Hawaii Report on Fee Schedules = Best Evidence, Mixed Results

The next report that I was presented to support the argument that going to an RVRBS fee schedule in California would impair injured workers' access to care is the Hawaii report to that state's legislature, "The Medical Fee Schedule Under the Workers' Compensation Law" (Martin, 1998).

The study in this report was done pursuant to a Senate Resolution to determine "if the 110% ceiling on the workers' compensation medical fee schedule should be adjusted, whether the workers' compensation fee schedule has had a negative impact on the access to specialty care or diminished the quality of care, and what the conditions are for adjusting the fee schedule."

The background paragraph to this document explains that during the 1980s medical costs comprised about one third of all cost components of workers' compensation, but that by 1994 the percentage had risen to 42%. As a consequence laws were passed, Act 234, Session Laws of Hawaii 1995, that changed the medical fee schedule from customary charges indexed to the Consumer Price Index to a RBRVS schedule not to exceed 110% of Medicare." Since the 1995 reform, workers' compensation costs have decreased. Some lawmakers estimate that savings to employers equaled as much as $100 million in 1996 and 1997" but it was unclear to what those cost savings were attributable.

The report notes that general health was paying 135% of Medicare at the time. In addition, the report states that the decline in physician participation is attributable to both the fee schedule and bill review, or "down coding." In addition to down-coding, doctors complain that approval for medical treatment is being made by adjusters with little or no medical training."

For one thing, at the time of this report, Hawaii required that all health care providers be "qualified by the Director of Labor and Industrial Relations." The report authors note that an attempt was made to get meaningful statistics from various government agencies concerning the number of physicians in total versus those that were "qualified" but there were no statistics available, so the study authors resorted to conducting surveys, mailed to 2400 physicians, 300 chiropractors. There also was an attempt to survey employers and workers, but no data was retrieved from those surveys for various reasons.

This report seems to have more statistical relevancy to the real question of whether there was a concomitant barrier to access following the introduction of the low RBRVS schedule because survey participants were asked for the number of workers' compensation patients both before and after the fee schedule reform. But, as you will read, there are other reasons why physician practices saw a decline in workers' compensation case loads.

In one interesting observation: "Survey responses indicated that, generally, health care providers are now treating fewer workers' compensation patients than before the new medical fee schedule was instituted. Health care providers also indicated that they believe the decrease in the number of workers' compensation patients treated, is due to changes in the fee schedule level of reimbursement. Specifically, seventy-five percent of medical doctors who indicated a decrease from 1990-1995 in the number of workers' compensation patients they treated attributed the medical fee schedule as a reason for this change. ... Those who showed a decrease are mostly in individual practice. These doctors also showed a greater range of decreases in their workers' compensation. Members of group practices were less likely to have experienced a substantial decrease in workers' compensation patient load and stayed in the 1-25 percent brackets both before and after 1995." [emphasis added.]

In addition, the Department of Labor and Industrial Relations calculated a 10.3 percent drop in reported work comp cases in 1996 compared to 1995. That is a big drop for just one year. Also the majority of physicians felt that law changes caused a decrease - "The majority of health care providers responding to the survey believe that injured workers' access to appropriate health care providers has decreased because of changes in the workers' compensation law since 1995. Analyzing these responses in more detail, sixty-three percent of the health care providers practicing in Hawaii before 1995 and who had at least some experience with previous workers' compensation fee schedules believed that injured workers' access had diminished. Sixteen percent believed access had stayed the same and nineteen percent stated they didn't know." [emphasis added.]

Indicating a larger problem than just fee schedules, "A number of health care providers commented that although they currently accept all workers' compensation patients, they were finding it difficult to continue the policy....Some health care providers indicated that they prefer to screen their workers' compensation patients for complexity of injury, or availability of alternate health insurance in case payment was not received under workers' compensation." [emphasis added.]

"The most frequent, number-one, reason cited by health care providers for the change in their policy on accepting workers' compensation patients was the change in the medical fee schedule level of reimbursement. A significant amount of the group that had previously had the policy of accepting all workers' compensation patients noted that controverted claims, processing paperwork and delays in prior approval for treatment were also reasons that caused a change in their policy of accepting all workers' compensation patients."

The report makes some "logical assumptions" that I don't necessarily agree with. For instance, "If every specialist is available to every injured employee, it is a logical assumption that those injured employees would likely be provided a higher quality of care because the employees could shop around until a suitable health care provider and treatment to their liking could be found." A) Injured workers don't shop around for treatment - they go where the carrier or their attorney tell them to go; B) just because one is a specialist does not mean they provide quality care - we see this all the time in medical malpractice examples.

More interesting though, state records at the Department of Labor and Industrial Relations DO NOT indicate an influx of complaints from patients who were unable to get treatment for their work comp injuries since the RVRBS schedule was put into place. This is a significant finding in my opinion because it directly disassociates cause and effect with the access to care issue. The report says these statistics are "not convincing" but tries instead to deflect the issue: "If health care providers are choosing not to treat workers' compensation patients, then injured employees cannot continue to have the same level of access to the specialty care they once had."

In other words, the report author completely dismisses the statistical fact that there was no change in the level of complaints about access to care and instead attempts to make a "logical assumption" that is not related to the data.

About the most cogent argument this report makes against the RVRBS schedule is that Medicare treatment is directed primarily at the elderly, and treatment of injured workers is fundamentally different that treating old people, with different expectations as to out come and paperwork needed. In addition, under Medicare there can be a patient co-pay. Workers' compensation does not provide this flexibility in physician billing.

An interesting aspect of this report that would seem to support that a 125% RVRBS schedule is appropriate in that 34% felt that it took 25% more time for work comp injuries, and another 22% felt that it took 50% more time. 25% felt it took the same amount of time (the report doesn't state what the other 19% felt). Add it all up and average it, then based on time 125% RVRBS is about right, according to the results of this study. Indeed this is the conclusion of the report authors - that the law be changed to allow for 125% and not more than 130% of Medicare in the RVRBS system.

All in all, I can accept this report as more credible than the other reports thus far reviewed concerning the potential limitation of access to care as a consequence of an RVRBS system that is structured too low. However, again, this report does not substantiate that there was in fact an access to care issue in Hawaii following the change to 110% Medicare RVRBS fee schedule, only that physicians were more reluctant to take cases.

And, this report DOES continue in the line of prior reviewed reports that the issue is much more complicated than just reimbursement, and that physician participation in workers' compensation takes on much more levels of complexity beyond a fee schedule. There are serious issues concerning physician participation in workers compensation, but this report advocates for exactly what the proposal is for California - RVRBS at 125%.