Workers Comp Fee Schedules WCRI Blogging Live
Workers Comp Fee schedules have long been discussed in this blog. One of the best methods for a reduction in the premium employers pay for WC is by instituting or modifying fee schedules.
Workers Comp Fee schedules are a balancing act. A fee schedule set too high means it will be basically ineffective. A fee schedule set too low will heavily affect access of care.
Barry Lipton – Practice Leader and Senior Actuary NCCI – Price Impact of WC Physician Fee Schedules
Even with discounts, the WC fees may not be a great reduction when compared to group health insurance:
- One fourth of WC payments are 30% more below the Maximum Allowable Rate (MAR)
- One fourth of general health payments are 63% or more below the MAR
Fee schedules influence more than just the small portion of charges that exceed MAR
Fee schedules may have the unintended consequences of increasing some payments
A discount from a fee schedule amount does not ensure a competitive price.
To determine the effectiveness of fee schedules, it is important to consider market rates.
Perverse Effect Of Fee Schedules That Are Too Low
Do states that have low WC prices which pay lower than group health cause access to medical care complications?
42 states in US have fee schedule, 6 states have fee schedule rates below group health for intermediate physician office visits.
WC office visits in lower fee schedule states
- usually bill as more complex office visits
- physician-dispensed medications
From a California study, when the physician fee schedules are frozen, then unfrozen, then frozen again, the physician stopped (while unfrozen) bill complex office visits. When the fee schedule was frozen again, the physicians began billing for more complex office visits.
Radiological studies that were reduced by fee schedules resulted in most billings for unscheduled services as the hospital would receive 75% of charges. (Florida Study). Scheduled radiology was paid at a much-reduce fee due to the 2003 reforms.
Treatment and billing practices were changed to sustain revenue such as medical providers increasing the number of services and the intensity of the services.
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