall be reimbursed at a rate that does not exceed the average wholesale price, plus $4.18 as a dispensing fee. Implants shall be reimbursed at 25% above the manufacturer's invoice price, less rebates.
Effective Sept. 1, the timeline for prompt payment of an accepted medical bill is reduced from 60 days to 30 days when a
provider provides a substantially all data required to pay the bill. This imparts an obligation on the insurance companies or self-insureds to promptly identify the basis for non-payment within a 30-day period rather than the prior 60-day window.
Utilization Review Guidelines: For treatment on and after Sept. 1, upon written notice the employer or an insurer is invoking utilization review, the provider must submit to the utilization-review process and make a reasonable, timely and complete report of clinical information needed to support the request. If a provider fails to make such reasonable efforts, the charges for treatment or services may not be compensable nor collectible by the provider or claimant. Any findings upon utilization review must be provided to the provider and employee. An Illinois employer may only deny payment or refuse authorization on the grounds the extent and scope of medical treatment is excessive or unnecessary pursuant to utilization review guidelines.
Effective Sept. 1, a petitioner must establish by the preponderance of the evidence a variance from utilization review standards is reasonably required before treatment denied under UR will be awarded. There is a requirement the final reviewing professional must be either available in Illinois for interview or deposition, or be available via telephone, video conference or any electronic means for remote deposition purposes.
Section 8(a)(4) of the Illinois Workers' Compensation Act outlines when an employer has an approved "preferred provider program" (or PPP) pursuant to Section 8.1(a), the employer shall, in writing on a form promulgated by the Workers' Compensation Commission, inform the employee of the preferred provider program and then subsequent to the report of injury, the employee may choose in writing at any time to decline the preferred provider program in which case that would constitute one of the two choices of the medical providers to which the employee is entitled.
We are not aware of any difference between all the "PP's" we feel these are confusing but the terms represent different names for the same thing.
- Preferred Provider Programs or PPPs,
- Preferred Provider Networks or PPNs,
- Preferred Provider Organizations or PPOs,
- Preferred Provider Associations or PPAs.
We feel these amendments are going to create a Plan A and Plan B type of medical care from the perspective of workers' compensation claims managers.
Plan A is the PPP that will have its own internal controls and costs on medical care they provide. Lost time should also be implicitly limited as part of such care.
Plan B is the opt-out situation that will have traditional and inefficient controls like independent medical examinations, utilization review and the Illinois medical fee schedule, surveillance and litigation to "control" overtreatment and overbilling.
No one in the industry is certain how employers and PPP's are going to intertwine. We expect the Liberty Mutuals, Zurich's, Travelers and other insurance carriers/third-party administrators to align with preferred PPP's, as they did with utilization review providers, but we do not currently have word this is happening. As they do with other vendors, some carriers may try to make
their PPP of choice exclusive in exchange for favorable business relations they do or don't disclose to their accounts.
We were asked this week if a large Illinois employer can pick their own PPP and tell their TPA/carrier who to use. The answer is
probably-if an employer is big enough, you stir the coffee and not vice-versa.
We were also asked this week if the state of Illinois will roll out a PPP for state workers. To be blunt, the answer is there is
probably too much red tape and they are probably too disorganized to try to actually save the taxpayers a dime. It will also be hard to find a PPP that won't mind having its providers paid in 2014 or later for medical services performed this year. Gov. Patrick Quinn won't address the issue unless and until the press causes a stink about inaction and then he will fire a bunch of folks to bring in more folks who have no idea what to do in other words, Illinois government at its finest.
From the perspective of medical providers, such as doctors, hospitals and diagnostic facilities, PPP membership is not exclusive. They can join every PPP and have different contracts and reimbursement packages with each PPP.
Subsection 8(a)(4) (C) indicates prior to the report of an injury, when an employee chooses non-emergency treatment from a provider not within a preferred program, this will constitute the employee's one choice of medical provider to which the employee is entitled.
Section 8.1(a) of the Illinois Workers Compensation Act outlines a Preferred Provider Program on the effective date of the Act allows an employer to utilize the program approved by the Illinois Department of Insurance.
This section also outlines any provider network must include "adequate" occupational and non-occupational providers. It shall include an adequate number and types of physicians to treat common work injuries in the general geographic area where the employee resides. The director of insurance may deny approval of any such preferred provider program where it is determined a policy or procedure is put in place which causes unfair reduction or delay of medical treatment.
A word of caution: it appears the employee, once he or she elects to treat within the provider network is permitted to choose any physician within the network without restriction on the choice of physicians. Therefore, it appears employees may be allowed to seek numerous second, third or fourth opinions, as long as the providers are within the network.
By offering a workers' comp PPP, an employer cuts claimant's choice of doctors in half. Just by offering it, the worker can only choose one doc and a single chain of referrals. Illinois employers can now openly direct care into a network that should understand your needs.
Our recommendation to all Illinois employers is to push workers' comp PPP's early and often. We are recommending our Illinois clients and prospective clients tell all workers about the PPP when they are hired at new employee orientation. We are confident savvy employers will have their supervisors route the workers into the PPP when they start care. We feel employers should push injured workers to stay in the PPP at all times. We feel employers should consider putting the PPP information and contacts on the company website.
At the end of care, we feel PPP docs may give out impairment ratings and offer the ratings to close claims and avoid litigation.
If a PPP doc or provider stinks and is routinely overtreating, we feel employers are going to yell at their carriers/TPA's to get them in line quickly or face being fired/ousted by the PPP. This is another positive feature to PPPs.
PPPs should provide medical reimbursements lower to much lower than the Illinois medical fee schedule.
No one is sure if companies are going to have one PPP for both group and workers' comp medical care. It makes sense to us but we are waiting and watching to see what the industry is doing with the idea.
Eugene Keefe is a founding partner of Keefe, Campbell & Associates, a Chicago workers' compensation defense firm. This column was reprinted with is permission from the firm's client newsletter.
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