In this Issue

Rehab that costs over $6k per day?

...why you should be concerned about the latest trend in inpatient facility bills.

www.qmedtrix.com

New concern over inpatient facility bills

Inpatient treatment of chronic care and long-term rehabilitation patients is shifting from hospitals to separate skilled nursing facilities (SNF) or rehab facilities. Presumably, routine care in a setting other than a costly, acute care facility should reduce the overall cost of treatment. In reality, SNF and rehab facility charges can be as high or higher than acute care hospital charges.

Consider a recent $189K bill for a 28-day stay in a hospital-owned, free-standing California inpatient rehabilitation facility - $106,540 in facility charges, $58,620 in therapy charges, and another $24,100 in supply, pharmaceuticals, lab and radiology charges.

The average daily charge? An astounding $6,759 per day.

Although SNF and rehab bills are specifically excluded from the California workers' compensation fee schedule, Qmedtrix was able to reprice the bill to “fair and reasonable,” reducing the bill by over $139,000 – that’s 73%!

Hospitals and carriers are presenting evidence in an August 1 hearing before the Division over proposed hospital reimbursement guidelines.

A previous attempt at legislation to address hospital reimbursement failed to make it to a vote before the Committee earlier this year. House Bill 1970 had proposed a Medicare-based fee schedule combined with a stop-loss provision that paid 75 percent of billed charges over $50,000.

Carriers balked at the bill, expressing concern over the proposed percentage levels for reimbursement and over the legitimacy and reasonableness of charges that would trigger the stop-loss provision.

Hospitals supported both the reimbursement levels and the stop-loss provision, which alleviated the concern of treating injured workers without definite and sufficient reimbursement, particularly for resource-intensive outlier cases, where providers remain unconvinced that carriers are able to determine adequate reimbursement amounts.

The Division will review reimbursement data from both hospitals and carriers during the August 1 hearing in order to determine an appropriate calculation for medical fee reimbursement. The Division has set an aggressive time frame for the inpatient and outpatient fee schedules, which includes adoption of final guidelines by December 14 and an effective date of March 1.

Qmedtrix supports the Division’s decision to review reimbursement data before developing a fee schedule, as there has been contention over previous attempts to adopt a fee schedule for hospitals in Texas. It is Qmedtrix opinion that any proposed fee schedule not include a stop-loss provision; while it is the simplest method of classifying outlier cases, it is also is subject to provider charge manipulation, particularly in services such as implants.

Until a fee schedule is adopted, Qmedtrix will continue to provide “fair and reasonable” reimbursement recommendations based upon current rules and judicial rulings. 

While the two recent WCAB appellate decisions in the Jimenez v. Galaxy Shade Systems and Pfeffer v. Fisher Construction cases have created a flurry of discussion in California, it is clear that the thrust of the Kunz decision – clear data-supported evidence of the “reasonableness” of charges – is still prevalent in most judges’ minds when ruling on pre-fee schedule medical fee disputes.

The decisions also support the notion, which Qmedtrix has steadfastly maintained, that a provider's billing in and of itself does not constitute “reasonable” charges.

For more information, questions or comments, visit our web site or contact your account manager.

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