Florida Comp Insurers Challenge Hospital Payment Plan. Up Next: Physician Dispensing

A group of workers’ compensation carriers has filed a formal challenge to the state’s hospital reimbursement plan, arguing that payment levels would be far out of line with what other states allow and what other insurers pay in Florida for inpatient services.

The move will likely delay implementation of the long-debated fee schedule for at least another few months.

The consortium of insurers includes Normandy Insurance Co., Zenith Insurance Co., Bridgefield Employers Insurance Co., Bridgefield Casualty Insurance Co., BusinessFirst Insurance Co. and RetailFirst Insurance Co. The challenge comes after almost three years of debate, court rulings and revisions to the Florida Division of Workers’ Compensation hospital inpatient Reimbursement Manual.

The petition, signed by attorney Ralph Douglas, of the McConnaughhay Coonrod law firm, was filed Sept. 12 with the state Division of Administrative Hearings. A hearing has not been scheduled but is not expected before late December.

The 23-page petition echoes arguments made at an August hearing before DWC. The insurers contend that, under the proposed plan, the maximum reimbursement allowance for inpatient services would be two to three times higher than the Southeastern U.S. average. The DWC continues to base reimbursement levels on hospital charges, but insurers have long said that they should be based instead on actual payments made by other payers.

“Because petitioners collectively, if not individually, receive hundreds of hospital bills each year and pay millions of dollars of hospital medical bills, the Hospital Reimbursement Manual has a material and substantial impact on petitioners,” the petition reads.

The proposed reimbursement manual is “arbitrary” and out of line with state law, which notes that MRAs must be reasonable, the insurers said. Insurance company advocates have said that while workers’ comp accounts for a fraction of the medical service in Florida, some hospitals are hoping to see the outsized revenue that results from inflated reimbursement levels.

In a related and equally controversial matter, the DWC had scheduled two workshops for Sept. 29 to discuss rules regarding physician dispensing of medications. The workshops have been postponed due to the impending hurricane bearing down on that part of the state, the division announced Monday, Sept. 26.

The proposed rule would allow doctors and physician assistants to dispense “authorized medications” to injured workers and insurers cannot deny payment.

The DWC is essentially starting over on the rules, after insurance companies challenged a bulletin from the state Department of Financial Services in 2020 that essentially authorized dispensing without going through the statutorily required rulemaking and review process.

Insurers have argued that millions of dollars annually are stake. They have said that physician dispensing is akin to self-dealing when doctors own the pharmacy providing the meds, and it allows higher charges and few safeguards on drug conflicts or overuse by patients.

Some Florida employers may not be as concerned about medical costs, after years of lowered comp rates. Today, Sept. 23, the state Office of Insurance Regulation will hold a virtual hearing on a proposed 8.4% average rate reduction for the voluntary market 2023, the seventh straight annual decrease. The hearing begins at 9 a.m. Eastern time.

Topics Florida Carriers