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Medical Fee Schedule As of February 1, 2006 for Illinois Workers' Compensation Claims
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Recently Illinois made changes to the Illinois Workers Compensation Act that effect medical payments from on the job injuries. This page discusses those changes. For more information on issues involved in Illinois workers compensation claims, please see our main Illinois Workers Compensation Page.
Illinois has now joined 44 other states by creating a medical fee schedule. Previously there were no limits on the fees doctors and hospitals charge; the charges just had to be reasonable and necessary. Section 8.2 now imposes a fee schedule for medical treatment and eliminates balance billing.
The medical fee schedule is in effect for medical treatment rendered on or after February 1, 2006. The fee schedule is to be applied to the area where the treatment was rendered, not where the invoice is generated.
I. Background
The Commission shall establish fee schedules for procedures, treatments, or services for hospital inpatient care, hospital outpatient care, emergency room and trauma ambulatory surgical treatment centers (ASTC) and professional services. The charges and fees on the fee schedule shall be designated by "geozip" or any smaller geographic unit. Illinois is divided into 29 "geozips." A geozip is a three-digit zip code based on data similarities, geographical similarities and frequencies. If a geozip does not have the necessary number of charges and fees to calculate a valid percentile for a specific procedure, treatment or service, data from the geozip along with four other geozips that are demographically and economically similar can be used until nine charges or fees for that specific procedure are obtained. If the data contains less than nine charges, then the reimbursement is to occur at 76% of the charge or fee.
The Commission has created the fee schedule by gathering data of charges and fees utilizing national databases provided by employers and insurers with data compiled from August 1, 2002 through August 1, 2004. For each procedure, at least nine charges were used pursuant to the Act. The charges were then sorted from smallest to largest and the 80th percentile was identified. That charge was multiplied by 90% and then multiplied by 4.96% (consumer index adjustment).
No later than September 30, 2006 and every year, the Commission shall increase or decrease the maximum allowable payment based on the percentage change in the Consumer Price Index - U for the 12 month period preceding August 31 of that year.
Should the Commission determine there is a "significant limitation on access to quality health care" it may change the Consumer Price Index - U for that specific field or specific geographic limitation on access to health care to address that limitation. The Commission will also establish a process to review cases that involve "extra-ordinary treatment to determine whether to make an additional adjustment to the maximum payment within a fee schedule for a procedure, treatment or service."
II. Implementation
A. 8.2 Fee Schedule Emergency Guidelines
The fee schedule is available for the download of some or all parts at the Illinois Workers Compensation website, iwcc.il.gov.
On January 26, 2006, the Commission unanimously voted on the implementation of the fee schedule and the emergency guidelines. The emergency guidelines are now in effect for the application of the fee schedule for a maximum of 150 days or until the new fee schedule and guidelines are adopted, whichever comes first.
Under the emergency guidelines, the lesser of the rate or the provider's actual charge is paid. If an employer or insurance carrier contracts with a provider for the purpose of providing services under the Act, the rate negotiated in the contract shall prevail. Whenever the fee schedule does not set a specific fee, the amount of reimbursement shall be at 76% of the actual charge.
For out of state treatment, reimbursement shall be the greater of 76% of the actual charge or the state's fee schedule amount; pay "pass through charges" (prosthetics/orthotics, pacemaker, lens implants, implants, investigational devices and drugs requiring detailed coding) at 65% of the actual charge.
An ASTC is to be reimbursed at 76% of the actual charge and any resulting "pass through charges" are to be paid at 65% of the actual charge.
Anesthesia payment is determined by multiplying the conversion factor in the schedule by the sum of all units according to the guidelines in the Relative Value Guide. Dental services shall be paid at 76% of the actual charge. Emergency room services shall be paid at 76% of the actual charge.
Hospital inpatient (confinement of 24+ hours) shall be paid per the fee schedule and "pass through charges" at 65 percent. Hospital outpatient is paid at 76% and any "pass through charges" are paid at 65 percent.
B. 8.2(d)
When a petitioner notifies a provider that the medical care being sought is due to a work-related injury and furnishes the provider the name and address of the responsible employer, the provider shall bill the employer directly. Payments to the provider must be made within 60 days of receipt of the bills as long as the claim contains substantially all required data elements necessary to adjudicate the bills. If a bill is not paid or partially paid under this provision interest accrues at 1% per month and becomes payable to the provider.
Note that Section 19(l) states that once a petitioner makes a demand for payment of medical treatment, the employer has 14 days in which to explain its reason for denial or a rebuttable presumption that the delay is unreasonable is created. However, when a medical bill is submitted for payment, the respondent has 60 days to determine payment and the 14-day period begins to run after the 60-day period. Therefore, the respondent has a 74-day period before Section 19(l) penalties are imposed. Between the 61st day and the 74th day a respondent must give a written explanation for the delay or denial or pay the bill, in order to avoid establishing a rebuttable presumption that the delay is unreasonable.
C. 8.2(e)
A provider shall not hold a petitioner liable for costs related to a compensable injury. A petitioner can submit information for their group health plan and if the group health plan covers the charges, the petitioner is responsible for co-payments and any additional charges per the plan. A provider cannot balance bill a petitioner, except under certain circumstances, as discussed below.
i. 8.2(e-5)
If a respondent notifies a provider that they do not consider the claim compensable, the provider may seek payment of the actual charges from the petitioner. However, once a petitioner informs the provider that an Application for Adjustment of Claim has been filed, the provider must cease all efforts to collect payment for the disputed services. Any statute of limitations applicable to the provider's efforts to collect payment from the petitioner are tolled from the date of the Application for Adjustment of Claim until the date the provider is permitted to resume collection.
ii. 8.2(e-10)
If an employer notifies a provider that they will only pay a portion of the bill, the provider may seek payment from the petitioner until informed that an Application for Adjustment of Claim has been filed, as in Section 8.2(e-5).
iii. 8.2(e-15)
When a dispute exists, a provider may mail a petitioner reminders that he / she will be responsible for the payments to the provider, but the reminders must indicate that they are not bills, include itemized information and that the petitioner need not pay until the provider is allowed to resume collection efforts under the Act. These reminders shall not be provided to any credit rating agency and they may request the petitioner to furnish information in regard to the pending case (names of parties, procedural posture and IC number). If the petitioner does not respond within 90 days, the provider may resume collection efforts with the petitioner.
iv. 8.2(e-20)
Once an award or final judgment is rendered, or once a settlement agreement is reached, the provider may resume collection efforts with the petitioner. The petitioner then becomes liable for the medical bills plus interest. If the treatment is deemed compensable, the provider shall not require a payment rate, excluding interest, greater than the lesser of the actual charge or the payment level set in the fee schedule established by the Commission. Payment for services deemed to be either not covered or compensable become the petitioner's liability and the fee schedule does not apply.
v. 8.2(f)
Respondents can contact a health care provider or group of health care providers for reimbursement levels for benefits provided under the Act that are different from those provided in the fee schedule.
D.8.3 Medical Fee Advisory Board
The Advisory Board shall advise the Commission on the establishment of fees for medical services and accessibility of medical treatment.
The Board consists of nine members, appointed by the Governor with the advice and consent of the Senate. Three members shall represent the employee class, three shall represent the employing class and three shall represent the medical provider class. Each member shall serve a four-year term and shall continue to serve until a successor is appointed. Members received no compensation for their services.
Section 8.7 Utilization Review Programs
I. Definition.
Pursuant to Section 820 ILCS 305/8.7(a), "Utilization Review" means the evaluation of proposed or provided Health Care Services to determine the appropriateness of both the level of Health Care Services medically necessary and the quality of Health Care Services provided to a patient, including evaluation of their efficiency, efficacy, and appropriateness of treatment, hospitalization, or office visits based on medically accepted standards.
According to the Act, the evaluation must be accomplished by a system that identifies the utilization of Health Care Services based on standards of care, or nationally recognized peer review guidelines, as well as nationally recognized evidence based on standards as provided in the Act. Utilization techniques may include the following:
- Prospective Review
- Second Opinions
- Concurrent Review
- Discharge Planning
- Peer Review
- Independent Medical Examinations
- Retrospective Review
Note: The Act states Utilization Review will not apply to prospective review of necessary first aid or emergency treatment.
II. In order to conduct a Utilization Review Program for Worker's Compensation Services, the person must register the Utilization Review Program with the Department of Financial and Professional Regulation once every two years and certify compliance with the Worker's Compensation Utilization and Management Standards or Health Utilization Management standards of URAC sufficient to achieve URAC accreditation, submit evidence of accreditation by URAC for its Worker's Compensation Utilization Management Standards or Health Utilization Management Standards.
Note: This does not require the employer, or insurer or the subcontractor to become URAC accredited.
The Secretary of Financial and Professional Regulation may certify alternative utilization review standards of national accreditation organizations or entities in order for plans to comply with 8.7(b). The Act states any alternative utilization review standards shall meet or exceed those standards required under 8.7(b).
The Secretary of Financial and Professional Regulation may establish a registration fee for each person conducting a Utilization Review Program.
III. When registering the Utilization Review Program, the following information is required: Name, address and telephone number of the Utilization Review Programs.
- The organization and governing structure of the Utilization Review Programs.
- Number of lives for which Utilization Review is conducted by each Utilization Review Program.
- Hours of Operation of which Utilization Review Program.
- Description of grievance process for each Utilization Review Program.
- Number of covered lives for which Utilization Review was conducted for the previous calendar year for each Utilization Review Program.
- Written policies and procedures for protecting confidential information according to applicably state and federal laws for each Utilization Review Program.
With regard to these written policies and procedures, subsection (e) of 8.7 states the Utilization Review Program shall have written procedures to ensure that patient specific information obtained through the process of Utilization Review will be kept confidential in accordance with applicable state and federal laws; and shared only with the employee, the employee's designee, the employee's Health Care Provider and those who are authorized by law to receive the information. Summary data shall not be considered confidential if it does not provide information to allow identification of individual patients or health care providers.
Only a health care professional may make determinations regarding the medical necessity of medical health care services during the course of Utilization Review. When making retrospective reviews, Utilization Review Programs shall base reviews solely on medical information available to the attending physician or ordering provider at the time the health care services were provided.
IV. The Department of Financial and Professional Regulation evaluates the compliance of Utilization Review Programs. If the Utilization Review Program is not in compliance with Section 8.7, the Department shall issue a corrective action plan and allow a reasonable amount of time to allow for compliance. However, if the program does not come into compliance, the Department may issue a cease and desist Order. Before doing so, they will provide the Utilization Review Program with written notice of the reasons for the order and allow a reasonable amount of time to supply additional information demonstrating compliance with the requirements of Section 8.7 and to request the hearing. The Act does allow the Utilization Review Program that is the subject of corrective action to continue to conduct business until a final decision has been issued by the Department of Financial and Professional Regulation.
V. Review.
A Utilization Review will be considered by the Commission in the same manner as all other evidence that is being considered in determining the reasonableness and necessity of the medical bills or treatment.
VI. Denials.
When an Employer denies payment of or refuses to authorize payment of any medical bill incurred pursuant to Section 8(a) of the Act, and if that denial or refusal to authorize complies with a Utilization Review Program registered under Section 8.7, and complies with all other requirements of said Section, THEN there shall be a rebuttable presumption that the employer shall not be responsible for payment of additional compensation pursuant to Section 19(k) of the Act. However, if the denial or refusal to authorize payment does not comply with a Utilization Review Program registered under Section 8.7 and does not comply with all other requirements of Section 8.7, then this evidence will also be considered by the Commission along with all the other evidence in determining whether the Employer may be responsible for penalties pursuant to Section 19(k) of the Act.
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