Inside Workers’ Comp Blog

Staying on Top of Regulatory Changes in Bill Review

Posted by Bob Fornicola on August 7, 2018

A challenge workers’ comp professionals often face is keeping up with ever-changing regulations, especially since each state mandates its own programs. In today’s Inside Workers’ Comp, Bob Fornicola, vice president of medical review services at Genex, explains how regulatory matters affect bill review and offers guidance on how to stay on top of new legislation.


Tom Kerr (TK): Bob, thanks for joining us.

Bob Fornicola (BF): Thanks, Tom. I'm glad to be here.

TK: So, in general, do most legislation changes in workers comp impact bill review?

BF: I would say less than 50 percent. Particularly when you take out the annual changes that many jurisdictions have related to fee schedule updates.

TK: So, fee schedule changes have the biggest impact?

BF: For bill review, it is fee schedule. Legislative bodies will incorporate various things other than just rate changes in the fee schedule. So, they'll incorporate utilization in the fee schedule, how many modalities that injured workers can receive for physical therapy, for instance.

So, people don't think about those being fee schedule related, but they really are because they impact the number of times that a bill review entity can allow certain services and charges.

TK: And are fee schedules generally modified annually?

BF: Mostly. There's many jurisdictions, Michigan, for instance, that mandate within their workers’ compensation regulations to update their fee schedules annually. So, there's quite a few other jurisdictions that do the same thing.

And then there's some jurisdictions, Illinois, for instance, that will only update when the legislative body decides to update. So, they don't have a regular schedule similar to states like Michigan.

TK: So, with that in mind, is there often confusion as to when new fee schedules take effect?

BF: So, when the fee schedule changes are made, for the most part, all pertinent bodies are aware of when the changes are made or that they're being made. Where the confusion comes into place is many jurisdictions will mandate the fee schedule changes retroactively. So, medical bills could have already been processed under the “old fee schedule” when the fee schedule is updated.

So, there's a lot of appeals and reconsiderations that need to be done at that time. That's actually more commonplace than people think.

The other time when the fee schedules become confusing is not just when they're updating the rates in the fee schedule, but when they're updating utilization guidelines within the fee schedules, or they're making coding changes within the fee schedules. So, for instance, if the jurisdiction would say that certain surgical procedure codes are no longer authorized when they're billed in conjunction with other surgical procedure codes, that gets very confusing to people out there. Even though they know the fee schedule has been updated, they may not know innuendos of what the updates to the fee schedule involve.

TK: What are some processes that might be missed when regulation changes occur?

BF: One of them I just mentioned — the coding updates are pretty easy to miss, because they're deeply embedded within the mandate. So, when fee schedules are updated and they're exchanging rates, it's pretty standard, and in most bill review software systems, it's uploaded in an automated process.

But when you're talking about allowing or disallowing procedure codes within the fee schedule update, that gets missed quite a bit. And it becomes confusing not just for the bill review company or the insurance companies, but it becomes confusing for the providers, as well. That's where a lot of the disputes start from, because of different interpretations of those type of things within the fee schedule.

TK: And who and what's involved in the process of managing a bill review regulation change?

BF: So, that's a really, really good question. Bill review companies or managed care companies should have a dedicated regulatory and compliance team to keep their eye on the regulation changes across the country, and inform all pertinent parties within the organization.

So, here at Genex, for instance, our bill review team, our medical review services team, we have our own regulatory compliance team that does this on a regular basis. Other companies have a team as well, and they do good jobs, as well, but they're not always dedicated to bill review.

So, what these regulatory and compliance teams do is they do things such as hold regular meetings with the bill review operations team, or they publish newsletters regarding pending legislation or legislation that's recently been enacted, to keep people informed and have a documented trail of when regulations are updated.

So not only using our internal resources, but using external resources, as well. And using bodies such as the IAIABC, whose main mission is to stay on top of regulatory updates. So, using various sources, not just relying on a single source. And when you use that, if you have what you would think is conflicting information, then you really challenge your own regulatory and compliance team, and say, "This is how I interpret this. This is how our vendor partner interprets this. Can you help shed some light on this?"

The great part about that is our regulatory and compliance team has relationships with the states that are mandating these changes. So, if there's some sort of grey area, they pick up the phone or call or send an email to get confirmation on exactly what the regulatory change is.

There are companies out there that don't have this, and they're relying on vendor partners or other entities to keep abreast of the changes. I don't think that works as well as having your own company with your own resources keeping you updated, and have a policy on how to keep everyone updated and enact the changes, because you can't just rely on your software system to process in accordance with the changes that have been made in fee schedules or the bill review regulations. Sometimes you need to enact manual processes, and this is where the regulatory and compliance departments come in handy.

TK: Over the course of the last 12 months, what regulation changes have had the greatest impact on workers’ comp and how are you managing these changes?

BF: So, there have been, in the past 12 months, several states that have enacted new formularies, such as California, Arkansas, Texas. And when we as a bill review company get billing, particularly from providers' offices that are billing for pharmaceuticals, it's important to keep up on the formulary changes that have been made.

The formulary changes just aren't about the rates for what we reimburse for the drugs that may be billed, but it's about what drugs are allowed, how many times they can be billed for these drugs, such as opioids and things of that nature.

So, there's several other states now that have pending legislation that's following suit. And particularly with their opioid crisis in the United States, many states have pending legislation about these.

So, what our regulatory and compliance team did, No.1 our software system, they made sure that it was updated as timely as possible when the regulations went into change. And No. 2, they informed all the operation staff, even though we've updated these formulary changes in our bill review system, you should have manual processes in place, because this is new legislation, just to make sure the system is processing accordingly, and you should audit these types of bills.

So, when, when they are regulation changes such as these, we place a greater emphasis on the bills that impacted and have a dedicated audit process to those bills that are impacted.

TK: Thanks, Bob. In our next Inside Workers’ Comp, we’ll learn more about the physical demand analysis and its impact on the workplace. Until then, thanks for listening. 


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