Langham: Important Points From 2017 Three-Member Panel Draft Report

Tuesday, January 3, 2017 | 0

The Florida Three-Member Panel will meet this month in Tallahassee. The panel is a statutory body created and enabled by Section 440.13(12), Fla. Stat. It deals with reimbursement rates and schedules. And, it is charged with submitting biennial recommendations "on methods to improve the workers’ compensation health care delivery system."

Chief Judge David Langham

The 2017 meeting has received some publicity because the agenda and draft report make mention of a pharmacy formulary. That is worthy of attention and discussion. However, there is much more in the draft report of the panel.

The panel notes that the workers' compensation system here is significant. It says, "Florida has a $3.64 billion workers’ compensation marketplace." This industry and system, the panel says, impacts "hundreds of thousands of employers, thousands of health care providers and hundreds of insurance companies."

It does not mention workers' specifically. But clearly the Florida workers' compensation system impacts literally millions of Florida employees (injured or not, the system is here for all employees). I have said it before: This system is literally "huge" (see "Where Did it Come From, Where Is it Going, and How 'Huge' is it Anyway?,' Lex and Verum, June 2014, http://www.nawcj.org/docs/newsletters/newsletter_2014-06.pdf).

The panel has previously noted its support for Florida workers' compensation being exempt from certain requirements of Chapter 120, Fla. Stat. Since 2010. All State agencies have been required to assess the financial impact of rules and regulations. The concept is simple: Government should be conscious of the implications of its actions. So, when regulations are proposed by agencies, they are required to assess the financial impact of those regulations.

If certain criteria are met, the proposed regulation has to be approved (ratified) by the Legislature (the body that is elected by the people of Florida to pass laws). The main criteria at issue here is when regulations will result in a $1 million impact or cost within five years of enactment.

The panel notes that workers' compensation is large, affects so many, and virtually any change in fee schedules for medical services will exceed that total. Therefore, the panel advocates that the division should be exempt from this requirement to enhance its nimbleness and effectiveness. Legislative bills in 2015 sought this change but did not pass.

Following attention to repackaging of pharmaceuticals, there were recommendations from the Three-Member Panel in 2013. Legislative changes were made regarding reimbursement for pharmaceuticals. The 2017 Biennial Report Draft says that the reimbursement for medication in Florida has changed markedly in the period 2011-2015. Highlights include:

• The total payments for physician-dispensed repackaged drugs decreased 73%.
• The total payments for pharmacy-dispensed repackaged drugs decreased 65%.
• The total payments for all repackaged drugs decreased 73%.
• The total number of repackaged drug prescriptions dispensed by pharmacies decreased 28% , (and for physicians) a 78% decrease.
• The total for physician-dispensed non-repackaged drugs increased 626%.
• Pharmacy-dispensed nonrepackaged drugs total payments increased.
• The total payments for all non-repackaged drugs increased 33%.
• The total payments for all drugs dispensed by physicians and pharmacies increased 2%.

The 2017 draft report also discusses electronic medical billing. It documents that the Division of Workers' Compensation held a meeting in 2014 and solicited input from stakeholders regarding electronic billing. From this meeting, the division concluded:

• E-billing continues to grow in Florida.
• There was general agreement that e-billing may lead to quicker payments to providers, and reduce administrative costs compared to issuing and processing paper bills.
• Pursuing a mandate and implementing a “one-size fits all” approach may prove to be the least effective method to expand the use of e-billing.
• The Division of Workers’ Compensation should continue to promote mutually agreeable e-billing practices between the provider and the insurer.  

The draft report concludes that the division should "continue its current practice of permitting health care providers to electronically submit medical bills to insurers" — essentially continue to allow but not mandate electronic billing. This allows flexibility, but little consistency for the "hundreds of thousands of employers, thousands of health care providers, and hundreds of insurance companies."

Essentially, Florida today may have hundreds of available e-billing platforms available to its "thousands of health care providers." Whether any make use of these hundreds of various programs is up to each provider. Would consistency or standards help the market move in the direction of e-billing?

There appears to be no appetite in Florida for mandatory e-billing. If either the medical providers or insurance carriers were clamoring for such a process, it seems likely that there would be more discussion and perhaps movement toward mandatory standards or participation.

The Three-Member Panel's recommendation for continuing the current course is predicated on the absence of such clamoring ("unless providers and insurers specifically request the Division to mandate a standardized e-billing requirement ...").

The debate of electronic medical billing came up in a recent conversation at the National Disability and Workers' Compensation Conference in New Orleans. The mandate of several states was mentioned, generally as outlined in When Will Electronic Billing Come to Florida. That post noted that only four states mandate e-billing: New Jersey, Minnesota, North Carolina and Texas. Six other states "have adopted an electronic medical billing framework for their workers' compensation systems: California, Georgia, Illinois, Louisiana, Oregon and Washington. While these are not mandating use, they are seeking some uniformity among likely "hundreds of insurance companies" in those states.

The benefits of e-billing are obvious. The process will reduce cost, decrease duplication of effort regarding data entry, and lead to greater access to treatment and cost data. When these benefits were discussed in New Orleans, several experts corrected the "misconception" of mandatory e-billing. They assured me that although some states "say" that e-billing is "mandatory," no state enforces the use of e-billing. One suggested to me that actual compliance with the requirement in some "mandatory" states may be as low "as the teens." One attendee confided in me that states lack the will to enforce regulations on physicians.

That conversation reminded me of the first meeting of the National Summit in Dallas last summer. As we discussed health care in the broadest workers' compensation context there, the impact of the Affordable Care Act was raised. Some expressed that it might impact workers' compensation positively, because now "everyone has health insurance."

That drew laughter and derision. Other participants assured us that millions remain uninsured after full implementation of this federal law. Despite health insurance being "mandatory" for all Americans, it appears that coverage may remain optional for a great many.

These two definitional misinterpretations of the word "mandatory" reminded me of Capt. Jack Sparrow ("Pirates of the Caribbean: The Curse of the Black Pearl," 2003). In it, various characters periodically attempt to rely upon the "code of the brethren," or the "pirate's code." Seen by some as a binding governing document, it is humorously discounted and derided throughout the movie.

Capt. Barbossa notes at one point, "the code is more what you'd call 'guidelines' than actual rules." And, perhaps that is true of the "mandatory" that is applied to e-billing and health insurance. Perhaps the benefit of "mandatory" e-billing is limited to a good feeling about "progress" without any commensurate actual requirement of actually using the system.

Perhaps there are those out there who have different perspectives on how "mandatory e-billing" works. Are there other "mandatory" elements of workers' compensation that are, in fact, voluntary due to enforcement issues? Are jurisdictions better served by "mandatory" systems that are not, or voluntary systems? Are voluntary systems with standardization better than those without? Many questions remain about electronic billing.

David Langham is deputy chief judge of the Florida Office of Judges of Compensation Claims. This column was reprinted, with his permission, from his Florida Workers' Comp Adjudication blog.