Workers Comp Audit Stress Reducer
Use It For Your Next Premium Audit

Medical Bills – UC vs Fee Schedule – Are You Overpaying?


Medical Bills U&C – Overpaying?

Are you overpaying for medical bills in U&C or a fee schedule?  I posted my views on medical billing for Workers Compensation in this article.

Workers Compensation bills, of course, are processed on a usual and customary (U&C) or a fee schedule basis. There seems to be a bit of confusion among J&L’s clients and people that I talk to at conferences or when I do presentations concerning U&C bills.

Medical Icon On Spotlight With Dollar Sign Shadow Medical Bills Graphic
(c) 123rf.com

Usually, when a Workers Comp medical invoice is received, it is processed with a fee schedule and then certain bill processing providers will send the bills through their Preferred Provider Networks (PPOs). A customary discount is taken – usually 10 – 20% for the medical providers that have signed on with the PPO.

As with health insurance PPOs, the medical providers trade the PPO discount for a theoretically higher volume of patients. Some networks allow a stacking of networks which will result in even a higher discount. Some states do not allow the stacking of PPO networks.

Picture Of Man Frustrated Holding Medical Bills Paper

There are many derivations of the fee schedule and PPO network structures. This post would be too long if I even started to cover them all. The main area I wanted to address is the U&C bills.

There are two main instances where medical bills should be processed under U&C:

  • If there are no Workers Comp fee schedules
  • Medical bills other than Workers Comp (disability, health, auto, liability, etc)

The one concern that most of our clients have is the cost of processing medical bills that do not have a fee schedule. Long-term or short-term disability cannot be processed as Workers Comp bills. They should be processed under a U&C agreement. There are many different levels of U&C. Medical bills other than Workers Comp are usually processed using many different factors such as address, etc. The one caveat here is that U&C bills are more expensive to process.

U&C bills often are subject to a nurse review, then varying different analyses to reduce the bills. U&C bills are much more likely to be protested or negotiated. The simple process mostly used for Workers Comp bills with a fee schedule does not apply.

Graphic Of Dollar Medical Bills Concept
(c) 123rf.com

Almost all U&C bills are processed on a % of savings basis. This consists of the medical bill processing company charging a % of the bill reduction, not on the total bill. For instance, if a $23,000 bill was reduced to $15,000 the medical bill processor will only charge a % of the $8,000 reduction – not on the $23,000.  

The bill processors we use have performed an outstanding job on U&C medical bills regardless of whether they were in a non-fee schedule Workers Comp state or if the bills were not Workers Comp. We recently added another provider that can be stacked on top of our normal medical bill processing.  J&L had to search for months to find this type of processor.

Bottom Line – Are you overpaying for your medical bill processing be it Workers Comp or not? It is not very likely regardless of whether the medical bills are Workers Comp or another line of insurance. There are exceptions that you can easily spot with reports from your medical bill processor.

©J&L Risk Management Inc Copyright Notice



James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


Get the latest workers' comp news FREE!

This field is for validation purposes and should be left unchanged.