Discount Dangers is a DaisyBill series on the ways some discount contracts unscrupulously reduce providers’ reimbursements. With this series we shine a light on the worst practices, to help providers fight back.
It seems like claims administrators really, really want to cheat California workers’ comp providers by reducing payment for the Treating Physician’s Progress Report, or PR-2.
First, we noticed an unsettling pattern in which claims administrators purposely underpay providers for PR-2 reports by using outdated reimbursement rates for WC002, the workers’ comp procedure code California providers use to bill for PR-2 reports.
Now, claims administrator practices compel us to point out another frequent source of WC002 underpayment: network discount contracts.
PR-2 Reports: A Necessary Burden
The PR-2 form (or its narrative equivalent) is a crucial piece of documentation in workers’ comp, one that takes provider time and effort to prepare correctly.
Physicians are required to issue this report at least every 45 days, or more depending on patient progress. And, completing a PR-2 report is not just a matter of ticking boxes.
As we’ve pointed out before, the PR-2 justifies every other charge in the entire bill, making reimbursement for all services rendered dependent on the accuracy of this report. Payment denials on the grounds of insufficient documentation are more and more frequent, and Independent Bill Review (IBR) tends to uphold such denials.
Bottom line: PR-2 reports are necessary, but this report is a burden on providers — and compensation for preparing them is insufficient even at OMFS rates, let alone discount contract rates.
Discount Contracts: A Reporting Ripoff
Anyone who reads this blog knows we have no love for Medical Provider Networks (MPNs), the organizations through which employers direct employee care.
In practice, MPNs add zero value to employers and create a great deal of friction. MPNs are simply a revenue-generating source for third-party administrators (TPAs), which often push these MPNs on unsuspecting employers. Worse, MPN and other discount contracts pointlessly reduce reimbursement for providers, lowering compensation to below Official Medical Fee Schedule (OMFS) rates.
For 2018 dates of service, the Treating Physicians’ Progress Report is reimbursable at a rate of $12.46. As the Explanations of Review (EOR) below demonstrate, MPN discounts lop off between $1.25 and $1.50 per report.
While $1.25 may not break the bank by itself, these contract discounts siphon thousands of dollars from providers collectively, over time.
For the workers’ comp system to function, compensation has to be fair for every service, every time.
MPN and other discount contracts are a scourge. These discounts are nothing more than legal ways to cheat providers out of the reimbursement rates the Division of Workers’ Compensation (DWC) established, in exchange for no discernible benefit to injured workers.
Discount rates for WC002 may only be cents below OMFS, but they’re just one more way networks nickel and dime providers out of any sense that treating injured workers is worth the hassle. California workers’ comp can do better.