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Judge Of Compensation After Full Trial Finds Medical Provider Was Properly Compensated In Burn Claim

There are thousands of medical reimbursement claims filed by medical providers in the New Jersey Division of Workers’ Compensation. A comprehensive decision following a lengthy trial was recently handed down by the Honorable Virginia Dietrich, Administrative Supervisory Judge of Compensation. To this practitioner’s knowledge, this is the first fully tried decision in the Division involving multiple witnesses and experts on a medical reimbursement claim.

The case stemmed from an accident that occurred to an employee known at G.T. who worked at Shop Rite. The injury was very serious involving 43% of total body surface with flame burns and severe smoke inhalation. G.T. had numerous graft procedures which resulted in charges by the Burn Surgeons at St. Barnabas Hospital of $388,251. New Jersey Manufacturers, the carrier for Shop Rite, paid $280,319.60. The Burn Surgeons filed a claim petition in the Division of Workers’ Compensation seeking a portion of the difference between the amount charged and the amount paid.

The case was unusual in many respects. First, there are few burn centers in the region. The Burn Center at St. Barnabas is the only burn center in northern New Jersey. Second, one of the burn surgeons, Dr. Marano, a board certified burn surgeon, testified in the case. Third, there were two burn surgeons involved in the surgical procedures, so the decision focuses heavily on how to deal with co-surgeon billings.

One of the key factors in the case is that each of the two burn surgeons billed for the total amount of excision and grafting done during the surgical procedures. Each surgeon did not bill for just the amount of grafting he did. Dr. Marano testified that it would be possible for one attending physician to do the procedure but stated that this would not be in the best interest of the patient. He considered that using co-surgeons would take less time, and that less time in surgery was beneficial for the patient.

It was admitted that the patient was not divided in half with one surgeon taking one side and the other taking the other side. The surgeons alternated components of the surgery but did not do two excisions at the same time. While one was doing the excision or grafting, the second surgeon was assisting in blood loss, blood pressure and pulse rate.

Dr. Marano further admitted that some hospitals do not use this team approach, and this approach is not recommended by the American Burn Association White Paper. Dr. Marano admitted that he could not identify the grafting that he had done as opposed to that done by his co-surgeon, Dr. Petrone.

Both parties produced billing supervisors and professionals who were familiar with CPT codes for the procedures at issue. Each party also presented testimony from an expert witness. The witness for the Burn Surgeons admitted that CMS (The Centers for Medicare and Medicaid Services) rules allow reimbursement at 62.5% of usual, customary and reasonable when co-surgeons are permitted. The witness also admitted that Medicare would not approve a co-surgeon charge for some of the codes billed in the procedures.

The decision covered a great deal of testimony regarding other charges from unrelated cases with the Burn Surgeons. There was obviously no testimony regarding reimbursements to other burn centers because of the paucity of such centers in New Jersey.

NJM produced a senior coding and reimbursement specialist who had many years of experience as a professional coder, certified by the American Academy of Professional Coders. She testified regarding adjustments that are often made to bills, called modifiers, of which there are two kinds: informational modifiers (those that provide details about the procedure), and money modifiers (those which indicate that a percentage is applied to the fees set for the procedure). These modifiers are defined by CMS and the American Medical Association. NJM had allowed a modifier in a prior burn case, paying for co-surgeons. That also was done in this case with NJM paying 125% of the usual, customary and reasonable amount for the procedure allocating 62.5% to each surgeon.

The Burn Surgeons contended that the judge of compensation should only consider those payments made by other commercial carriers and disregard payments made by Medicare, Medicare HMO, Medicaid, and Blue Cross/Blue Shield. Judge Dietrich noted that there is no fee schedule in the New Jersey Division of Workers’ Compensation. Providers are entitled to be reimbursed based on “fees that are reasonable, usual and prevailing in the same community for similar surgeons’ services.” The judge reflected on case law in holding that paid fees are a more accurate indicator of what is reasonable and customary than charged fees.

The judge noted that both parties conceded that the Ingenix database used by NJM fairly reflects the UCR (usual, customary and reasonable charges) fee for each of the surgical CPT codes. The judge found as follows in a comprehensive decision that can be viewed on the New Jersey Division of Workers’ Compensation website:

(1) NJM was correct in not paying each co-surgeon in full. She credited the testimony of Dr. Lawrence Spitz, NJM’s expert, who said that the definition of co-surgeons is two surgeons who work together as primary surgeons performing distinct parts of the procedure. In this case, one surgeon was doing excisions while the other monitored vital signs of the patient. There were no American Burn Association guidelines that supported the use of co-surgeons in this case. It was therefore “inappropriate for both doctors in these surgeries to each bill for the total amount of excision and grafting.” Furthermore, she found that separate operative notes should have been done by each surgeon participating in the surgery.

(2) NJM paid 73.6 percent of the charged amount in this case, which was a percentage clearly in line with payments made by other commercial carriers and well above payment from government programs. That reimbursement rate was 17.2% higher than other commercial carriers generally pay and 55% higher than what government programs generally pay. Most, if not all, government providers do not pay for co-surgeons. In fact, NJM initially rejected the initial bill for services from the Burn Surgeons for G.T. but made manual adjustments to pay at 125% of UCR, or 62.5% for each surgeon. The judge found that there was no basis for the claim that each surgeon should be paid 87% of UCR. She noted that NJM made payments at a higher rate than was appropriate for certain codes that were not eligible for payments at the 125% rate.

(3) The judge rejected the argument by the Burn Surgeons that additional monies should be paid because of the difficulty, the severe illness of the patient and the expertise required. She said that all of these considerations were taken into account when the codes were prepared.

Clearly, the respondent has demonstrated that a physician using this code whether he be a burn surgeon or an orthopedist has the right to the same reimbursement at the same rates based on all considerations including geographic location. . . .[T]he seriousness of the case was contemplated when the codes were designed. To make it absolutely clear, this case is not an example of an insurance company substituting its judgment for the judgment of a doctor. The decisions establishing the codes and the modifiers and values attached thereto were made by doctors who thoroughly understood the skills necessary to carry out the procedures. I find that NJM correctly valued the codes used in the 12/2704 and 1/10/05 surgeries.

(4) The judge found that the practice used by the Burn Surgeons of allowing clerks in the billing office to assign modifiers is in contradiction with accepted practices set forth by the AMA and the ABA (American Burn Association). “Billing clerks should not determine which codes or modifiers should be added to the HCFA; this is the job for the physician.”

(5) The judge found that “it is appropriate to accept the guidelines set forth by the Centers for Medicare and Medicaid Services (CMS).” She also recognized the standards set by the American Medical Association and various subspecialty groups in their definition of the codes and the modifiers at issue.

As a result of her findings, the judge dismissed the claim petition and awarded no additional monies to the Burn Surgeons. It is important for readers in New Jersey and elsewhere to understand the level of complexity in this decision, particularly with respect to coding requirements. As noted above, the case can be obtained on the Division website. It is a very lengthy decision because there were many witnesses and because it was necessary to understand sophisticated coding rules, such as the resource based relative value scale (RBRVS). That scale takes into consideration the physician’s work, the related practice expenses and the cost of malpractice insurance. The RBRVS assigns procedures performed by a physician a relative value which is adjusted by geographic region. This value is then multiplied by a fixed conversion factor, which changes annually, to determine the amount of payment. Thus the same surgery performed in New York City will be worth more than the comparable surgery performed in Wichita, Kansas.

All of this is beyond the scope of this case summary but will be very important for practitioners to read in the future. This is a decision which will be studied for many years because of its comprehensiveness and because it delves into all aspects of billing and coding, very little of which is commonly understood outside the world of professional coders. As such, this case will serve as a primer for future medical reimbursement litigation in the New Jersey Division of Workers’ Compensation.

Visit John H. Geaney’s Blog page at NJworkerscompblog.com

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