Category Archives: Billing

“Florida, We Have a Problem”

Tuesday, Judge David Langham, Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings, wrote a rather lengthy post about the differences between cost-shifting and case-shifting in workers’ comp.

Much of what the Judge wrote were subjects that I already discussed in a number of previous posts about cost-shifting and case-shifting, so I won’t go into it here. I am only focusing on the parts that relate to Florida workers’ comp. You can read the entire article yourselves.

But what caught my attention was what he said about Florida and what the Workers’ Compensation Research Institute (WCRI) reported in some of their studies on these issues.

As Judge Langham wrote this week, he wrote a post two years ago that asked the question “Why Does Surgery Cost Double in Workers’ Compensation?”

Judge Langham noted in that post that Florida employers have been documented paying almost double for shoulder or knee surgery that is paid for under workers’ compensation, compared to group health costs.

The implication of case-shifting in Florida, he says, could arguably be a doubling of cost.

He cited a WCRI report released earlier this year that suggests however that case-shifting is perhaps not as likely in Florida.

According to the report, Judge Langham continues, “as of July 2011, six states had workers’ comp medical fee schedules with rates within 15% of Medicare rates. They were California, Massachusetts, Florida, North Carolina, New York and Hawaii.”

However, Judge Langham pointed out that the WCRI concluded that case-shifting is more likely in states where the workers’ compensation fee schedule is 20% or more above the group health rates, and not in Florida.

Judge Langham stated that this analysis of workers’ compensation fee schedules does not appear to include analysis of the reimbursement rates for hospitals, and that It also seems contradictory to the assertions that Florida workers’ compensation costs for various surgeries have been documented as roughly double the group health rates (100% higher, not 15% higher).

Injured workers who missed work in the Florida workers’ compensation system could be compensated in 2016 at a rate as high as $862.51 per week, the “maximum compensation rate.”

So, if recovery from such a “soft-tissue” injury required ten weeks off-work, he wrote, the case-shifting to workers’ compensation might add another four to nine thousand dollars to the already doubled cost of surgical repair under workers’ compensation.

This could be directly borne by the employer if the employer is self-insured for workers’ compensation; or, if the employer has purchased workers’ compensation insurance, the effect on the employer would be indirect in the form of potentially increased premium costs for workers’ compensation following such events and payments, Judge Langham states.

According to WCRI, the Judge quotes, “policymakers have always focused on the impact (workers’ compensation) fee schedules have on access to care as well as utilization of services.

This has been a two-part analysis, he says:

First, fee schedules have to be sufficient such that physicians are willing to provide care in the workers’ compensation system; and second, the reimbursement cannot be too high, or perhaps overutilization is encouraged.

Lastly, Judge Langham points out that the disparity between costs has also been noted in discussions of “medical tourism.”

The last question he posits is this, “might medical decision makers direct care to more efficient providers, across town, across state lines?”

What about national borders?


I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

I am also looking for a partner who shares my vision of global health care for injured workers.

I am also willing to work with any health care provider, medical tourism facilitator or facility to help you take advantage of a market segment treating workers injured on the job. Workers’ compensation is going through dramatic changes, and may one day be folded into general health care. Injured workers needing surgery for compensable injuries will need to seek alternatives that provide quality medical care at lower cost to their employers. Caribbean and Latin America region preferred.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Will accept invitations to speak or attend conferences.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com.

Transforming Workers’ Blog is now viewed all over the world in 250 countries and political entities. I have published nearly 300 articles, many of them re-published in newsletters and other blogs.

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The Miasma of Fraud

One last post before you celebrate Thanksgiving.

Business Insurance’s Stephanie Goldberg reported today, that five people have been charged  with workers’ comp insurance fraud in California, and that the insurance commissioner called it, “one of the largest workers’ compensation insurance fraud cases we have ever seen.”

In July, 2014, I wrote two articles about fraud in California, “The Stench of Fraud: Why Workers’ Comp Can No Longer Be a Closed System” and “The Stench of Fraud, Continued.”

Charged in the case was the former CFO of Pacific Hospital, James L. Canedo, two orthopedic surgeons, a chiropractor, and Paul Richard Randall, a health care marketer.

They were charged with illegally referring more than 4,000 patients for spinal surgeries, and generated more that $580 million in fraudulent bills during an eight-year period, according to the US Department of Justice, in a statement released yesterday.

Many of the claims were paid by the California work comp system, the rest by the federal government.

Canedo and Randall have pled guilty, and the other three have agreed to plead guilty, and under the terms of their plea agreements, each defendant could face prison terms and be required to pay restitution to their victims.

The US Attorney’s office for the Central District of California said in a statement that Canedo faces 10 years in prison and at least $20 million in restitution.

The scheme consisted of kickbacks of $15,000 for each lumbar fusion surgery, and $10,000 for each cervical fusion surgery, according to the US Attorney’s statement.

The ongoing investigation, dubbed “Operation Spinal Cap”, discovered that some of the patients lived hundreds of miles away from Pacific Hospital, and closer to other qualified facilities, the patients were not informed that medical professionals were offered kickbacks for referrals, and that insurers had paid the hospital more than $226 million for the surgeries.

Once again, we see that workers’ comp, especially in California, but also in other states, is like a fetid pool of rotting vegetation and other foul matter, so that what was once called a stench, is now a miasma that hangs over the surface of the system.

It does not have to be like that. It can be better. You can find an alternative to expensive surgeries and illegal payoffs, if only you would consider new ideas and new possibilities.

Or you can continue to breathe in the foul air. The choice is yours.

 

 

 

California Work Comp: What a Mess!

Kevin Tremblay, V.P., National Accounts for SMS National Solutions in Altamonte Springs, Florida, and a connection of mine on LinkedIn, penned the following article about California work comp and liens.

Normally, I shy away from articles involving California work comp, but on one or two occasions have written articles about it that I feel fit the subject of this blog. This article is one of those, but is more about the mismanagement of one state’s work comp system, rather than the state of affairs of the entire system nationwide.

Here is Kevin’s article in full:

California Workers Compensation System – Liens, Waste and Medical Provider Billed Charges

The California workers’ compensation system is unique like no other state in the country. There are two distinct sides of the equation in California workers’ compensation, Applicant and Defense.

Applicant-The party, usually the claimant that opens a case at the local Workers Compensation Appeals Board (WCAB) office by filing an application for adjudication of claim.

Defense-The party, usually the employer or its insurance company opposing the claimant in a dispute over services and benefits.

Lien-A right or claim for payment against a workers’ compensation case. A lien claimant, such as a medical provider, can file a form with the local Workers Compensation Appeals Board to request payments of money owed in a workers’ compensation case.

OMFS-The official medical fee schedule is promulgated by the DWC, Department of workers Compensation administrative director under labor code section 5307.1 and can be found in section 9789.10 of title 8, California code of regulations. It is used for payment of medical services required to treat work related injuries and illnesses. The California Official Medical Fee Schedule is considered prima facie evidence of reasonableness.

A lien claimant has the burden of proving that any amount charged is reasonable, and a lien claimant must prove that there are “extraordinary circumstances” that justify a fee that exceeds the Official Medical Fee Schedule.

According to some recent reports, an expected 500,000 liens will be filed by treating medical providers in the California Workers Compensation system in 2015, costing employers and insurers an estimated $200 million dollars in loss adjustment expenses and delaying claims adjudication.

Some of these liens forces some employers or insurance companies to settle liens they may not be legally obligated to pay simply to settle and close the claim to avoid paying additional disability, administrative and legal costs. Emphasis here on, ‘forces

Some additional statistical findings reported by the DWC are:

  • Medical treatment liens account for more than 60 percent of the liens filed, and 80 percent of the dollars in dispute.
  • $1.5 billion per year is claimed in medical lien disputes after adjusting for amended lien files.
  • One-third of medical liens involve disputes over the application of the Official Medical Fee Schedule.
  • Authorization for treatment was in dispute in seven out of 10 medical liens surveyed.
  • Reasons treatment was not authorized were: 37 percent provider not authorized to treat (mostly out-of-network); 7 percent denied claims; 6 percent medical necessity of treatment rejected by utilization review; 1 percent contested body parts; 20 percent authorization status unknown or not stated.
  • The volume of liens filings is sensitive to procedural changes, such as the adoption or repeal of a $100 filing fee and the adoption of new filing procedures.
  • Up to 30 percent of medical liens are prematurely submitted before the time has elapsed for the claims administrator to pay or object to the provider’s bill.
  • Ten percent of medical liens are submitted on the date the service is provided.
  • Nearly one quarter of medical liens are filed more than two years after the last date of services for which payment is claimed, including 6 percent that are filed five or more years after the last date of services.

The report was based on information provided by the Division of Workers’ Compensation, and was an attempt to characterize the problem so policymakers can propose solutions to the lien problem.

Source: CHSWC/InsuranceJournal.com

The Lien System Game:

Bill ($5,000) – Paid ($1,000)-in accordance with OMFS

Fee to file the lien the claim in court by medical provider $150.00

Lien balance $4000

Demand: $3800

Offer: $2000

Negotiation continues

Collector says $3200 is the bottom line for him

Adjuster forced to pay and settle to avoid additional claim cost agreement at $3200

So while the DWC and legislators continue to sort over of resolve the issues of the lien process, what can adjuster’s implement to mitigate the process and reduce claims costs? The following strategies are a good place to start:

  • How much is the lien?
  • How much is the OMFS or reasonable value of the lien?
  • What are your lien defenses?
    • AOE/COE
    • MPN
    • OMFS or other fee schedules / IBR
    • Reasonableness & Necessity
    • UR / IMR
    • Other technical issues
  • What evidence do you have to support your position? Objection letters? MPN Notices?
  • Did you serve your evidence on the lien claimants and/or your counsel?
  • What are the probable economics of your decision to settle or fight?
  • How much are you willing to pay to settle or resolve the lien?
  • We paid per OMFS & DOS is after 1/1/13
  • You failed to request 2nd review within 90 days (LC 4603.2(e)(2))
  • You failed to request IBR within 30 days from 2nd review (LC 4603.6(a)
  • You are done. The Code says: “the bill shall be deemed satisfied and neither the employer nor the employee shall be liable for any further payments.”
  • Any appearance at the board on your lien will result in a petition for costs & sanctions! [LC 5811 & Valdez decision (en banc) (77 CCC 1113)]

The State of California has taken recent measures with the advent of SB863 and labor codes 9792.5.12 and 4903.1(b) regarding independent bill review process and tighter lien submission rules. California legislators need to continue to act and close the loop holes in existing laws to mitigate and eventually eliminate the magnitude of waste and abuse by certain medical providers that is currently taking place and plaguing the workers’ compensation system.

The lien process is certainly unique to the rest of the country’s state by state workers’ compensation system. So what is it? Unethical gaming of the system and adding tremendous unnecessary costs and clogging the California courts and workers’ compensation system, no question. Anything more, you decide…..

A Hospital Bill We Can All Appreciate

Recently, a friend of mine received a hospital bill from a hospital they stayed at in Spain after suffering a life-threatening condition that kept her in the country longer than she expected.

The bill for her DVT/PE included a Chest x-ray, CT of the lungs and 2 nights of observation. The total in Euros was 1475.61. In US dollars, that translates to $1,641.02.

One reason given by a commentator on LinkedIn was that “the hospital (v. the US) is that they’re only billing you for incremental cost — there’s no capital expenditure or labor costs they need to recapture as that comes from other budgets. So, instead of your fractional share of billing, doctor’s salaries, etc., they’re just trying to keep the budget whole from the fact that you were there v. the bed being empty.”

But we know that hospitals are run like businesses, and many of them are owned by businesses, so they try to squeeze every last drop of profit out of the patient, or their insurance company.

Spain is not the only country that has lower cost medical, but travelling there for care is not yet practical until we can fly on suborbital commercial planes.

But there are places closer to home that will be much lower in cost, and not just for emergency care. But like the three monkees, we Americans are deaf, dumb and blind to reality, and unwilling to see that we are not No. 1.

What part of ‘You’re being ripped off’ do you not understand?

Arbitrary-Hospital-Fees

The issue of what hospitals charge and how much doctors are paid, and what Medicare pays for, has import to the workers’ comp industry, as an article in Workers’ Comp Insider.com stated today, and in Modern Healthcare.com

According to Workers’ Comp Insider, the inpatient data released earlier this month by CMS, shows Medicare paid about $62 billion to cover more than 7 million discharges.

Bob Herman of Modern Healthcare said the following about hospital charges:

Hospitals have been under intense scrutiny for their billing practices, often triggered by extremely high charges—or sticker prices—for common procedures. Consumer groups and patient advocates argue hospital pricing is shrouded in secrecy, which has put patients on the hook for costly bills. But hospitals have said the listed charges are irrelevant because they only serve as a starting point for negotiations with insurers and that patients rarely, if ever, pay those prices.

Herman goes on to say that:

…Philadelphia, Los Angeles and Newark, N.J., had the largest gulfs in charges between the top and bottom hospitals. For example, in Philadelphia, the average difference in average hospital charges across all procedures was $123,847. In Los Angeles—an area rife with academic medical centers such as Cedars-Sinai Medical Center—the average difference between the highest-charging hospital and the lowest-charging hospital was about $112,000.

Physician data encompasses 950,000 physicians, nurse practitioners and other providers and $90 billion of Medicare funds, according to Herman, and spending on hospitals and physician services makes up a majority of U.S. healthcare expenses.

The Modern Healthcare article also listed the top ten Diagnostic Related Groups (DRG’s) by total payments to hospitals, and the number one DRG was DRG 470, Major Joint Replacement without major complications/comorbidities, with 446,148 discharges and $7 billion in payments.

So here’s the bottom-line:

If you think that you can negotiate your way out of paying through the nose, if you think that opt-out is going to be the savior to your bottom-line that its promoters promise it to be, and if you think that getting better medical care is possible in your local hospital, then by all means, continue to delude yourself, because that is what you are doing.

But if you see through all of the hype about opt-out, and see it for what it really is, an ideological tool that employers will wield against workers, and if you are tired of paying hospitals outrageous charges and paying for physicians to pad their bank accounts, then you need to consider an alternative to high-cost, average quality medical care, and consider medical travel.

It will save you money, and provide your employees with a better outcome and a better outlook on the job.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com. Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp. Connect with me on LinkedIn and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

Nickel and Dimed: Hospital Edition

Last week while I was drinking Indio and Dos Equis, Anthony Cirillo, president of Fast Forward Consulting, which specializes in experience management and strategic marketing for healthcare facilities wrote an article in Hospital Impact entitled, “Much like airlines, hospitals nickel and dime patients”, in which he says that hospitals have learned from the airline industry how to nickel and dime patients by making up reimbursement cuts by creatively finding ways to charge extra and often hidden fees.

Mr. Cirillo cites two articles in The New York Times by Elizabeth Rosenthal. The first article, “After Surgery, Surprise $117,000 Medical Bill From Doctor He Didn’t Know”, mentioned that a patient received a bill from an assistant surgeon he did not know was on his case. The bill was $117,000. The primary surgeon was reimbursed for $6,200, but the assistant surgeon billed for, and was reimbursed for the $117,000.

The second article, “As Insurers Try to Limit Costs, Providers Hit Patients With More Separate Fees”, discussed how providers are billing patients for separate fees such as a $1,400 emergency room fee, which the insurer paid , when a husband and wife went to a hospital for a scheduled induction of labor for their second child, and a $2,457 fee for “noncritical activation” of the trauma team in addition to the hospital’s $240 facility fee, after a woman drove her stepdaughter to an emergency room after a bicycle crash.

Cirillo said that patients do have options and choice when it comes to their healthcare. They can choose between local competitors, go cross-county, cross-state, out of state and out of country. Medical tourism continues to grow and with the increasing number of Joint Commission International accredited hospitals, employers are actively choosing to send people overseas.

This option, as I have been saying now for two years, should also apply to workers’ comp. Anyone who thinks that hospitals will not try to stick it to employers and comp carriers for their injured workers’ medical bills is sadly mistaken, fee schedule or no fee schedule.

Employers who are self-insured or who are in a state that allows them to opt-out of the statutory system, are vulnerable to this adding on of fees to the total hospital bill, on top of what the surgeon charges for the actual operation, much the same way patients in the two articles by Ms. Rosenthal were.

When the bill came from the hospital in which my father passed away in, the total bill was over $200,000. I looked through it to see if there were any charges that did not seem right, but could not find anything out of place. With his health insurance paying the majority of the bill, our portion was still over $900.

Cirillo also stated that as high-deductible plans become the norm, these fees impact consumers directly and then cause health premiums to rise in tandem. Sure, he states, there are legitimate fees typically not reimbursed, but then there are the wink and the nod fees that have become so commonplace that they fade into the background and people are numb to them just like the airline charges.

Some employers have high-deductible workers’ comp policies, and it would be incumbent on them and their brokers to explore alternatives to extra and added-on hospital bill fees, and as Mr. Cirillo said, medical tourism can be one such alternative.