Workers’ comp fees among highest in Western states

Monday, July 15, 2002 | 9:41 a.m.

CARSON CITY -- The state's workers' compensation fee schedule for reimbursing doctors is among the highest in the West and above both Medicare and Medicaid rates, an insurance spokesman said.

Robert Ostrovsky, representing Care Network, a subsidiary of Employers Insurance Company of Nevada, said the state Division of Industrial Relations should conduct further study before following recommendations to boost medical fees an average 15 percent.

Ostrovsky's comments came at a public hearing Friday on the $125,000 study of the fee schedule for those who care and treat workers who are injured while at work and for those who provide medical equipment.

Division Administrator Roger Bremner said after the hearing there won't be an immediate decision on whether to increase the fee schedule.

He said he wants to get solid information, set the fees and then adjust them every February according to the medical price index. Some of the fees in the study have been recommended to go up and others to go down.

Bremner said the fees set by his division are used as a ceiling by insurance companies, managed care organizations and others for reimbursing physicians, hospitals, medical suppliers and other groups.

The rates actually paid these providers are negotiated downward by the insurance, MCOs and others, he said. For instance, he said, there were reports that Employers Insurance Company of Nevada, which writes policies for the largest number of businesses in Nevada, reduced its payment schedule by 20 to 25 percent to doctors.

Ostrovsky said a random sampling by his company showed Nevada's fee schedule was the second highest of 11 states surveyed for anesthesia services; ninth highest of 11 states for surgery; highest for radiology; and seventh in 11 states for medicine, which includes visits to the doctor's office.

Most of the states were in the West.

In another comparison, Ostrovsky said the Nevada fee schedule is 290 percent higher than Medicare for anesthesiology, 252 percent higher for surgery, 194 percent higher for radiology and 156 percent higher for medicine. Nevada is 1,195 percent higher for pathology but Medicare doesn't reimburse for many lab tests.

For instance, Nevada's fee is $3,787 for a herniated lumbar disk removal, a common surgery for workers injured on the job. The Medicare payment is $1,637. Ostrovsky said although Medicare was established to serve the elderly, the program has become a standard and benchmark for many in setting payment schedules. He said 17 states now use Medicare-based fee schedules for workers' compensation.

Bill Welch, executive director of the Nevada Hospital Association, said it was appreciative of the recommended fee increase by Milliman USA what performed the study.

But he said it appeared there would be a reduction in reimbursement for the higher cost cases handled by hospitals. After the hearing, Welch said reimbursements for hospitals in intensive care, rehabilitation and nursing homes would be lowered.

The present state fee schedule is already below the hospital billed charges. And then the insurance companies and MCOs want discounts in addition to the reduced fees, he said.