Whether you’ve worked in workers’ comp billing for ten days or ten years, one thing is inescapably clear: This is a complex system, rife with moving parts and the possibility for confusion. One of our clearest goals at DaisyBill is to illuminate the inner workings of work comp e-billing and spread understanding, compliance, and awareness. To that end, we’ve compiled a who’s who guide to the various players you’ll meet along the e-billing journey.
Medical Coders and Billers
A workers’ comp bill is born with medical coders and billers. Important distinctions delineate these two roles, though the two different roles can be performed by the same person.
A medical coder reviews a physician’s chart notes assigns the services the appropriate standard procedure codes using the Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS). A medical coder is not a requirement, many physicians provide the appropriate codes for their services.
Medical billers take the information prepared by either the physician or a coder and submit it as a bill for reimbursement.
Workers’ Comp Insurance Company
Per California Labor Code, employers must pay for all “reasonable expense incurred by or on behalf of the employee in providing treatment” to workers who sustained injuries on the job. The most common way to cover this liability is for the employer to obtain workers’ compensation insurance.
In the event of an injury to an employee, the employer’s insurance company is the payer and is responsible for paying any expenses associated with the injury claim. The insurance company is also responsible for complying with state workers’ comp laws. Some insurance companies act as their own claims administrator, while others hire third-party claims administrators to manage injury claims.
Self-insured employers are responsible for paying for the expenses incurred due to employee injury claims. In California, this option is limited to organizations worth $5 million or more, with net annual profits of $500,000 per year over a five-year period.
In the event of an injury to an employee, the self-insured employer is the payer and is responsible for paying any expenses associated with the injury claim. While the self-insured employer ultimately pays for the claim expenses, only some self-insured employers act as the claims administrator. Others hire third-party claims administrators to compliantly manage injury claims.
A claims administrator is the entity responsible for managing and processing an employee’s injury claim as directed by the state workers’ comp laws and regulations, including issuing any required payments to the injured worker, processing bills associated with the injury, registering the necessary paperwork as directed by state law. The claims administrator is either the payer (insurance company or self-insured employer) or a Third Party Administrator hired by the payer.
Third-Party Administrator (TPA)
An independent entity that acts as the claims administrator on behalf of insurance company or self-insured employer. TPAs are required to compliantly process claims as directed by the state workers’ comp laws and regulations.
EDI Agent / Clearinghouse
Because medical providers and claims administrators are not equipped to generate and receive the electronic files that form an e-bill, these entities hire third-party e-billing specialists known as EDI agents or clearinghouses. The EDI agent / clearinghouse is then responsible for complying with the electronic billing rules and regulations on behalf of either the provider or the claims administrator. We published a blog post earlier this year with additional information.
Utilization Review (UR)
The program through which physician Requests for Authorization (RFAs) for medical treatment are processed. Claims administrators are required to establish a utilization review program, which is in turn responsible for determining whether the medical provider’s proposed course of medical treatment outlined on the RFA is “medically necessary.” For more information, click here.
Separate from utilization review, a bill review program is responsible for determining the correct reimbursement for services rendered by medical providers.
Medical Provider Network (MPN)
A group of medical providers chosen and established by an insurance company or self-insured employer. Injured workers must check whether their self-insured employer or their employer’s insurance company has established an MPN. If so, treatment must be sought from one of the providers within the MPN – otherwise, the injured worker’s claim could be denied. MPNs must be approved by the DWC. We have more information here.
A group of ancillary providers chosen and established by an insurance company or self-insured employer. Ancillary services support those of the primary treating physician, and can include things such as diagnostic testing, physical therapy, or chiropractic services.
For further information about California workers’ comp, consult the DWC’s 2016 Physician’s Guide to Medical Practice in the California Workers’ Comp System. The title is a bit of a mouthful, but the guide offers a clear and insightful overview of each of the players mentioned above, and how they fit into the broader workers’ comp picture.
Want to learn more about electronic billing for California workers’ comp? We’re hosting a webinar in May devoted to e-Billing, and we’ll share eye-popping data on compliance, time to payment, and more.