TWCC Cuts Medical Reimbursements

The Texas Workers’ Compensation Commission adopted a new medical fee guideline (MFG) that cuts doctor reimbursement fees by an average of 15 percent to reduce claims for care of injured workers.

Both the Houston Chronicle and the Dallas Morning News report that the commission was enacting a bill passed in the last session of the State Legislature, H.B. 2600, which tied state workers’ comp reimbursement rates to those on the federal Medicare level.

The commission, controlled by Republicans, voted 4-2 to approve a new fee guideline of 125 percent of standard Medicare payments, compared to a current average of 140 percent. Potential revenue declines for pathologists, surgeons and radiologists could reach 58 percent, 35 percent, and 28 percent, respectively. However, the commission believes its actions could reduce workers’ comp claims by 12 percent to $336 million this year.

In a statement, TWCC explained that the new rule was adopted to comply with Texas Labor Code mandates. H.B. 2600 amended Section 413.011 of the Texas Labor Code to add new requirements for commission reimbursement policies and guidelines. These requirements mandate that the TWCC adopt the most current reimbursement methodologies, models, and values or weights used by the federal CMS (formerly Health Care Financing Administration) to achieve standardization, including applicable payment policies relating to coding, billing and reporting. The TWCC is also required to develop conversion factors taking into account economic indicators in health care and provide for reasonable fees for the evaluation and management of care.

As required by HB 2600, the TWCC MFG will use the Resource Based Relative Value System (RBRVS), which assigns units based on the relative costs required to provide them. Each service is given a value that reflects its cost or value when compared to all other physician services. Moving to RBRVS will result in a reduction in reimbursement for some services and an increase in reimbursement for other services. Maximum allowable reimbursements for medical services provided to injured workers by treating doctors and other doctors billing under the evaluation and management codes will be increased overall.

Among other things, the commission took into account public comments from 400 individuals and organizations while determining the new MFG.

The new guideline was hailed by the Texas Association of Business, whose president Bill Hammond said that Texas employers pay higher rates per claim—as much as 80 percent higher—than the national average due to high fees and overutilization of services.

The Texas Medical Association, however, decried the commission’s action. Fred Meridian, president of the association, said the new guideline would likely result in fewer physicians willing to take on workers’ comp cases. Meridian also contended that the commission’s guidelines amounted to federal price controls on the Texas system by allowing rates to be tied to those that the federal government sets for Medicare.

Gov. Rick Perry, whose commission appointee Richard Smith voted against the new guidelines, had asked the commission not to vote on the fee schedules until the impact on injured workers could be more easily ascertained.