Virginia to Implement Medical Fee Schedules Commencing January 1, 2018
The 2016 regular session of the Virginia General Assembly delivered a major change for the future of medical payments under the Workers’ Compensation Act. On March 7, 2016, Governor McAuliffe signed a bill to implement a medical fee schedule to commence on January 1, 2018. This law is not retroactive; therefore, only dates of medical service after January 1, 2018 will be subject to the fee schedule.
Currently, there are no medical fee schedules for workers’ compensation treatment in Virginia, which creates uncertainty because different health providers charge different amounts for the same service. If a provider challenges the amount paid for treatment by the carrier, it will initiate a “medical provider application” with the Virginia Workers’ Compensation Commission (“Commission”).
A medical provider application initiates litigation regarding the billed charges, and these claims are often costly to defend. Generally, defenses to medical provider applications include (1) the “prevailing rate” in the community or (2) the contract. If the defense raised is the “prevailing rate” in the community, litigation expenses can include hiring an expert witness, obtaining CPT code data, and attorney’s fees. As such, the legislature sought to streamline medical billing as it relates to workers’ compensation.
Pursuant to the new legislation, there will be seven categories for payment by provider types and rates will vary depending on geographic communities. These provider type categories include: physicians, surgeons, type one teaching hospitals, other hospitals, ambulatory surgical centers, other outpatient medical service providers, and purveyors of miscellaneous items and any other providers. Additionally, employers and insurers continue to be able to enter into contracts, which allow them to pay more than or less than the amounts set by the fee schedule. Notably, special provisions of the law apply to traumatic injuries or serious burn injuries. “Traumatic injury” has a specific definition, which includes medically necessary treatment at a Level I or Level II trauma center.
According to the Commission’s website, from April 10 to May 10, 2017, the public may review and provide comments to the Medical Fee Schedule Regulatory Advisory Panel regarding the proposed fee schedules and rules. A public hearing is scheduled for May 23, 2017. After implementation, the Commission is required to review the fee schedules following the first year, and biennially thereafter. The Commission is also required to provide public access to information regarding the fee schedules by provider type and geographic communities.
s the law is not retroactive, expect that the service providers will continue to utilize medical provider applications that are filed with the Commission for fee disputes for dates of service prior to January 1, 2018. The specific code sections affected by the bill include Va. Code §§ 2.2-4006, 65.2-605, 65.2-605.1, and 65.2-714. For more information and a timeline of the project, please visit http://vwc.state.va.us.