2013 Fee Schedule Annual Rate Adjustment

The Illinois Workers' Compensation Commission announced its annual rate adjustment for the Illinois workers' compensation fee schedule. Effective January 1, 2013, the fee schedule rates will increase 1.69%.

Section 8.2(a) of the Illinois Workers' Compensation Act provides that, each year, fee schedule rates shall increase or decrease by the percentage change in the Consumer Price Index-U (CPI-U) in the previous year.  

The IWCC's announcement includes a chart that shows the adjustment rate for each year since 2006.

The medical fee schedule rates will increase 1.69% in 2013, which is less than half the rate of medical inflation (CPI-M). As the chart below shows, the fee schedule amounts are now running 37% below medical inflation over the life of the fee schedule.

The 37% difference between the IL fee schedule and medical inflation does include HB 1698/PA 97-18's 30% fee schedule reduction effective on September 1, 2011.  The remaining 6.96% is the difference between the rate of medical inflation (CPI-M) and Consumer Price Index-U (CPI-U). 
  
As Glen Boyle reported at the IWCC Medical Fee Advisory Board's December meeting, the 2013 annual fee schedule updates and rates are currently scheduled to complete internal review and quality check by December 21, and the new 2013 rates have an anticipated posting date of December 28, 2012. The annual fee schedule updates are effective on January 1 of each year.

 

IWCC & Repackaged/Compounded Pharmacy

With the recent meningitis contamination and push for more oversight over compounding pharmacies (see these articles from Business Insurance & the Chicago Tribune),  we received several questions regarding the new IWCC repackaged pharmacy repricing methodology and compounded drugs.
 
While variations exist,

• Physician-dispensed repackaging usually involves drugs that are purchased in bulk, repackaged into smaller fill amounts, and then dispensed by a provider’s office, rather than from a pharmacy. 
• "Traditional pharmacy compounding in the United States involves the act of combining, mixing or altering ingredients to prepare a customized medication for an individual patient upon receipt of a valid prescription." (University of Southern California, Pharmacy compounding – regulatory issues)

 
Compounded drugs were on the IWCC Medical Fee Advisory Board's December meeting agenda, and the Board made a clear distinction between the new physician-dispensed repackaged pharmacy reimbursement methodology and compounded drug regulations.
 
With several state and federal agencies reviewing potential changes to the review and regulatory oversight of compounded pharmaceuticals, the Medical Fee Advisory Board stated that it will continue to monitor federal and state regulatory actions, and this issue could appear on a future meeting agenda if necessary.



 

JCAR December Meeting Reminder

As a reminder, the General Assembly's Joint Committee on Administrative Rules (JCAR) meets on Tuesday, 12/11/2012 at 11:00am.  The meeting is in Room 600C of the Michael A Bilandic Building, 160 N LaSalle St, Chicago, IL.

As of this morning, the December JCAR agenda includes a Department of Insurance-proposed rulemaking concerning a Medical Malpractice Data Base.

• Medical Malpractice Data Base (50 Ill. Adm. Code 928) proposed 7/6/12 (PDF Page 205)

There are no IL Workers' Compensation Commission-proposed rulemakings on the December agenda, and, as of this post, the Department of Insurance WC PPP rulemaking is on neither the December nor the January JCAR meeting agendas. 

Final Physician-Dispensed Pharmacy Rule Published

The IWCC's final repackaged drug repricing methodology was published in the December 7 edition of the Illinois Register.

 

As we covered in our 11/20/2012 post, the effective date of the change is November 20, 2012.  The Medical Fee Advisory Board did clarify at its December meeting that the pricing methodology is for dates of service of 11/20/2012 and later.  The final adopted amendment did not contain changes to the language from the previously published proposed rulemaking.
 
The implemented rules begin on page 17108 (PDF page 315) of Volume 36, Issue 39 of the Illinois Register.
 

From the IL Workers' Compensation Commission's Notice of Adopted Amendment:

Summary and Purpose of Rulemaking: The amendment implements Section 8.2(a-3) of the Workers' Compensation Act by specifying that when a prescription dispensed outside of a licensed pharmacy is repackaged, the Average Wholesale Price used to determine the maximum reimbursement shall be the Average Wholesale Price for the underlying drug product, as identified by its National Drug Code (NDC) from the original labeler.

Pursuant Section 8.2(a-3) of the Act, only prescriptions dispensed outside of a licensed pharmacy are subject to a fee schedule. The fee schedule sets the maximum reimbursement levels for these prescriptions. For prescriptions dispensed outside of a licensed pharmacy, Section 8.2(a-3) provides that the fee schedule shall not exceed the Average Wholesale Price, plus a dispensing fee of $4.18. Average Wholesale Price is determined by the NDC set forth in Medispan.   

The amendment addresses a practice known as "repackaging" which means that the prescription will be purchased and then repackaged in different quantities. It is then given a new NDC number with a higher Average Wholesale Price. Thus, the "repackaging" avoids the NDC for the drug from the original labeler. "Repackaged" drugs are typically dispensed by physicians in their offices.

IWCC Arbitrator Coverage Update

In 2013, there will be two IWCC "TBA Call" Zones (Chicago & Chicago/Wheaton) without permanently assigned arbitrators for the call (see our recent post regarding Arbitrator Zanotti).

The IWCC recently announced the January-March 2013 arbitrator coverage lists for both "TBA Calls" on its website.

Chicago TBA Call Coverage (previously Arbitrator Zanotti)

Chicago/Wheaton TBA Call Coverage (previously former Arbitrator Kinnaman)

IWCC Fee Schedule Updates

The Illinois Workers' Compensation Commission's Medical Fee Advisory Board met on Wednesday for its December meeting.
 
The agenda covered a range of topics, and this first post will cover a couple of those issues.
 

Physician-Dispensed Repackaged Pharmacy

Our previous update covered the changes to the reimbursement for physician-dispensed pharmacy in Illinois.  The final rule should appear in the Illinois Register tomorrow (12/7/12), and the effective date of the reimbursement modification is November 20, 2012. 
 
The Board did clarify that the modification only applies to bills with dates of service/fills on 11/20/12 and later.
 

2013 State Fee Schedule Updates

Glen Boyle, from Health Systems International, LLC, provided a written update regarding both finalized and potential updates to the Illinois state workers' compensation fee schedule.
 
The 2013 annual fee schedule updates and rates are currently scheduled to complete internal review and quality check by December 21, and the new 2013 rates have an anticipated posting date of December 28, 2012.  The annual fee schedule updates are effective on January 1 of each year.
 
In addition to the annual updates, Glen Boyle also reported out on potential methodology changes to update the POCs. 

(The IWCC defines POCs as "when the Commission is unable to calculate a fee for a procedure, there is a default payment provision. From 2/1/06 - 8/31/11, the default is POC76, meaning payment shall be 76% of the charged amount. Effective 9/1/11, all default payments are 53.2% of the charged amount (POC53.2).")
 
From his written report:

2013 IWCC Calendar & Arbitrator Changes

The Illinois Workers' Compensation Commission announced several changes to its 2013 Downstate Arbitration Calendar. 

Arbitrator McCarthy will cover Zone 2 (Urbana, Springfield, Quincy) while Arbitrator Neal is on leave.

Also in Zone 2, Arbitrator Zanotti will replace former Arbitrator Akemann effective 1/1/2013.  Arbitrator Zanotti's Chicago call will become a "TBA" call with various arbitrators covering the hearing dates.

Per the IWCC update:

Please direct Arb. Zanotti's Zone 2 mail to
P.O. Box 2647
Carbondale, IL 62902-2647
brandon.zanotti@illinois.gov

Please send Arb. McCarthy's Zone 2 mail to
P.O. Box 3130
Decatur, IL 62524-3130
douglas.mccarthy@illinois.gov

Follow this link for the full IWCC announcements.