Clinics interested in expanding their practice into the area of industrial rehabilitation face the challenge of understanding and navigating the workers’ compensation payment system. Providing helpful information about this topic can be challenging due to the lack of standardization in payment statutes and regulations from state to state. Medicare rules may be onerous, but at least they are consistent across all states. By comparison, the rules of engagement in workers’ compensation vary significantly from state to state. Clinic decision makers who are considering a move into this area of practice will first want to consider the following questions: How should clinicians go about educating themselves? What key pieces of information do they need to know in order to maximize payment? How does workers’ compensation coverage differ from medical insurance? What are the general state-to-state differences? What are the resources for state-specific information? What are the effective strategies for successful reimbursement?
DIFFERENCES FROM MEDICAL INSURANCE
The primary difference between workers’ compensation insurance and medical insurance is causation and indemnity. Causation refers to the concept that a medical condition is not covered under workers’ compensation unless it is caused by work. Under medical insurance, causation is not a factor. Medically insured patients only need to have a diagnosis, regardless of the cause to be covered. Medical insurance covers all medical problems (unless preexisting illness is a factor). Workers’ compensation insurance typically covers only the injury or illness that was caused or exacerbated by work. Medical insurance typically covers only the medical treatment of the patient. In contrast, workers’ compensation insurance provides wage replacement and payment for other things such as transportation and loss of function for the worker in addition to the medical coverage.
The avenues for employers to obtain workers’ compensation insurance vary from company to company and state to state. In most states, larger employers self-insure for workers’ compensation. Sometimes these self-insured companies will hire a third-party administrator (TPA) to manage their claims. Employers post a cash bond with the state and then draw upon those reserves to pay claims. TPAs provide administrative services from care management to payment of claims. In many states, private workers’ compensation carriers compete for employer coverage. In these states, some smaller companies will insure through industry-related workers’ comp funds. Other states have a single payor model with one mandated state fund. The federal government insures federal workers under federal insurance programs. (Go to www.dol.gov/dol/topic/workcomp/index.htm for more information about federally funded workers’ compensation programs.)
APPROVAL FOR COVERAGE
Most incidents of work-related injuries begin with a “first report of injury” originating with employee notification of injury to the employer. After an employee reports a workers’ compensation claim, there may be a time lag before the claim is approved as a covered work-related injury and the employee is covered. Once the claim is approved, the employee is assigned a claim number. The clinic administrative staff should be trained to ask about coverage and to record any relevant workers’ comp claim number. If the patient arrives for treatment and has filed a workers’ comp claim but the claim has not been approved, the administrative staff should collect information regarding medical insurance as well as any workers’ compensation information. Until the claim is approved, clinicians may need to bill the patient’s medical insurance. If the workers’ comp claim is denied, then the medical insurance should continue to provide coverage. Once the workers’ compensation claim is approved, the clinician may need to submit the charges to the workers’ comp carrier and reimburse the medical insurer for any payments made.
If a claim for treatment or evaluation is denied under workers’ compensation, it is typically because important information has been omitted from the claims form. The date of injury is an important piece of information that must be consistent with the date of injury documented on the original claim. Another typical error is that either a procedure is not allowed under state law, or the diagnosis is not consistent with the diagnosis of record on the claim. If preauthorization is required but not obtained, the claim will be denied. Some state statutes provide for care and payment for up to three visits if the claim would have been otherwise approved. Other states require prior authorization, so check your state’s rules and regulations before you take on a workers’ compensation claim.
Some states have state-specific billing codes for procedures that are unique to workers’ compensation and industrial rehabilitation such as work hardening, work conditioning, job analysis, functional capacity evaluation (FCE), or impairment rating.
STATE TO STATE DIFFERENCES
Payment rates vary significantly from state to state, and many states have a workers’ compensation fee schedule. The schedules provide the minimum or maximum payment amounts as well as document the specific procedures that will be covered. (For a listing of state fee schedules, go to www.apta.org/Payment/WorkersCompensation/StateGuide. To view a directory of workers’ compensation administrators, go to www.ic.nc.gov/ncic/pages/wcadmdir.htm.) Some states have a standard number of treatments for all patients. In many states, the number of treatments must be approved prior to treating and extensions requested if the patient needs additional treatment. In some states, a functional capacity evaluation must receive prior approval in order to be covered. In some states, clinics are paid a standard fee for FCEs regardless of how long the test takes to perform. In other states, FCEs are charged in 15-minute increments (15 minutes = 1 unit) using the 97750 CPT codes. In some states such as Oregon, there are levels of FCEs that can be done with specific restrictions and guidelines associated with each level. Some states require physician referral for workers’ compensation patients despite direct access.
States also differ according to who can provide certain services and which services will be covered. In some states, for example, by rule or regulation, only a physical or occupational therapist can perform an FCE. The FCEs performed by therapist assistants, exercise physiologists, or athletic trainers must be done and cosigned in conjunction with a physical therapist. In an attempt to minimize the cost associated with performing FCEs, some clinics that use therapist assistants, exercise physiologists, or athletic trainers have therapists simply sign off on the report without having conducted any part of the test. This practice creates serious legal risks for the clinic.
States also vary according to who can perform an impairment rating. Some workers’ compensation laws explicitly state that only a physician can perform an impairment rating. Other states allow therapists to perform them, and the physician only needs to sign off on the impairment rating to make it legal. Each state dictates the edition of the American Medical Association’s Guides to the Evaluation of Permanent Impairment that can be used for impairment ratings. Each edition of “The Guide” uses different protocols for calculating percent impairment. Therefore, clinicians need to consult their state’s workers’ compensation board to determine the appropriate edition of the Guide being used for that state.
Documentation and invoicing requirements for treatment and evaluation also differ from state to state. In some states, specific forms are used. Other states are not as closely regulated.
COMMUNICATION: THE KEY TO SUCCESS
Regardless of documentation and invoicing requirements, the most effective method of insuring payment is to communicate regularly with the assigned case manager and/or insurance adjustor. Not only will this regular communication improve the amount and timeliness of payment, it is an important marketing tool to increase referrals. Effective communication includes providing your prognosis for the patient’s recovery and return to work shortly after the initial evaluation; obtaining a job description early in the treatment process; discussing return to work with the patient and case manager early in the treatment process; sharing any concerns regarding self-limiting, inconsistent, or noncompliant behavior; and reporting any new medical complications that arise during the course of treatment. Therapists are encouraged to adopt a mind-set that the patient’s job during treatment is to get better and to return to work. Rehabilitation and progression toward return to work are what patients with work-related injuries are being paid to do. A therapist’s job is to make sure that happens!
To be proactive regarding your payment, obtain a copy of your state’s workers’ compensation law, associated fee schedule, and regulations. Educate your support and therapist staff regarding these parameters of practice. Keep abreast of any changes that occur by attending statewide workers’ compensation organization meetings and read the organization’s newsletter, if such exists in your state. Watch for updates on the APTA Web site as the association is continuing to collect information specific to each state’s workers’ compensation laws and regulations.
Acknowledgement: The authors acknowledge Karen Jost of the American Physical Therapy Association for her assistance in preparation of this manuscript.
Deborah Lechner, PT, MS, is founder and president of ErgoScience Inc. She has more than 25 years of clinical experience as well as an extensive research background.
Jay Jones, is executive director of Southern Physical Rehab Network and chair of APTA’s PPS Administrators Council. Jones has more than 25 years of health care experience. For more information, contact .