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Circuit Court Resolves Common Fee Schedule Issue: Surgery Center Can’t Get Paid for “Missing” Surgery Codes
The Illinois Workers’ Compensation Commission Medical Fee Schedule (“Fee Schedule”) was designed to help contain medical costs and promote consistency, predictability, and efficiency in processing and resolving medical bills in workers’ compensation cases.
However, some aspects of the Fee Schedule can leave gaps and gray areas leading to disputes over the amount payable for certain bills, causing delays in resolving otherwise undisputed cases or increasing administrative costs from litigating medical bill balances post-settlement.
Although the Commission has the authority to resolve issues involving the proper application of the Fee Schedule to a specific bill, it has recently struggled in applying the Fee Schedule in certain situations.
One increasingly common issue concerns a surgical facility’s charges for procedures that have multiple components or codes (for example arthroscopic shoulder surgeries or multi-level spinal injections). The Circuit Court of Cook County recently addressed this issue in Costco Wholesale v. IWCC (Djolic), 2021 L 050574. The Circuit Court reversed the Commission’s interpretation of the fee schedule, and the case was appealed to the Illinois Appellate Court. However, while the appeal was still pending, the workers’ compensation case settled, and the appeal was dismissed by agreement of the parties. Nonetheless, the Circuit Court seemingly provided some clarification into how these issues should be handled.
Issues With Missing Codes
Some of the largest medical costs in a workers’ compensation case are surgery bills, particularly the facility fees. Surgeries in Illinois Workers’ Compensation cases are typically performed at ambulatory surgical treatment centers (ASTCs) or on an outpatient basis. Under the Fee Schedule, the surgery fees for these facilities are considered “global” – that is, all of the charges on a facility’s bill are subject to a single amount based on the surgical procedures performed. However, multiple procedure codes may be billed and may be payable, and certain items such as implants are eligible for additional reimbursement as “carveouts”.
The Workers’ Compensation Act provides the framework for the Fee Schedule and tasks the Commission with calculating rates for procedure codes based on historical charge data. The Commission supplements the Act with Fee Schedule Rules that provide additional guidance through the Fee Schedule Instructions and Guidelines.
The Fee Schedule lists reimbursement rates based on dates of service, location, and the type of billing provider (professional, inpatient, ASTCs, etc.). The Fee Schedule typically lists specific amounts for each CPT or HCPCS code. When there is insufficient data for the Commission to calculate the Fee Schedule amount, the Fee Schedule will specifically list the default amount of “POC532” for that code, rather than a specific dollar value. However, there are also some codes that are not payable to certain providers and therefore, those codes are completely missing from the Fee Schedule.
Several ASTC’s have argued that if a surgery bill involves procedures codes that are missing from the fee schedule, then the entire bill should be paid at 53.2%. There is some support for this argument: The Instructions and Guidelines provide several examples. One of the examples states that because a facility fee is a global reimbursement, when there is insufficient data to calculate the amount of for one or more of the procedures (i.e., POC 532), the entire bill minus the carveout should be paid at 53.2%. However, the Instructions and Guidelines and the Fee Schedule FAQ page, both published by the IWCC, specifically address how the missing code should be handled for facility fees rendered in an outpatient or ASTC setting.
Per the Commission’s FAQ Page:
How should we pay procedures that are not listed in Hospital Outpatient Surgical and ASTC schedules?
The IWCC used the CMS list of Hospital Outpatient Surgical Facility (HOSF) procedure codes (not reimbursement levels) to develop the HOSF and ASTC fee schedules. This list is more extensive than that approved by CMS for ASTCs. CMS excludes codes from this list for two main reasons:
- The procedure is relatively minor, and the facility component is included in the physician’s charge for the procedure;
- The procedure is commonly done as inpatient.
For procedures that CMS classifies as inpatient, the IWCC recommends that payers and providers should use the POC76 (before 9/1/11)/POC53.2 (on or after 9/1/11) default for these facility bills. Codes excluded from the template as being bundled into the procedure would continue at a “no reimbursement level”. (emphasis added).
Despite this guidance, some ASTC’s continue to seek additional reimbursement for the “missing codes”, which can hold up an otherwise agreed settlement or lead to unnecessary administrative costs in arguing over additional reimbursement post-settlement.
The Circuit Court Weighs-In
This exact situation was recently addressed by the Commission in Frank Djolic v. Costco Wholesale, 21 IWCC 000580. The Arbitrator’s Decision provided that (at least at the time of trial) the parties had agreed on the level of permanency. The only disputed issue was how to address two medical bills for an arthroscopic shoulder surgery. The Arbitrator found that reimbursement was warranted for both bills, and the Commission affirmed without any additional comment.
The first billing issue involved reimbursement for a surgical assistant’s charges. While beyond the scope of this article, it is worth noting that the Circuit Court reversed the Arbitrator and Commission’s interpretations, and simply applied the rules in the Instructions and Guidelines and the Payment Guide to Global Days (another resource adopted and published by the Commission) and found that the assistant was not payable for the charge at issue.
The second issue involved the ASTC’s $17,000.00 billing entry for a subacromial decompression. While we presume the facility’s bill listed additional codes and charges for the shoulder surgery, this was not specified in any of the three Decisions.
Although the Fee Schedule provides a specific amount for professional charges (i.e. the surgeon’s fee) for this code, the ASTC Fee Schedule did not list the code at all (i.e., it did not list POC532, the line for that code was simply missing from the list). The Arbitrator tacitly considered the FAQ and Instructions and Guideline’s directions about how to address missing codes, noting that the ASTC’s witness argued that because the procedure was “not minor” it should revert to the default percentage payment of 53.2%. The witness who testified for Respondent noted that the code is found in CMS’ Out-Patient Prospective Payment System (OPPS), but the OPPS provided an indicator code identifying it as a “package service or item for which no separate payment is due” (indicating that this was a minor component and should be considered bundled into the other procedure codes). The Arbitrator found the testimony of the ASTC’s witness more persuasive, and awarded the charge at 53.2%. The Commission affirmed and adopted the Arbitrator’s decision.
Although the Circuit Court did not cite the Fee Schedule FAQ or Instructions and Guidelines about handling missing codes, the Court did cite the OPPS, and distinguished this as a non-payable code rather than a code for which the Commission was unable to calculate a fee. The Court noted the fee for the billing code was calculable and the Commission, through its Fee Schedule, previously determined it was non-payable. Therefore, the “default” payment provision did not apply.
Although the case was appealed to the Appellate Court, the case settled before the Appellate Court could rule on it, and the appeal was dismissed. How the Appellate Court would have ruled is an open question.
Impact
Many insurance carriers, self-insureds, and bill review companies in Illinois have seen similar disputes arise in the context of shoulder surgeries with multiple components or spine injections involving multiple levels, where codes for subsequent levels of injection are also missing from the ASTC fee schedule.
Currently, the only options to a payer dealing with this issue is to either compromise the amount or take the case to trial. The Djolic case is a clear example of some of the unnecessary “hoops” respondents need jump through to avoid having to pay for charges the Fee Schedule says they are not responsible for. Unfortunately, the costs to litigate the issue through the Court system can easily match the amount in controversy.