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Medical Balance Billing: Different Tests For Different Contexts

December 14th, 2016

Those clients who work with us on improving their rate of realization on worker’s compensation billings know that Virginia statute prohibits invoicing a patient with an awarded, work-related injury for any portion of his account for medical services provided. In worker’s compensation, medical providers must channel claims through the administrative process, seeking payment only from employers and their insurers.

The administrative process has historically been very favorable to providers – at least until the General Assembly began eroding provider rights with laws passed over the past three years. One key rule of evaluation adopted by the Virginia Worker’s Compensation Commission has been its emphasis on determining “prevailing community rates” – the statutory standard applicable in the absence of any contractual agreements governing billings – according to what providers charge, and without regard to what insurers want to pay or what compromises might be made. The Commission has affirmed this rule in numerous case decisions limiting prevailing community rate inquiries to studies of charges data, with payment and settlement data excluded from the decision process.

That standard will remain in place at least until January 1, 2018, when the new fee schedule under development is supposed to take effect.

But providers should understand that all of this discussion relates only to the limited context of worker’s compensation claims. When dealing with patients who have more typical billing arrangements (group health insurance, individual policies, self payment, etc.), none of the worker’s compensation rules apply at all.

For the greater number of patients, the standard rules of contract law apply without any special modification for medical billings. The key points to bear in mind are:

Currently, the Virginia Supreme Court is considering an appeal of a decision by a trial judge to consider the amounts providers accept as payment for their services when making these determinations. While the Supreme Court sometimes offers surprises, our expectation is that it will uphold the trial court, and make this sort of inquiry standard across the state.