Medicare Fee Schedules: Considerations for the WC Program

1. Medicare Fee Schedules: Considerations for the WC Program Barbara O. Wynn May 2, 2003

2. What are the problems with the OMFS? • Growth in CA workers’ comp medical costs • Administrative burden for providers and payers • No limit on ambulatory surgery facility fees • Inadequate resources to maintain existing fee schedules • Professional payments unrelated to resources required to furnish services

5. Why consider Medicare fee schedules? • Opportunity to shift on-going costs of refining and updating payment system to Medicare • Regularly refined and updated • Well-established and familiar payment rules • Inpatient fee schedule example of how Medicare can be adapted to meet WC needs • Other WC programs have adapted Medicare fee schedules

6. Medicare and WC Payment Systems Share Similar Goals • Ensure patient access to high-quality, medically necessary care • Promote efficiency in the delivery of care • Compensate providers fairly • Avoid unintended consequences, perverse incentives

7. Issues in Adapting Medicare Fee Schedules • No “gold” standard” to set the overall payment level • Medicare typically pays less than private payers • Use a multiplier to assure access • More than fees: also payment policies and coding rules • Separate coverage and payment determinations • Imbed modifications in the fee schedule to facilitate automatic updates in future • Large payment changes may require a transition

8. Medicare Fee Schedules Are Attractive • Shifts on-going administrative burden to CMS • Allows DWC to concentrate on issues unique to WC • Provides for regular updates with public input • Relates payments to resources • Promote efficient delivery of appropriate care • Modifications to accommodate WC issues • On-going monitoring of access, quality and cost important