Installation of Proposed Outpatient Fee Schedule Software Expected to Cost $2,000 Per Carrier or Claims Administrator; Rule Hearing on Florida Workers’ Compensation Reimbursement Manual for Hospitals (69L-7.501) Scheduled for August 8

The Florida Division of Workers’ Compensation (“DWC”) advised yesterday, July 16, 2012, that it has scheduled a Rule Hearing on Wednesday, August 8, 2012 at 2:00 p.m. to review proposed amendments to Rule 69L-7.501, F.A.C., entitled “Florida Workers’ Compensation Reimbursement Manual for Hospitals.”

The purpose and effect of proposed Rule amendments is to adopt by reference the 2012 Edition of the Florida Workers’ Compensation Reimbursement Manual for Hospitals, thereby replacing the 2006 Edition of the Florida Workers’ Compensation Reimbursement Manual for Hospitals in the existing Rule.

The 2012 Edition will incorporate a fee schedule for certain hospital outpatient services within defined geographic areas in Florida utilizing Current Procedural Terminology^® (CPT) line level charge data.  The methodology for the incorporated fee schedule establishes criteria to evaluate 18 months of hospital outpatient bill data.  The 2012 Edition also makes technical changes to include a new manual format, an expanded table of contents and chapters by topic.

Please note that the DWC has determined that adoption of the proposed Rule will have an adverse impact on small business or likely increase–directly or indirectly–regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the Rule.  The DWC will prepare a statement of estimated regulatory costs (“SERC”) accordingly.

Based on its own preliminary analysis, the DWC estimates that the proposed Rule will result in new costs of $2,000 per carrier or claims administrator for expenses associated with the loading and installation of the proposed outpatient fee schedule into their medical claims payment software.  There are 418 subject carriers (as of September 26, 2011) impacted by the proposed Rule.  Thus, the aggregate, one-time cost to the carrier community for updated software is $836,000.

Additionally, an analysis of the proposed revision to the Florida outpatient fee schedule performed by the National Council on Compensation Insurance (“NCCI”) estimates that implementing the proposed fee schedule for Category 2 and Category 3 hospital services would result in an impact of between -0.5% ($-14 million) and -0.6% ($-17 million) on overall workers’ compensation system costs in Florida.  The DWC has determined that the proposed Rule is expected to require legislative ratification based on the statement of estimated regulatory costs or, if no SERC is required, the information expressly relied on and described herein:  Based on the preliminary economic analysis conducted by the DWC and the analysis that was prepared by NCCI, the DWC has determined that the proposed rule is likely to increase regulatory costs, including any transactional costs, in excess of $1 million in aggregate within five years after implementation of the Rule.

Any person who wishes to provide information regarding the statement of estimated regulatory costs or a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

If requested in writing within 21 days of the date of this notice, the August 8 hearing will be held at 2:00 p.m. in Room 102 of the Hartman Building, 2012 Capital Circle Southeast, Tallahassee, Florida.

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