Just to be clear, I’m talking about the ones used in spine surgery, bone and joint surgery, and other orthopedic procedures. The use of surgical implants has grown dramatically, as have their prices, and the impact of utilization and price means big bucks for WC payers.
Big bucks as in $72 million in California alone. As in adding 11% to 33% to inpatient hospital bills in the Golden State.
While implants may well be useful, appropriate, and in many cases help the patient, they can also be extremely expensive. And even when there are clear guidelines as to what a payer should reimburse, the basis for reimbursement can be rather vague.
Here’s the issue. In several jurisdictions (including NY TX CA and FL) the basis for reimbursement is some version of the “documented paid amount” plus a handling fee of 10% or so up to a cap of a few hundred dollars (CA) or a percentage of the invoice amount (FL).
The problem lies in the documentation of the paid amount. Most payers ask for a copy of the invoice, which, on the surface, makes sense – this is what was paid.
Not exactly. What the invoice doesn’t show can include:
– volume purchase discounts
– rebates
– “3 for the price of 2” deals
– waste (some surgeons use the cage from one kit and screws from another, so the payer is paying for more hardward than is actually being used)
– internally developed invoices (documents prepared not by the supplier but by the provider)
Reimbursing off the invoice is not consistent with many states’ fee schedules, and certainly inappropriate for U&C states.
There’s another problem with implants – when they are defective, the patient has to go back in for more surgery. And the WC insurer has to pay. The only way to mitigate risk is to track the model and manufacturer for each implant – yes, it’s work, and yes, it’s work worth doing internally or at the very least outsource it to a specialist firm.
What does this mean for you?
Don’t reimburse based on the invoice. Period. Know and understand the regs in the claim’s state. And either use a third party firm expert in this area, or build the expertise internally.
More info –
Several states are in the process of revising their regs to deal with implant costs, but none (at least that I’m aware of) are requiring real “truth in labeling” when it comes to invoices. New York and Florida are two that are in the regulatory process.
Why does the state of West Virginia send chronic pain patients like myself to pain clinics and tell the DR’s that my current meds work just fine and then turn around and say the meds that cost 650.00 amonth are to expensive and then want to have a Morphine pump put in my body and the monthly cost for refilling the pump is between 1500.00 and 2000.00 . If any other people are going through the same thing with Workers comp in WV please email me at turbo1957@gmail.com .
Self-Pay patients are over-charged for implants also. An acquaintance of mine was charged $26,035.50 for a Synthes periarticular distal femoral locking plate (knee implant). I could be wrong, but it is hard for me to believe that hospitals pay even half of that price for an implant.
Does anyone have information as to specialty bill audit firms that specialize in reviewing bills for implants. This appears to be a continuing issue.