LITIGATION FORECAST - BEYOND THE PPO

RECOMMENDATIONS FOR YOUR DEFENSE

 

 

            Although we continue to see new claims being filed against employers in the PPO litigation, the volume of suits involving such disputes has significantly diminished.  Does this mean we can now relax and get back to the business of managing our “normal” workers’ compensation cases?  It may be Christmas time but our trial lawyer friends are not in the Christmas spirit.  The forecast calls for more clouds and storms in the medical billing front.

 

Outpatient/Emergency Room/Ambulatory Surgical Services

 

            Under the Louisiana Reimbursement Schedule what should an employer pay a medical provider for outpatient, ER and ambulatory surgical services?  The provider’s attorney will tell you that you must pay “90% of billed charges”.  Your fee review company will tell you that the “charges” must be “reasonable”.  This conflict is the source of the litigation we see on the horizon for another series of massive suits in the OWC.  As a result of the litigation over PPO discounts, the providers’ attorney already has a system in place to receive and review payments to medical providers.  They are now inviting the providers to send them the EORs (explanation of review) for outpatient procedures and other billing issues.  Therefore, we anticipate a new waive of litigation primarily over the reduction of outpatient charges under the “usual and customary” standard applied by the fee review company.

 

How To Avoid or Reduce Your Exposure for Outpatient Litigation

 

          After defending numerous clients in these cases we have developed the following recommendations:

 

1. Establish a dollar threshold for fee review of outpatient bills.  Rather than submitting every outpatient bill for fee review limit the review to bills above a pre-selected level (such as all bills over $7,500);
2. Those bills over your threshold should be sent for review to determine if the billing is “reasonable” under a “usual and customary” standard.  The fee reviewer should be able to justify their opinion recommending reduction of the fee and be prepared to testify should the matter go into litigation;
3. When the review results in a finding that the fee should be reduced we recommend that you contact the provider to reach an agreement on payment to avoid litigation.  If the provider agrees to the payment, document their acceptance in your file.
4. If the provider will not agree to a lesser payment you should either pay the 90% of billed charges or pay the amount recommended by the fee reviewer.  You may also want to send the payment with a letter requesting documentation supporting the level of the charges for the outpatient bill.

 

Down-Coding of Charges

 

Another area of potential litigation is the down-coding of charges by a fee reviewer.  Down-coding may be reasonable if it is done after a review of the medical records or reports.  However, beware of the practice of down-coding by a fee review company if it is not supported by the medical records.  This will be another area of scrutiny by the attorney for the medical providers and could expose the employer to potential penalties and attorney fees.

 

If you have any questions about the PPO litigation or the forecast for medical provider suits please call Denis Juge, Joe Guilbeau or John Quaglino 504-831-7270.