Workers' Compensation Fee Schedules, Maximum Allowable Fees, And Comparative Reimbursements - Fact Sheet

 

Fact Sheet

Q. How many fee schedules are there in Hawaii for workers' compensation?

A. Two. One is the 110% Medicare fee schedule, which sets maximum charges at 110% of the Medicare payment amounts applicable to Hawaii. The other is the supplemental fee schedule, which by law sets maximum charges at the "prevalent charge for fees for services actually received by providers of health care services to cover charges for that treatment, accommodation, product, or service."

Q. Do they work in conjunction with each other?

A. Yes, charges shall not exceed the greater of the prevalent charge set under the supplemental fee schedule or 110% of the charges allowed under Medicare.

Q. How does that work out in practice?

A. If maximum allowable fees for a medical service are listed under both the supplemental fee schedule and the Medicare fee schedule, then the maximum allowable fee is determined by the supplemental fee schedule. If maximum allowable fees for a medical service are listed only under the Medicare fee schedule, then the maximum allowable fee is determined by the 110% Medicare fee schedule. If maximum allowable fees for a medical service are not listed under either schedule, then the maximum allowable fee is the provider's lowest fee received for that medical service when rendered to private patients. Medical services are identified by their Current Procedural Terminology, or CPT, codes.

Q. Which schedule is the primary one?

A. The supplemental schedule governs the maximum allowable fees of over a majority of the CPT codes that were reported in our survey of most frequently used codes.

Q. How high are the maximum allowable fees under the supplemental fee schedule?

A. For the CPT codes reported in the survey, the suallowable fees at about 136% of Medicare amounts.

Q. What are the most frequently used services in workers' compensation?

A. Based upon our survey, the evaluation and management services were the most frequently reported services. Specifically, the five most frequently reported CPT codes in descending order were 99213 (office visit; established patient; medical decision making is of low to moderate severity), 99214 (office visit; established patient; medical decision making is of moderate to high severity), 99203 (office visit; new patient; medical decision making is of moderate severity), 99212 (office visit; established patient; medical decision making is self-limited or minor), and 99204 (office visit; new patient; medical decision making is of moderate to high severity).

Q. How do reimbursement levels in workers' compensation compare to reimbursement levels in employer group health plans?

A. Based upon our survey, actual reimbursements under the fee schedules are about 99% of the reimbursements received from both carriers and patients under employee group health plans.

Q. How do Hawaii's maximum allowable fee levels compare to the maximum allowable fee levels of other states?

A. For the five most frequently reported CPT codes in the survey, Hawaii's maximum allowable fees are about 102% of the average maximum fee levels of the thirty-two states whose fee schedules we reviewed.

Q. Do all states have fee schedules?

A. No, some do not, but most do. Some fee schedules are based on charges, expressed as the prevailing charge or the usual and customary charge. Other fee schedules are based on the Medicare fee schedule or upon the Medicare resource-based relative value units. Still others are based upon the relative value units of the Ingenix publication Relative Values for Physicians.

Q. How do states update their fee schedules?

A. Where specified, the schedules are authorized or required to be adjusted on a periodic basis (although some states do not require adjustment). Specified periods of adjustment are annually, semi-annually, biennially, triennially, quarterly, periodically, from time to time, as necessary, and as needed. Sometimes, the bases for the adjustments are specified. If the basis is specified, the basis is usually the consumer price index, in particular, the consumer price index--urban. Another basis frequently used is the state average weekly wage. Other bases used includethe Medicare economic index, the year- over-year inflation rate, changes in levels of reimbursement, and prevalent charges.

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