Jeffrey Shanton, chair, Advocacy & Legislative Affairs Committee, for the New Jersey Association of Ambulatory Surgery Centers, has issued a statement in response to an article in the Insurance Journal titled "New Jersey Looks to Put a Lid On Its PIP 'Pot of Gold' for Medical Providers, Attorneys."
The article discusses proposed regulations by the New Jersey Department of Banking and Insurance (DOBI) that would include personal injury protection hospital outpatient department and doctor office-based procedures for the first time on a fee schedule that includes ASCs. The column does not include an ASC perspective.
Mr. Shanton's statement reads as follows:
--
While the comment period had indeed been extended, unfortunately DOBI has not publicly released all of the proposed regulations, specifically the pain protocols. These protocols will most likely have the effect of reducing the number of PIP cases in New Jersey, undoubtedly to the detriment of the patient. Thus we are being asked to comment on a glass half full. Our position is that no action should be taken by DOBI until all of the pieces are made public, and they can get read and digested as a whole.
While trying to close loopholes, DOBI has failed to understand some basic matters.
It has adopted the CMS 2011 ASC fee schedule as the basis for the OFS. Unfortunately by doing so, it has failed to realize that there are different fee schedules for all of the entities it is trying to combine under on roof. The HOPD fee schedule includes procedures not found on the ASC fee schedule. We have identified over 40 procedures routinely and currently being performed in ASCs (and reimbursed) that are now not on the OFS. One of the basic tenants of these proposed regulations is to reduce cost. By not allowing these procedures to be performed in any of the OFS venues, you force them to be performed as inpatient hospital cases, with all of the attendant cost involved as hospital inpatient is not fee scheduled.
And if indeed one of DOBI's other reasons for new regulations is to reduce arbitrations, this will not accomplish that either. Hospitals are paid UCR and will undoubtedly initiate administrative arbitrations if they are not satisfied with PIP carrier reimbursement. Simply put, DOBI should encourage any procedure possible to be done at an ASC, as we are the lowest cost, most efficient and (despite what some would say) safest option.
When DOBI Insurance Director Doug Wheeler comments that there are pro-provider elements such as a revised fee schedule includes increases on 85 percent of the existing codes on the schedule, Mr. Wheeler fails to tell the whole story. The proposed new fee schedule is simply the 2011 CMS fee schedule adopted in total. The current fee schedule (yes, there is one) is based on 2006 CMS. Thus, whatever procedures/specialties increased or decreased from then until now are reflected in the OFS. This has nothing to do with DOBI being magnanimous to healthcare providers! While Mr. Wheeler is correct that there are procedures that have increased, unfortunately most of them are not procedures that you would perform on a PIP patient! Indeed the most common procedures are soft tissue pain management injections. I would venture to estimate that at least 85 percent (and I am probably low) of the PIP procedures performed are of this nature. For those procedures, you will see an 18 percent decrease in reimbursement with the proposed new fee schedule.
Over the past seven years, the number of motor vehicle insurance carriers doing business in New Jersey has increased every year. This is not an example of 2002/3 where carriers were fleeing the state. The number of carriers doing business has much to do with the supposed decrease in profits. It is called: competition. These carriers have to compete with each other to give the best rates they can to the consumer. When my auto policy came due and my premium increased, I shopped around and got a better deal.
I would also object to the labeling of arbitration as "exploitation." This is the only venue that healthcare providers have (with teeth in it) to have their day in court that insurance carriers respect. Mr. Wheeler again is painting with a broad brush. There are two types of arbitration: medical necessity and administrative. A doctor has to apply for pre-certification with an insurance carrier before he can perform any PIP related procedure. Yes, doctors will perform PIP cases if the insurance carrier has not given them the okay (a pre-cert) if the doctor feels there is a medical necessity. Again, you have an insurance company, albeit with nurses and doctors reviewing documentation, making a decision on treatment. I cannot imagine anyone suggesting that they should hold the same weight of judgment as the treating/attending doctor. By limiting this ability through arbitration, you would countenance the sometimes complex issue of medical necessity being taken away from the doctor and having it placed in the hands of the insurance carrier.
Mr. Wheeler has previously stated that 95 percent of the pre-cert requests are approved. That number is from the insurance carriers, and is certainly not substantiated by any healthcare provider that I know of! If the insurance carriers did indeed authorize procedures on this scale, providers would not be arbitrating; there would be no debate! Do the math. Look at the number of cases in arbitration vs. the total number of PIP cases. It does not add up. The statement that arbitration has become a primary vehicle for some trial attorneys instead of a last resort is a curious one. What does that mean? If you perform a procedure that has not been pre-certified by the insurance carrier, you submit the bill, they deny it. You then are obligated to submit a first level appeal (and for some carriers, a second level appeal). Only then, if the appeals are still denied, would you be able to initiate a medical necessity arbitration.
Regarding medical necessity arbitrations, the truth is that the provider wins the vast majority of these cases. I am sure that has something to do with DOBI and most certainly the insurance carriers wanting to limit the number of arbitrations. In fact, DOBI sent a letter to the dispute resolution professionals regarding this issue, instructing them on how to make decisions against healthcare providers! Connect the dots. Insurance carriers routinely deny requests for procedures (much more than the 5 percent claims by DOBI). The provider goes ahead and does the procedure, as he is certain there is a medical necessity. The insurance carrier does not pay, and a medical necessity arbitration is initiated. A hearing is held in front of a DRP with both sides present, and inevitably the provider wins, proves medical necessity. That means that without this process, all of those arbitration wins would be patients who genuinely need the treatment (medical necessity was proven), but would not have received the treatment if the regulations were different. So, who are the arbitration changes really helping and hurting? In this instance certainly not the consumer/patient!
Mr. Wheeler is most probably speaking about administrative arbitrations. These are usually where an insurance carrier has paid, but the amount is in dispute. This is where the amount of the award vs. the attorney fee is called into question. I fail to see what the amount of the award has to do with anything. Quite honestly, if the carrier would have paid correctly in the first place, this would never have been necessary.
I will go one step further. If a carrier pays you incorrectly, you have to appeal the payment. Thus the carrier has the ability at that moment to do the right thing, to issue the correct payment. The carriers are the ones forcing these arbitrations. So we would have a system where carriers could routinely under or incorrectly pay a provider, no matter how small the amount, and there would be no recourse — with teeth — for the provider to utilize. Wrong is wrong, no matter the amount, period.
I will use one last analogy: If you or I wrote a check to our insurance carrier for our auto coverage, and we shorted the amount by $50.00, we would not have coverage!
--
Related Articles on New Jersey ASCs:
NJ Surgery Center Association Visits DC to Support ASC Quality & Access Act
NJ ASC Association Initiates Letter Writing Campaign on PIP Benefits Proposal