Wiki Illinois Workers Compensation Fee Schedule for Facility component of bill

[Mjahic]

Good morning,

As a billing company we have client based in Illinois who is performing a lot of spine surgeries.

IWCC fee schedule defines that facility component of the bill for these surgeries is to be paid per POC 53.2% (53.2% of the billed amount), which leaves room to providers/business owners to set customized fee for those bills.
Recently WC companies started to complain about how Facility component of the bill is being overcharged and client is asking us are these complaints reasonable.

Is there any guide on how to set customized fee for those POC 53.2% CPT codes that would represent reasonable charge for this type of bill?

Any guide/assistance is greatly appreciated.

Thank you!!

 

[thomas7331]

This is a rather complicated question actually, and not really my area of expertise, but I can take a try at answering based on my understanding.

When a payer reimburses a facility at a percentage of charge, they are paying based on that facility's cost-to-charge ratio (CCR). Facilities are required by CMS to report the costs they incur to provide care each year and this is compared to the amounts billed on claims through the year to compute the CCR. Payers will use that ratio to negotiate and determine a percentage of charge that they will pay that will cover the facility's costs of care plus give a premium for the benefit of having the payer contract. Normally, under this kind of a contract, there will be a clause that states that facilities are required to notify the payer if they change or update their fee schedules - this is because those changes will necessarily cause a change to the CCR and may require a renegotiation of the contact.

So to answer your question in brief, the general guidelines for setting of facility fees is that they should be in line with the CCR - in other words, any new fee should have a markup above cost that roughly matches the facility's other fees. 'Customized fees' is a rather questionable practice from a compliance standpoint. The fee schedule should be set and in place at the time that the percentage of charge is determined by the payer, not 'customized' from service to service. If the facility is changing their fees or their rate of markup in the interim and not notifying the payer so that the percentage of charge can be adjusted, then they could be in breach of their agreement or out of compliance with regulations. If a payer suspects this may be happening, they can take steps to audit the fees, such as requesting itemized statement, which could show if the facility is billing fees that are different than those that were in place when the contract was set up. But even if not audited, payers will catch on to this kind of practice quickly because the increased fees will show up in a change in the CCR in the following years. If payers see the CCR increase, they'll usually reduce the percentage of charge accordingly to compensate.

As this is a complex issue, it's best to refer this kind of concern to someone in a legal or compliance role who has a knowledge of the regulations and contractual requirements.