How Do Hospitals Keep Up with Work Comp Fee Schedules?

Posted April 17, 2018 by Jesse Larrison

Occasionally, I will get an email or a phone call from a VP of Revenue Cycle or a hospital CBO Manager asking me to help them find their state’s workers’ compensation fee schedule. I do my best to point them in the right direction, but more often than not I will try and better understand what their underlying question about work comp really is, as it is frequently NOT found in the fee schedule. That said, fee schedules are a good starting point for hospitals eager to learn more about their expected work comp reimbursement.

Currently, 45 states including the District of Columbia set rates for how hospitals are paid for the treatment of injured workers. These fee schedules vary from super complex custom-developed fee schedules to simple percent-of-charge pay scales. The trick is where to find them.

Where to find the fee schedule

The first step in understanding your state’s work comp fee schedule is to locate a copy of the latest version. I say latest, because many states update their rates at least annually, and some even more frequently than that. Using an old fee schedule might send you down the wrong path and create unnecessary complications. Most states will publish a link to their fee schedule right on their website with instructions on how to download and use. Some states outsource this function to a third party and require these schedules to be purchased. If you can’t find the download link directly, email or call your state’s department of labor and ask to speak with someone in the work comp medical division. (You can always message me and I will tell you where it is.)

Don’t be fooled!

Most states publish separate fee schedules for hospitals and non-hospital practitioners so make sure you are looking at the right fee schedule when you make billing decisions. We are often asked to provide proof to a hospital or employer when dealing with payment discrepancies only to find out later that the other party was incorrectly applying physician fee schedule rates to hospital services. Even some revenue cycle companies make this common mistake!

Keeping up with the times

So now you’ve got your handy hospital fee schedule ready to go. You passed it along to your billing team or even tried to code the rates into your H.I.S. system. Great job! Now what? Now you need to ensure that your data stays relevant and applicable to the discharge dates for the bills you are sending out the door. It’s critical to understand when your fee schedule will change next as well as get updates on any amendments to the hospital fee schedule that the state publishes. The best way to do this is to get on your state’s Work Comp Advisory Council email list. Again, contacting your department of labor (state, not federal) is the best way to get on this notification list. Staying on top of these changes will ensure that you are correctly identifying what each bill should be paid and not wasting time with unnecessary appeals. Beyond just learning what changes are coming down the pike, getting visibility to your Work Comp Advisory Council will give you the opportunity to get more involved with how rates are set and perhaps positively impact your health system.

Not long ago, we were asked by a large Hospital Association to review proposed changes to their state’s fee schedule. We were able to not only review the changes, but also model the financial impact to their CFO members and offer alternatives to the Work Comp Advisory Council. Some of these changes were adopted, which ultimately preserved millions of dollars in work comp payments for their hospitals. Staying close to your local work comp administrators can have a material impact to your hospital business.

The fee schedule is only half the battle

Matching Revenue Codes and CPT/HCPCS codes to the rate tables in your fee schedule is a good start, but that alone may not get you all the way to the finish line. You need to really understand the billing guidelines that go along with the associated tables. Read and digest the payment rules before moving forward. Often, certain procedures (like Physical Therapy, Labs, Pathology, or Radiology) will be separated and paid a different way, even if they show published rates in your table. Other pitfalls include state-specific Modifiers or Status Indicators that alter the final payment amount. Some fee schedules require you to print certain information on the bill (such as implant cost information) and others mandate atypical multiple procedure rules. A deep dive into your fee schedule documentation should reveal these idiosyncrasies to your home state’s reimbursement rules and set your billing team up for success.