IWCC Fee Schedule Region Recalculation Update

The main issue on the agenda at the most recent IWCC Medical Fee Advisory Board meeting, besides the PPP notification form, was a final decision on the fee schedule calculations for the HB 1698-mandated new fee schedule regions.

During the August 23 meeting, the Board narrowed the potential calculation methodologies down to two options: 

1. A straight average of all the included geozips' reprice amounts for each code
2. A weighted average, by geozip population, of all the included geozips' reprice amounts for each code

After that meeting, Glen Boyle and his team ran additional calculations and examples for the two methodologies.  He presented that analysis to the Board at the meeting last Tuesday, September 20.

There was a great deal of debate over legislative intent in regard to whether the calculations for the new regions' fee schedule amounts had to maintain the 30% rate reduction that took effect on 9/1/2011.  By collapsing geozips into new regions and averaging the different geozip fee schedule amounts, some providers will see additional reductions to their current fee schedule base rates, while others in the same region will see their base rates increase.


Two examples from Tuesday's Board meeting: 

• New Non-Hospital Region 1 (Cook County)
• CPT Code 99213 (Office visit for the evaluation and management of an established patient)

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• New Hospital Region 14 (All Other Counties)
• DRG 460 (Spinal Fusion except Cervical w/o MCC) 

The two regions that have the potential for the most rate fluctuation once the current geozips are collapsed into the new regions are Non-Hospital Region 4 and Hospital Region 14 (the "all other counties" regions that span the entire state).

After a great deal of debate, a majority of the Board voted to utilize a weighted average, by geozip population, of all the included geozips' reprice amounts for each code. 

Glen Boyle & his team will utilize this weighted average methodology to calculate the new fee schedule base rates for the 14 Hospital and 4 Non-Hospital fee schedule regions effective 1/1/2012. It appears everyone who currently applies the state fee schedule to workers' comp bills will also have to update their systems as the fee schedule migrates from geozip-based schedules to county/region-based schedules.