|
DOBI
Proposal
Summary
N.J.S.A.
39:6A-4.6(a) requires the Commissioner of Insurance to promulgate medical
fee schedules for the reimbursement of health care providers providing
services or equipment for which reimbursement is made under the medical
expense benefit of the Personal Injury Protection ("PIP")
coverage and medical expense benefits by motor bus insurers. The statute
requires that the fee schedules "incorporate the reasonable and
prevailing fees of 75% of the practitioners" within a region. The
medical fee schedules regulate insurers by setting the maximum
reimbursement permitted for medically necessary services provided under
PIP.
In 1997, the New Jersey
State Legislature amended N.J.S.A. 39:6A-4.6(a) to permit the
Commissioner to "contract with a proprietary purveyor of fee
schedules" to maintain New Jersey’s fee schedules. Following a
public bidding process, the Department contracted with Ingenix (formerly
known as Medicode) to revise the fee schedules. Ingenix assembled New
Jersey specific data from both proprietary and public data bases of billed
and charged fees to develop the new proposed fee schedules. Once adopted,
the Department expects to update the fee schedule pursuant to N.J.S.A.
39:6A-4.6(a) to reflect more recent fee data as well as changes in the
coding system.
These
proposed new fee schedules implement the requirement of N.J.S.A. 39:6A-4.6
that the fee schedules "incorporate the reasonable and prevailing
fees of 75% of the practitioners" within a region. As such, this
medical fee schedule is market based, that is, the fees set forth in the
schedule reflect the market prices for the services provided. Because this
proposed fee schedule for the first time is based not only on data
regarding "billed" fees, but also on data regarding
"paid" fees, some additional explanation about how the existing
fee schedule was developed is necessary.
N.J.S.A.
39:6A-4.6 was first enacted in 1988 as part of a series of amendments to
the automobile insurance statutes that were intended to contain or reduce
the cost of coverage. The statute was substantially amended in 1990 with
the enactment of the Fair Automobile Insurance Reform Act (FAIRA). The
specific direction that the fee schedule "incorporate the reasonable
and prevailing fees of 75% of the practitioners" was added by FAIRA,
in furtherance of specific cost containment objectives (see N.J.S.A.
17:33B-2).
In
developing the fee schedule adopted in 1990, the Department obtained
proprietary data about fees billed by health care providers. Data was
initially obtained from New Jersey health insurers and later from
commercially available sources. The nature of this available data was
"billed" fees, that is, the fee charged or set forth on the bill
by providers and submitted to health insurers (and ultimately reported by
them to commercial compilers of health care fee data). The Department’s
previous medical fee schedules for physicians services and dental services
were created as a statistical reflection of this billed fee data at the 75th
percentile, with some adjustments to address statistical variations and
anomalies.
During
the years that the fee schedules have been in effect, it has become
apparent to the Department that there is an increasing difference between
fees billed by health care providers and the fees actually accepted by
them as payment for services rendered. This disparity is commonly
demonstrated by the Explanation of Benefit ("EOB") forms from a
health benefit carrier. The amount charged is almost always higher than
the payment to the provider by the health benefit carrier.
This
difference may be attributed to several causes, including: (a) the
prevalence of government sponsored medical programs such as Medicare and
Medicaid, which reimburse health care providers at a level lower than the
level of fees billed; (b) a substantial amount of medical fees that are
paid to "participating providers" by health service
corporations, which fees are paid at a level lower than the 75th
percentile of billed fees; and (c) most significantly for the New Jersey
market in the past 10 years, a dramatic rise in the number of physicians
who enter into contractual arrangements that set agreed fees with health
benefit carriers or networks. These contracts often characterize the level
of reimbursement as either a percentage discount from the physician’s
billed fees or a fixed schedule of fees. All of these factors have
contributed to the present significant difference between the level of
fees billed and the level of reimbursement actually received by health
care providers.
Since
it is clear that the purpose of the medical fee schedule statute is to
contain costs while providing a fair level of reimbursement for services
based on what providers receive in the market, the revised fee schedule
utilizes actual levels of reimbursement paid to health care providers,
including those paid by government programs, participating provider
agreements and other contractual arrangements between physicians and
health care plans, to develop the schedule incorporating the
"reasonable and prevailing fees of 75% of the practitioners."
For
the reasons set forth above, the revised fee schedules were developed
using the more accurate level of fees as represented by reimbursements to
providers from a variety of sources, not simply the fees as billed by
providers.
In
March, 2000, the Department distributed a preliminary draft of this rule
proposal to interested parties including groups representing various
medical providers and insurers. Over the following six months,
representatives of the Department met with a number of groups and
individuals and received many comments on the draft. As a result of this
process, the major changes to the draft of the rules as originally
distributed are as follows:
-
The Department has determined that it does not have sufficient data on
paid dental fees to develop a fee schedule at this time. The current
dental fee schedule is being proposed for repeal. The Department will work
with dental trade organizations and others to compile a fee schedule that
accurately reflects market-based billed and paid dental fees;
-
The physicians fee schedule will not apply to services rendered as
emergency care at acute care hospitals. The Department recognizes that the
medical specialists who staff New Jersey’s system of trauma centers
around the clock have a higher cost basis than outpatient and regularly
scheduled surgery;
-
As described more fully below, the Department is proposing to change the
three regions for which fees have been developed for physicians and home
care services from one based on counties to one based on the first three
digits of the zip code. In response to many comments that the regions
described in the draft rules were too confusing, the three regions have
been made geographically contiguous;
-
To address certain anomalies in the indicated fees for the same American
Medical Association’s Current Procedural Terminology ("CPT")
code in different regions, the physicians’ fee schedule has been
adjusted so that the regional fee for any CPT code does not vary more than
15 percent from the Statewide average; and
-
As described more fully below, the proposed amendments to the rule raise
the cap on the maximum daily charge for physical medicine and
rehabilitation codes from $85.00 to $90.00.
The new fee schedule for
Physicians’ Services at N.J.A.C. 11:3-29 Appendix, Exhibit 1 continues use of CPT codes and was updated using a database
of allowed amounts specific to New Jersey. The allowed amount represents
the total amount paid for services inclusive of the insurer’s payment
plus the co-pay and/or deductible paid by the insured. The allowed amount
also satisfies the statutory requirement at N.J.S.A. 39:6A-4.6a that the
fee schedules "incorporate the reasonable and prevailing fees of 75%
of the practitioners within the region."
Data from each of the
three regions, respectively, was used to compute the fee schedule amounts
for each region. Approximately 400,000 records from this database of
charged and allowed amounts were used in the computations.
The medical fee schedule
for physician services published in August of 1993 contained 746 CPT
codes. The new fee schedule for physicians’ services in N.J.A.C. 11:3-29
Appendix, Exhibit 1 contains 953 codes, including codes revised or added
to the coding system as of this year. In addition, certain procedures are
a combination of a physician and technical component that may be billed
separately. The new fee schedule includes the global charge for these
codes and the physician component, which is identified with the modifier
-26.
The former nursing and
allied professional health services fee schedule at N.J.A.C. 11:3-29
Appendix, Exhibit 3 has been substantially revised and renamed the Fee Schedule
for Home Care Services. Included are home services provided by registered
nurses, home health aides, medical social workers and physical,
occupational and speech therapists. These services are billed on a per
visit basis. New Jersey specific data was used to develop the home care
services fee schedule for each of the professional service categories in
each of the three regions. The resulting fee schedule reflects the 75th
percentile for each category.
The proposed home care
services fee schedule eliminates hourly rates and the categories of
licensed practical nurse (LPN) and home health aide while adding
categories for home health aide visits and medical social worker visits.
Hourly rates were eliminated to recognize visits as the predominant method
of billing and to dispense with the practice of billing based on the
length of the visit. LPNs were eliminated as a category since more than 90
percent of home health nursing visits are performed by registered nurses
(RNs), which reflects an established trend. The proposed schedule would
reimburse at the same level for either an RN or an LPN and was developed
based on the actual mix of RN/LPN services used in New Jersey. Live-in
attendants were eliminated as a category due to the lack of data to
support a scheduled maximum consistent with the prevailing standards. Home
health aide visits and medical social worker visits were added since they
represent significant aspects of home health services and reliable data
was available to support their inclusion.
The new fee schedule for
ambulance services at N.J.A.C. 11:3-29 Appendix, Exhibit 4 includes several new codes and is based on 1999 Medicare
rates for New Jersey.
The fee schedule for
durable medical equipment and prosthetic devices at N.J.A.C. 11:3-29
Appendix, Exhibit 5 is based on Medicare rates for New Jersey for the year 2000.
A modifier following the Federal Health Care Financing Administration’s
Common Procedure Code System ("HCPCS") code is used to
distinguish between equipment purchased new (modifier -NU), purchased used
(modifier -UE), and rental equipment (modifier -RR). See N.J.A.C.
11:3-29.4(c). Modifiers are listed for applicable codes only.
Several changes have
been made in the definitions section of the fee schedule rules at N.J.A.C.
11:3-29.2. "Global charge" has been changed to "global
service" to be more consistent with the terminology used throughout
the healthcare industry, but the definition otherwise remains the same.
The definition of "provider" has been deleted and replaced with
a definition of a ‘health care provider’ or ‘provider’ referring
to the definition of those terms in N.J.A.C. 11:3-4.2 adopted in 1998 to
implement the Automobile Insurance Cost Reduction Act. Definitions of
"medically necessary" or "medical necessity" and
"emergency care" have been added, also consistent with the
definitions in N.J.A.C. 11:3-4.2. Other newly defined terms are
"bilateral surgery" and "three-digit zip code."
The definition of
"three-digit zip code" reflects a major change at N.J.A.C.
11:3-29.3 where counties have been replaced by zip codes in defining the
three regions of the State. A schedule based on zip codes is easier to
administer since a zip code is a numeric field that is commonly included
on a claim form and therefore does not have to be translated to a county
designation. A review of the regional designations was conducted to
determine if the fee structure should continue to reflect the differences
in provider charges across the major market areas of New Jersey. Three
sources of data were used to conduct the analysis. These sources are zip
code based provider charge data, Federal government wage indices and the
current regional configurations. This analysis resulted in three
contiguous geographic regions based on the first three digits of the US
zip code. The home care services and physicians’ fee schedules were
developed with rates for each of the three regions.
A
number of changes and additions have been made to N.J.A.C. 11:3-29.4. The
most important of these eliminates most physical medicine and
rehabilitation codes from application of the multiple procedures reduction
formula (100/50/25 percent) set forth in subsection (f) and replaces them
with a daily maximum for such services.
Reimbursement
of physical medicine and rehabilitation codes, except those for
osteopathic manipulation actually performed by an osteopathic physician,
will continue to be based on usual, customary and reasonable amounts
subject to a daily upper limit dollar amount ($90.00) imposed by new
subsection (m). N.J.S.A. 39:6A-4.6(b) permits the fee schedule to include
a single fee for a group of services commonly provided together. Prior to
the promulgation of the original fee schedule, physical medicine and
rehabilitation services were commonly billed on a per visit rather than
per modality basis. In 1992, the Department expressed its intention to
propose such a fee schedule in response to a comment on the adoption of
the original fee schedule (24 N.J.R. 1347(a), 1348).
The
Department believes the $90.00 daily maximum is reasonable in comparison
to fees developed using the multiple procedures reduction formula. For
example, when the multiple procedures reduction formula is applied to four
commonly billed physiotherapy procedures in New Jersey (CPT 97014, 97035,
97110 and 97112), the results are fees of $77.18, 79.54, and 72.08 in
Regions 1 through 3 respectively. The multiple procedures reduction
formula was also applied to a group of codes representing a common
chiropractic treatment session (CPT 98941, 97112 and 97530) resulting in
fees of $71.20, 80.10 and 70.06 in Regions 1 through 3 respectively.
Finally, a $90.00 fee is further supported by comparison with two other
states, Connecticut and Washington, which use a daily cap of $90 and $91
respectively, for physical medicine services in their worker’s
compensation fee schedules.
Other new subsections
have been added to N.J.A.C. 11:3-29.4 that clarify administration
of the fee schedules. N.J.A.C. 11:3-29.4(k) and (m) require that billings
for the use of assistant surgeons and co-physicians include the use of a
modifier to the CPT and establishes limits on the fees for such services.
N.J.A.C. 11:3-29.4(l) notes that certain fees in the schedules have a
separate professional component indicated by modifier -26 in addition to
the global fee, which is the combination of the professional and technical
fees N.J.A.C. 11:3-29.4(i) requires that where injections are
administered during evaluation and management services, only the code for
the substance injected shall be billed since the administration is
included in the evaluation and management service. N.J.A.C. 11:3-29.4(o)
provides criteria for when follow-up evaluation and management services
can be billed in addition to the therapeutic procedures. Finally, N.J.A.C.
11:3-29.4(n) limits reimbursement of those modalities and procedures not
including time increments to one per day.
11:3-29.3
Regions
(a)
Region I, as used in this subchapter, consists of the following [counties]
three-digit zip codes in New Jersey: [Atlantic, Burlington, Camden,
Cape May, Cumberland, Gloucester and Salem] 080, 081, 082, 083 and 084.
(b)
Region II, as used in this subchapter, consists of the following
[counties] three-digit zip codes in New Jersey: [Hunterdon, Mercer,
Middlesex, Monmouth, Ocean, Somerset, Sussex and Warren] 077, 078, 079,
085, 086, 087, 088 and 089.
(c)
Region III, as used in this subchapter, consists of the following
[counties] three-digit zip codes in New Jersey: [Bergen, Essex,
Hudson, Morris, Passaic and Union] 070, 071, 072, 073, 074, 075 and 076.
(f)
[The] Except as provided in (m) below, the following shall apply to
multiple [treatment] and bilateral procedures:
1.
When multiple or bilateral procedures are performed on the same
patient by the same provider at the same time or during the same visit, it
is virtually never appropriate for the fee to be the sum of the fees for
each procedure. The [principle] primary procedure at a single
session shall be paid at 100 percent of the eligible charge, the second
procedure at no more than 50 percent of the upper limit [on] in the
fee schedule for that particular procedure, and if performed, any
additional procedures at no more than 25 percent of the upper limits [on] in
the fee schedule for those particular procedures. [If the total amount
resulting from application of the multiple procedures reduction formula is
in excess of the total amount of the billing, the billing may be submitted
and paid without change assuming it is not in excess of usual, customary
and reasonable charges for the services provided. If the total amount is
less than the total amount of the billing, then the total amount of the
billing must be reduced accordingly. When appropriate, providers may apply
this multiple procedures reduction formula in the process of preparing
their billings, clearly indicating that this has been done.]
2.
Procedure codes denoted as "each additional" are valued as
listed and are not subject to the multiple and bilateral procedures
guidelines.
[2.]3.
If two or more providers in different specialties perform procedures or if
one provider performs multiple procedures on different body parts or
regions, each individual provider, or each individual body region or body
part procedure may be reimbursed separately. For purposes of such billing,
the body shall be divided into: head (including skull and brain); face;
neck; chest; abdomen; back; and pelvic regions. In addition, the
extremities shall be subdivided into right and left: upper arm, elbow,
forearm, wrist and hand; and thigh, knee, lower leg, ankle and foot. This
reference to specific body parts or regions is included as a guideline to
be used in billings for operative and surgical procedures. It is not
intended to apply to nor should it be used in connection with billings
submitted for non-surgical [or physiotherapy type] services provided
during the same visit except as a means of describing the treatment
rendered.
[3]4.
(No change in text.)
(g)
Artificially separating or partitioning what is inherently one total
procedure into subparts [which] that are integral to the whole for
the purpose of increasing medical fees is prohibited. Such practice is
commonly referred to as "unbundling" or "fragmented"
billing.
(h)
For surgery and many other procedures, it is established practice to
include follow-up care and visits as part of the basic procedure charge.
Such charges shall not be subject to additional billings. The existence of
a CPT[-4] code, per se, does not imply the right to receive separate
compensation for the procedure/sub-procedure so described. If a procedure
is judged to be part of the [major or principal] primary procedure,
only the charges for the [principal] primary procedure are
eligible. As identified in CPT, separate procedures are commonly
carried out as an integral part of another procedure. They shall not be
billed in conjunction with the other procedure, but may be billed when
performed independently of the other procedure.
(i)
When a covered injection is provided during an evaluation and management
service, only the code for the substance shall be billed. The
administration codes shall not be billed because the administration is
included in the evaluation and management service.
[(h)](j)
The insurer’s limit of liability for medically necessary [assisting] assistant
surgeon expenses shall be 20 percent of the primary physician’s
allowable fee determined pursuant to the fee schedule and rules. Assistant
surgeon expenses shall be reported using modifier -80, -81 or -82 as
designated in CPT. When the assistant surgeon is someone other than a
physician surgeon, the reimbursement shall not exceed 85 percent of the
amount that would have been reimbursed had a physician surgeon provided
the service. These services shall be reported using modifier -AS as
designated in HCPCS.
(k)
When two physician surgeons are required for a specific surgical
procedure, the separate services claimed by each surgeon shall be reported
using the modifier -62 as designated in CPT. Total eligible expense shall
equal 150 percent of a single practitioner’s eligible expense amount for
the surgical procedure performed, to be divided equally between the two
surgeons.
[(i)
The insurer’s limit of liability for the professional component of
allowable global charges for radiology services shall be 40 percent of the
global charge.]
(l)
The professional component of global service charges shall be reported
using modifier -26 as designated in CPT. Services with professional
component amounts of zero in the fee schedule are considered to be 100
percent technical. The technical component is the difference between the
global service and the professional component amounts listed in the fee
schedule.
(m)
The daily maximum allowable fee shall be $90.00 for Physical Medicine and
Rehabilitation procedures (CPT 97001 through 98943) but not including
Osteopathic Manipulative Treatment actually performed by the osteopathic
physician (CPT 98925 through 98929). The daily maximum applies when such
services are performed for the same patient on the same date. However, an
insurer is not prohibited from reimbursing providers in excess of the
daily maximum where a patient has serious traumatic injuries to more than
one area of the body.
(n)
Supervised modalities and those therapeutic procedures that do not list a
specific time increment in their description shall be limited to one unit
per day.
(o)
Follow-up evaluation and management services for the re-examination of an
established patient shall be reimbursed in addition to physical medicine
and rehabilitation procedures only when any of the circumstances set forth
in (o)1 through 4 below is present and not more than twice in any 30 day
period. Modifier -25 shall be added to an evaluation and management
service when a significant separately identifiable evaluation and
management service is provided and documented as medically necessary.
1.
There is a definite measurable change in the patient’s condition
requiring significant change in the treatment plan.
2.
The patient fails to respond to treatment, requiring a change in the
treatment plan.
3.
The patient’s condition becomes permanent and stationary, or the patient
is ready for discharge; or
4.
It is medically necessary to provide evaluation services over and above
those normally provided during the therapeutic services.
11:3-29.5
Balance billing prohibited
No
health care provider may demand or request any payment from any person in
excess of those permitted by the medical fee schedules and this
subchapter, nor shall any person be liable to any health care provider
for any amount of money [which] that results from the charging of
fees in excess of those permitted by the medical fee schedules and this
subchapter.
Back to Top
|
