Sunday, April 30, 2006

Department of Labor Abuses Rulemaking Authority?

In a story that has not received any press coverage, the Jackson Clinic is asking an administrative law judge to rule that the Department of Labor and Workforce Development violated the law by making changes to the workers' compensation medical fee schedule without providing notice or a hearing.

Last year, the department adopted provisions in the fee schedule that paid physical therapists treating workers' compensation patients less if they worked for a "physician affiliated" facility than they would be paid if they were independent. In February, the Department suddenly announced that it had adopted changes (effective May 1) to the physical therapy reimbursement rules. Under the changes, a physician could be fined $10,000 if he referred to a physician affiliated physical therapist. The Commissioner of Labor said that no notice or hearing was required since the changes were "minor."

Before: phsyician affiliated physical therapist gets paid for treatment, but less than an independent.

After: physician who referred to the physician affiliated therapist is fined $10,000.

Does anyone see this as minor?

On Friday, the department published further changes -- effective tomorrow -- granting some additional exemptions to the physician affiliated prohibition, but requiring preauthorization for any physical therapy visit. It is unclear from the revised rules whether therapists with patients scheduled for treatment on Monday -- neither health care providers or insurers had advance notice of this new preauthorization requirement -- can be paid for providing the treatment.

As I mentioned above, this story has not received any press, but if you would like more information, please e-mail me at the address listed under my profile.

3 Comments:

Blogger Kat Coble said...

I can see both sides.

I definitely think the participants should have been notified, but I think perhaps they weren't because it sounds like a loophole through which there could have been much insurance fraud.

Example:
You're a doctor. You have a PT as a member of your practice. You refer patients who don't necessarily need therapy to your in-office PT, bill the Insurer for $200 a session and pay the PT $50/hr.

I'd be interested to know if they had seen a great percentage increase in the number of PT claims over a certain amount of time.

It sounds like perhaps the reimbursement change was a covert trap to sting a few bad actors.

4:10 PM  
Blogger MCO said...

Kat, the new PT requirements will cost far more to administer than anything they will save through denials of unnecessary treatment.

If there are concerns about utilization, they could have been addressed more effectively in other ways.

In a hearing back in February, the Commissioner and the department's medical director acknowledged that they had no data showing problems in PT utilization.

4:14 PM  
Blogger Kat Coble said...

In a hearing back in February, the Commissioner and the department's medical director acknowledged that they had no data showing problems in PT utilization.

Well if there is no risk management reason to implement a punitive system, then there's no sense to it other than an abuse of power.

11:11 PM  

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