IWCC Medical Fee Advisory Board Proposes Rules Defining “Explanation of Benefits”
On May 20, 2019, the Illinois Workers’ Compensation Medical Fee Advisory Board announced a Proposed Amendment to the Workers’ Compensation Commission’s Administrative Rules. The proposed rules will help employers and providers navigate some of the changes implemented to the medical bill processes implemented last year by Senate Bill 904.
In November 2018, Public Act 100-1117 amended Section 8.2(d) of the Illinois Workers’ Compensation Act, offering an avenue to providers for enforcing the Act’s pre-existing medical bill interest provisions. Under that amendment, providers may now seek recovery of interest accrued on unpaid medical bills by filing an action in Circuit Court. There were several unanswered questions following the amendments, one of which was how employers or their designees (“payers”) could stop interest from accruing on medical bills that were incomplete or missing necessary information, or for treatment that was denied for other reasons, such as being unrelated to the work injury, disputed conditions, or for a disputed and denied accident.
Under the Public Act 100-1117 amendments, interest begins accruing 30 days after receipt of a bill containing substantially all required data elements to adjudicate the bill. Those necessary data elements had previously been thought to include the date of service, diagnosis code, type of facility, zip code for location of treatment, procedure code, and, arguably, the associated medical records. When a bill lacked substantially all necessary data elements, or the claim (not “bill”) is denied for any other reason, the amendments state that the payer “shall provide written notification to the provider in the form of an explanation of benefits explaining the basis for the denial and describing any additional and necessary data elements within 30 days of receipt of the bill.”
The plain language of the amendments state that bills will begin accruing 1% interest after 30 days in situations where: 1) the bills contained substantially all required data elements, 2) a portion of the bill was not paid, or 3) where a provider was not issued an explanation of benefits (“EOB”). The amendments, however, left unanswered what exactly constitutes an EOB.
The proposed rule, which can be found here, provides that: “[i]n Section 8.2(d) of the Act ‘explanation of benefits explaining the basis for the denial and describing any additional necessary data elements’ means an Electronic Remittance Advice (ERA) or Standard Paper Remittance (SPR) that contains all the relevant data elements set forth by” Accredited Standards Committee X 12 (ASC X12) EDI American National Standards, including the Group Claim Adjustment Reason Codes, Claim Adjustment Reason Codes (CARC), and associated Remittance Advice Remark Codes (RARC).
Paper EOBs or SPRs must also contain all information necessary to match the EOB with the associated medical bill. The proposed rules include a list of additional data elements required for paper EOBs.
While not everyone may recognize the terms Electronic Remittance Advice (ERA) or Standard Paper Remittance (SPR), these generally refer to medical insurance payment explanations. While they may come in different shapes and sizes, they have standardized data elements explaining payment, nonpayment, or adjustment of cases, and resemble those issued by bill review companies. Essentially, what most people consider as an “EOB.”
Although the specific standards cited in the proposed rules may be difficult to find, or require an access fee, they are based on an international standardized system, which is already widely used in healthcare claims processing. In fact, the Illinois Department of Insurance has already approved these same standards for use in processing workers’ compensations payments.
The proposed rules also prohibit parties from rejecting standard paper or electronic transactions on the basis that they contain additional data not needed or used by the other party, or data exceeding those required for a “complete bill.” Additionally, payers and providers may mutually agree to exchange data for medical bills and EOBs in non-prescribed formats. However, the mutually agreed formats must still contain all the data elements required under the proposed rules.
The Workers’ Compensation Commission will accept written public comments on the proposed rule for 45 days after its publication in the Illinois Register. Interested persons can present their comments to the Commission’s general counsel:
Ronald A. Rascia
Illinois Workers’ Compensation Commission
100 W. Randolph St., Suite 8-200
Chicago, IL 60601
NOTE: This Rule may represent a drastic departure from payers’ current workflows. Instead of an adjuster sending a denial letter to a provider for denied bills, for example, a formal EOB would now need to be sent.