Prior to the recent amendments to the Workers’ Compensation Act, a doctor, hospital, or other medical provider who provided treatment to an employee who suffered a work-related injury, was free to charge any fee they wished, without limitation, as long as the treatment related to the work injury. Further, the carrier or employer was required to pay the bills related to the injury, even if the fee was excessive and the treatment unnecessary. The only procedure available for a carrier or employer wishing to challenge the reasonableness or necessity of a medical bill was to file a Petition to Review Medical Treatment with the Bureau of Workers’ Compensation. Until the workers’ compensation Referee (now Judge) issued his/her final decision stating the treatment at issue was reasonable and/or necessary, the carrier or employer was required to continue paying for the treatment. The failure to pay the bills subjected the employer or carrier to additional penalties, even if it was eventually determined that the treatment at issue was unreasonable and/or unnecessary. This review procedure typically lasted well beyond one year and there was no means until very recently by which a carrier or employer could recoup past payments made for unreasonable and/or unnecessary treatment.
Under the new amendments to the Act, the provisions regarding reasonable and necessary medical services and fees are altered significantly. Fees charged by providers of medical services for work-related injuries are now generally limited to 113% of Medicare reimbursement, although some exceptions exist. The most notable exception is for treatment provided by members of a comprehensive care organization (“CCO”) retained by employers or insurers, who are free to enter into private contracts for fees which exceed the 113% of Medicare limitation. An exception also exists for emergency room care provided by hospitals in certain instances.
The new amendments to the Act create a mechanism for reviewing whether the appropriate fee has been charged or paid or whether the treatment provided is reasonable or necessary. The new Act creates three new entities: peer review, utilization review, and fee review. Peer review is a system by which a workers’ compensation judge may obtain an independent review by a peer review organization (“PRO”) of the frequency or necessity of treatment. Utilization review also addresses reasonableness and necessity of treatment, but adds several administrative steps providing for independent review by other health care professionals known as utilization review organizations (“UROs”) prior to the issue of reasonableness or necessity going before a workers’ compensation judge. Fee review addresses only the issue of whether the fee is correct under the Medicare calculation, and is to be administered in-house by the Department of Labor and Industry.
A. Peer Review
The Act defines Peer Review as an impartial physician or other health care provider, a panel of such professionals and providers, or a peer review organization selected by the Secretary of Labor and Industry for the purpose of undertaking reviews and reports pursuant to the Act. Because no peer review organizations have yet been selected by the Secretary, the Bureau of Workers’ Compensation has issued a notice stating that, until February 28, 1994, it will adopt as its list the list of peer review organizations currently used by the Insurance Commission for review under Act 6 (the auto insurance law). A request for peer review may be made by a party either in writing or by oral motion before the Workers’ Compensation Judge. The opinion from the peer review is limited only to the necessity or frequency of treatment at issue. The peer review is not empowered to render opinions regarding the cause or extent of disability or of the relationship of the treatment to the injury. For example, a peer review cannot state that treatment for arthritis in a joint is unrelated to a prior injury to that particular joint. The workers’ compensation judge may consider the peer review’s report of its opinion as evidence as to the necessity or frequency of treatment, but is not bound by such report.
B. Utilization Review
A utilization review is a method whereby an employee, employer, or insurer may request an independent opinion from a utilization review organization (URO) as the reasonableness or necessity of treatment for work-related injuries. As with peer reviews, utilization reviews may not address the cause or extent of disability or the casual relationship between the treatment and the injury.
A utilization review is distinguished from a peer review in that peer review is initiated by a workers’ compensation judge, upon request, and a utilization review can be initiated by an employee, employer, or insurer. A provider does not have standing to request a utilization review at the first level, but may appeal the initial determination made by the URO. Prior to the new amendments, a health care provider had no standing under the Act to seek a review of the reasonableness or necessity of its treatment in the event that a carrier or employer unilaterally refused to make payment.
Under the new Act, an employer or insurer must pay a medical bill within thirty days of receipt of the bill and records from the provider substantiating the bill, unless the employer or insurer initiates utilization review to challenge the reasonableness or necessity of the treatment which gave rise to the bill. A utilization review must be completed within thirty (30) days after a request for the same has been made. Insurance companies and employers pay fully for the first request to review medical bills. Any party dissatisfied with the URO decision can then file a Petition to Review with the Bureau of Workers’ Compensation, which will eventually be heard by the workers’ compensation judge.
C. Fee Review
Fee review is a procedure by which a provider who has submitted the reports and bills required by the Act and who disputes the amount or timeliness of payment from the employer or insurer, may obtain a review with the Department of Labor and Industry, within thirty (30) days of filing an application for fee review.
Only medical providers have standing to utilize fee review and employees, employers, and insurers are excluded. A decision must be issued within thirty (30) days.
D. Collection of Payment of Medical Bill from Injured
Employees
As far as injured employees are concerned, one of the most significant amendments to the Workers’ Compensation Act is a provision which prevents a medical provider from collecting or attempting to collect, directly from the employee, payment for services rendered in connection with a work injury. Thus, if a provider either chooses not to go through the utilization or peer review process, or is dissatisfied with the ultimate determination of the URO or workers’ compensation judge as to the reasonableness or necessity of their bill, they may not attempt to obtain payment directly from the injured worker. Prior to the amendments, providers nearly always attempted to collect directly from the patient, where the workers’ compensation carrier or employer denied payment of the bill. Claimants often had providers, or collection agencies “breathing down their necks” about unpaid bills or had their credit ruined simply because an employer or carrier refused to pay a bill. If the Claimant attempted to compel the employer or carrier to pay the bill by filing a Petition to Review with the Bureau of Workers’ Compensation, the procedure often lasted more than a year and did nothing to help the Claimant’s credit rating, which was already ruined by the non-payment. Additionally, Claimants often were forced to incur attorney fees which frequently exceeded the amount of the bill.
Under these new provisions, Claimants are taken “out of the loop.” While at first blush, this may appear to be nothing short of wonderful, there is one potential pitfall. That being that a doctor or hospital who is not paid for treatment rendered to an injured worker, may be reluctant in the future to provide further treatment. Thus, even though a Claimant may not be legally responsible for payment of a bill, he or she certainly has a vested interest in seeing that his or her doctor is paid.
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For more than 20 years, our attorneys have been helping injured workers navigate the complex Pennsylvania workers’ compensation system. We empower workers with the information and the representation they need to make the best decisions for themselves and their families’ future.
