Worker’s Comp Medical Billing: New Deadline Law Affecting Claims
This year has seen the General Assembly direct the Virginia Worker’s Compensation Commission to develop a fee schedule for medical billings, to take effect for dates of service on or after January 1, 2018.
That major hit to the bottom line of worker’s comp practitioners is still nearly two years off. But even before this year, when fee schedule legislation was staved off temporarily, some less-noticed concessions to the insurance industry found their way into the law. Some of them have already begun to effect medical billing claims filed with the Commission.
For treatment provided on or after July 1, 2014, billing claims are often – but not always –subject to a new one-year limitations period, with the year running from the date when payment is processed. Now, each passing day leaves more and more underpaid billings uncollectable due to this new defense available to the insurance industry.
Before 2014, there was no statute of limitations for billing claims. Case law from the Commission allowed insurers to fend off claims that had been allowed to grow so old that, e.g., files no longer existed to allow for fair review. But cases where that actually happened were extremely rare. As a practical matter, no claim younger than 5 years was ever denied as untimely, and even older claims were often permitted to proceed.
In the horse trading of the 2014 Assembly session, the Medical Society of Virginia was willing to yield on the insurance industry’s request for the adoption of a limitations period, as long as providers got something in return for the concession. Ultimately, the two sides crafted a compromise under which insurers committed to a specific time line for processing billings, providing written explanations for reviews, and remitting payments for the portions of billings that were uncontested. In return, the industry got a very short limitations period, but was allowed to invoke that defense only when the insurer could demonstrate that it had first met its own timeliness requirements.
As we first began hearing from insurers asserting the statute of limitations defense last fall, we often found that the insurers had not met their own timeliness burdens. In those situations, the law reverts to where it was prior to 2014 – with no effective limitations period at all. Thus, the defenses failed, and our clients collected.
But as insurers have realized the benefits they can reap from speeding up their review and payments processes, we are now starting to see instances where the limitations period can be, and is being, properly invoked to defeat underpayment claims.
Providers need to know that this new law can act to hurt their bottom lines. True, it applies only when the initial, partial payments are received more swiftly than was often the case in past years. But the ability to claim for amounts left unpaid has been compromised.
As a practical matter, providers need to adopt standard procedures for identifying underpaid claims before they reach the anniversaries of the dates of service. As noted above, the one-year limitations clock does not actually start ticking until payment is made, so getting a file into your lawyer’s hands before the anniversary of the date of service will assure that your lawyer has ample opportunity to review the case and still file a valid claim on time.
The reality is that if a billing has not been paid in full within 3-4 months, nothing is likely to change after that unless you have your lawyer pursue a claim with the Commission. There is no reason to wait longer than that to assure that files are reviewed, worker’s comp claims are identified, and cases are turned over to your lawyer for handling. Providers can therefore protect themselves by scheduling quarterly reviews of their accounts receivable, so that valid claims can be identified and pursued before it is too late.
In short, neglect and procrastination will now be punished like never before. But simply by instituting and following sound accounting and management procedures, providers can avoid the loss of any claims.