Articles & Blogs

What Insurers Need to Know About the Fee Review Process in Pennsylvania

Tips on controlling costs and limiting exposure.

Pennsylvania
March 13, 2019
February 8, 2019
View
Jonathan P. Spadea, Esquire

The medical fee review process in Pennsylvania was created to streamline billing disputes between workers’ compensation insurers and providers. Because it operates with its own unique rules and procedures, it can be confusing to the uninitiated. Don’t be intimidated! Once you know the basics, this process can serve as an important tool in your fight to control costs and limit exposure. Here are the most important things you need to know:

1. The General Process. The fee review process begins after an insurer pays a different amount than what the provider billed. If the provider disputes that payment, they will file an application for review before the Medical Fee Review Section of the Pennsylvania Bureau of Workers’ Compensation (“Bureau”). After its own review, the Bureau will render a determination awarding or denying additional payment. Either party is then free to challenge that determination by filing a special petition called a “Request for Hearing.” This petition gets assigned to Fee Review Hearing Officer, and litigation begins. In addition to this general schedule, it is important to remember that...

2. The Fee Review Process Has a Very Narrow Scope.  The fee review process was designed to address two, and only two, issues: the amount and timeliness of payment. Stated another way, did the insurer pay the correct amount, and did they pay on time? That’s it. All other issues are beyond the scope of the fee review process. In practical terms, this means that any such issues, such as causation or disputes over liability, should act to bar judicial review before a Hearing Officer. This is important because once the process gets into litigation…

3. The Burden is on the Insurer, and the Review is De Novo. Even if the provider filed the petition, the insurer must go first and present their case. Generally, this will require submission of evidence, testimony, and written argument. The consequences of this burden are real. If the insurer does not actively participate in litigation, the Hearing Officer can render a decision against them without any evidence submitted by the provider. Moreover, the Hearing Officer is not bound by the Bureau’s determination. Thus, even if the Insurer won a favorable determination from the Bureau, an insurer must start from square one and prove its case. There is one notable exception...

4. Timing of the Provider’s Appeals. The only time that a Provider bears the burden in the fee review process concerns the timeliness of their underlying applications and petitions. Providers have thirty days following notice of a disputed bill, or ninety days from the original billing date, to file their initial application. The later of the two dates controls. Following the Bureau’s determination, the parties have thirty days to file their Request to begin litigation. These rules are very strict, and are often the easiest way to ‘win’ before the Hearing Officer.  If a provider fails to comply with the deadlines, their challenges will be dismissed. That is why it is so important to...

5. Know the Rules and Be Consistent. The fee review process is controlled by statutory rules and regulations. Strict compliance with these rules is crucial to succeeding before the Bureau and a Hearing Officer. Another prime example is ‘downcoding,’ or when an insurer disputes and changes a provider’s billing codes. If an insurer does not strictly comply with these rules, including providing notice and opportunity to respond, than it will lose every time this issue goes before a Hearing Officer. This highlights the importance of applying the correct rules at every stage of this process. Another common, and more expensive, example concerns trauma bills…

6. In Pennsylvania, Trauma Bills Are Exempt from the Fee Schedule Caps...Except When They Aren’t. The fee review regulations provide that acute care provided in a Level I or II trauma or burn center are exempt from the medical fee caps, and as such, should be paid at 100% of the ‘usual and customary rate.’ In the past, this has generally been interpreted to mean that trauma providers are paid 100% of their actual, billed charges. This is no longer the case thanks to a recent series of Commonwealth Court cases. The Commonwealth Court has held that trauma charges should be compared with similar charges from other trauma centers in the same geographic region of the state. Providers should be paid at 100% of that customary rate. In addition to this analysis, trauma bills should be thoroughly analyzed to determine whether the care is ‘acute,’ the injury urgent or life-threatening, or whether the treatment was rendered in a properly accredited facility. Because these bills can easily approach seven figures, this analysis is critical. Most non-trauma bills, however, are rarely this expensive, therefore…

7. You have to be practical. It does not make sense to litigate every bill in the fee review process. Even if an insurer does everything right, it will be far cheaper to pay a small bill than litigate it through to a decision. For that reason, there are times when negotiating with the provider is recommended. That is not always the case, however, and further analysis should be applied. For example, if the bill is small, does the provider bill that same treatment month after month? Or, do they provide that treatment to multiple patients? In addition, are there legitimate questions about whether the care qualifies as medical treatment, or whether the provider is actually recognized as such under the Pennsylvania Workers’ Compensation Act? These are all good questions to keep in mind, because there are times when fighting a small dispute can have a huge effect on an insurer’s bottom line.

At first blush, the fee review process can be complex and confusing. Don’t worry, you are not alone. The truth is most workers’ compensation attorneys don’t fully understand this area of law, and even fewer regularly practice it. With the help of an expert in the field, however, you can develop a thorough and rigorous approach to each stage of the fee review process, thus forming an effective tool in reducing costs and limiting exposure.

A graduate of the University Of Notre Dame, Jonathan P. Spadea is an Associate with the Chartwell Law Offices in Camp Hill, Pennsylvania. He has helped some of the largest insurers in Pennsylvania navigate the fee review process, including appeals to the Commonwealth Court. If you have any questions about the above, or require additional assistance with your own fee dispute, he can be reached at jspadea@chartwelllaw.com or (717) 686-9582.

1 134 Pa.Code. § 127.251.
2 Crozer Chester Med. Ctr. v. Dep’t of Labor & Indus., 610 Pa. 459, 22 A.3d 189 (Pa. 2011).
3 34 Pa.Code. § 127.259(f).
4 34 Pa.Code. § 127.259(a).
5 Thomas Jefferson University Hosptial v. Bureau of Workers’ Compensation Medical Fee Review Hearing Office, 794 A.2d 933, at 934 (Pa.Cmwlth. 2002).
6 34 Pa.Code. § 127.252(a).
7 34 Pa.Code. § 127.257(b).
8 34 Pa.Code. § 127.101, et. seq.
9 34 Pa.Code. § 127.207.
10 34 Pa.Code. § 127.254; see also, Philadelphia v. Medical Fee Review Hearing Office, 737 A.2d 356 (Pa.Cmwlth. 1999).
11 34 Pa.Code. § 127.128.
12 See, Geisinger Health System v. Bureau of Workers’ Compensation Fee Review Hearing Office (State Workers’ Insurance Fund), 138 A.3d 133 (Pa.Cmwlth. 2016); and, Allegheny General Hosp. v. Bureau of Workers’ Compensation Fee Review Hearing Office (State Workers’ Insurance Fund), 143 A.3d 449 (Pa.Cmwlth. 2016).
13 Allegheny General Hosp., 143 A.3d 449, at 459 (Pa.Cmwlth. 2016)