Unbundled Medical Charges: How Billing Specialists Can Effectively Step In

Medical bills are a significant portion of the costs associated with a workers’ compensation claim as oftentimes, the medical bills exceed the temporary and permanent disability benefits paid on a given claim. Efforts are made by carriers, employers, and defense attorneys to minimize costs as much as possible.

In Illinois, respondents have the benefit of the Medical Fee Schedule Act to limit charges. Treatment providers are often experts in the complex arena of medical billing and have made creative attempts to exceed the limitations of the fee schedule.

Example of Unbundled Medical Charges

In a recent claim, a provider attempted to increase recovery for medical charges even though the charges were technically pursuant to the fee schedule. They attempted to bill the primary and secondary procedures separately, resulting in an additional charge for services covered in the primary CPT code.

The provider and petitioner’s attorney were aggressive in seeking payment for the inappropriate charges and demanded additional penalties and interest under the Act. Thanks to the vigilance of the carrier’s medical bill review specialist, the respondent was able to successfully litigate the inappropriate charges. The demand for penalties and interest was also denied.

Case Background

In the claim, the petitioner injured her lumbar spine while moving a heavy box and the treating surgeon performed an L4-L5 microdiscectomy. The claimant reached maximum medical improvement and the parties entered settlement negotiations, to which the settlement contract was approved by the arbitrator. The settlement terms enumerated the medical providers and agreed to pay their bills pursuant to the fee schedule or negotiated rate, whichever was less.

The respondent took the position that all medical bills were received, reviewed, and paid before the settlement contract was approved, and the petitioner’s attorney did not allege any outstanding medical charges at the time of contract approval. However, the petitioner filed a penalty petition before a Commissioner three months after the case was closed. They sought penalties under Sections 19(k) and 19(l), Section 16 attorney’s fees, and interest for the allegedly outstanding medical balances of 1% per month under Section 8.2 of the Act.

Botched Billing Process

The primary procedure performed was the microdiscectomy, and it was billed under CPT code 63056. The fee schedule allowed charges up to $8,074.50. The provider also charged three additional CPT codes for secondary procedures performed during the primary microdiscectomy:

• CPT 69990 for microsurgical techniques (use of a microscope). The fee schedule allowed charges for this code up to $1,230.79.
• CPT 76000 for fluoroscopy, a separate procedure with the 59 modifier. The fee schedule allowed charges for this code up to $179.73.
• CPT 64484 for injection of an anesthetic agent or steroid. The fee schedule allowed charges for this code up to $415.35.

The provider and petitioner’s attorney argued that CPT codes 69990 and 76000 were genuine codes recognized by the fee schedule and should be paid.  The petitioner’s attorney gave examples of previous cases where the same codes were paid and argued that code 64484 would not exist if it were inclusive and that the respondent’s claim regarding the National Correct Coding Initiative (“NCCI”) edit rules applied only to Medicare cases.

The respondent received the medical bills, including the three denied charges, before the settlement contract was approved. The charges were reviewed by the carrier’s billing department and deemed to be non-compensable in the Illinois workers’ compensation claim because the charges were considered in the primary code.

The NCCI is a product of the Center for Medicare and Medicaid Services. Its purpose is to reduce medical billing errors and provide guidance to assist with accurate payments. While the NCCI addresses multiple billing questions, one topic is the improper unbundling of services by providers. Medical providers that treat Medicare patients are likely familiar with the NCCI and its prohibitions against unbundling. Here, the provider and the petitioner’s attorney were unaware that the unbundling provision of the NCCI had been adopted by the Illinois Workers’ Compensation Commission when the fee schedule was adopted in 2006.

Disputing the Petitioner’s Penalty Petition

The respondent disputed the penalty and interest petition and argued that:

• Code 69990 was for microsurgical techniques that were used in a microdiscectomy surgery. In this case, the surgeon used a surgical microscope that was covered by the primary CPT code.
• Code 76000 states fluoroscopy may only be billed separately if it was used in a different session, procedure, or site. Since fluoroscopy in this surgery was part of the primary procedure, the separate, unbundled charge was inappropriate.
• Code 64484 covers the treatment of disc pathology as did the primary procedure. Therefore, the guidelines did not allow for a less intensive procedure to be completed at the same level as the primary procedure.

The Commissioner assigned to the case explained that the NCCI was adopted by the Commission and denied all three charges along with all penalties and interest. Here, the attentive eye of the carrier’s billing specialist identified the improper charges.

Since the petitioner’s attorney argued that similar charges were paid in separate cases, it is likely that this improper billing practice is not uncommon. Being aware of this billing practice is yet another tool respondents may use to limit overall exposure.

The NBKL blog is provided for informational purposes; we are not giving legal advice or creating an attorney/client relationship by providing this information.  Before relying on any legal information of a general nature, you may consider consulting legal counsel as to your particular facts and applications of the law.