California: The Important Role of IBR in Resolving Billing Disputes

There are several aspects of the medical treatment benefit in California’s workers’ compensation process. The aspect that is most frequently discussed is whether a specific treatment should be provided to the injured worker. For example, the question may be whether the worker should receive an X-ray for his low back. These types of questions are resolved through the Utilization Review (UR) and Independent Medical Review (IMR) processes.

However, once the specific treatment is found to be medically necessary, there are frequently significant, and sometimes very complex, questions relating to how much a defendant should have to pay for a given treatment. Like the questions relating to “whether” a treatment should be provided, the system has Independent Bill Review (IBR) to determine the question of “how much” a defendant should have to pay for a necessary service.

Recently, the Workers’ Compensation Appeals Board (WCAB) has taken an increased interest the question of what types of billing disputes have to be resolved by the IBR process. In Jessica Senquiz v. City of Fremont and York Insurance, ADJ5829433, a panel of three commissioners addressed the question of whether the WCAB had jurisdiction to address a case involving allegedly duplicative services. The defendant in Senquiz argued that really, the only dispute was how much defendant should have to pay for the services in question and that question had to go through the IBR process.

">

Citing Labor Code Section 4603.2(a), the panel noted that if the only dispute is the amount to be paid, the provider must submit its bills to IBR within 30 calendar days of service of the second review denial. The panel found that although the National Correct Coding Initiative (NCCI) was not formally adopted into the Official Medical Fee Schedule (OMFS), IBR would be within its rights to utilize the NCCI in determining the amount to be paid. In short, the panel found that the NCCI is a tool that can be applied by IBR in interpreting the OMFS. As such, the panel found that the dispute centered on how much lien claimant was owed under the OMFS as well as the utilization of the correct procedure codes; issues that had to go through IBR.

In another panel decision, Donald Tepfer v. San Diego Gas & Electric Company, ADJ389041, defendant paid lien claimant’s bills based on a Diagnosis Related Group (DRG) Code 470 code. Lien claimant argued that it should have been paid pursuant to the DRG 469 code which was analogous to DRG 470 but resulted in an additional $13,150.32 being payable to lien claimant. The panel adopted and incorporated a Workers’ Compensation Administrative Law Judge’s (WCALJ) decision that two different codes relating to a total knee replacement was not a question of analogous codes but rather an issue relating to appropriate application of the OMFS which, again, was an issue exclusively subject to IBR.

The description of DRG 469 as an analogous code is significant to the extent Labor Code Section 4603.2(b)(2) provides that issues that are not eligible for IBR include “the proper selection of an analogous code or formula based on a fee schedule adopted by the Administrative Director…” The WCALJ concluded that the two International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9) codes were separate and distinct. He found that the DRG 469 only applied if there was medical evidence of complications and/or co-morbidities and DRG 470 applied if there were not. In short, he found that it was an “either/or” situation. As such, citing Senquiz, he concluded that the issue involved a coding dispute which had to go through the IBR process.

In conclusion, as the WCAB has done with IMR, the commissioners are actively clarifying issues surrounding the application of Labor Code Section 4603.2. In litigating these questions, it is important to remember that once the question of medical necessity is resolved, most questions surrounding the payment of submitted bills will, in fact, involve the question of how much the provider is owed pursuant to the OMFS. Section 4603.2 makes it very clear that these disputes are the exclusive subject of IBR.

Any information or opinions contained in this commentary are not necessarily endorsed by LexisNexis® or its affiliates.

© Copyright 2018 LexisNexis. All rights reserved.