As daisyNews explored recently, Functional Restoration Programs (FRPs) are a valid, widely recognized approach to persistent chronic issues resulting from workers’ comp injuries.

Because FRPs are multifaceted and vary in their specific combination of treatments from patient to patient, it's impossible to establish a universal reimbursement rate. Instead, providers bill for the approved FRP hours using CPT 97799, a “By Report” (BR) code.

Under California Official Medical Fee Schedule regulations, the provider must furnish a separate report with “pertinent information” that “should include an adequate definition or description of the nature, extent, and need for the procedure, and the time, effort and equipment necessary to provide the service.”

Despite the extensive medical report required when billing for FRP services, some payers and their advocates see this as an opportunity for provider grift, and providers have been broadly accused of getting “creative” with billing for unlisted services and treating CPT 97799 as a “loophole.”

In this culture of suspicion toward providers, where the legal and regulatory environment ensures payment disputes default to the payer’s advantage, some payers are denying reimbursement for FRPs using dubious or outright untrue reasoning.

These demonstrably invalid denials ignore the fact that every FRP requires payer authorization, just like all other treatment rendered to a California injured worker.

In case after case, payers have formally authorized FRPs only to later claim that the FRP did not pass Utilization Review (UR), that the charge is outside the fee schedule, or that the payer should be able to reimburse each constituent treatment á la carte, ignoring the time, expense, and expertise necessary to plan, execute, and monitor a team effort to resolve a complex and stubborn condition.

Below, see how payers have improperly refused correct reimbursement for a course of treatment that the state’s utilization guidelines, Independent Medical Review (IMR), and the payers’ own UR recognize as legitimate.

The Hartford: Invalid FRP Denial

For just a single example among hundreds, see the bill denial below from insurer The Hartford.

In this case, The Hartford’s UR initially denied the FRP; the injured worker successfully had IMR overturn the denial. Unbelievably, in response to the bill, The Hartford refused to pay, claiming that the FRP “APPEARS TO BE UNRELATED” to the injury.

Given a chance to correct this obvious error, The Hartford doubled down, responding to the provider’s Second Review appeal by reiterating its nonsensical payment denial reasons.

Below is a partial list of other nonsense reasons we’ve seen for refusal to pay for various FRPs, all of which came in response to bills that had both proof of authorization for the FRP and separate reports substantiating the charges attached:

• THE SERVICE HAS BEEN NON-CERTIFIED BY UTILIZATION REVIEW
• THE SERVICE WAS NOT AUTHORIZED DURING THE UTILIZATION REVIEW PROCESS
• PAYMENT WAS MADE FOR A GENERIC EQUIVALENT AS NO SUBSTITUTION
• REDUCTION BASED ON UTILIZATION AGREEMENT
• THE CHARGE EXCEEDS THE OFFICIAL MEDICAL FEE SCHEDULE ALLOWANCE
• THE ATTACHMENT/OTHER DOCUMENTATION THAT WAS RECEIVED WAS INCOMPLETE OR DEFICIENT
• WORKERS' COMPENSATION JURISDICTIONAL FEE SCHEDULE ADJUSTMENT
• PAYMENT REDUCED OR DENIED BASED ON WORKERS' COMPENSATION JURISDICTIONAL REGULATIONS OR PAYMENT POLICIES, USE ONLY IF NO OTHER CODE IS APPLICABLE

FRPs & CPT 97799: The Facts

FRPs comprise customized treatment plans that may include physical therapy, psychotherapy, vocational education, and more, all tailored to an individual worker’s needs and requiring ongoing monitoring and evaluation.

FRPs are consistent with state guidelines for chronic conditions that conservative treatments have failed to resolve. In hundreds of cases, independent medical reviewers have upheld their appropriateness, at rates that defy the statistically payer-friendly IMR process.

The only way to bill appropriately for an FRP is with CPT 97799, which the fee schedule designates as "By Report" under California Code of Regulations Section 9789.12.4. FRPs require prior authorization, and the Physician Fee Schedule requires extensive documentation when a CPT code’s reimbursement is designated as “By Report.”

Nothing about the FRP charge in a compliant bill is opaque, unjustified in the attached bill documentation, or not approved in advance by the payer (at least in our clients' cases). Yet payers frequently claim otherwise in their Explanations of Review, based on demonstrably untrue statements.

A Convenient Narrative (for Payers)

Much of the industry moaning around CPT 97799 and FRP treatments is fueled by a California Workers’ Compensation Institute (CWCI) report on unlisted codes and “medical inflation.”

This is a classic example of insurer-funded, insurer-controlled research that pushes an industry narrative and distracts from the more obvious drivers of California’s excessive workers’ comp claim costs. In CWCI’s warped version of reality, California claims are expensive because doctors are exploiting loopholes in the fee schedule to squeeze payers.

In the universe of verifiable data, workers’ comp is an exceptionally profitable line of insurance nationwide (including in California, if state-specific loss ratios are any indication). Medical cost growth is unexceptional nationally and in California, where fee schedules rank toward the bottom of all states.

Meanwhile, the choices made by insurers, Third-Party Administrators, and various payer vendors have resulted in California spending nearly double the national median on administrative expenses. For every dollar that goes to medical treatment and all other comp benefits combined, California spends 52 cents on:

• Bill review
• Utilization Review (UR)
• Medical Provider Networks (MPNs)
• Reimbursement discount contracting
• Litigation
• Medical-Legal disputes
• …and other non-treatment expenses

This inefficiency is unique to California and wildly profitable for various vendors and their private equity backers. It’s also the obvious first place to look when diagnosing California’s out-of-control comp costs.

…but sure, let’s focus on doctors using CPT 97799 to bill for complex courses of treatment like FRPs.

Payers have control over which providers render care (through MPNs) and what care is rendered (through UR), and should know what to expect on every bill. California’s Official Medical Fee Schedule mandates specific formulas for calculating reimbursement for codes such as CPT 97799 and requires providers to substantiate their charges.

Whinging about provider reimbursement doesn’t bring California workers’ comp stakeholders any closer to real solutions; it only obscures the real problems. And it certainly doesn’t return employers’ injured workers to their occupations.

Get paid faster and more accurately with daisyBill. Click below to see how:

BILL BETTER: DAISYBILL