What's Coming in Florida

Tuesday, June 3, 2008 | 0

--By Joe Paduda

I'm mystified, perplexed, confused, confounded, and appalled.

There's just no other logical reaction to the goings-on in the Sunshine State, where several workers' comp payers are actually supporting a major increase in reimbursement for outpatient facilities -- an increase that is wildly inflationary and completely unnecessary.

I've reported on this impending disaster a couple times over the past month, a disaster that the payers are bringing on themselves. Comp reimbursement in Florida is under the control of the 'three member panel', a triumvirate that is attempting to come up with a clear definition of 'usual and customary' -- the criteria by which facilities are reimbursed under workers' comp.

Here's a brief video metaphor of the last hearing...

The panel is looking to specifically and clearly define U&C in an effort to eliminate the ongoing legal battles between payers and hospitals over what exactly is 'usual' and 'customary'. The benchmark that the panel seems committed to is the amount hospitals charge Medicare. Not get paid by Medicare, but charge Medicare. According to testimony at one of the panel's recent hearings, hospitals mark up their Medicare costs by 715% -- they charge Medicare seven times more than it costs the hospital to provide the service.

If the proposed regulation is adopted, workers' comp's "usual and customary" would be based on that 715% mark up. Running the numbers, this would result in workers comp payers paying Florida hospitals (and perhaps ASCs) 472% of what Medicare pays for outpatient services -- one of the highest rates in the nation.

And this will increase Florida WC costs by about 20%.

Yet payers are supporting this change. Why? Do they want to increase policyholders' costs? Jack up their loss ratios? Are they feeling particularly charitable (always easy when spending policyholders' money)?

Or is it because they are sitting in the back of the train, relaxing while it hurtles down the tracks, blindly confident in their ability to determine its destination?

In private conversations, they say because it will make it easier to deal with the issue, establish a firm basis for reimbursement, eliminate the hassle, end the litigation.

If that's the case, why not just set the amount at "whatever the billed amount is, you have to pay it"? That would be even simpler, eliminate the complex calculation needed under the proposed system - and have the same result.

Payers are being incredibly short sighted. Lazy even. And that's leading to a train wreck.

What does this mean for you?

(Many) employers in Florida are being ill-served by their insurers and TPAs. Send this post to your broker and ask them to find out what your work comp carrier's position on this is and why, and what they are doing to protect your interests.

Or you can just hang out in the club car, trusting that someone will get control of this impending disaster before too late.