Florida’s Workers’ Comp Three-Member Panel Reviews Hospital Reimbursement; Approves Biennial Report Recommending Legislative Action on Repackaged Prescriptions

 

Florida’s “Three Member Panel” (“Panel”) met in Tallahassee on December 13, 2010 to review the following items:

• Reimbursement methodology to determine usual and customary charges for hospital outpatient services
• Drafting the Panel’s Biennial Report.
• Medical Reimbursement Dispute and Overutilization Report.
• Status updates on Rules 69L-7.020 and 69L-7.100, F.A.C.

To view yesterday’s meeting agenda, click here.

The Panel, which comprises Florida Insurance Commissioner Kevin McCarty, Terry Morrow and Jorge Durand, determines statewide schedules of maximum reimbursement allowances for medically necessary workers’ compensation-related treatment, care and attendance provided by physicians, hospitals, ambulatory surgical centers, work-hardening programs, pain programs and durable medical equipment.

Following is a brief summary of the meeting:

 

Reimbursement Methodology for Hospital Outpatient Services

Florida Division of Workers’ Compensation (“Division”) Assistant Director Andrew Sabolic reviewed the reimbursement methodology in proposed Rule 69L-7.501, entitled “Florida Workers’ Compensation Reimbursement Manual for Hospitals,” which would determine the usual and customary charges for hospital outpatient services.  The Division has initiated rulemaking on proposed Rule 69L-7.501 in response to the First District Court of Appeal’s opinion in One Becon Insurance v. Agency for Health Care Administration.

Should proposed Rule 69L-7.501 be implemented, the National Council on Compensation Insurance estimates a small cost savings to businesses.  Currently, the proposed Rule has been challenged and is being held from further action, pending the Panel’s decision on the issue.

 

Public Comments

Insurance industry representatives expressed various concerns with proposed Rule 69L-7.501.  Some explained that it could be problematic for insurers in the long term, because hospital charges could significantly increase as a result of its implementation.

It was noted that the workers’ compensation system should not be based on hospital charges.  However, any changes to the existing system would require legislative action, inasmuch as current law requires a system based on such charges. 

If ultimately adopted, the insurance representatives said that the outcomes of proposed Rule should be monitored closely.

Arguing that One Becon is not a controlling judicial decision on hospital reimbursements, hospital representatives testified that they felt it is not appropriate for the Panel to move forward with the proposed Rule.  Echoing opinions of the insurance representatives, they noted that the reimbursement issues should be addressed in Florida’s Legislature, rather than through the regulatory process.

Florida Office of Insurance Regulation Actuary Jim Watford expressed concerns with the use of outliers in the data determinations.  Commissioner McCarty asked Mr. Watford to thoroughly review the underlying data in the proposed Rules.

Following the discussion, the Panel agreed to temporarily suspend rulemaking on Rule 69L-7.501, citing concerns with related data integrity.  The Panel is expected to meet in approximately 45 days to reconsider this and other proposals.

 

Submission of the Draft Three-Member Panel Biennial Report

Mr. Sabolic presented the Panel’s Biennial Report (“Report”), which addresses various issues, including electronic medical billing, prescription medications, physician dispensing and drug repackaging, practice parameters, treatment protocols, the Florida uniform permanent impairment rating schedule and federal health care reform. 

The Report recommends that the Florida Legislature consider addressing the reimbursement amount for prescription drugs, including repackaged drugs.  The Panel approved the report with edits based on the discussions.

 

Medical Reimbursement Disputes and Overutilization

Eric Lloyd of the Division’s Office of Medical Services provided a statutory report on medical reimbursement disputes and overutilization, noting that 76 percent of related disputes involve hospital outpatient care.  The Division receives over 2,000 disputes annually.

 

Rules 69L-7.020 and 69L-7.100

Mr. Lloyd also reported briefly on proposed Rule 69L-7.020, entitled “Florida Workers’ Compensation Health Care Provider Reimbursement Manual” and proposed Rule 69L-7.100, entitled “Florida Workers’ Compensation Reimbursement Manual for Ambulatory Surgical Centers,”  both of which are still in the rulemaking process.

Copies of the materials provided at the hearing are attached for review. 

 

 

Should you have any questions or comments, please contact Colodny Fass.