Critics decry the current WC Medical Fee Schedule as not recognizing enough real present medical cost savings but, if they look at historical rates of medical cost inflation, they would see the true value of the present WC Medical Fee Schedule in capping the rate of medical inflation and not in the immediate slashing of medical fees.
The WC Medical Fee schedule certainly results in immediate cost savings in those cases where certain medical providers were charging excessive fee amounts beyond the norm but, you don’t hear a single word uttered from the same critics about those savings even being mentioned.
The highest billing medical professionals or hospitals for a given Geozip (a billing area looking at the 1st three numbers of the zip code), billing at the top or 100th percentile of their peers, based on their local historical charges and with the exact same medical billing codes, would be greatly reduced under the new Illinois Workers Compensation Medical Fee Schedule. Those top billing medical providers would be reduced down to 90% of the 80th percentile. Those savings must be occurring statewide and those savings must represent a significant ongoing immediate cost savings for Illinois employers trying to protect jobs here in
Where are the reports of those savings? Two of our local orthopedic surgeons are presently studying the immediate effects and extent of those cost savings.
Utilization Review (see sec. 8.7) is the new tool for Illinois businesses specifically designed to achieve medical cost savings by eliminating unnecessary and unreasonable medical care and where the current 2005 reforms are really expected to obtain the most significant medical cost savings for insurers and management besides capping medical inflation. That is why insurers and management lobbied so hard for utilization review to begin with, in and amongst the many other negotiated exchanges in the agreed bill process.
Utilization Review is presently highly under utilized in Illinois workers comp insurance practices and therefore employers and insurers are not properly recognizing the medical cost savings that they were expecting and that were in fact built into the 2005 WC reforms.
The importance of retaining Geozips in Illinois for the Illinois Workers Compensation Fee Schedule is that it maintains historical medical charges for any given area and historical levels of access to medical care.
The insurers don’t presently like paying claims based on the Illinois WC Geozip system because their software is not geared for the 29 geographical Geozip pricing areas for the entire state. They must take the time and expense to process the workers comp medical bills by the Geozip system. The real protest to the geozip system by insurers is about the inconvenience of processing bills rather than an issue of providers shifting geozip care sites for a marginal profit edge.
Yes, it will require either more workers or new software by the insurers to process the workers compensation medical bills given the many Geozips involved but, the multiple Geozip system guarantees the access to medical care for areas based on the traditional rates and traditional charges.
If an area historically had medical charges that were lower, then the overall cost of providing medical services in that area given the associated lower overhead costs were probably much lower to begin with. Higher local rents, higher local taxes and higher local salaries do in fact run up the cost of medical overhead and therefore are reflected in the historical medical charges. Under the Medical Fee Schedule Geozip system, the lower overhead cost areas are reimbursed proportionately to their surroundings and historical medical charges.
Critics have complained about the different reimbursement rates for different Chicago suburbs citing Evanston and Oak Park, but Oak Park is one of the nicer neighborhoods in the city of Chicago and the high property taxes and high property values reflect that difference. Those property taxes and the high property costs are built into the past historical medical charges.
The proposed alternative of having just 3 geographical pricing codes for the WC fee caps over an entire state leaves a lot of providers no choice but to move to where they can obtain higher reimbursement rates and thus would deprive the traditionally more rural areas or traditionally poorer areas of the state. The 3 code system would be assailed as being ultimately discriminatory against the rural and poor areas, not by design or intent but discriminatory in applied effect.
Critics should look before they leap. Labor and management were extremely concerned about the future access to medical care issues at the time of the development of the 2005 Workers Comp reforms. The Geozip system answers those concerns and it avoids further depletion of medical care in poor urban and rural areas.
Any attempts to defraud the current system can be properly dealt with and addressed by the newly beefed up Illinois workers compensation fraud unit and prosecuted in a system where the fines can be quite expensive and quite extreme. A medical provider would be extremely foolhardy to attempt shifting medical care to a different geozip merely to obtain a marginally increased payment. Such a thinly veiled attempt at insurance fraud would likely face the workers compensation fraud unit prosecution.
© Copyright 2008 by Brad Bleakney. All rights reserved. Reprinted by permission. This blog originally appeared on Illinois Workers Compensation Blog, published by Brad Bleakney, Bleakney & Troiani, Work Comp Chicago, LLC.