Impact of New Legislation

January 13, 2006

By Francis M. Brady

The Governor has now appointed members of the Medical Fee Advisory Board. There are three representatives from the employee class; three from the employer; and three from the medical provider class. The Board is responsible for making rules implementing the Fee Schedule now being constructed.

The Board met in public in the Oral Argument room at the Illinois Workers' Compensation Commission in Chicago on January 13, 2006. Valuable presentations were made by Chairman Dennis Ruth followed by Glen Boyle and Brent Veninga. Mr. Boyle is project manager and is charged with developing, and making usable, the fee schedule contemplated by Section 8.2 of the recent workers' compensation legislation.

Mr. Veninga is a representative of Ingenix. He, too, made an instructive presentation consisting of his comments and PowerPoint slides. From its own base, augmented with information from the Illinois Department of Public Health, Ingenix is compiling the huge amount of data required to build the fee schedule.

All three gentlemen stressed that the fee schedule is definitely a work in progress. Much of what was stated in the meeting was qualified by this idea and the fact that there could still be significant changes. Still, with this qualifier, we wanted to provide some items which may be of interest:

• The fee schedule contemplated for Illinois is not Medicare based but, instead, relies on "historical" data regarding actual charges specific to this State.
• The State was divided into 29 geographic areas by 3‑digit zip codes ("geo zips") and charges for various procedures examined in each from 2002 - 2004.
• As a threshold, the fee schedule seeks to price at 90% of the 80th percentile of all charges per procedure in a given geo zip subject to adjustments based on the Consumer Price Index. The initial adjustment will mean a 4.96% increase of the above figure.
• There has been a great deal of work devoted (and the work is ongoing) to making the fee schedule comprehensive. A huge amount of data has been collected and interpreted. It is still being interpreted. Still, there is data missing for various treatments (including forms of outpatient care) and, thus, pricing these modalities according to a schedule has been difficult. For such forms, pricing will default to a percentage of change.
• Concerns were expressed regarding increases in the frequency of care and treatment which might impact savings from the fee schedule.
• The intention is to make the fee schedule "user friendly;" that is, easily accessible by all interested parties. In this regard, the fee schedule will be promulgated by Internet.
• The aim is to have the fee scheduled constructed, and promulgated (including Internet presence) by February 1, 2006.
• However, Illinois law requires that the Act be held up to public scrutiny meaning at least one more public meeting where interested parties could give testimony. The date of this public meeting was not apparent, however, the next meeting of the Medical Fee Advisory Board is tentatively scheduled for January 26, 2006.

This morning's presentation was reduced to writing and made available to attendees. If you would like a copy, please let me know. We recognize that you are knowledgeable regarding payment of medical bills. Rather than try and interpret for you what is in the presentation, we will allow you to assess it for yourself. We would certainly welcome your thoughts after you peruse the presentation. Once again, please let me know if you'd like a copy.

As soon as we have additional information (for example, the date of the public meeting), we will be sure to send along an update.