Resources

Legislative Updates

• Q3 2019 Legislative Updates

  Q3 2019 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the third quarter of 2019 and their practical implications:

  California

  Senate Bill 537 has been signed into law by Governor Newsom.  The law requires networks to provide a standardized disclosure form to their payer clients, if network provider reimbursements are less than 80 percent of the Official Medical Fee Schedule rates.

  • Implications

  The Division of Workers’ Compensation is given the task of developing the provider reimbursement disclosure form required by this provision, which becomes effective July 1, 2021.  MedRisk will be following the DWC’s work closely to ensure that the form provides information that is clear and operationally useful. The California Consumer Privacy Act, recently enacted, greatly expands protections for California residents regarding the unauthorized sale and commercial use of personal consumer information gathered through online transactions such as purchases, social networking and use of “free” applications.  A particular target is the undisclosed profiling of individuals without their knowledge, especially when these individuals are children.

  • Implications

  MedRisk does not sell or commercially use personal consumer information gathered through online transactions. And, because the act specifically exempts from its reach any individually identifiable health information covered by federal or state privacy laws, this legislation has no effect on MedRisk’s communications with providers and payer customers.  Its largest impact will be on business entities that use consumer data mining in their marketing strategies.

  Illinois

  The Workers’ Compensation Commission has published proposed regulations implementing last year’s SB 904, which clarified Illinois’ prompt payment requirements imposed upon WC payers.  The proposed regulation (50 IL Adm. Code 9110) once adopted would clear up ambiguities contained in the legislation regarding grounds payers can use for denying provider bills.

  • Implications

  Stakeholders have until October 28 to send comments to the WCC.  Some observers have complained that the proposed regulation should have gone further in addressing such issues as permitted grounds for providers’ lawsuits against payers, criteria for the imposition of interest penalties on unpaid provider bills, and the timing when those interest payments are due.  Unless the WCC reopens its rulemaking process to consider these questions, their answers may be determined only by costly and lengthy litigation.

• Q2 2019 Legislative Updates

  Q2 2019 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the second quarter of 2019 and their practical implications:

  California

  Senate Bill 537 – introduced this past April – has been passed out of the California Senate and the Assembly Insurance Committee and will now be presented to the Assembly Appropriations Committee.  Language from the bill that would have prohibited WC network discounts below 100% of Medicare rates has been removed. Nevertheless, the bill still contains ambiguous language threatening to disrupt the administration of Medical Provider Networks (MPNs) as they currently operate.

  • Implications

  Although advocated only by a handful of California physical therapists, the bill broadly applies to all medical services and MPNs. As currently drafted, the bill could disrupt California’s successful MPN system, resulting in higher costs for payers, employers and taxpayers. MedRisk and other organizations are urging the adoption of clarifying wording that would eliminate unnecessary confusion and preserve effective MPN operations. The intervention of employers and commercial payers, however, is also needed.  For more information, please contact your MedRisk account representative.

  New York

  New York Governor Andrew Cuomo has signed into law an omnibus budget bill containing authorization for providers of acupuncture to treat injured workers within the WC system, provided the patient has a referral from a physician or nurse practitioner.  Physical and occupational therapists are among the clinicians that are permitted to perform acupuncture if they are certified to perform these services.  The Workers’ Compensation Board, which supported this expansion, has proposed a regulation (12 NYCRR 323.1) and is accepting comments through August 18, 2019.

  • Implications

  When the regulation is adopted by the WCB, New York will join a handful of other states in authorizing payment for acupuncture under workers’ compensation when the services are deemed medically necessary.  Most of the jurisdictions that affirmatively permit acupuncture for WC claimants require a referral from a treating physician.

  Nevada

  Nevada has recently enacted two laws that impose new regulatory requirements on workers’ compensation managed care.  Senate Bill 365 requires all “health carriers,” including workers’ compensation payers, to explicitly state contract rights and obligations in provider agreement and to maintain a website listing all customers granted network access via the provider agreement.  The new law is due to take effect on January 1, 2020, after the Division of Industrial Relations has adopted implementing regulations. Nevada also enacted Senate Bill 381, which permits a WC insurer to limit employee choice of physician or chiropractor to those listed on its provider panel, but only if the panel contains, by discipline or medical specialty, at least twelve providers or, if there are fewer than twelve authorized by the Division, all of the members of the discipline or specialty.

  • Implications

  Neither of the new statutes have much impact on MedRisk workflows for operations in Nevada.  MedRisk provider agreements and operations already conform to the “best practices” standards of SB 365.  Further, the increased network access standards of SB 381 relate only to physicians and chiropractors:  Nevada remains an employee choice state for PT.

• Q1 2019 Legislative Updates

  Q1 2019 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the first quarter of 2019 and their practical implications:

  California

  In January 2019, California became the first state to adopt a fee schedule using 32 distinct regional rates for MSA-based localities, based on Medicare Geographic Practice Cost Index (GPCI), which is now in the process of a six-year phase-in. Since many jurisdictions currently use other Medicare payment rules, and since use of dominant Medicare regional payment methodology offers both improved health care access to claimants and operational economies to WC agencies, it is probable that other states will follow suit.

  • Implications

  The primary beneficiaries of the GPCI based regional fee schedule are providers in some of the higher-cost urban areas, who would see regulatory rate increases. Payers would be required to modify their bill review systems in order to properly track regulatory rates and providers’ treatment locations.

  Arkansas and Virginia

  Arkansas and Virginia have recently enacted legislation to join the PT Compact, an interstate reciprocal agreement permitting physical therapists licensed in one state to practice in another.  There are now 23 member states, and other states including Georgia, Maryland, Massachusetts, Michigan, and Nevada, have legislation pending to join the PT Compact in 2019.

  • Implications

  The PT Compact facilitates the nationwide rollout of MedRisk’s TeleRehab Program by removing administrative barriers to multi-jurisdictional practice by a MedRisk clinician. Using appropriate telecommunications technology, the MedRisk TeleRehab PT evaluates and treats injured workers in their homes or workplaces, expediting the delivery of care and avoiding needless travel.

• Q4 2018 Legislative Updates

  Q4 2018 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the fourth quarter of 2018 and their practical implications:

  New York

  The New York Workers’ Compensation Board published its long-awaited fee schedule revision on December 26. The new rates and payment rules go into effect on April 1, 2019. MedRisk’s early analysis indicates that physical therapy regulatory rates will increase significantly, due in large part to a 50% increase (from eight to twelve) in PT relative value units. Rates for chiropractic treatment were also raised. The Board also dropped an earlier proposal to cap physical medicine sessions after 12 visits or 180 days of service, retaining the current rule that permits more than 12 treatments or more than 45 days of therapy or chiropractic treatment if the need is fully documented by a physician. In other New York news, a New York appellate court in November upheld the WCB’s authority to change its policy regarding application of the New York medical treatment guidelines to out-of-state providers treating New York claimants. Previously, the WCB applied its guidelines to in-state providers and to out-of-state treatment received by New York residents, but now applies them to all in-state and out-of-state providers treating New York claimants, even if the claimant lives outside New York.

  • Implications

  The fee schedule increase is the first in 20 years. Because the New York fee schedule is very low compared to other states and to estimates of providers’ cost of care expenses, the increases may expand injured workers’ access to medical care by encouraging more providers to treat WC claimants. Regarding application of New York medical treatment guidelines to out-of-state providers, this initiative may prompt pushback from out-of-state providers unfamiliar with New York’s substantive protocols and administrative procedures.

  Texas

  Through a complex regulatory process, the delivery of telehealth services to workers’ compensation claimants located in Texas by physical therapists is now permissible in Texas. The regulations broadly support the delivery of these services by a PT provider, regardless of his or her location, who has an unrestricted Texas license or who has a Compact Privilege to practice in Texas. The standard of care is the same as applies in an in-person setting, with customary informed consent and confidentiality requirements. Earlier in the year, the Division of Workers’ Compensation removed the requirement that the patient must be located in a rural location. Next, a new Texas statute permitting the delivery of telehealth services opened these services to health professionals including physical therapists. Finally, effective November 11, 2018, the Texas Board of Physical Therapy Examiners adopted standards asserting the necessary regulatory authority over telehealth services delivered by PTs.

  • Implications

  Texas joins a growing number of major states encouraging telerehab services for injured workers. The increasingly friendly regulatory environment should encourage rapid expansion of these services.

  Illinois

  On November 27, the Illinois General Assembly overrode outgoing Governor Rauner’s veto of Senate Bill 904, thereby supporting Illinois providers to charge 1% per month interest for late payments for WC-related services. The legislation also requires payers to affirmatively notify providers within 30 days when a payment has been denied.

  • Implications

  This measure reinforces providers’ existing rights by giving them an administrative process via the Workers’ Compensation Commission for collecting late-payment interest. The law places corresponding pressure on payers to process medical bills quickly and to ensure that denials are timely communicated.

• Q3 2018 Legislative Updates

  Q3 2018 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the third quarter of 2018 and their practical implications:

  Tennessee

  As reported in last quarter’s Legislative Update, the Tennessee Bureau of Workers’ Compensation has adopted a regulation requiring providers to submit and payers to receive medical bills electronically, effective for dates of service beginning July 15, 2018, unless the Bureau grants and exception to individual providers and payers on a case-by-case basis. Under the Rule, payers have only 15 days to accept or reject electronic and must pay all uncontested portions of the bill within that 15-day period. Late payments accrue an interest rate of 2.08% per month (25% annually). MedRisk raised the question whether the rule applies to provider requests for reconsideration, an issue apparently not fully considered by the Bureau nor clearly addressed by the regulation. The Bureau has very recently responded to MedRisk’s inquiry, stating that, while the regulation’s language is inconsistent in places, the intent of the Bureau to require providers to submit all bills including reconsideration requests and, require payers to receive them, using any electronic format, including secure fax, secure encrypted email or standard ASC X12 format. MedRisk is working with our trading partners to develop resubmissions and amends capabilities to complete our electronic submission capabilities.

  • Implications

  Incorporating bill receipt via fax or email into bill ingestion systems may present challenges to payers. The Tennessee Bureau has acknowledged this and has granted delays to claim administrators who ask for a temporary exception from the rule’s electronic receipt and payment requirements. Given the recent influx of electronic billing and payment regulations, however, commercial payers may struggle to meet these challenges in the near future. MedRisk is monitoring these developments to ensure full compliance.

  Illinois

  Also reported in the Second Quarter update, the Illinois General Assembly sent to Governor Rauner for signature a bill that empowers the Department of Insurance to establish rules to ensure that all providers submit bills electronically and require all payers to receive them electronically, with certain exceptions. On July 29, the Governor issued an amendatory veto, stating that he does not object to the major thrust of the bill – mandating payers’ electronic bill acceptance and processing within a short 30-day TAT – but he recommended changes that insurers and employers view would rebalance undue advantages the bill gives to providers (e.g., imposing a 90-day bill submission TAT on providers, replacing providers’ right to file a civil action in circuit court to obtain payment with an administrative hearing determined by the Illinois Workers’ Compensation Commission).

  • Implications

  The implications of the amendatory veto are uncertain. The General Assembly now has the option of attempting to override the Governor’s veto by three-fifths vote, incorporating some or all of the Governor’s recommendations into the bill by majority vote, or abandoning this initiative for now. The General Assembly is in the second year of its two-year session, and SB 904 cannot be carried over into 2019. Legislative action (or inaction) bears watching in the next few months.

  California

  A 32-regional fee schedule is coming closer to reality in California. The Division of Workers’ Compensation’s solicitation for a second round of stakeholder comments to the DWC’s proposal resulted in support from the provider community, as expected, and only muted criticisms from the payer community, including a request for a six-month postponement from the scheduled January 1, 2019, inception date.

  • Implications

  Sooner or later, it appears that California WC payers and their trading partners will need to move to Medicare’s Geographic Practice Cost Indices (GPCIs). This initiative in California could harken a nationwide shift toward greater sensitivity to regional variations in the cost of health care delivery, especially through the use of methodology employed by a dominant claim payer such as Medicare. Although the shift to GPCIs represents a major shift in fee schedule methodology, the direct impact on California fee schedule rates is not that significant. A recent RAND study estimated that implementation of the GPCI methodology would result in modest decreases (1% - 5%) in the more rural, low-cost areas of the state and material increases (5% - 9%) only in Northern California areas encompassing San Francisco and Santa Clara. The Los Angeles area, which represents over 42% of California WC payments, would be relatively unaffected, with an increase of less than 1%. Click Here to see estimated OMFS allowances per region.

• Q2 2018 Legislative Updates

  Q2 2018 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the second quarter of 2018 and their practical implications:

  New York

  In early June the NY Workers’ Compensation Board announced a proposed regulation that would increase the New York medical fee schedule for the first time in 20 years. The WCB projected an overall increase of five percent but gave no details then on how individual provider specialties would be affected. Very recently, the WCB has published draft regional conversion factors and individual CPT relative values.  MedRisk has analyzed those proposed rates, which, if adopted, would increase PT/OT fee schedule rates by 24% to 30% and chiropractic treatment fee schedule rates by 24% to 43%, depending on the applicable region.

  • Implications:

  Because the NY fee schedule is very low compared to other states and to estimates of providers’ cost of care expenses, most stakeholders have supported this proposed increase as a means of increasing injured workers’ access to health care. If adopted, the increase will be effective for all dates of service after October 1, 2018. There has been a great deal of legislative and regulatory activity mandating providers’ submission and payers’ and their agents’ receipt of electronic bills. Among the jurisdictions addressing this issue are the following:

  Virginia

  Implementing the statute discussed in the Legislative Update for First Quarter, 2018, the Virginia Workers’ Compensation Commission has published draft regulations that mandate providers to submit bills electronically, with certain exceptions for small and low-volume providers. If finally adopted, the rule takes effect December 31, 2018, and applies to all bills with dates of service after that date. Payers are given only two days to reject bills submitted electronically in the mandated uniform format. Payers must pay uncontested portions of electronically submitted bills within 60 calendar days or must automatically include in late payments interest at Virginia’s standard annual judgment rate of interest, currently six percent.

  Tennessee

  The Tennessee Bureau of Workers’ Compensation has adopted a similar regulation, effective for dates of service beginning July 15, 2018, with two principal differences. First, the Bureau is empowered to grant exceptions to individual providers from this electronic bill submission mandate, and payers are exempt from the electronic bill receipt process for low-volume providers. Second, the payer has only 15 days to accept or reject electronic and must pay all uncontested portions of the bill within that 15-day period. Late payments accrue an interest rate of 2.08% per month (25% annually).

  New Jersey

  The New Jersey Department of Labor and Workforce Development has adopted final rules, implementing a 2016 statute, which mandate providers’ submission and payers’ receipt of electronic bills. There are exceptions for low-volume providers. Payers are given 60 days to pay uncontested bills, but there are no provisions in the regulation for late-payment interest or penalties. This is a new regulation and does not have an effective date shown.

  Illinois

  The Illinois General Assembly has passed and sent to Governor Rauner for signature a bill that empowers the Department of Insurance to establish rules to ensure that all providers submit bills electronically and require all payers to receive them electronically, with reasonable exceptions. If the bill is enacted, the DOI will use its discretion in drafting regulations consistent with this broad direction.

  • Implications:

  These electronic bill measures represent a multi-year and widespread initiative to mandate electronic bill submission and payment for all but a limited number of providers and payers. Although most commercial payers have technology in place to receive provider bills, the statutes and regulations mandating rapid rejection or acceptance and payment will challenge the payer community operationally.

• Q1 2018 Legislative Updates

  Q1 2018 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the first quarter of 2018 and their practical implications:

  California

  In mid-March the Division of Workers’ Compensation published a draft revision to California’s Official Medical Fee Schedule, which would convert the OMFS from single statewide rate to 32 distinct regional rates, based on Medicare MSA-based localities now in the process of a six-year phase-in. The DWC asserts that using Medicare’s Geographic Practice Cost Index will improve injured workers’ access to health care in high-cost areas and will eventually result in a small overall reduction in medical costs after “hold-harmless” protections against decreases in low-cost regions expire in 2022. The proposed effective date of the regulation is January 1, 2019.

  • Implications: Providers in many high-cost urban areas would immediately enjoy a fee schedule rate increase. Although increases in the Los Angeles area would be modest (approximately 1%), rates in San Francisco would rise over 10%. To protect providers in rural areas, reductions would not be immediate but would be stepped down gradually until 2022. Payers would be required to modify their bill review systems in order to properly track regulatory rates and perhaps to exercise greater vigilance to ensure a match between providers’ actual and claimed treatment locations.

  Virginia

  Virginia has enacted HB 558, which clarifies the appropriate regulatory rate to apply to services delivered by out-of-state providers. If the employer’s principal place of business is located in Virginia, the ZIP Code of that address is considered to be the applicable medical provider “community” for applying the regional fee schedule. If the employer’s principal place of business is not located in Virginia, the ZIP Code of the regional Workers’ Compensation Commission office where the dispute would be conducted is used to determine the applicable fee schedule.

  • Implications: This legislation removes an ambiguity that previously existed in Virginia’s new fee schedule by establishing the methodology to following in reviewing out-of-state providers’ bills, but it creates challenges for bill reviewers in identifying the factually appropriate in-state location for determining the correct fee schedule rate. Further, the bill doesn’t have an effective date, so there is no obvious date-of-service “start date” for the new methodology.

  New York

  The New York Assembly has sent to the Senate a bill authorizing the Workers’ Compensation Board to establish a WC fee schedule for massage therapy services. The bill, AB 6797, would require these services to be provided by a licensed massage therapist and for the referral to be made by an authorized physician. Further, the measure specifically prohibits massage therapists from performing independent medical examinations.

  • Implications: Bills to authorize massage therapy for workers’ compensation claims are perennially introduced in the New York Assembly. This legislative season, the measure is given a moderate chance of success in the New York Senate.