RVRBS and Quality - Does Anyone Care?

Paying for medical services is hugely complex because of competing interests.

Factor in the added complexity of workers' compensation's indemnification factors, which ultimately rely on the execution, delivery and interpretation of medical services, and the complexity increases substantially.

California's conversion to a Resource-Based Relative Value Scale fee schedule, which has been in the works for years, is drawing out these competing interests more acutely as the time for implementation draws near.

Some physician groups have been saying that moving to an RVRBS system will alienate doctors even further and constrict access to care because specialists will not be reimbursed sufficiently to encourage their participation.

Others argue that an RVRBS system, which according to reports will increase reimbursement for primary care physicians, will actually increase access and improve outcomes by redirecting the motivations of practitioners.

And of course there is the old debate about how costs to employers will be affected.

Earlier this week the California Workers’ Compensation Institute that the division’s plans for annual inflation adjustments to its proposed medical fee schedule will eventually exceed 120% of Medicare and will cost the employer community much more than legislatively intended due to the way the Division of Workers' Compensation is interpreting the law and implementing the regulatory framework.

The DWC says that the way CWCI has calculated costs is erroneous, and that DWC's application of RVRBS, which ties rate structure to Medicare rates, will maintain medical costs within the Labor Code's mandate of no more than 120% of Medicare.

At the heart of the various arguments is how Medicare adjusts rates over time with annual inflation adjustments.

CWCI says that DWC's proposed methodology will result in total allowable fees for physician services to increase by $250.23 million during the DWC’s proposed four-year transition to RBRVS.

They say the Labor Code allows the DWC to adopt conversion factors and other adjustments affecting physician payments that are different than those used by Medicare so long as total aggregate fees in the work comp schedule don’t exceed 120% of Medicare’s total allowable fees for the same services.

“Unless this section of the law is applied in the physician fee schedule regulations adopted by the DWC, the compounding effect will drive up allowable physician fees beyond the 120% cap and undermine reform savings intended to pay for increased disability benefits for injured employees,” CWCI said.

DWC says CWCI is interpreting the law incorrectly and that SB 863 says aggregate fees under the RBRVS fee schedule can’t exceed 120% of aggregate fees under Medicare as of July 1, 2012, and as adjusted for the Medicare Economic Index and relative value scale adjustments.

DWC's interpretation is that this is a legislative mandate that the workers’ compensation fee schedule diverge from Medicare, but that the update factors in the proposed fee schedule regulations utilize Medicare’s MEI and Medicare’s relative value scale adjustment factors as required by SB 863.

I don't know who is correct in this debate.

I'm not even sure it matters.

Once again, the workers' compensation world revolves around the cost of the system, rather than the delivery of quality care to injured workers.

The debate should really be about whether this conversion will: a) promote efficient, effective medical care to injured workers; and b) provide sustainable access to care by encouraging good medical participation.

The debate about costs arises only within the context of the payer community, be it insurance companies or self-insured employers, whose focus, in my opinion, is short-sighted.

The "long-tail" of workers' compensation claims has direct relationship to the quality of medical care delivered: timeliness, appropriateness, effectiveness - qualitative factors that can not be measured by a reimbursement schedule but which have direct impact on the duration and extent of disability.

In other words, the indemnity part of a claim.

The RVRBS debate is unfortunate, because it distracts the industry from a more robust, healthier (pun intended) debate about medical care payment and delivery - how to motivate both the doctor and the patient towards better outcomes.

So long as the industry makes costs its focal point there won't be any sound strategy, investigation, imagination, or development of methodologies to encourage quality over quantity, to the chagrin of the injured worker waiting to get the care needed to return to work, and the employer whose experience modification factor is unnecessarily inflated due to claim duration.