iNews from Picciano & Scahill

We have all seen or handled bills where the provider submitted charges that were not in compliance with and in excess of that which is allowed in the New York State Fee Schedule. Most of us would agree that this practice should not be allowed. But "how much is too much". Recently, one of our Insurance Carrier clients rightly protested bills submitted by a particular medical supply company that deserves the question, "how much is too much?".

This particular medical supply company routinely submits a bill in the amount of approximately $515.00 for electrodes and batteries, under codes A4556 and Code A4630. The New York State Fee Schedule allows for only $11.05 for reimbursement under these codes, for this particular bill. Therefore, the insurer denies the remainder of the bill as being outside the amount allowed under the Fee Schedule.

Under the current state of the law, the defense of not billing in conformity with the Worker's Compensation Fee Schedule is preserved only through a timely and valid denial. Westchester Medical Center v. American Transit Ins. Co., 17 AD3d 581 (2d Dept. 2006); New York Hosp. Medical Center of Queens v. Country-Wide Ins. Co., 295 AD2d 583 (2d Dept. 2002). See, Capio Medical, P.C. ex rel. Berger v. Progressive Cas. Ins. Co., 7 Misc.3d 129(A)(App. Term 2d Dept. 2005); Triboro Chiropractic and Acupuncture, PLLC v. New York Central Mut. Fire Ins. Co., 6 Misc.3d 132(A)(App. Term 2d Dept. 2005)("We note that said untimely denials precludes the defense that the benefits claimed exceeded the maximum benefits provided by the Workers' Compensation Law"); Rigid Medical of Flatbush, P.C. v. New York Cent. Mut Ins. Co., 11 Misc.3d 139(A)(App. Term 2d Dept. 2006).

Insurance Law § 5108 (a) & (b) states:

Limit on charges by providers of health services

(a) The charges for services specified in paragraph one of subsection (a) of section five thousand one hundred two of this article...Shall not exceed the charge permissible under the schedules prepared and established by the chairman of the workers' compensation board...

(b) The superintendent...shall promulgate rules and regulations implementing and coordinating the provisions of this article and workers' compensation law with respect to charges for the professional health services specified in paragraph one of subsection (a) of section five thousand one hundred two of this article...

As it relates to the fee scheduling for supplies delivered on or after July 11, 2007, a medical provider is only able to charge the amount that Medicaid would pay for similar supplies. See, 12 NYCRR § 442.2. The following represents that portion of the workers compensation fee schedule as it relates to the proper compensation of durable medical supplies:

The maximum permissible charge for the purchase of durable medical equipment, medical/surgical supplies, and orthotic and prosthetic appliances shall be the fee payable for such equipment or supplies under the New York State Medicaid program at the time such equipment and supplies are provided, except that the fee for bone growth stimulators (HCPCS codes E0747, E0748 and E0760) shall be paid in one payment and not split. For orthopedic footwear and if the New York State Medicaid program has not established a fee payable for the specific item, then the fee payable, shall be the lesser of:

the acquisition cost (i.e. the line item cost from a manufacturer or wholesaler net of any rebates, discounts or other valuable considerations, mailing, shipping, handling, insurance costs or any sales tax) to the provider plus 50%; or the usual and customary price charged to the general public.

The maximum permissible monthly rental charge for such equipment, supplies and services provided on a rental basis shall not exceed the lower of the monthly rental charge to the general public or the price determined by the New York State Department of Health area office. The total accumulated monthly rental charges shall not exceed the fee amount allowed under the Medicaid fee schedule.

Therefore, when the insurer pays and denies the subject bill within the regulatory timeframe, the insurer is successful in defending any action that is file to collect these excessive amounts. However, what occurs when a bill of this type is not paid or denied within 30 days of receipt by the insurer? Currently, the Courts have routinely found in favor of the provider. In this case, the provider would receive a windfall of nearly 47 times or approximately 4,700% of the allowable charge. The current strict interpretation of the "30-day rule", with respect to bills that are submitted and not in conformity with the New York State Fee Schedule, results in a windfall for providers who are in the practice of charging in excess of the New York State Fee Schedule. Again, "how much is too much" and at what point will legislators and/or adjudicators answer this question? Currently, the answer is unknown. We'll keep you posted! More to come in future editions of iNews!