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Work Comp Confusion: Interpreting 5307.11 Contracts

July 8, 2015 by Catherine Montgomery

We get a lot of questions about 5307.11 contracts for workers’ compensation. In a nutshell, 5307.11 contracts allow providers and claims administrators to contract for reimbursements different from the OMFS. This includes reimbursement for services that are otherwise un-reimbursable or bundled, such as record review. We’ve previously written about this thorny topic and it continues to confuse many providers.

Apparently, these work comp contracts also seem to confuse medical provider networks, insurers and their claims administrators. In at least one instance, a large claims administrator sent a potentially misleading letter to a provider who attempted to negotiate a 5307.11 contract for record review. It’s a somewhat slippery letter because it does not outright state that the DWC does not allow such contracts--it just implies it.

For instance, consider the two sentences below, copied from a claims administrator’s letter:

Please be advised that claims examiners are not authorized to agree to any change in fees beyond the Official Medical Fee Schedule (OMFS), nor are their actions binding to a client/payor as they do not have the legal capacity to commit the employer/payor contractually to fee beyond the fee schedule.
The state of CA has maximum allowable values that employers should pay for medical services.

It’s unclear from the wording and the proximity of the two sentences whether it’s the state of California or the claims administrator or the payor that does not authorize any changes in fees beyond the OMFS. In fact, of course, California’s workers’ comp regulations DO allow for contracts for such changes.

Also troubling is the assertion that claims examiners’ actions are not binding to a client or payor, which seems legally ludicrous--indeed, it boggles the common-sense mind.

In this instance, we advised our client that should the claims administrator not wish to pay for record review, their agent should not sign the 5307.11 contract. Providers should also consider submitting Requests for Authorization (RFAs) to review records, both as a way to guarantee payment for services and to serve as a signal to claims administrators that service will not be forthcoming should they not approve the RFAs.

Further, as Bill Tappin recommended at the recent California Orthopaedic Association conference, if the claims administrator chooses not to enter into a separate contract for record review, the doctor should consider referencing in their documentation that extensive records were received, but records were not reviewed due to a lack of agreed upon reimbursement. Mr. Tappin also advised noting and documenting the volume of records (pages, boxes, etc.) received.

Finally, I’d like to join with Mr. Tappin in pointing out that the current E/M definition of record review was developed in the context of group health. However, group health commonly does not suffer from the forest-killing abundance of records that characterizes workers’ compensation record review. We’re talking boxes and boxes of legislatively mandated documents, much of it legal and requiring many hours, sometimes days, of concentrated attention.

Once again, I need to state that workers’ comp is NOT group health. Workers’ comp is vastly more complicated, much more heavily regulated, and exponentially more burdensome to administrate on both the payor and provider sides--all of which translates into mountains of documents. It’s simply unrealistic to force workers’ comp into a group health model; and this is particularly true in the case of record review, where it’s a failing in the workers’ compensation system to adopt a concept of record review based on group health.

Let me know about any other misleading or confusing work comp billing issue and I’ll address it either directly or  in this blog.

For more information on 5307.11 contracts, refer to our Work Comp FAQs.

Below, I’m citing the specific OMFS and Labor Code regulations that allow for 5307.11 contracts:

  • Physician Fee Schedule Regulations
  • Chapter 1. Jurisdiction - California Labor Code Section 5307.11
  • Chapter 1. Jurisdiction - California Labor Code Section 5307.1

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

(a) Maximum reasonable fees for physician and non-physician practitioner medical treatment provided pursuant to Labor Code section 4600, which is rendered on or after January 1, 2014, shall be no more than the amount determined by the Official Medical Fee Schedule for Physician and Non-Physician Practitioners, consisting of the regulations set forth in Sections 9789.12.1 through 9789.19 (“Physician Fee Schedule.”)  Maximum fees for services rendered prior to January 1, 2014 shall be determined in accordance with the fee schedule in effect at the time the service was rendered. The Physician Fee Schedule shall not govern fees for services covered by a contract setting such fees as permitted by Labor Code section 5307.11. 

Chapter 1. Jurisdiction - California Labor Code Section 5307.11

A health care provider or health facility licensed pursuant to Section 1250 of the Health and Safety Code, 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 or health facility licensed pursuant to Section 1250 of the Health and Safety Code, 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. Except as provided in subdivision (b) of Section 5307.1, the official medical fee schedule shall establish maximum reimbursement rates for all medical services for injuries subject to this division provided by a health care provider or health care facility licensed pursuant to Section 1250 of the Health and Safety Code other than those specified in contracts subject to this section.

Chapter 1. Jurisdiction - California Labor Code Section 5307.1

(h) This section does not prohibit an employer or insurer from contracting with a medical provider for reimbursement rates different from those prescribed in the official medical fee schedule.

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