What is a reasonable charge for a physician visit or a hospital admission? Answering that question has become important to disputes between providers and health plans and Texas personal injury attorneys whether they represent plaintiffs or defendants. Plaintiff attorneys often must resolve medical liens before money can be distributed to the client and the attorney. Defense attorneys must decide whether to challenge affidavits medical providers file under Section 18001 asserting their charges are usual, customary and reasonable (“UCR”).
Some states have decided what charges are reasonable for out of network medical providers. Presumably, the same upper bounds apply to medical services in personal injury cases. For example, New York sets this boundary as the lesser of the actual charge or the 80th percentile charge calculated by Fair Health.[1] New York uses the usual, customary and reasonable (“UCR”) approach to set reasonable charges. UCR is only one of several approaches to determine the maximum reasonable amount a provider should be paid.[2]
Texas has not defined the upper bound of reasonable changes for out of network providers. Instead, Texas has established a mediation process to resolve disputes when a person is treated by a provider with which his health plan does not have a negotiated rate.[3] However, this mediation process is not designed for personal injury cases.
The only Texas law that establishes a maximum fee for medical services in the private sector is for workers’ compensation patients. Since 2001, the legislature directed the Division of Workers Compensation[4] to establish medical fee guidelines based on Medicare payment policies with a payment adjustment factor (“PAF”).[5]
Figure 1 Texas Workers’ Compensation Medicare Payment Adjustment Factors
Source: Texas Department of Insurance, Division of Workers’ Compensation. Medical and Facility Fee Guideline Information. Available at: http://www.tdi.texas.gov/wc/fee/index.html
*Non-Device Intensive; **Plus the device payment portion, ***2016, exclusive of facility-based surgeries.
Figure 1 shows the PAFs. Administrative rules define payment of a percentage of Medicare fees as fair and reasonable, but no Texas court has applied them in a medical lien or personal injury case. This does not mean courts could not do so.
Data are available to calculate the 80th percentile charge for most health services for most Texas markets from the Department of State Health Services (“DSHS”) and from the Center for Medicare and Medicaid Services (“CMS”). DSHS publishes Public Use Data Files for hospital inpatient services and for selected services of hospital outpatient departments and ambulatory surgery centers.[6] CMS publishes Medicare Standard Analytical Files and Public Use Data Files for most medical services.[7]
RPC uses these data to calculate the 80th percentile charges for specific services in specific Texas markets. Comparing the 80th percentile charge to a provider’s actual charge is a reasonable basis for an opinion on the maximum reasonable charge. RPC medical bill analysis testimony on the reasonableness of charges has been accepted by courts in Texas and other states. Call us at 512-371-8167 if you have a case that may benefit from medical bill analysis.
Notes
[1] New York Financial Services Law (FIS), Article 6, Section 603(h)(3)(i). Available at: https://www.nysenate.gov/legislation/laws/FIS/603
[2] California, for example, uses the greater of 125% of Medicare reimbursement, or the average contracted rate for the same services in the same area as the upper limit of what an insurer must pay an out of network provider.
[3] The rules for this process are contained in 28 TAC Sections 21.5010-21.5013. More information on the process is available on the Texas Department of Insurance website at http://www.tdi.texas.gov/consumer/cpmmediation.html
[4] And its predecessor the Texas Workers’ Compensation Commission
[5] Pursuant to the Texas Workers’ Compensation Act, Section 413.011, “the commissioner shall adopt the most current reimbursement methodologies, models, and values or weights used by the federal Centers for Medicare and Medicaid Services” and in determining appropriate fees, “shall also develop one or more conversion factors or other payment adjustment factors”
[6] The public use data files are available from DSHS at https://www.dshs.texas.gov/thcic/ under the Data subheading.
[7] More information on Standard Analytical Files is available from CMS at https://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/StandardAnalyticalFiles.html. Information on file cost and availability is available through the Research Data Assistance Center (ResDAC) limited data set website at https://www.resdac.org/cms-data/request/limited-data-sets