HF 2235

as introduced - 89th Legislature (2015 - 2016) Posted on 09/01/2016 11:14am

A bill for an act
relating to workers' compensation; adopting recommendations of the workers'
compensation advisory council regarding inpatient hospital payments;
authorizing rulemaking; requiring a report; amending Minnesota Statutes 2014,
section 176.136, subdivision 1b; proposing coding for new law in Minnesota
Statutes, chapter 176.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 176.136, subdivision 1b, is amended to read:

Subd. 1b.

Limitation of liability.

(a) The liability of the employer for treatment,
articles, and supplies provided to an employee while an inpatient or outpatient at a deleted text begin small
hospital deleted text end new text begin Critical Access Hospital certified by the Centers for Medicare and Medicaid
Services new text end shall be the hospital's usual and customary charge, unless the charge is determined
by the commissioner or a compensation judge to be unreasonably excessive. deleted text begin A "small
hospital," for purposes of this paragraph, is a hospital which has 100 or fewer licensed beds.
deleted text end

(b) The liability of the employer for the treatment, articles, and supplies that are not
limited by subdivision 1a deleted text begin or deleted text end new text begin , new text end 1c deleted text begin or deleted text end new text begin , new text end paragraph (a) new text begin , or section 176.1362 new text end shall be limited to
85 percent of the provider's usual and customary charge, or 85 percent of the prevailing
charges for similar treatment, articles, and supplies furnished to an injured person when
paid for by the injured person, whichever is lower. On this basis, the commissioner or
compensation judge may determine the reasonable value of all treatment, services, and
supplies, and the liability of the employer is limited to that amount. The commissioner
may by rule establish the reasonable value of a service, article, or supply in lieu of the
85 percent limitation in this paragraph. A prevailing charge established under Minnesota
Rules, part 5221.0500, subpart 2, must be based on no more than two years of billing data
immediately preceding the date of the service.

(c) The limitation of liability for charges provided by paragraph (b) does not apply
to a nursing home that participates in the medical assistance program and whose rates are
established by the commissioner of human services.

(d) An employer's liability for treatment, articles, and supplies provided under this
chapter by a health care provider located outside of Minnesota is limited to the payment that
the health care provider would receive if the treatment, article, or supply were paid under
the workers' compensation law of the jurisdiction in which the treatment was provided.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for billing and payment of inpatient
hospital services, articles, and supplies provided to patients discharged on or after January
1, 2016.
new text end

Sec. 2.

new text begin [176.1362] INPATIENT HOSPITAL PAYMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Payment based on Medicare MS-DRG system. new text end

new text begin (a) Except as
provided in subdivisions 2 and 3, the maximum reimbursement for inpatient hospital
services, articles, and supplies is 200 percent of the amount calculated for each hospital
under the federal Inpatient Prospective Payment System developed for Medicare, using
the inpatient Medicare PC-Pricer program for the applicable MS-DRG as provided in
paragraph (b). All adjustments included in the PC-Pricer program are included in the
amount calculated, including but not limited to any outlier payments.
new text end

new text begin (b) Payment under this section is effective for services, articles, and supplies
provided to patients discharged from the hospital on or after January 1, 2016. Payment
for services, articles, and supplies provided to patients discharged on January 1, 2016,
through December 31, 2016, must be based on the Medicare PC-Pricer program in effect
on January 1, 2016. Payment for inpatient services, articles, and supplies for patients
discharged in each calendar year thereafter must be based on the PC-Pricer program in
effect on January 1 of the year of discharge.
new text end

new text begin (c) Hospitals must bill workers' compensation insurers using the same codes,
formats, and details that are required for billing for hospital inpatient services by the
Medicare program. The bill must be submitted to the insurer within the time period
required by section 62Q.75, subdivision 3. For purposes of this section, "insurer" includes
both workers' compensation insurers and self-insured employers.
new text end

new text begin Subd. 2. new text end

new text begin Payment for catastrophic, high-cost injuries. new text end

new text begin (a) If the hospital's
total usual and customary charges for services, articles, and supplies for a patient's
hospitalization exceed a threshold of $175,000, annually adjusted as provided in paragraph
(b), reimbursement must not be based on the MS-DRG system, but must instead be paid at
75 percent of the hospital's usual and customary charges.
new text end

new text begin (b) Beginning January 1, 2017, and each January 1 thereafter, the commissioner
must adjust the previous year's threshold by the percent change in average total charges
per inpatient case, using data available as of October 1 for non-Critical Access Hospitals
from the Health Care Cost Information System maintained by the Department of Health
pursuant to chapter 144. The commissioner must annually publish notice of the updated
threshold in the State Register.
new text end

new text begin Subd. 3. new text end

new text begin Critical Access Hospitals. new text end

new text begin Hospitals certified by the Centers for Medicare
and Medicaid Services as Critical Access Hospitals shall be reimbursed as provided in
section 176.136, subdivision 1b, paragraph (a).
new text end

new text begin Subd. 4. new text end

new text begin Submission of information when payment is by MS-DRG. new text end

new text begin Except
when a postpayment audit is allowed under subdivision 6, an insurer must not require an
itemization of charges or additional documentation to support a bill from a non-Critical
Access Hospital when all of the following requirements are met:
new text end

new text begin (1) the hospital must submit its charges to the insurer on the 837 institutional
standard electronic transaction required by section 62J.536;
new text end

new text begin (2) an MS-DRG must apply to the hospitalization; and
new text end

new text begin (3) the hospital's total charges must be less than the threshold amount in subdivision
2, as annually adjusted.
new text end

new text begin Subd. 5. new text end

new text begin Prompt payment requirement when MS-DRG payment is made. new text end

new text begin (a)
When the requirements in subdivision 4 have been met, the insurer must take one of the
following actions within 30 days of receipt of the hospital's bill:
new text end

new text begin (1) pay the hospital's bill as provided in subdivision 1, with no reductions based on a
review of charges for specific services, articles, or supplies; or
new text end

new text begin (2) deny payment for the entire hospitalization for one of the following reasons:
new text end

new text begin (i) the patient's workers' compensation injury claim is denied;
new text end

new text begin (ii) the diagnosis for which the patient was hospitalized is not related to the insurer's
admitted workers' compensation injury; or
new text end

new text begin (iii) the hospitalization was not reasonably required to cure and relieve the employee
from the effects of the injury under section 176.135 or rules adopted under section 176.83,
subdivision 5.
new text end

new text begin (b) When the requirements of subdivision 4 are met, an insurer must not deny
payment for one or more charges on the basis that the charge should have been bundled
into another charge, or on the basis that a particular service, article, or supply was not
reasonably required, except that the insurer may raise these issues during a postpayment
audit under subdivision 6.
new text end

new text begin Subd. 6. new text end

new text begin Postpayment audits; records; interest. new text end

new text begin (a) The insurer may conduct a
postpayment audit if both of the following requirements are met:
new text end

new text begin (1) the insurer paid the hospital's bill within 30 days according to the PC-Pricer
program amount described in subdivision 1; and
new text end

new text begin (2) the amount paid according to the PC-Pricer program in subdivision 1 included
an outlier payment.
new text end

new text begin (b) If an audit is permitted under paragraph (a), the insurer must request any additional
records needed to conduct the audit within six months after payment. The records
requested may include an itemized statement of charges. Within 30 days of the insurer's
request, the hospital must provide the additional documentation requested. An insurer
must not request additional information from a hospital more than three times per audit.
new text end

new text begin (c) An insurer must pay the hospital interest at an annual rate of four percent if
it is determined that the insurer is liable for additional hospital charges following a
postpayment audit. A hospital must pay the insurer interest at an annual rate of four
percent if it is determined that the hospital owes the insurer reimbursement following
the insurer's audit. Interest is payable by the insurer from the date payment was due
under this section or section 176.135. Interest is payable by the hospital from the date the
overpayment was made.
new text end

new text begin Subd. 7. new text end

new text begin Study. new text end

new text begin The commissioner of labor and industry shall conduct a study
analyzing the impact of the reforms under this section to determine whether the objectives
have been met and whether further changes are needed. The commissioner must report the
results of the study to the Workers' Compensation Advisory Council and the chairs and
ranking minority members of the house of representatives and senate committees with
jurisdiction over workers' compensation by January 15, 2018.
new text end

new text begin Subd. 8. new text end

new text begin Rulemaking. new text end

new text begin The commissioner may adopt or amend rules using the
authority in section 14.389, including subdivision 5, to: (1) implement this section and
the Medicare Inpatient Prospective Payment System for workers' compensation; and (2)
implement the Medicare Hospital Outpatient Prospective Payment System, or other fee
schedule, for payment of outpatient services provided under this chapter by a hospital or
ambulatory surgical center, not to take effect before January 1, 2017.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Subdivisions 1 to 6 are effective for billing and payment of
inpatient hospital services, articles, and supplies provided to patients discharged on or
after January 1, 2016. Subdivision 8 is effective the day following final enactment.
new text end