NCCI Analyzes Virginia’s Impending Fee Schedule Implementation
In March of 2016, Virginia Governor Terry McAuliffe signed House Bill 378, which directs the Workers' Compensation Commission to adopt regulations establishing fee schedules that shall become effective on January 1, 2018. Virginia regulators selected Oliver Wyman Actuarial Consulting to assist the Commission in developing their fee schedule, and the firm released a report in May 2017, outlining methodology for developing the fee schedule. A number of services were excluded by statute from the Commonwealth’s first medical fee schedule including:
- Inpatient treatment of traumatic injuries or severe burns
- Outpatient pharmaceuticals dispensed for at-home use
- Durable medical equipment (DME) from a retail facility
After nearly eighteen months of preparation and broad stakeholder input, the Commission has formally approved draft regulations that will implement new medical fee schedules for use effective January 1, 2018.
The National Council on Compensation Insurance (NCCI) recently released an analysis of the potential impact the fee schedules will have on ratemaking and claim costs.
Total physician costs are expected to decrease 6.5%, due to a combination of reimbursement decreases and increases. Predicted decreases in reimbursement for professional services are as follows:
- Anesthesia – 5.8%
- Surgery – 12.3%
- Evaluation and Management – 7.2%
- Other HCPCS – 6.7%
Predicted increases in reimbursement for professional services are as follows:
- Radiology – 0.1%
- Pathology and Laboratory – 6.8%
- Other Medicine – 12.9%
Healthesystems provided early input to the Workers’ Compensation Commission and the Fee Schedule Advisory Committee as they develop additional fee schedules for initially excluded services such as pharmacy and DME, which the Commission will soon meet to discuss.
Healthesystems has been advocating for a single uniform standard for pharmacy services, since late 2015, when initial discussions of a fee schedule commenced. We have urged the Commission to utilize the existing Average Wholesale Price benchmark to conform to the most widely used benchmark in workers’ compensation rules across the nation. Additionally, we recommended rules be developed which would ensure payers have appropriate utilization controls such as requiring generic medications to be used where available, days’ supply limitations and cost controls on physician dispensed and repackaged drugs and topical compound medications.
Click here to download the NCCI report for more information.
Tags: NCCI, Virginia, fee schedule, fee schedules
