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DTCI: Synopsis of House Enrolled Act 1320

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noltemeyer-aubrey-dtci By Aubrey K. Noltemeyer
bushemi-amanda-dtci By Amanda E. Bushemi

On May 11, 2013, Indiana Gov. Michael Pence signed into law House Enrolled Act 1320, a bill authored by Rep. Matt Lehman, R-Berne, and co-authored by Rep. Ed Soliday, R-Valparaiso. The workers’ compensation reform legislation, effective July 1, 2013, not only increases benefit amounts to injured workers, but also, most notably, imposes a fee schedule for the reimbursement of medical service facilities based upon Medicare’s reimbursement rates. The significant changes to the Indiana Worker’s Compensation Act are discussed below, along with comparable provisions from the workers’ compensation statutes of surrounding states.

Reimbursement to medical service facility based on Medicare’s reimbursement rate

HEA 1320 enacts legislation governing payments made under the Act by an employer or an employer’s insurance carrier to a medical service facility beginning July 1, 2014. Under the Act, medical service facility is defined as only the following: (1) a hospital (as defined in Ind. Code § 16-18-2-179); (2) a hospital-based health facility (as defined in Ind. Code § 16-18-2-180); or (3) a medical center (as defined in Ind. Code § 16-18-2-223.4). Ind. Code § 22-3-6-1(j). The new legislation imposes a fee schedule that places a cap on reimbursement at 200 percent of Medicare’s reimbursement rate for treatments or procedures by a medical service facility to a workers’ compensation claimant. Id. at § 22-3-3-5.2(b)(2); see also § 22-3-6-1(k)(2)(B) (defining pecuniary liability). Such fee schedule is applicable unless the amount of reimbursement is otherwise negotiated between the medical service facility and any of the following: (1) the employer; (2) the employer’s insurance carrier; (3) a billing review service on behalf of the employer or the employer’s insurance carrier; or (4) a direct provider network that has contracted with the employer or the employer’s insurance carrier. Id. at § 22-3-3-5.2(b)(1); see also § 22-3-6-1(k)(2)(A) (defining pecuniary liability).

Even after this new reimbursement rate takes effect July 1, 2014, medical service providers, such as physicians, will continue to be reimbursed pursuant to the 80th percentile reimbursement rate that is already established by the Act. Based on the law, medical service provider is now defined as “a person or entity that provides services or products to an employee under IC 22-3-2 through IC 22-3-6.” Id. at § 22-3-6-1(i). The relevant portion of the Act reads:

This subdivision applies before July 1, 2014, to all medical service providers, and after June 30, 2014, to a medical service provider that is not a medical service facility. Payment of the charges in a defined community, equal to or less than the charges made by medical service providers at the eightieth percentile in the same community for like services or products.

Id. at § 22-3-3-5.2(a)(3); see also § 22-3-6-1(k)(1) (defining pecuniary liability).

The following is a brief analysis of the reimbursement rates implemented by surrounding states to compare with Indiana’s new legislation:

Kentucky

Kentucky’s fee schedule is longstanding and consists of two separate fee schedules: one for hospitals and one for physicians. While many states base fee schedules on Medicare or Medicaid’s rate and apply a flat rate, the applicable hospital fee schedule in Kentucky varies by the location of the facility. See 803 Ky. Admin. Regs. 25:091 (2013). The applicable percentage, unique to that facility’s physical address, is applied to the hospital’s bill to determine the maximum reimbursement for the treatment of an injured worker. Id. On the other hand, reimbursement to physicians in Kentucky does not vary by the health care provider’s location. Rather, a standard rate is applied to the particular procedure, resulting in the maximum fee allowed for the service. See id. at 25:089. It should be noted that Kentucky prohibits balance billing, and thus physicians and hospitals are prohibited from attempting to collect reimbursement in excess of that provided under the fee schedule. Ky. Rev. Stat. Ann. § 342.035(2) (2013).

Illinois

Illinois’ basic fee schedule provides for payment of a percentage of the 80th percentile cost of any given procedure, treatment or service. 820 Ill. Comp. Stat. 305/8.2(a) (2011). “The maximum allowable payment shall be 90 percent of the 80th percentile of charges and fees as determined by the Commission utilizing information provided by the employers’ and insurers’ national databases” for compensable treatment rendered on or after Feb. 1, 2006. Id. For treatment rendered on or after Sept. 1, 2011, the maximum allowable payment is 70 percent of the fee schedule amount. Id. at 305/8.2(a-2). The fee schedules make cost modifications based upon geographic location, similar to Kentucky. See id. at 305/8.2(a-1)(a). Nonhospital fee schedule amounts are grouped into four regions by county, and hospital fee schedule amounts are grouped into 14 county-specific regions. Id. If the treatment is extraordinary, it can be reviewed to determine whether an additional adjustment to the maximum reimbursement is necessary. Id. at 305/8.2(c).

Michigan

In general, Michigan’s reimbursement rate to a health facility or health care provider is the lesser of either: (1) the maximum fee by a health facility or health care provider established in the localized fee schedule; or (2) the customary charge that the attending health facility or health care provider typically charges for such treatment. Mich. Comp. Laws Ann. § 418.315(2) (2013); see also Mich. Admin. Code R. 418.10101(1)(b), (k) (2013). Similar to the fee schedule for physicians in Kentucky, the maximum allowable payment is derived from use of a relative value unit and a conversion factor. See Mich. Admin. Code R.418.101002a(1). Michigan uses the Medicare Resource-Based Relative Value Scale to determine the relative value unit, which takes into account the resources used to provide each service as well as the geographic location, thus enabling Michigan prices to be more accurately reflected. Id. at R. 418.10106(3). As in Indiana, there are instances when Michigan’s fee schedule is deemed inapplicable, including when a carrier and provider have a contractual agreement providing for alternative reimbursement below that which the fee schedule would provide. Id. at R. 418.10101(4).

Wisconsin

In Wisconsin, the reimbursement standard for fees charged to an employer or its insurer by health service providers is not based upon an established fee schedule but rather is based upon “reasonableness” in relation to comparable services. See Wis. Stat. Ann. § 102.42 (2013).

Disputes as to the reasonableness of a fee charged by a health service provider for medical services provided to an injured employee who claims benefits under Wisconsin’s Worker’s Compensation Act are resolved by the Wisconsin Department of Workforce Development. Id. at § 102.16(1m)(a), (2)(a); see also id. at § 102.18(bg)(1). When the reasonableness of reimbursement is disputed, the employer or its insurer must provide the Department of Workforce Development with information about fees charged by other health service providers for comparable services, obtained from a database certified by the department. Id. at § 102.16(2)(c). The standard used by the department in its reasonableness determination is the following: “a disputed fee is reasonable … if that fee is at or below the mean fee for the health service procedure for which the disputed fee was charged, plus 1.2 standard deviations from that mean, as shown by data from a database that is certified by the department.” Id. at § 102.16(2)(d). Thus, anything below the mean fee plus 1.2 standard deviations is deemed reasonable unless the health service provider proves, as in Illinois, that a higher fee is justified because the relevant treatment was unusually difficult or complicated. Id.

Reimbursement for implant furnished to employee

Leaving our neighbors aside, the following is an expansion on the additional implications of HEA 1320, which deals also with pecuniary liability for medical implants furnished to injured workers. The Act now places a cap on the price of implants using the actual cost to the medical service provider. Payment to a medical service provider for an implant furnished to an injured employee under the Act may not exceed the invoice amount paid by the medical service provider plus 25 percent. Ind. Code § 22-3-3-5.2(c).

Reimbursement for repackaged prescription drug furnished to employee

In response to the rapidly increasing costs of physician-dispensed prescription drugs for injured workers, HEA 1320 also provides new regulations regarding the reimbursement amounts for repackaged prescription drugs. The new law states that whenever a prescription covered under the Act is filled using a repackaged (as defined in Ind. Code § 25-26-14-9.3) legend drug (as defined in Ind. Code § 25-26-14-7), the maximum reimbursement amount for the repackaged legend drug is computed using the average wholesale price set by the original manufacturer. Ind. Code § 22-3-3-4.5(c). Thus, such drugs cannot be sold for a price higher than the average wholesale price established by the original manufacturer. It should be noted that this is not applicable to a retail or mail order pharmacy. Id. The additions to the Act also provide that if the National Drug Code for a legend drug cannot be determined from the medical service provider’s statement or billing, then the maximum reimbursement amount for the repackaged legend drug is the lowest cost generic for that legend drug. Id. at § 22-3-3-4.5(d).

Increased benefit amounts for injured workers

The enactment of HEA 1320 also increases the benefit amounts for injured workers covered under the Act with regard to dollars per degree for permanent partial impairment and the maximum amount of nonmedical compensation. In addition, the maximum and minimum average weekly wages are increased.

First, the amended legislation includes graduated percentage increases to the compensation schedule for impairment benefits over a three-year period, beginning July 1, 2014. The dollars per degree will increase as follows:

For injuries on and after July 1, 2014, and before July 1, 2015:

1-10 degrees of PPI: $1,517 per degree

11-35 degrees of PPI: $1,717 per degree

36-50 degrees of PPI: $2,862 per degree

51+ degrees of PPI: $3,687 per degree

For injuries on and after July 1, 2015, and before July 1, 2016:

1-10 degrees of PPI: $1,633 per degree

11-35 degrees of PPI: $1,835 per degree

36-50 degrees of PPI: $3,024 per degree

51+ degrees of PPI: $3,873 per degree

For injuries on and after July 1, 2016:

1-10 degrees of PPI: $1,750 per degree

11-35 degrees of PPI: $1,952 per degree

36-50 degrees of PPI: $3,186 per degree

51+ degrees of PPI: $4,060 per degree

Ind. Code § 22-3-3-10(j)(13)-(15).

In addition, the maximum amount of nonmedical compensation, including temporary and permanent disability and impairment benefits, paid to injured workers will increase beginning July 1, 2014. For injuries occurring on and after July 1, 2014, and before July 1, 2015, the maximum amount of compensation, exclusive of medical benefits, may not exceed $347,000. Id. at § 22-3-3-22(t)(11). For injuries on and after July 1, 2015, and before July 1, 2016, the maximum amount of nonmedical benefits paid under the Act is $368,000. Id. at § 22-3-3-22(t)(12). For injuries that occur on and after July 1, 2016, the maximum amount of nonmedical compensation that can be paid to an injured worker is $390,000. Id. at § 22-3-3-22(t)(13).

Finally, the amended legislation increases the average weekly wages used in computing compensation for temporary total or temporary partial disability as well as total permanent disability. The maximum and minimum average weekly wages for injured workers are amended as follows:

For injuries on and after July 1, 2009, and before July 1, 2014: maximum, $975; minimum, $75

For injuries on and after July 1, 2014, and before July 1, 2015: maximum, $1,040; minimum, $75

For injuries on and after July 1, 2015, and before July 1, 2016: maximum, $1,105; minimum, $75

For injuries on and after July 1, 2016: maximum, $1,170; minimum: $75

Id. at § 22-3-3-22(j)(10)-(13).

Confidentiality provisions for data collected by the Worker’s Compensation Bureau

New legislation regarding the confidentiality of information filed with the Indiana Worker’s Compensation Bureau was also enacted when HEA 1320 became law. The bureau may collect data from its members, including the following: (1) claims data; (2) policy data such as policy number, policy term, and employer and employee identification information; and (3) proof of coverage data such as employer identification information, classification information, carrier information, agency identification information, premium information and payroll data. Ind. Code § 27-7-2-40. However, all data collected by the bureau are subject to this new privacy provision and are deemed confidential. Id. Such information “shall not be disclosed or disseminated to third parties” unless consented to by the bureau or specifically stated otherwise in the Act. Id.

Conclusion

Overall, HEA 1320 is an effort by our state to control and contain the ever-increasing costs of medical care for those covered under the Indiana Worker’s Compensation Act. Whereas Indiana previously ranked as one of the highest states in reimbursement rates but one of the lowest in benefits to injured workers, the new legislation makes changes that favor both ends of the spectrum. Not only is there increased transparency and cost containment with regard to reimbursement to medical service facilities, but benefits to injured workers are also increased. The portions of the legislation highlighted in this article curb problems that are still in the forefront of the workers’ compensation systems of many other states. Thus, with the enactment of HEA 1320, Indiana has provided long-awaited reform to our system that helps ensure that injured workers receive adequate health care but, at the same time, provides its medical service facilities with increased incentive to provide workers’ compensation treatment.•

Ms. Noltemeyer is a partner and Ms. Bushemi is an associate in the Indianapolis office of Kightlinger & Gray. They are both members of the Defense Trial Counsel of Indiana. The opinions expressed in this article are those of the authors.

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  1. This guy sounds like the classic molester/manipulator.

  2. Louis D. Brandeis was born in 1856. At 9 years of age it would have been 1865. The Brandeis family did not own slaves. My source Louis D. Brandeis: A Life, by Melvin L. Urofsky.

  3. My name is Matthew Lucas Major, I recently went through a jury trial in Bloomington , In. It was the week of Feb 19-21. Although I have been incarcerated since August 5, 2014. The reason I 'am writing to you sir is on the 21 of February the jury came in with a very excessive and wrongful verdict of guilty on 6 child molesting charges against my daughter who was 9 at the time I was accused. I also had 2 other Felonies one of Intimidation and 1 of Sexual Vicarious Gratification. Judge Marc Kellam on the second day of trial gave me a not guilty on those 2 felonies. The jury was sent out during that time and when brought back Judge Kellam told them to not concern themselves with the 2 Felonies that he ruled on them. They were told to not let evidence they had already heard influence there verdicts. I never in my life touched any child sexually and definitely not with my own daughter. When I was arrested Detective Shawn Karr told me I would be convicted guilty just on my daughters word even without evidence. That's just what happened. my public defender did me so wrong he never once proved to the court and jury all the lies the child told, and Jeremy Noel my public defender could of proven the lies easily. The stories in Serenity's depositions and Forensic interview changed and were not consistent as Prosecutor Darcie Fawcett claimed they were. Yet my attorney never mentioned that. The facts that the child accused me of full penetration in her vagina and rectum was proven lies. Doctor Roberta Hibbard of Riley hospital in Indianapolis confirmed Serenity's hymen intact, no scars, no tearing, no signs of rape to her. Yet my attorney didn't use that knowledge . the DNA was all in my favor. I tell you I will spend my entire life in prison going through rape and beatings etc. even Judge Kellam abused his authority by telling the jurors to listen and believe what the prosecutors side in evidence like my daughters testimony. In one interview with the detectives my daughter got flustered with her mom and said on camera " I'm saying what you told me to mom"!! Yet Mr. Noel said nor did anything to even resemble a defense attorney. Judge Kellam allowed edited version of a taped conversation between the child and her mother. Also Judge Kellam allowed the Prosecutor too bring in to my case a knife found under my seat, the knife wasn't part of my case. She was allowed by my attorney and the judge to put a huge picture of it on the screen and huge picture of my naked privates in a full courtroom and open court. Ms. Fawcett says to jury see how easy Mr. Major could reach the knife and cut his Childs throat. Even though I had no weapons charge against these cases. This gave the jurors prejudice thought against me thinking I threatened her with that knife and how scared she would of been knowing i could get it and kill her. On my sentencing court March 19, 2014 my public defender told Judge Kellam he wish to resign from being my attorney and wished for the court to give me outside council to file a error to trial or appeal. We were denied. Now after openly knowing my public defender don't want to represent me he has to. Well when as parents we make our kids clean a room when they really don't wish to, well the child will but don't mean she will do a good job, that's where I'm at with Mr. Noel. please dont ignore mine and my families pleas for your help . we have all the legal proof you could need to prove Im innocent. Please dont make my spend years in prison innocent when you can fix this wrong. Im not saying Im a perfect man or that I was a perfect dad to my 2 children none of us are. Ive made some bad choices in life and I paid for them. But I didnt ever touch or rape my daughter . I love my children with all my heart. And now through needing attention and a ex-wife who told my granny several times she wish she could put me in prison to get me out of their lives. Well my ex finally accomplished her goal. Sad part is she is destroying our daughter with all this horrific lies and things she taught my daughter to say. My daughter will need therapist to ever hope for a chance of a normal life after what she had done to her by her mom and their side of the family. My daughter told everyone even on stand she had a dream months before i supposedly molested her in this dream I was molesting her and when I finally did it matched her dream perfectly. She admitted to watching movies about little girls being molested and watching U-Tube videos about child molesting all before it happened supposedly to her. Doesn't that sound very unusual that a non molested 9 yr old would need to know so much about being molested? The only reason I could think a 9 year old would need so much information is to be prepared to know what to say and be able to say how it felt what took place etc.. So when questioned by authorities she would be prepared. And there again sir if a parent is pre grooming a 9 year old child she would need intimate details . Like telling her daughter about a couple moles on my private area. The child admitted to sneaking my cell and looking many many times at nudes of me and my girlfriend even one where my penis was entering my girlfriends vagina. In that picture my moles are obvious. Yet when prosecutor showed everyone in court my privates and pictures of the moles she said the only way the child would know about them is if she saw them for herself. My attorney once again said nothing about the pictures my child saw. Or could a ex-wife be able to describe my moles to help her case against getting rid of me? I beg you help me. This is my very existence. Ive lost everything , a good job, a wonderful girlfriend, my freedom, but worse thing Ive lost is my children. They were my reason to get up every morning and strive to be better. The wonderful bond I had with my Serenity is gone. After this I would be afraid to even hug her for fear of what next can they do to me. I'm not afraid to tell you I sit here in this cell and try to hold back my tears. Everyone knows you cant show weakness in prison. My life has already been threatened here at Wabash Valley Prison. After only 3 days of arrival. I was tricked into signing a waiver now Im in G Block General Population with 6 child molesting felony charges. Mrs. Hart as a 18 year old I almost died hooked to machines in hospital almost 1 month and now I know that fear was childish compared to this . I cant help but put emotions in this, after all Mrs. Hart Im human and God help Me I never been more afraid in my life. I didnt hurt my little girl I didnt touch her sexually. As much as it shreds me and fills my mind what Im facing I worry more about my mom and granny because of their great love for me mam they are suffering so deeply. I aint done this things but my loved ones suffering right along beside me and If you take my case you will be in essence freeing them also. I sent momma this letter and asked her to email it to you. I'm scared I have been done so unjustly by our legal system and I need you to fix this and give me freedom. I ask you please don't just ignore my pleas. Here in America its nice to be able to trust our legal justice system, well they destroyed my and my loved ones trust in our justice system . And I'm trusting in You !!! My entire family is suffering this nightmare with me. My 77 year old granny had a stroke and isn't doing so well. My single mother that raised 3 kids alone is dying from Lupus and since my arrest has stayed so sick and weary. Our lives torn to peices by a government I was taught I could trust in. my momma has tried so many innocent project and wrongfully accused and cant get anywhere. please please help me. A quote from the late Nelson Mandela: To be free is not merely to cast off ones chains, But to live in a way that respects and enhances The Freedom Of Others. I have Faith in you and your clinic to cast my chains off and give me freedom I do deserve as a wrongfully accused Man, son, brother, father, friend. Matthew Major DOC# 246179 Cause # : 53c02-1308-FA-000779 God Bless you. Please contact me with your decision so I know you made a life changing decision for me , just please at least write me so I know you care enough about your citizens to respond to cries for your help. You can speak openly with my mother Charlotte Spain (828) 476-0406: 71 Lakeview Dr. Canton, NC 28716 Thank You Matthew Major I know yall get thousands of request and inmates claiming innocence, and each person who are innocent deserve to have organizations like yours willing to fight for them and I give yall so much Thanks and I thank God everyday yall are out there caring enough to help free the innocents. Since discovering firsthand how easily lives and families can be destroyed by Poor Defense attorneys not doing their job . And Prosecutors allowed to do as they please in court

  4. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  5. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

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