Here at DaisyBill, our goal is to ensure the proper processing of all workers’ comp bills; in particular, that all parties observe the regulations mandated by the DWC. When providers or claims administrators inform us of work comp billing errors, we do everything in our power to correct the error and help providers receive proper reimbursement.

Today I want to discuss two IBR errors that a physician’s office brought to our attention. The staff in this physician’s office wanted to know the best way to handle an IBR decision that they thought misapplied California workers’ compensation rules.

Below is an excerpt from correspondence received from the physician’s office:

...we just received final determination [from Maximus] as cpt code 99070 is a status code "B" bundled into reimbursement for other services. According to [Maximus’,] ...we should be using HCPCS code J3490 (Unclassified drug) therefore reimbursement for code 99070 is denied as these services were reported with incorrect code. This is incorrect we have been getting paid for 99070...

In a nutshell, these are the mistakes in the reasoning of the IBR decision:

1. incorrect denial of an IBR request for use of 99070 for physician-dispensed drugs; and
2. incorrect instructions to use J3490 for physician-dispensed drugs.

IBR regulations are confusing, and it’s easy to see how Maximus misinterpreted the regulations.

To assist the physician’s office in appealing the incorrect Maximus ruling, DaisyBill provided the physician with factual information pertaining to California’s Physician Fee Schedule Regulations.

Here’s a more detailed parsing of what went wrong with the decision and how to correct it:

1. Maximus incorrectly applied the physician fee schedule regulations to physician-dispensed pharmaceuticals. Maximus should apply the Pharmaceutical Fee Schedule rules to physician-dispensed pharmaceuticals. In fact, the DWC explicitly stated in a Newsline that the physician fee schedule regulations do NOT apply to other parts of the Official Medical Fee Schedule.
2. Maximus also incorrectly instructed the use of a J-code for this bill. Per § 9789.13.2 of the Physician Fee Schedule, J-codes are used in conjunction with physician-administered drugs and NOT physician-dispensed drugs.

If you receive an incorrect IBR decision based on these grounds, we recommend that you cite both the DWC Newsline and the relevant regulations. You can find them pasted at the bottom of this article.

You should also consider using language similar to this:

Per Labor Code 4603.6 IBR appeals of “Final Determination” are allowed if “(f)(5)The determination was the result of a plainly erroneous express or implied finding of fact, provided that the mistake of fact is a matter of ordinary knowledge based on the information submitted for review and not a matter that is subject to expert opinion.”

The decision by Maximus incorrectly applies physician fee schedule regulations to physician-dispensed drug services. In its decision Maximus erroneously applied physician fee schedule status code ‘B” bundling reimbursement rules that are not, in fact, applicable to the Pharmaceutical Fee Schedule set forth in section 9789.40.  Per the Pharmaceutical Fee Schedule section 9789.40, a correct and valid NDC number was provided for the purposes of determining reimbursement for the physician dispensed pharmaceutical.

Directly related to this issue, the DWC’s 9/16/2014 Newsline regarding physician MUEs clarified that physician fee schedule regulation did not apply to other other applicable parts of the OMFS when determining maximum fees for services or goods not covered by the Physician Fee Schedule, such as pharmaceuticals (section 9789.40): “DME dispensed by a physician is billed under the “durable medical equipment, prosthetics, orthotics and supplies” (DMEPOS) fee schedule, not the physician fee schedule. Therefore, the physician fee schedule MUE are not applicable.”

Furthermore, Maximus erroneously states: “Although the intent is to still allow for reimbursement of certain pharmaceuticals dispensed by Providers ….For reporting of pharmaceuticals an appropriate HCPCS should be utilized and if a specific HCPCS code is unavailable then code J3490 (Unclassified drug) should be utilized.”

Maximus’ instructions erroneously instructs the use of a J-code for physician dispensed drugs. Per § 9789.13.2 of the Physician Fee Schedule, J-codes are to be used in conjunction with physician-administered drugs not physician-dispensed drugs.

If you have any other questions related to IBRs, watch our IBR webinar? Consult our IBR FAQs.

References

DWC Newsline No.: 2014-83

Date: September 16, 2014

Under the physician fee schedule regulations, the physician MUE apply to services billed under the physician fee schedule. DME dispensed by a physician is billed under the “durable medical equipment, prosthetics, orthotics and supplies” (DMEPOS) fee schedule, not the physician fee schedule. Therefore, the physician fee schedule MUE are not applicable. A physician can bill and be reimbursed for medically necessary durable medical equipment dispensed to his or her patient.    

Physician Fee Schedule Regulations

Title 8, California Code of Regulations

Division 1, Chapter 4.5

Subchapter 1 Administrative Director – Administrative Rules

Article 5.3 Official Medical Fee Schedule

§ 9789.12.1 Physician Fee Schedule: Official Medical Fee Schedule for Physician and Non-Physician Practitioner Services – For Services Rendered On or After January 1, 2014

(c) Physicians and non-physician practitioners shall utilize other applicable parts of the OMFS to determine maximum fees for services or goods not covered by the Physician Fee Schedule, such as pharmaceuticals (section 9789.40), pathology and clinical laboratory (section 9789.50) and durable medical equipment, prosthetics, orthotics, supplies (section 9789.60), except: 1) where such services or goods are bundled into the Physician Fee Schedule payment, and/or 2) as otherwise specified in the Physician Fee Schedule.                

§ 9789.13.3 Physician-Dispensed Drugs                    

The maximum reimbursement for physician-dispensed drugs is determined pursuant to the Pharmaceutical Fee Schedule set forth in section 9789.40 and pursuant to the provisions of Labor Code section 5307.1.

Authority: Sections 133, 4603.5, 5307.1 and 5307.3, Labor Code. Reference: Sections 4600, 5307.1 and 5307.11, Labor Code.          

§ 9789.13.2 Physician-Administered Drugs, Biologicals, Vaccines, Blood Products

(a)(1) Vaccines shall be reported using the NDC and CPT-codes for the vaccine. Other physician-administered drugs, biological and blood products shall be reported using the NDC and J-codes assigned to the product.

Labor Code 4603.6

(f) The determination of the independent bill reviewer shall be deemed a determination and order of the administrative director. The determination is final and binding on all parties unless an aggrieved party files with the appeals board a verified appeal from the medical bill review determination of the administrative director within 20 days of the service of the determination. The medical bill review determination of the administrative director shall be presumed to be correct and shall be set aside only upon clear and convincing evidence of one or more of the following grounds for appeal:

    (5) The determination was the result of a plainly erroneous express or implied finding of fact, provided that the mistake of fact is a matter of ordinary knowledge based on the information submitted for review and not a matter that is subject to expert opinion.

Work Comp FAQs

For more information, read:

• § 9789.13.3 Physician-Dispensed Drugs (Help with CPT Code 99070)
• What are the regulations for CPT Code 99070 for physician-dispensed drugs?