In California, physicians use code ML106 to bill for supplemental medical-legal examinations. However, what constitutes a supplemental medical-legal exam for billing purposes can be hard to pin down. Physicians and their billing staff, understandably confused by the regulations, can sometimes mistakenly use ML106 to bill for services that do not qualify.
In particular, there are four scenarios in which physicians regularly, but mistakenly, apply ML106 — which leads to time-consuming bill denials.
Medical-legal evaluators must refer to the California Code of Regulations (CCR) Section 9795 to determine the appropriate billing code for services rendered (reimbursement rates available here on our blog). While parts of § 9795 are fairly straightforward, this regulation leaves plenty of room for error.
Specifically, the rules regarding ML106 for supplemental medical-legal evaluations require close attention to avoid common billing errors, like the following:
A supplemental evaluation must be…well, supplemental. In other words, it must supplement a medical-legal evaluation. As As CCR Section 9793 states (emphasis ours), the definition of a supplemental medical-legal evaluation is one that:
Physicians sometimes incorrectly apply ML106 to “supplemental” evaluations and reports that do not refer to the evaluator’s completion of a medical-legal evaluation. In fact, a California Workers’ Compensation Institute (CWCI) study from 2017 found that one of every five supplemental reports billed with ML106 was billed absent an initial medical-legal evaluation. This is non-compliant.
Qualified Medical Evaluators (QME) are appointed by the state to examine patients for the purpose of dispute resolution. Agreed Medical Evaluators (AME) are physicians agreed upon by both the claims administrator and the injured worker’s attorney for the same purpose.
Only QME and AME may perform comprehensive medical-legal evaluations. Therefore, only a QME or AME can perform a supplemental report billed with ML106. Providers who are neither QME nor AME may not use medical-legal billing codes, ever, for any reason.*
Non-medical-legal providers may not use ML106 to bill for any kind of reports, even those relevant to a dispute. When a non-medical-legal evaluator submits a bill containing medical-legal billing codes, this is non-compliant, potentially fraudulent, and can carry serious consequences.
§ 9795(c) describes the seven services for which a medical-legal provider may bill. For supplemental medical-legal evaluations, the description is very clear regarding when not to apply ML106 (emphasis ours):
The time spent studying reports already available prior to the initial evaluation is not separately billable under ML106. Rather, such review is part of the initial or follow-up medical-legal examination itself, and should be included in the evaluation bill.
§ 9795(c) goes on to explain that ML106 does not apply to reviewing:
This remains true even if the evaluator reviews laboratory reports, images, or other diagnostic results at a later date. All diagnostic information that stems from the initial evaluation is, for billing purposes, part of the initial evaluation.
For example, if an evaluator orders an X-ray during the initial evaluation, but reads the X-ray days later, that reading is not a supplemental evaluation. As far as the regulation is concerned, reading the X-ray is simply a continuation of the initial visit.
This remains true no matter how much time passes between the initial evaluation and receipt of the diagnostic information.
When a medical-legal evaluator orders diagnostic testing during the initial evaluation, the evaluator must include the results of that testing in the original report for the initial evaluation. If necessary, an evaluator may request an extension on filing the report when waiting for diagnostic results. But under no circumstances is information obtained from the initial evaluation reported or billed for separately.
Staying compliant with medical-legal billing regulations can be challenging, given the sheer complexity of the regulatory codes. However, it’s vital to be on the right side of the rules in order to obtain correct reimbursement.
*While the regulations refer to the right of Primary Treating Physicians to conduct medical-legal examinations, DaisyBill has confirmed with the DWC Administrative Director that the regulations are in error. PTP’s may not conduct medical-legal exams, nor bill therefor.
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