Hannaford Moves to Reduce Workers' Compensation Fee Schedule
At a public hearing on the 2003 coding and technical update to the workers' compensation medical fee schedule last Thursday, an attorney representing the grocery store chain Hannaford argued that the fee schedule should be reduced to be on par with the fee schedules of the principal private payers in the Maine marketplace. The W.C. conversion factor is $60 while the major private payers' conversion factors range from $43 to $48. A representative of One Beacon Insurance Company also spoke in favor of cutting the fee schedule.
The MMA's comments in opposition to any reduction in the W.C. fee schedule are below. The written comment deadline for W.C. Board Rule Chapter 5 is Monday, October 6, 2003 at 5 p.m. If you would like to submit written comments, you should send them to:
Melinda Porter, Workers' Compensation Board, State House Station 27, Augusta, Maine 04333-0027.
COMMENTS ON W.C.B. RULE CHAPTER 5, MEDICAL FEES; REIMBURSEMENT LEVELS; REPORTING REQUIREMENTS
Thank you for the opportunity to review and comment upon the 2003 amendments to W.C.B. Rule Chapter 5, the medical fee schedule in the workers' compensation system. The MMA is comfortable with the 2003 coding and technical update and we support the proposed amendments as presented.
Response to the Proposal to Reduce the Conversion Factor and the Fee Schedule:
Based upon the discussion of the proposed rule at the July 1, 2003 Board meeting, I understand that the more controversial issue in this rulemaking proceeding will be whether Rule Chapter 5 is "too generous" in comparison to Medicare, Medicaid, and the principal private insurers in Maine. While the analysis presented below demonstrates that the workers' compensation fee schedule is higher than other payers' reimbursement rates in Maine, the MMA believes that this difference is justified because of the greater demands on practitioners in the workers' compensation system.While all stakeholders in the system - - employees, businesses, insurers, and providers - - share concerns about cost containment, an across-the-board rate cut would undermine the quality, and ultimately to the success, of the system. The MMA urges the Board not to decrease the fee schedule. A reduction in the fee schedule, particularly in the current environment, will discourage physicians from participating in the workers' compensation system and will reduce the great access injured workers historically have enjoyed to the broadest network of practitioners in the state.
At the Board meeting on July 1st, Ms. Inman gave you an overview of the 2003 update to the rule and the history of the fee schedule. In May 1996, the Board contracted with the Maine Health Information Center and the Muskie School of Public Service to develop a resource-based relative value scale (RBRVS) fee schedule. The conversion factor recommended and adopted by the Board at that time has not received an inflationary adjustment since, despite the increase in practice expenses experienced by Maine practitioners during this period.
As I promised in July, I have attached a chart (Attachment 1) listing 38 representative occupational medicine procedure codes with a comparison among the 2002 workers' compensation fee schedule, Anthem, Medicaid, Medicare, and proposed 2003 workers' compensation fee schedule prepared by Jana Purrell, C.P.C., a certified professional coder affiliated with the MMA. This chart indicates that the workers' compensation fee schedule conversion factor is $60.00, as it was in 1996, Medicare is $36.78, and Anthem is $43.50.Medicaid is not a RBRVS fee schedule and the Aetna, Cigna, & Harvard Pilgrim fee schedules are not readily available to the public.Ms. Purrell estimates that the Aetna, Cigna, and Harvard Pilgrim conversion factors are in the range of $45.00-48.00. The discrepancy between the workers' compensation fee schedule and other payers is amplified in this chart because the other payers all have cut their fee schedules since 1996.
1.IT IS APPROPRIATE THAT MAINE'S WORKERS' COMPENSATION CONVERSION FACTOR AND FEE SCHEDULE ARE HIGHER THAN OTHER PAYERS BECAUSE WORKERS' COMPENSATION CLAIMANTS PRESENT MORE COMPLICATED MEDICAL ISSUES THAN THE AVERAGE PATIENT AND WORKERS' COMPENSATION CASES IMPOSE A GREATER ADMINISTRATIVE BURDEN ON MEDICAL PRACTICES.
Workers' compensation patients simply present harder cases to the practitioner, on average, than do other patients.Their medical issues are complex and they often have a long medical history with prior extensive injuries. More time and professional skill (the "work" component of the RBRVS system) are required of the practitioner to properly treat patients in the workers' compensation system.
Furthermore, the administrative burden on medical practices imposed by the workers' compensation system is substantially greater than by other payers (the "practice cost" component of the RBRVS system).The medical records often are voluminous, the reporting requirements are detailed, and the practitioner's medical judgments often are challenged.Practitioners often experience significant delay in receiving reimbursement. Finally, workers' compensation cases involve practitioners in litigation and present medical-legal issues to the practitioner far more often than do other cases. Participating in litigation in support of the patient and the system is an important duty, but it is time consuming and it diverts the practitioner from providing medical care to attending depositions or administrative or judicial proceedings.
This difference between the professional and administrative cost of workers' compensation cases and other cases is demonstrated by The Effect of Payer Type on Orthopaedic Practice Expenses from the October 2002 edition of The Journal of Bone & Joint Surgery (Attachment 2). The authors of this study found significant differences among payers for orthopaedic practice expenses with the costs for workers' compensation cases being the highest. The authors' findings include:
The total orthopaedic practice expense per episode of care was $123 for self-pay, $195 for an indemnity plan, $148 for Medicare, $178 for PPO, $208 for HMO/POS, and $299 for Workers' Compensation. These differences among payer types persisted even after accounting for patient age, gender, treatment type (nonoperative versus operative), and number of office visits.Nonvalue-added activity expenses differed to a greater degree among the payer types than did value-added activity expenses.Id. at p. 1816.
2.A REDUCTION IN THE WORKERS' COMPENSATION MEDICAL CONVERSION FACTOR AND FEE SCHEDULE WILL REDUCE INJURED WORKERS' ACCESS TO THE BEST PRACTITIONERS IN MAINE.
A reduction in the workers' compensation fee schedule undoubtedly would discourage practitioners from participating in the system and would decrease the access of injured workers to the broadest network of practitioners in the state, particularly the best practitioners who have the luxury to choose their patients.Also, a reduction would exacerbate the cost shifting that is already a significant contributor to the problems in our health care system.
Maine practitioners traditionally have been very good about accepting patients in the workers' compensation system, despite the difficulties associated with the adversarial nature of the system.I understand that your responsibility is workers' compensation system costs, but Maine practitioners would have to consider your decision to reduce reimbursement in an environment where reimbursement rates have been flat or cut by other payers.A reduction in reimbursement at this time would send a bad message to these practitioners and likely would force practices to re-evaluate their participation in the system by limiting the number of worker's compensation patients accepted or leaving the network altogether. [return to top]