By Kim Presbrey
Employers across the United States have been crying to their state legislatures about the high cost of medical fees for injured workers. Many of the state legislatures have implemented medical fee schedules based upon Medicare.
In Illinois the state legislature implemented a fee schedule based upon 90% of the 80th percentile of usual and customary charges. This fee schedule was implemented in order to avoid the political football which Medicare often represents and also to maintain access to the best treating physicians in Illinois. This fee schedule as implemented was supposed to allow employers in the state of Illinois to realize a 10% savings in medical costs.
Unfortunately, NCCI made a presentation to the medical fee advisory committee less than one year after the implementation of the statute which stated that this fee schedule would only provide a 1% savings to employers. One of the premises of the presentation was that doctors who receive substantial cuts in their reimbursements recapture their losses by committing fraud. NCCI admitted that they had not acquired any empirical data in Illinois to support this premise.
After this presentation, the employer and the employee community were left scratching their heads as to what the real data would actually show. That "real data" began to surface at the April 2008 meeting of the medical fee advisory committee. In a study being done by Dr. Lorenz of Hinsdale Orthopedics, the data suggests that employers are saving as much as 40% off of usual and customary charges with this fee schedule.
The $64 question is "does this represent 10% savings?" The reason this is the $64 question is the insurance community in the state of Illinois have never been able to furnish the state or the employee community with an actual figure for medical costs. One might guess that the insurance community is using these windfall profits to stuff their pockets and not pass along the savings to employers in the state of Illinois.
To read the minutes of the April 2008 meeting, click here
To view a list of the IL WCAB members, click here