California: It’s Here--Independent Bill Review (Part 1)

California: It’s Here--Independent Bill Review (Part 1)

 By David Bryan Leonard, Esq.

© Copyright 2013 LexisNexis. All rights reserved.

2013 has started off with a whirlwind of new regulations and administrative processes. We have several new sets of regulations that cover topics such as Independent Bill Review (IBR), Independent Medical Review (IMR), Utilization Review (UR) and Lien Activation Fees. While the majority of new processes contain the letter “R”, each set of regulations covers a unique aspect of California’s workers’ compensation act. Stated differently, while the commonality of name may seem to create topical overlap, each process is very different and specialized. This article highlights some of the key features of the Independent Bill Review (IBR) emergency regulations that became effective January 1, 2013.

Contained in the California Code of Regulations, Title 8, Chapter 4.5 Division of Workers’ Compensation, the Regulations initially read like an “industrial medical factory complex” operations manual. Many aspects of the digital age of the “Medi-Biz” phenomena are incorporated into the new guidelines.

Medical Billing and Payment Guide; Electronic Medical Billing; Implementation Guides

Section 9792.5.1 starts with a medical billing and payment guide along with details on electronic medical billing and payment. In addition, various implementations guides are recommended. Each of these guides and data base sources of information is incorporated by reference. They are not set forth in the regulations themselves. (See 9792.5.1(a)-(i).) Regulation 9792.5.1 sets forth a long list of data bases that are incorporated by reference into the workers’ compensation system.

The data bases incorporated by reference are:

1. The California Division of Workers’ Compensation Medical Billing and Payment Guide, version 1.1. (Regulation 9792.5.1(a))

2. The California Division of Workers’ Compensation Electronic Medical Billing and Payment Companion Guide, version 1.1. (Regulation 9792.5.1(b))

3. The HIPAA-approved Technical Reports Type 3 for billing listed in subdivision (c)(1) through (3). (Regulation 9792.5.1(c))

4. The HIPAA-approved implementation guides for pharmacy billing. (Regulation 9792.5.1(d))

5. The HIPAA-approved Technical Report Type 3 and errata, for acknowledgment and remittance. (Regulation 9792.5.1(e))

6. The National Uniform Claim Committee 1500 Health Insurance Claim Form Reference Instruction Manual for 08/05 Version, Version 6.0 07/10, and the 1500 Form (revised 08-05). (Regulation 9792.5.1(f))

7. The National Uniform Billing Committee Official UB-04 Data Specifications Manual 2011, Version 5.0, July 2010, including the UB-04 form. (Regulation 9792.5.1(g))

8. The Manual Claim Forms Reference Implementation Guide Version 1.0, October 2008, National Council of Prescription Drug Programs (NCPDP) Data Specifications Manual including the NCPDP paper WC/PC Universal Claim Form Version 1.1 – 05/2009, except pages 13-36. (Regulation 9792.5.1(h))

9. The CDT 2011-2012-ADA Practical Guide to Dental Procedure Codes, including the ADA 2006 Dental Claim Form. (Regulation 9792.5.1(i))

Payers’ Obligations for Payment of Medical Treatment Bills

In addition to the new billing protocols listed above, Section 9792.5.3 details the payers’ obligations for payment of Medical Treatment Bills.

There are two different operational dates, both of which are in effect. The first, beginning October 15, 2011, requires claims administrators to conform to the payment, communication, penalty, and other provisions contained in the California Division of Workers’ Compensation Medical Billing and Payment Guide. (Regulation 9792.5.3(a))The second operational date begins October 18, 2012. It applies to the payment of electronic medical bills. It requires claims administrators to conform to the payment, communication, penalty, and other provisions of the California Division of Workers’ Compensation Electronic Medical Billing and Payment Companion Guide. (Regulation 9792.5.3(b))

Independent Bill Review Definitions

After setting out the new data base and payment protocols, the regulations turn to participant driven billing dispute resolution process, commonly referred to as Independent Bill Review (“IBR”). Applicable to medical treatment provided on or after January 1, 2013 regulation 9792.5.4 begins with a series of definitions on basic operating terms such as:

(a) “Amount of payment” means the amount of money paid by the claims administrator for either:

(1) Medical treatment services rendered by a provider or goods supplied in accordance with Labor Code section 4600 that was authorized by Labor Code section 4610, and for which there exists an applicable fee schedule located at sections 9789.10 to 9789.111, or for which a contract for reimbursement rates exists under Labor Code section 5307.11.

(2) Medical-legal expenses, as defined by Labor Code section 4620, where the payment for the services are determined by sections 9793-9795 and 9795.1-9795.4.

(b) “Billing Code” (TX or M/L) means those codes adopted by the Administrative Director for use in the  Official Medical Fee Schedule, located at sections 9789.10 to 9789.111, or in the Medical-Legal Fee Schedule, located at sections 9795(c) and 9795(d).

(c) “Claims Administrator” means a self-administered insurer providing security for the payment of compensation required by Divisions 4 and 4.5 of the Labor Code, a self-administered self-insured employer, or a third-party administrator for a self-insured employer, insurer, legally uninsured employer, or joint powers authority.

(d) “Contested liability” means the existence of a good-faith issue which, if resolved against the injured worker, would defeat the right to any workers' compensation benefits or the existence a good-faith issue that would defeat a provider’s right to receive compensation for medical treatment services provided in accordance with Labor Code section 4600 or for medical-legal expenses defined in Labor Code section 4620.

(e) “Consolidation” means combining two or more requests for independent bill review together for the purpose of having the payment reductions contested in each request resolved in a single determination.

(f) “Explanation of review” means the document described in Labor Code section 4603.3 provided by a claims administrator to a provider upon the payment, adjustment, or denial of a complete or incomplete itemization of medical services.

(g) “Independent bill review organization” or “IBRO” means the organization or the organizations designated by the Administrative Director.

(h) “Independent bill reviewer” means an individual retained by the IBRO.

(i) “Provider” means a provider of medical treatment or a provider of medical-legal services that has requested a second bill review and, if applicable, independent bill review to resolve a dispute over the amount of payment for services according to either a fee schedule established by the Administrative Director or a contract for reimbursement rates.

Independent Bill Review Process; Second Review

Next, Regulation 9792.5.5(a)-(b) details the multiple stages of the Independent Bill Review (IBR) process. Applicable to both medical treatment and medical legal billing submitted for services performed after January 1, 2013, the IBR process begins with the provider’s decision to agree or disagree with the amount paid for medical services billed. (Regulation 9792.5.5(a))

If the provider disagrees with the amount paid, the provider may request the claims administrator to conduct a second review of the bill. (Regulation 9792.5.5(a)) With various rules defining date of service, a second review must be requested within 90 days of the following:

(1) Service of the explanation of review provided by a claims administrator. (Regulation 9792.5.5(b)(1))

(2) The date of service of an order of the Workers’ Compensation Appeal Board. (Regulation 9792.5.5(b)(2))

The format requirements required to submit a secondary review are defined in regulation 9792.5.5(c). This section details the difference between electronic and non-electronic bills.

For non-electronic treatment bills, the second review must be submitted on a CMS 1500 or UB04, as modified by this regulation. The request must be marked using the National Uniform Billing Committee (NUBC) Condition Code Qualifier “BG” and followed by NUBC Condition Code “W3” in the field designated for that information to indicate a request for second review. (Regulation 9792.5.5(c)(1)(A))

For ADA 2006 forms, the payee seeking review must use the words “Request for Second Review”. This should be marked in Field 1, or for the NCPDP WC/PC Claim Form. Also, the words “Request for Second Review” may be written on the form. (Regulation 9792.5.5(c)(1)(A))

Alternatively, the request for secondary review may be submitted on the DWC Form SBR-1, found at section 9792.5.6. (Regulation 9792.5.5(c)(1)(B))

(2) For electronic medical treatment bills for professional, institutional or dental services, the request for second review must be submitted utilizing the National Uniform Billing Committee (NUBC) Condition Code Qualifier “BG” followed by NUBC Condition Code “W3”. For reference the reader is referred to the Division of Workers’ Compensation Electronic Medical Billing and Payment Companion Guide. (Regulation 9792.5.5(c)(2))

For an electronic pharmacy bill that used either the NCPDP Telecommunications D.0 or the NCPDP Batch Standard Implementation Guide 1.2, the request for second review may be addressed in the trading partner agreement, or the second review may be requested on the DWC Form SBR-1. (Regulation 9792.5.5(c)(3))

For medical-legal bills, the second review shall be requested on the Request for Second Bill Review form, DWC Form SBR-1, set forth at section 9792.5.6. (Regulation 9792.5.5(c)(4))

In summary, after Regulation 9792.5.5(c) et seq. details proper method for titling requests for secondary review, the regulations move on to section 9792.5.5(d), which details the required content of the second request for review. If the provider does not request a second review within the 90-day window of subdivision (b), the bill shall be deemed satisfied. This means that neither the claims administrator nor the employee shall be liable for any further payment.

The request for second review must include the original dates of service and the same itemized services rendered as the original bill. No new dates of service may be included. (Regulation 9792.5.5(d)(1)) In addition, 9792.5.5(d)(2)(A)-(D) requires that the second review request shall include, as applicable, the following:

(A) The date of the explanation of review and the claim number

(B) The item and amount in dispute.

(C) The additional payment requested and the reason therefor.

(D) The additional information provided in response to a request in the first explanation of review or any other additional information provided in support of the additional payment requested.

If a request for secondary review is timely filed, the claims administer must respond within 14 days of receipt of the request. In response, the claims administrator must issue written response on each of the items in dispute. The claims administers’ response must include all the information required by Labor Code section 4603.3, including an explanation of the time limit to raise any further objection and how the provider may obtain an independent bill review under Labor Code section 4603.6. (Regulation 9792.5.5(f))The claims administers’ response deadline may be extended by mutual written agreement. (Regulation 9792.5.5(f)(1))

Claims Administers’ Responsibilities; Penalty for Late Review

9792.5.5(f)(2) details the claims administers’ penalty for late review. If any properly documented itemized service is not paid timely, the billed amount must be paid at the fee schedule rates then in effect. This amount must be increased by fifteen (15) percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the provider’s initial itemized billing. This penalty applies only if the claims administrator issues a late response to timely secondary bill review requests.

9792.5.5(g) requires that the claims administer pay any balance not in dispute within 21 days of receipt of the request for second review.

Payment Disputes Subject to Independent Bill Review

After the provider and claims administer assess the billing dispute in the secondary review protocol, if the medical provider’s dispute is not resolved, the medical provider may request Independent Bill Review (“IBR”). (Regulation 9792.5.5(h)) Regulation 9792.5.6 has the form required for the medical provider to request a secondary bill review. Regulation 9792.5.7 details the mechanisms of the IBR process. The first issue concerns whether or not the medical provider billing dispute qualified for IBR.

The services must be provided on or after January 1, 2013 and have been considered in the request for secondary review. IBR covers nothing but payment disputes. It does not cover any other issue, such as contested liability, medical services that do not have an applicable fee schedule and billing code disputes. (Regulation 9792.5.7(b)) To be eligible for IBR, the dispute must involve billing submitted pursuant to Labor Code sections 4603.2 or 4603.4. It may also be a bill for medical-legal expenses submitted pursuant to Labor Code section 4622. Only the provider may initiate the IBR process. Absent consolidation of issues under section 9792.5.12, IBR resolution is limited to the following disputes: (Regulation 9792.5.7(a))

(1) A disagreement over the amount paid for medical treatment services performed by a single medical provider in a single case for one date of service, and one billing code.

(2) A medical-legal bill dispute involving the amount paid to a single provider in a case involving one injured employee, one claims administrator, and one medical-legal evaluation including supplemental reports.

With limited exception, IBR generally must be requested within 30 days after the date of service of the final written determination. (Regulation 9792.5.7(c)) To request an IBR, the medical provider may, electronically submit an online request. The electronic request must include payment of the required fee of $335.00. Alternatively, the provider can mail in an IBR request using DWC Form IBR-1 along with the required fee of $335.00. (Regulation 9792.5.7(d)) All IBR requests must include: (Regulation 9792.5.7(d))

(A) The original billing itemization;

(B) Any supporting documents that were furnished with the original billing;

(C) If applicable, the relevant contract provisions

(D) The explanation of review that accompanied the claims administrator’s response to the original billing;

(E) The provider’s request for second review of the claims administrator’s original response to the billing;

(F) Any supporting documentation submitted to the claims administrator with that request for second review;

(G) The final written determination of the second review (explanation of review) issued by the claims administrator to the provider.

When requesting an IBR, the medical provider must serve a copy of the IBR request and supporting documents. The IBR request forms can be found at § 9792.5.8. In specified circumstances, the medical provider may request consolidation of two or more disputes that would each constitute a separate IBR request as defined by 9792.5.12. (Regulation 9792.5.7(e))

This ends Part 1 of a two-part article. Continue to Part 2

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