IWCC Corrects the Implant Invoice Repricing Effective Date on Its Website

There was a discrepancy regarding the effective date of implant repricing on the IWCC Medical FAQ page.  The IWCC originally had an effective date of 6/28/11 on their website for the new implant repricing methodology; however, the new law appears to reference a 9/1/11 effective date for this change.  After being notified of this inconsistency, the IWCC has updated their Medical FAQ section to reflect the 9/1/11 effective date.   

We updated yesterday’s post to reflect the change in the effective date for the implant repricing methodology.

IWCC News & Updates (updated 7/29/11)

The IWCC posted an updated Handbook on Workers’ Compensation and Occupational Diseases yesterday.  It incorporates several of the new reforms included in HB 1698, including preferred provider programs, into a general overview of the Illinois work comp system.  While it does provide specifics in some areas of the system, filing a claim, types of disability, etc., it does not include details on the modifications to the medical fee schedule rates or repricing. 

The IWCC’s updated Medical FAQS does have information on the new medical fee schedule effective dates:

Effective 6/28/2011

·        Out of State Provider Reimbursement:  An out-of-state provider will receive the lesser of that state's fee schedule amount or the fee schedule amount for the region in which the injured employee resides.  If the provider’s state does not have a WC fee schedule, the provider will receive the lesser of the billed charge or the fee schedule amount for the region in which the employee resides.

·        Provider Payment Time Frames:  The bill payment window is now 30 days from the receipt of the bill (reduced from the previous requirement of 60 days), as long as the bill contains substantially all required data elements. Employers or insurers must explain the basis for denial or send notification of any missing required data elements within 30 days of the receipt of the bill.

 Effective 9/1/2011

·        30% Reduction in Provider Reimbursement:  The maximum allowable payments for all listed flat rate codes will be 70% of their current state fee schedule reprice amounts.

o    POC76 codes, codes where a schedule amount cannot be determined, will reimburse at 53.2% (currently 76%) of billed charges.

o    Non-implant “pass through codes” remain at 65% of billed charges.

o    Implant “pass through codes” will reprice according to the new implant repricing methodology.

·        Implant Repricing Methodology:  Implants will reimburse at 25% above the net manufacturer’s invoice price less rebates, plus actual reasonable and customary shipping charges. (The IWCC Medical FAQ originally listed this effective date as 6/28/11,  it was updated on the IWCC website on 7/29/11)

·        Prescription Fee Schedule:  The IWCC’s Fee Schedule Committee will create a new fee schedule for prescriptions filled and dispensed outside of a licensed pharmacy that will not exceed the Average Wholesale Price (AWP) plus a dispensing fee of $4.18.

Effective 1/1/2012

·        New Geographic Regions for Provider Reimbursement

o    4 Regions for “Non-Hospital Fee Schedule Amounts”

o    14 Regions for “Hospital Fee Schedule Amounts”

o    If a geozip overlaps into 1 or more of the regions, the Commission shall average or repeat the charges and fees in a geozip in order to designate charges and fees for each region.

o    According to the preliminary discussion and interpretation at the 6/14/11 IWCC Medical Fee Advisory Board meeting, the fee schedules define “hospital” according to the IDPH hospital definition.

The next Medical Fee Advisory Board meeting is scheduled for August 23 at 9:00am.  That meeting should provide additional clarifications about the implementation methodologies for all of the reforms in HB 1698.  Hopefully, the Board will also provide additional information about how Glen Boyle (the Fee Schedule Project Manager) and his team are determining and recalculating the fee schedule reprice amounts for both the new Hospital & Non-Hospital fee schedule regions effective 1/1/2012.  This is a major undertaking that will have a profound impact on provider reimbursement.

Please feel free to use the comments section, or email us directly, with any questions about the new repricing methodologies or the IL WC system in general.

Governor Quinn appoints the Workers’ Compensation Advisory Board

Governor Quinn announced his 12 appointments to the Workers’ Compensation Advisory Board in a press release today.  HB 1698 included a provision that terminated all of the members serving on the Advisory Board as of the legislation’s effective date.

The 12 Advisory Board members are:

1.    Mitchell W. Abbett (Holten Meat Inc.)

2.    Richard Aleksy (Corti, Aleksy, and Castenada)

3.    Aaron Anderson (Painters Dist. Council #30)

4.    Michael Carrigan (Illinois AFL-CIO)

5.    John Carpenter (Chicagoland Chamber of Commerce)

6.    Mark Denzler (Illinois Manufacturers' Association)

7.    Phillip Gruber (International Association of Machinists and Aerospace Workers)

8.    David Halffield (Sears Holdings Management Corporation)

9.    William Lowry (Nyhan, Bambrick, Kinzie, and Lowry)

10. Mark Prince (Prince Law Firm)

11. Sean T. Stott (Laborers' International Union)

12. David Vite (Illinois Retail Merchants Association)

One of the main responsibilities of the Advisory Board is the make recommendations to the Governor about the initial set of arbitrator appointments. 

As of July 1^st, all of the current Commission arbitrators were terminated due to the new legislation.  The Commission is currently taking applications for the arbitrator positions, and the Governor has not announced when he will begin appointing new, or reappointing former, arbitrators.  There is also a lawsuit from five arbitrators attempting to block the firings and have that section of HB 1698 ruled unconstitutional.

IWCC: NCCI Reduces Rates & PPP-Approval Process Under Consideration

The Illinois Workers’ Compensation Commission’s website posted two announcements today regarding HB 1698 and workers’ compensation reform.

First, the Commission announced that NCCI filed for an 8.8% decrease in voluntary advisory insurance rates effective 9/1/11, pending approval from the Illinois Department of Insurance.

Second, the IWCC reiterated that the Department of Insurance is still creating the rules and regulations for the workers’ compensation “preferred provider program” (PPP) approval process. 

According to the legislation, the Commission must release a notification form that employers will use to inform injured workers about their PPP.  Based on today’s news update from the IWCC, the Commission will not release that form until the Department of Insurance has released all of its requirements for PPP approval.

For an explanation of the difference between PPAs & PPPs, please see our previous post. 

This chart illustrates the preferred provider program direction of care outlined in HB 1698. 

Illinois Preferred Provider Programs: PPAs & PPPs

As a follow-up to our earlier post regarding approved preferred provider program administrators, there is some uncertainty and confusion over the terminology involved with preferred provider programs & HB 1698.

Currently, if you are a PPO operating in the state of Illinois, you need to be registered by the Illinois Department of Insurance as a preferred provider program administrator, also known as a preferred provider administrator or PPA.  There is an annual renewal process with the Department for every PPA in Illinois. 

The Department of Insurance keeps two lists of approved PPAs on their website: here & here.  The Provisionally Approved Companies list consists of previously approved companies with renewal applications in house at the Department. As the Department reviews and approves the renewal applications, those companies move to the Approved Companies list.

HB 1698 now allows an employer to utilize a “preferred provider program” (PPP) approved by the Department of Insurance for the direction of medical treatment of injured employees.  These new workers’ comp PPPs must comply with all of the existing PPA requirements, but the law also lays out additional requirements as well.

In addition to the specific PPP requirements described in Section 8.1a of HB 1698, the final portion of 8.1a states,

The Director of the Department of Insurance may promulgate such rules as are necessary to carry out the provisions of this Section relating to approval & regulation of preferred provider programs.

Until the Department releases its additional requirements, and begins the new PPP approval process, none of the currently approved PPAs are Department of Insurance–­approved workers’ comp preferred provider programs.

As a PPA with a successful workers’ comp network, HFN is prepared to meet all of the specific PPP requirements included in HB 1698.  HFN will immediately take the additional steps to become a Department of Insurance–approved WC preferred provider program once the Department establishes those new approval requirements. 

For more detailed information about these changes, or any WC reform issue, you can always use the comments section on the blog or email us directly.

For more information on HFN’s workers’ compensation products and solutions, contact Guy Swanson, HFN’s Director of Workers’ Comp, by email or at (630) 990-8609.

Five Arbitrators File Suit to Block Firings

One of the first changes resulting from HB 1698 was the termination of the Workers’ Compensation Commission arbitrators for the State of Illinois on July 1, 2011.  The governor is scheduled to appoint new, or reappoint current, arbitrators at an as yet undetermined date.  Until then, the current arbitrators will continue to hear cases until either they are reappointed or their successors replace them. 

Five arbitrators filed suit Tuesday in federal court in order to block the firings and have that particular section of the new legislation ruled unconstitutional.

Both the Belleville News-Democrat & the State Journal Register have the full stories regarding this development.

Approved Preferred Provider Program Administrators in Illinois

We will have the first detailed analysis of HB 1698’s employer direction and “preferred provider programs” next week, but numerous individuals have contacted HFN asking which companies are currently approved preferred provider program administrators in Illinois.

The Illinois Department of Insurance manages the application and approval process for all preferred provider program administrators.  Since the Department has a small staff assigned to process and review the annual applications, there is a “provisionally approved companies” list which contains previously approved companies with renewal applications in-house at the Department.

Preferred Provider Program Administrators approved by the Illinois Department of Insurance: Provisionally Approved Companies & Approved Companies

HFN CEO applauds preferred provider program & direction of care in HB 1698

HFN CEO David Kolb’s statement commending Governor Quinn for improving injured workers’ medical care through the use of preferred provider programs appeared yesterday in the TRIB local Oak Brook Business section.  It read in part, “Recognizing the need for integrated and coordinated cost effective medical for injured workers, this bill allows, for the first time, employers the ability to refer workers to a comprehensive network of medical providers, skilled in effectively treating workplace injuries.”