803 KAR 25:091. Workers' compensation hospital fee schedule

Link to law: http://www.lrc.ky.gov/kar/803/025/091.htm
Published: 2015

      803 KAR 25:091. Workers' compensation

hospital fee schedule.

 

      RELATES TO: KRS 216B.105, 342.020,

342.035, 342.315

      STATUTORY AUTHORITY: KRS 342.020, 342.035(1),

342.260(1)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS

342.035(1) and 342.260(1) require the Commissioner of the Department of

Workers' Claims to promulgate administrative regulations to adopt a medical fee

schedule for fees, charges and reimbursements under KRS 342.020. KRS 342.020

requires the employer to pay for hospital treatment, including nursing,

medical, and surgical supplies and appliances. This administrative regulation establishes

hospital fees for services and supplies provided to workers' compensation patients

pursuant to KRS 342.020.

 

      Section 1. Definitions. (1)

"Ambulatory surgery center" means a public or private institution

that is:

      (a) Hospital based or freestanding;

      (b) Operated under the supervision of an

organized medical staff; and

      (c) Established, equipped, and operated

primarily for the purpose of treatment of patients by surgery, whose recovery

under normal circumstances will not require inpatient care.

      (2) "Hospital" means a facility;

surgical center; or psychiatric, rehabilitative, or other treatment or

specialty center that is licensed pursuant to KRS 216B.105.

      (3) "Hospital-based

practitioner" means a provider of medical services who is an employee of

the hospital and who is paid by the hospital.

      (4) "Independent practitioner"

means a physician or other practitioner who performs services that are covered

by the Kentucky Workers' Compensation Medical Fee Schedule for Physicians, incorporated

by reference in 803 KAR 25:089, on a contract basis and who is not a regular

employee of the hospital.

      (5) "New hospital" means a

hospital that has not completed its first fiscal year.

 

      Section 2. Applicability. This

administrative regulation shall apply to all workers' compensation patient

hospital fees for each hospital for each compensable service or supply.

 

      Section 3. Calculation of Hospital's Base

and Adjusted Cost-to-charge Ratio; Reimbursement. (1)(a) The commissioner shall

calculate cost-to-charge ratios and notify each hospital of its adjusted

cost-to-charge ratio on or before February 1 of each calendar year.

      (b) A hospital's base cost-to-charge

ratio shall be based on the latest cost report, or HCFA-2552, which has been

supplied to the Cabinet for Health and Family Services, Department of Medicaid

Services, pursuant to 907 KAR 1:815 and utilized in 907 KAR 1:820 and 1:825 on

file as of October 31 of each calendar year.

      (c) The base cost-to-charge ratio shall

be determined by dividing the net expenses for allocation as reflected on

Worksheet A, Column 7, Line 95, plus the costs of hospital-based physicians and

nonphysician anesthetists reflected on lines 12 and 35 of Worksheet A-8, by the

total patient revenues as reflected on Worksheet G-2 of the HCFA-2552. The

adjusted cost-to-charge ratio shall be determined as set forth in paragraph (d)

of this subsection.

      (d)1. The base cost-to-charge ratio shall

be further modified to allow for a return to equity by multiplying the base

cost-to-charge ratio by 132 percent except that a hospital with more than 400 licensed

acute care beds as shown by the Cabinet for Health and Family Services, Office

of Inspector General's Web site or a hospital that is designated as a Level I

trauma center by the American College of Surgeons shall have a return to equity

by multiplying its base cost-to-charge ratio by 138 percent.

      2. If a hospital's base cost-to-charge

ratio falls by ten (10) percent or more of the base for one (1) reporting year,

the next year's return to equity shall be reduced from 132 percent to 130

percent or 138 percent to 135 percent as determined by subparagraph 1. of this

paragraph.

      a. This reduction shall be subject to an appeal

pursuant to Section 4 of this administrative regulation.

      b. Upon written request of the hospital

seeking a waiver and a showing of extraordinary circumstances, the commissioner

shall waive the reduction for no more than one (1) consecutive year.

      c. The determination of the commissioner

shall be made upon the written documents submitted by the requesting hospital.

      (e)1. Except as provided in subparagraph

2 of this paragraph, a hospital’s adjusted cost-to-charge ratio shall not exceed

fifty (50) percent, including the return to equity adjustment.

      2. The adjusted cost-to-charge ratio

shall not exceed sixty (60) percent for a hospital that:

      a. Has more than 400 licensed acute care

beds as shown by the Cabinet for Health and Family Services, Office of

Inspector General's Web site;

      b. Is designated as a Level I trauma

center by the American College of Surgeons;

      c. Services sixty-five (65) percent or

more patients covered and reimbursed by Medicaid or Medicare as reflected in

the records of the Cabinet for Health and Family Services, Department of

Medicaid Services; or

      d. Has a base cost-to-charge ratio of

fifty (50) percent or more.

      (2)(a) Except as provided in paragraph (b) of

this subsection, the

reimbursement to a hospital for services or supplies furnished to an employee that

are compensable under KRS 342.020 shall be calculated by multiplying the

hospital's total charges by its adjusted cost-to-charge ratio after removing

any duplicative charges, billing errors, or charges for services or supplies

not confirmed by the hospital records.

      (b) If part of a bill for services or

supplies is alleged to be noncompensable under KRS 342.020 and that part of the

bill is challenged by the timely filing of a medical fee dispute or motion to

reopen, the noncontested portion of the bill shall be paid in accordance with

paragraph (a) of this subsection.

 

      Section 4. Appeal of Assigned Ratio. (1) A

hospital may request a review of its assigned ratio. A written appeal to request

a review shall be filed with the commissioner no later than thirty (30)

calendar days after the ratio has been assigned and the hospital notified of

its proposed cost-to-charge ratio.

      (2) The determination of the commissioner

shall be made upon the written documents submitted by the requesting hospital.

 

      Section 5. Calculations of New Hospitals,

Hospitals that do not file Worksheets A and G-2 of HCFA-2552 and ASC's within

the Commonwealth of Kentucky.

      (1)(a) A new hospital shall be assigned a

cost-to-charge ratio equal to the average adjusted cost-to-charge ratio of all

existing in-state acute care hospitals until it has been in operation for one

(1) full fiscal year.

      (b) A hospital that does not file

Worksheets A and G-2 of HCFA 2552 shall be assigned a cost-to-charge ratio as

follows:

      1. A psychiatric, rehabilitation, or

long-term acute care hospital shall be assigned a cost-to-charge ratio equal to

125 percent of the average adjusted cost-to-charge ratio of all in-state acute

care hospitals;

      2. An ambulatory surgery center shall be

assigned a cost-to-charge ratio equal to:

      a. 120 percent of the average adjusted

cost-to-charge ratio of all acute care hospitals located in the same county as

the ambulatory surgery center;

      b. 120 percent of the average adjusted

cost-to-charge ratio of all acute care hospitals located in counties contiguous

to the county in which the ambulatory surgery center is located, if an acute

care hospital is not located in the county of the ambulatory surgery center; or

      c. The adjusted

cost-to-charge ratio of the base hospital if:

      (i) The center is

hospital based;

      (ii) It is a

licensed ambulatory surgery center pursuant to 902 KAR 20:106; and

      (iii) It is a

Medicare provider based entity; and

      3. All other hospitals not specifically

mentioned in subparagraphs 1 or 2 of this paragraph shall be assigned a

cost-to-charge ratio equal to:

      a. The average adjusted cost-to-charge

ratio of all acute care hospitals located in the same county as the facility;

or

      b. If there are no hospitals in the

county, the average of all acute care hospitals located in contiguous counties.

      (2) An assigned cost-to-charge ratio

shall remain in full force and effect until a new cost-to-charge ratio is

assigned by the commissioner.

 

      Section 6. Calculation for Hospitals and

Ambulatory Surgery Centers Located Outside the Commonwealth of Kentucky. (1) A

hospital or ambulatory surgery center located outside the boundaries of

Kentucky shall be deemed to have agreed to be subject to this administrative

regulation if it accepts a patient for treatment who is covered under KRS

Chapter 342.

      (2) The base cost-to-charge ratio for an

out-of-state hospital shall be calculated in the same manner as for an in-state

hospital, using Worksheets A and G-2 of the HCFA 2552.

      (3) An out-of-state ambulatory surgery center

having no contiguous Kentucky counties shall be assigned a cost-to-charge ratio

equal to 120 percent of the average adjusted cost-to-charge ratio of all

existing in-state acute care hospitals.

      (4) An out-of-state ambulatory surgery

center having one (1) or more contiguous Kentucky counties shall be assigned a

cost-to-charge ratio in accordance with Section 5(1)(b)2.b. of this administrative

regulation.

 

      Section 7. Reports to be Filed by

Hospitals. Each bill submitted by a hospital pursuant to this administrative

regulation shall be submitted on a statement for services, Form UB-04 (Formerly

UB-92), as required by 803 KAR 25:096.

 

      Section 8. Billing and Audit Procedures.

(1) A hospital providing the technical component of a procedure shall bill and

be paid for the technical component.

      (2)(a) An independent practitioner

providing the professional component shall bill for and be paid for the

professional component.

      (b) An independent practitioner billing

for the professional component shall submit the bill to the insurer on the

appropriate statement for services, HCFA 1500, as required by 803 KAR 25:096.

 

      Section 9. Miscellaneous. (1) A new

hospital shall file a letter with the commissioner setting forth the start and

end of its fiscal year within ninety (90) days of the date it commences operation.

      (2)(a) An independent practitioner who

does not receive direct compensation from the contracting hospital shall use

the statement for services defined by 803 KAR 25:096 if billing for professional

services and shall be compensated pursuant to the Kentucky Workers'

Compensation Medical Fee Schedule for Physicians, incorporated by reference in 803

KAR 25:089.

      (b) An independent practitioner who is

directly compensated for services by the contracting hospital shall not bill

for the service, but shall be compensated pursuant to the practitioner's

agreement with the hospital.

      (c) The hospital may bill for the

professional component of the service under the Kentucky Workers' Compensation

Medical Fee Schedule for Physicians if the independent practitioner is directly

compensated for services by the contracting hospital.

      (3) A hospital-based practitioner shall

not bill for a service he performs in a hospital if the service is regulated by

803 KAR 25:089, but he shall receive payment or salary directly from the

employing hospital.

 

      Section 10. Incorporation by Reference.

(1) The following material is incorporated by reference:

      (a) Form UB-04, 10-23-06; and

      (b) HCFA 1500, 12-90.

      (2) This material may be inspected,

copied, or obtained, subject to applicable copyright law, at the Department of

Workers' Claims, Prevention Park, 657 Chamberlin Avenue, Frankfort, Kentucky

40601, Monday through Friday, 8 a.m. to 4:30 p.m. (19 Ky.R. 1026; 1396; 1755;

eff. 2-2-93; 21 Ky.R. 1569; 1884; 2130; eff. 2-9-1995; 23 Ky.R. 2619; 2988;

eff. 2-10-1997; TAm eff. 8-9-2007; 35 Ky.R. 1907; 2304; 2435; eff. 6-5-2009; 37

Ky.R. 1080; 2005; eff. 3-4-2011; TAm eff. 10-25-11.)
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