Navigating Pennsylvania’s Medical Fee Review Process for Workers’ Compensation

The medical fee review process in Pennsylvania is intended to resolve billing disputes between workers’ compensation insurers and healthcare providers. While this process may seem complicated, understanding the key principles and recent legal developments can help insurers manage costs and reduce liability. Here’s what insurers need to know:

1. The Fee Review Process: Structure and Limitations

The fee review process begins when there is a dispute over the amount or timeliness of payment for medical services. If an insurer pays an amount different from what a provider billed, the provider can file a fee review application with the Medical Fee Review Section of the Pennsylvania Bureau of Workers’ Compensation (“Bureau”). The Bureau will determine whether additional payment is warranted, and either party can challenge this determination by filing a “Request for Hearing” before a Fee Review Hearing Officer.

It is important to note that the fee review process has an extremely limited scope: it deals strictly with the amount and timeliness of payments, without addressing broader issues such as causation, liability for treatment, or the nature of the injury. These limitations shape the contours of the process and restrict what issues can be raised during litigation.

2. Clarifying Causation Challenges

A recent appellate court decision significantly impacts how insurers should handle causation-based disputes. The Commonwealth Court ruled that when an insurer disputes the causal connection between treatment and the accepted work injury, this does not fall within the fee review process. Instead, such causal disputes should be addressed through under either a direct challenge to causal relationship though a “petition to review” and/or a challenge to “reasonableness and necessity” of treatment, through the utilization review process.

The decision emphasized that causation challenges cannot be used to render a fee review application premature. If an insurer believes that a treatment is not related to a work injury, it must seek a utilization review rather than denying payment outright. This ruling mandates that insurers follow the correct procedural channels, and failure to do so could result in an obligation to pay the disputed bill plus any applicable interest.

Implications for Insurers: The Cass decision reinforces the need for insurers to pursue utilization reviews when challenging whether a treatment is related to the accepted injury. This ruling helps prevent insurers from using causation disputes as a tactic to delay or avoid payment. Insurers should be prepared to meet their burden in a utilization review, as failing to properly dispute treatment may lead to unfavorable outcomes.

3. Practical Considerations, Trauma, Time and Downcoding

Strict adherence to statutory rules and procedural requirements is crucial in the fee review process. For instance, insurers must comply with notice requirements when disputing billing codes or payment amounts. Non-compliance can result in losses during hearings. Similarly, trauma bills present unique challenges due to specific rules regarding payment for care provided in Level I or II trauma centers, which are often exempt from fee schedule caps.

To succeed in the fee review process, insurers must be mindful of strict time limitations: providers have 30 days from the notification of a disputed bill or 90 days from the original billing date to file a fee review application, and insurers have 30 days to make payment or respond to a bill. When insurers dispute billing through practices such as downcoding—changing the procedure code to a less costly one—they must provide a written explanation and base the decision on a review of the medical records. Providers must then be given an opportunity to challenge the downcoding. Failure to adhere to these rules can result in unfavorable decisions during hearings.

Strategic Decisions: While litigation is appropriate for some disputes, it could be more cost-effective to settle smaller bills. Insurers should consider factors such as the likelihood of recurring disputes, the frequency of similar treatments, and whether the care in question qualifies as medical treatment under the law. In some cases, strategic settlements may help control long-term costs more effectively than prolonged litigation.

Conclusion: Adapting to the Legal Landscape

The fee review process serves as an important tool for managing workers’ compensation costs, but it requires navigating evolving legal standards and procedural rules. By understanding these legal developments and implementing strategic approaches, insurers can better control costs and minimize exposure in the workers’ compensation system.

Questions can be directed to Christopher L. Scott, Esquire at 717.237.7111 or cscott@tthlaw.com.