STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

CARL RAEMISCH, Applicant

FABCO EQUIPMENT INC, Employer

TWIN CITY FIRE INS CO, Insurer

WORKER'S COMPENSATION DECISION
, Claim No. 2003-014099


An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and order in that decision as its own, except that it makes the following modifications:

1. Delete the fourth paragraph beginning on page 4 of the ALJ's decision and substitute:

"As a further result of the work injury the applicant incurred reasonable and necessary medical expenses, including $89.75 from UW Hospitals and Clinics, which was paid by the applicant and he is entitled to reimbursement; $334.50 from Teff Chiropractic, all of which is unpaid; $22,819.50 from Deancare, of which $7,344.15 was paid by Dean Health and it is entitled to reimbursement, $5,179.85 was adjusted from the bill, and $10,295.50 remains unpaid; $8,034.03 from St. Mary's Hospital, of which $3,318.76 was paid by Dean Health and it is entitled to reimbursement, $1,999.77 was adjusted from the bill, and $2,715.50 remains unpaid; $1,420 from Madison Radiologists, of which Dean Health paid $440.35 and it is entitled to reimbursement, and $979.65 was adjusted from the bill; $226.87 from Associated Pathologists, of which Dean Health paid $12.48 and it is entitled to reimbursement, $98.19 was adjusted from the bill and $116.20 remains outstanding; $208.50 from Beyler Chiropractic, which was paid by Dean Health and it is entitled to reimbursement; $459.63 in mileage expense incurred by the applicant and he is entitled to reimbursement; and $151.18 in prescription expense, of which $25.30 was paid by the applicant and he is entitled to reimbursement, $45.98 was paid by Dean Health and it is entitled to reimbursement, and $79.90 was adjusted from the bills."

2. Delete the second paragraph of the ALJ's Interlocutory Order and substitute:

"The respondent and insurance carrier shall also pay the following medical expenses: to Teff Chiropractic, the sum of Three hundred thirty-four dollars and fifty cents ($334.50); to Dean Medical Center, the sum of Ten thousand two hundred ninety-five dollars and fifty cents ($10,295.50); to St. Mary's Hospital, the sum of Two thousand seven hundred fifteen dollars and fifty cents ($2,715.50); to Associated Pathologists, the sum of One hundred sixteen dollars and twenty cents ($116.20); and shall reimburse Dean Health, the sum of Eleven thousand three hundred seventy dollars and twenty-two cents ($11,370.22); and to the applicant, the sum of Five hundred seventy-four dollars and sixty-eight cents ($574.68).

ORDER

The findings and order of the administrative law judge, as modified, are affirmed.

Dated and mailed February 18, 2005
raemisc . wmd : 101 : 4   ND § 5.46

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

MEMORANDUM OPINION

The sole issue on appeal is whether the ALJ properly ordered payment to certain providers on some of the amounts adjusted from the medical expense bills. In general, the commission does not order payment of amounts written off or adjusted from medical bills, on the assumption that the amount billed net of the write-off reflects the expense of the treatment. In Hoefs v. Midway Motor Hotel, WC Claim No. 1999-029146 (LIRC, October 21, 2003), the commission stated:
Under Wis. Stat. § 102.42(1), an employer has the duty to supply necessary medical treatment or pay the reasonable expense of such treatment. "Expense" in this context means the cost or price to the applicant of the treatment. The record in this case does not indicate why Marshfield Clinic wrote off a portion of the expenses; there is no indication that Marshfield Clinic regarded the expense as uncollectable, as for example might occur if the respondent had refused payment and the applicant declared bankruptcy. On this record, then, the commission concludes the charges, after deducting the written off amounts, reflect the expense of the actual cost or price in terms of the Marshfield Clinic treatment.

The commission examined the bills supporting the applicant's claim for treatment expense on form WKC-3 carefully. In two instances, the bills from Teff Chiropractic and Dean Health Systems, the bills show write-offs on charges paid by The Hartford (which the commission assumes is related to the WC insurer in this case (1))  not just charges paid by DeanCare HMO (or Dean Health Plan) the non-industrial insurer. In another instance, St. Mary's Hospital, the bill itself shows payment in full of the charges by DeanCare HMO, though a handwritten annotation indicates there was an adjustment to the bill. In another instance, UW Hospitals, the bill lists a DeanCare HMO write-off which was retracted or never actually applied, apparently because DeanCare HMO denied payment and the applicant himself paid the bill in full. Finally, while deductions were also made by Dean Health Plan when it paid certain prescription expense (exhibit I last page), the ALJ did not pay these deductions to the prescription provider apparently because the prescriptions provider was not identified by name.

Consistent with Hoefs, the commission has amended the ALJ's findings and order to deny payment of the amounts adjusted or discounted from the bills, where those amounts are not currently due or outstanding. The exception is the UW Hospital bill, where the write-off was either retracted or never applied, so that the full amount of the bill remains outstanding. See: Pospichal v. Ashley Furniture and Employers Insurance of Wausau, WC Claim No. 2002-022704 (LIRC November 30, 2004).

On appeal, the applicant's attorney states that she has seen cases where medical expenses have been found compensable, and the medical providers have sent back the HMO payment or the Medicare payment and billed the injured worker directly for the full amount. These cases would be similar to Popsichal, where the commission ordered payment of a retracted write-off billed to the worker. If a provider attempts to "unpay" and rebill after hearing and decision, the worker may seek further hearing under the ALJ's interlocutory order with respect to the medical expense as rebilled to him or her, or may seek relief under Wis. Stat. § 102.18(4).

The applicant also asserts that the commission's prior decisions do not take into account the effect of capitation. The applicant explains that capitation is an arrangement under which an insurer pays a provider a certain monthly amount per insured-patient in exchange for getting a reduced fee when the provider actually renders services to the insured-patent. The applicant asserts that if the commission does not order a worker's compensation insurer to pay the amounts written off or adjusted from the bill, it allows the worker's compensation insurer to "piggyback" onto Dean Health HMO's capitation payment. In other words, the applicant asserts, the capitation payments are a kind of advance payment of the medical fees subsequently charged. This suggests that unless the commission accounts for the capitation payments by paying the discounts or write-offs, the commission is not ordering payment of the actual expense of the treatment. In this case, however, there is no evidence in the record to show a capitation agreement actually exists here between Dean Health HMO and the providers at issue, as opposed to a straight negotiated fee or other arrangement accounting for the write-offs, or what the effect any such capitation agreement has on the provider's billings for worker's compensation patients.

cc:
Attorney Helen Schott
Attorney Gary Stanislawski



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Footnotes:

(1)( Back ) The Hartford is the insurer named in the hearing application and the applicant does not seek reimbursement of the expenses paid by it. The applicant did not claim payment for, and the ALJ did not order payment to, the providers for the write-offs when they were applied to payments made by the Hartford.

 


uploaded 2005/02/23