When the Official Medical Fee Schedule (OMFS) assigns the reimbursement for a procedure code as “By Report” (BR), establishing the correct payment amount is one of the trickier aspects of California workers’ compensation billing.

For codes designated a BR reimbursement, the Division of Workers’ Compensation (DWC) does not assign a specific reimbursement amount. Instead, the provider must determine and request a reasonable amount for these procedures from the employer or insurer’s claims administrator.

To help providers determine and obtain the correct reimbursement for these codes, we’ve put together this “By Report” reimbursement guideline.

Why Some Codes are By Report

The OMFS designates the reimbursement amount for a procedure code as “BR” in the following situations:

1. The procedure code is listed in the Current Procedural Terminology (CPT), but

1. Is not listed in the Center for Medicare and Medicaid Studies (CMS) National Physician Fee Schedule Relative Value File, or
2. Is not subject to California Code of Regulations (CCR) § 9789.30-9789.70.
   

2. The procedure code has a status indicator C, N, I or R and the procedure code does is not assigned a Relative Value Unit (RVU).
   
3. The procedure code has a status indicator E, and

1. Does not start with ‘J’ or ‘P’ and
2. Fee Schedules § 9789.30-9789.70 do not apply
   

4. The procedure code is assigned a status indicator X, and the procedure code is not subject to CCR § 9789.30-9789.70.

In any of the above scenarios, the fee schedule offers no base maximum fee for the procedure code in question. The provider must determine a reasonable charge — and thus reimbursement — as instructed in California Code of Regulations (CCR) 9789.12.4 (more on that below).

Establishing and Justifying Reimbursement

CCR § 9789.12.4 offers guidelines to determine an appropriate reimbursement amount for BR codes. Essentially, the regulation instructs providers to find a comparable procedure, one similar in the amount of time, skill, and resources required. The BR reimbursement amount should be comparable to the reimbursement for the comparable code:

In determining the value of a By Report procedure, consideration may be given to the value assigned to a comparable procedure or analogous code. The comparable procedure or analogous code should reflect similar amount of resources, such as practice expense, time, complexity, expertise, etc. as required for the procedure performed

Basing BR reimbursements on “comparable procedures or analogous codes” is not a requirement per se, but the DWC’s suggestion. However the provider determines reimbursement, that provider must justify the chosen amount with a separate, non-reimbursable report.

The report must be sufficient in detail to support both the application of the procedure and the requested reimbursement. Per the regulation, it must establish that the procedure was “reasonable and necessary to cure or relieve from the effects of the industrial injury or illness.” To support the reimbursement amount, the report must also document:

• The time required for the service
• Equipment used for the service
• The level of expertise or skill required to perform the service

Establish BR Reimbursements via Contract

The most secure, hassle-free way providers can guarantee reasonable reimbursement for procedure codes assigned a BR as the reimbursement is to enter into a contractual agreement with the employer or insurer’s claims administrator.

California Labor Code Section 5307.11 establishes the right of payors and providers to mutually agree to reimbursement amounts outside the fee schedule — especially useful when the fee schedule offers no reimbursement amount:

A health care provider...and a contracting agent, employer, or carrier may contract for reimbursement rates different from those in the fee schedule adopted and revised pursuant to Section 5307.1. When a health care provider… and a contracting agent, employer, or carrier contract for reimbursement rates different from those in the fee schedule, the medical fee schedule for that health care provider or health facility licensed pursuant to Section 1250 of the Health and Safety Code shall not apply to the contracted reimbursement rates.

This rule has one extremely important requirement, however: the contract must be established prior to providing the service. The provider must establish reasonable reimbursements for BR codes in writing, and have the claims administrator initial each reimbursement amount individually before signing the document.

While providers can still determine and request reasonable BR reimbursements without a signed agreement, doing so leaves the door open for disputes that require Independent Bill Review (IBR) to resolve. In the long run, securing a signed agreement is worth the initial effort.

We offer a downloadable, printable sample document for establishing contractual rates for BR codes. Providers can easily fill this form in with the relevant procedure codes and reimbursement rates.

Provider’s BR Code Checklist

It’s unfortunate that even the task of determining some reimbursements, along with the other myriad burdens of workers’ comp billing, somehow falls on the provider. In summation, to secure proper, reasonable reimbursement for BR codes, we recommend taking the following steps:

1. Determine which BR codes used by your providers.
2. Identify comparable procedures whose analogous procedure codes have established reimbursement rates per the OMFS.
3. Determine the reimbursement for the BR codes based on the comparable procedure codes. Prepare language that justifies those rates based on the requirements found in CCR 9789.12.4 to use in reports.
4. Draw up a written agreement specifying the BR codes and their respective reimbursement. Have claims administrators initial and sign.

With a signed agreement secured, your office is guaranteed a fair rate of reimbursement for BR procedure codes. Be sure to factor any change in reimbursement rates for analogous procedure codes into your own rates, and update your agreements if necessary.

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