Disability Law

Increased WC Medical Costs Coming?

By David A. McCranie, Esq.

Medical costs for Florida workers' compensation claims are about to go up by about 20% if the Division of Workers' Compensation adopts a recommendation made by a consulting firm which it retained.  That's what Joe Paduda says in this post on his "Managed Care Matters" blog.

Section 440.13(12) provides that most hospital outpatient services are to be reimbursed at 75% of "usual and customary charges."  The problem is that the statute does not define "usual and customary charges."    According to Mr. Paduda, in its 12/13/2007 report, Research & Planning Consultants, L.P., recommended that WC reimbursement for outpatient hospital services be tied to the rate that hospitals charge Medicare, not the rate at which they are actually paid by Medicare.  The problem, says Mr. Paduda, is that hospitals mark up the amount they charge Medicare by about 715%.  That is, they charge Medicare more than seven times what it costs to provide the service.  This will result in a reimbursement rate of about 472% of what Medicare actually pays for outpatient services.

If Mr. Paduda's predictions are correct, I'd say that increases in workers' compensation premiums can't be far behind.

Full post as published by Florida Workers’ Compensation Law Blog on June 02, 2008 (boomark / email).