Since 2011, Section 8.2(d) of the Illinois Workers’ Compensation Act has held that undisputed bills must be paid within 30 days of receipt of a complete bill. It states that bills unpaid after 30 days shall incur interest at the rate of 1% per month payable directly to the provider. However, the Act did not contain a method for medical bill providers to enforce the interest provision. Medical providers would demand payment of interest for bills paid after the 30 day period, to be met with crickets from insurance carriers and third-party administrators who knew the providers had no way to collect the interest.
Senate Bill 904 was lobbied for by the Illinois State Medical Society, the Illinois Health & Hospital Association, and a number of large medical practices throughout Illinois. It was passed over Governor Rauner’s veto and amended Section 8.2(d) adding, in pertinent part, “if the employer or its insurer fails to pay interest required pursuant to this subsection (d), the provider may bring an action in Circuit Court to enforce the provisions of this subsection.”
Exposure for interest on unpaid medical bills has existed for years. Now medical providers have a venue to seek court-ordered payment of that interest beginning with November 27, 2018 dates of service. There has been a great deal discussion at the Illinois Workers’ Compensation Commission about Senate Bill 904 and its implications on our cases. Some practitioners may warn you of millions in increased exposure and others may tell you that you have nothing to worry about. The truth is, no one knows exactly how things are going to play out until the first round of these cases are heard in Circuit Court. The purpose of this post is to put you in the best possible position to defend a claim for the payment of interest on an outstanding medical bill.
Upon receipt of any medical bill, determine if it has all of the elements required to adjudicate the bill. The necessary elements include:
- Date of service;
- Diagnosis code;
- Type of facility;
- Zip code to determine county/region;
- Procedure code;
- Medical records (if necessary)
If any of these elements are missing, issue an explanation of benefits explaining that the bill is denied for failure to provide all of the necessary elements for adjudication and demand a copy of the complete bill. Remember that providers need not provide you with a Health Insurance Claim Form but only have to issue a bill with all of the necessary elements. The excuse that your company’s system cannot process bills unless they are in HCFA form is not sufficient to avoid the interest provisions of Section 8.2(d).
If the bill does contain all of the necessary elements, determine whether or not there is another defense to the bill. For instance, is it reasonable and necessary (Utilization Review)? Is it causally related to the work accident (IME)? Is the provider within the Petitioner’s choice of physicians or chain of referrals? If the bill is being denied on any legal grounds, issue an explanation of benefits to advise the provider in writing as soon as possible.
If a medical bill contains all of the necessary elements for adjudication and we do not have any legal defenses to payment, issue payment as soon as possible but no later than 30 days after receipt. Medical providers lobbied for this bill, alleging that accepted bills were not being paid in a timely fashion. The law is clear that if the bill is complete and you do not dispute it, you will owe interest if it is not paid within 30 days.
Section 8.2(d)(3) states, “in the case of nonpayment to a provider within 30 days of the bill which contained substantially all of the required data elements necessary to adjudicate the bill . . . or where the provider has not been issued an explanation of benefits for a bill, the bill . . . shall incur interest at a rate of 1% per month payable to the provider.”
The plain language of the amended act requires that interest incur on a bill if it is complete and owed or if an explanation of benefits is not issued, even if there is a dispute. If you are denying a medical bill for any reason, issue a written explanation of benefits indicating why the bill is denied.
If you do not issue an explanation of benefits, you will face exposure for interest on unpaid bills. Medical providers may file suit in the Circuit Court while the case is pending at the Commission. If you are disputing a bill for a legitimate legal reason but fail to issue an explanation of benefits, the provider may file suit to seek interest payment. The plain language of the law allows the Circuit Court to determine that interest has accrued before the Commission has even made a determination as to whether or not you owe the bill. Issuing the explanation of benefits may allow you to avoid interest and litigation associated with it.
If and when interest begins to accrue on disputed medical bills that are eventually awarded or that we agree to pay as part of a settlement agreement is the million dollar question. Issuing a timely explanation of benefits may allow you to avoid interest until a Decision or contract becomes final. We expect the providers to seek interest on all outstanding bills from the date of service through payment, regardless of whether or not there is a valid dispute. Only time and the Circuit Court will tell. We will update the blog with pertinent developments as they arise. In the meantime, please do not hesitate to contact me with any questions about demands for payment of interest.