Last Chance to Avoid Higher Comp Costs in Fla.

Thursday, December 3, 2009 | 0

By Joe Paduda

Florida is scheduled to dramatically change the way hospitals get paid to care for workers comp patients, and if payers don't get their act together, they're going to be paying more a lot more for medical care.

WorkCompCentral reported that a hearing, tentatively scheduled for this Wednesday to review the change, will not be held if no public comments are submitted. That was the case as of the day before Thanksgiving.

Here's why payers should have shucked off their post-prandial lethargy and gotten their comments/objections/concerns in to DWC.

The revised fee schedule would have payers owing hospitals 174% of Medicare for surgeries and 395% of Medicare for other compensable charges. Workers' comp is already the most profitable line of business for Florida hospitals, and this methodology makes it even more lucrative. According to an analysis performed by FairPay Solutions, this methodology will increase payers' costs today by 181% for surgeries and 330% for other hospital outpatient services.

Not only are the hospitals going to prosper under this new scheme, work comp networks contracted with hospitals at a percent off charges are going to be rolling in dough, as the charges are going to be much higher, and their 'savings' are going to be as well.

It's not just a price issue expect to see many surgeries and other services currently performed on an outpatient basis shifted to inpatient to take advantage of the much higher reimbursement. Thus procedures which were being done in offices will now be billed at the much higher rates by hospitals.

This isn't just speculation. South Carolina put in a Medicare+ hospital fee schedule on Oct. 1, 2006. NCCI recently filed a 23.7% WC rate increase. Even though South Carolina's adoption of a Medicare+ hospital fee that pays hospitals less than the fee schedule proposed by Florida (140% of Medicare in South Carolina versus 174% to 395% of what Medicare pays being proposed for Florida), paying South Carolina hospitals more has significantly increased medical costs and utilization in the state.

What does this mean for you?

If you're a network or hospital, happy days.

If you're a payer, higher costs - much higher costs.

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