Workers' Compensation Resource Guide
The following is a compilation of general information. IMS is not offering legal advice by making this information available.
Workers’ compensation (WC) insurance covers medical and rehabilitation costs and lost wages for employees injured on the job. The employer, or its WC insurance carrier, not the patient, is the “responsible party” for purposes of payment of medical services provided in WC cases.
Iowa Does Not Have a WC Fee Schedule
For Iowa physicians providing workers’ compensation services, Iowa has never had a WC fee schedule.
Absent a WC fee schedule, medical practices set their own fees and expect full billed charges to be paid unless prior contractual arrangements have been made. Something to keep in mind when establishing fees is that Iowa law does not mandate usual, customary, and reasonable (UCR) determinations of fair pay for medical services rendered, but Iowa law also does not preclude using UCR determinations to set fees or settle fee disputes. Similarly, Iowa has not adopted a specific methodology for determining fees for medical services in WC cases but, again, Iowa law does not preclude utilization of methodologies for determining fees.
Resolution of Medical Fee Disputes
Iowa law uses a “reasonableness standard” for resolving workers’ compensation medical fee disputes. Iowa Code Section 85.27(3) governs medical fee disputes in WC cases.
Section 85.27(3) reads: “Charges believed to be excessive or unnecessary may be referred by the employer, insurance carrier, or health service provider to the workers’ compensation Commissioner for determination… .” Section 85.27(3) later makes reference to disputes over the “reasonableness” of a fee for medical services. Regulations defining fee disputes subject to WC Commissioner review address disagreements between a provider and a responsible party over “the necessity of service or the reasonableness of charges or both.” Iowa Admin. Code r. 876-10.3(2).
Fee disputes filed under Rule 876-10.3 are submitted by the WC Commissioner to a reviewer. Processes for selecting the reviewer and for assessing fees paid to the reviewer are set forth in the rule. The rule specifically directs: “The person making the review shall make a determination of the amount that is reasonable and necessary.” Rule 876-10.3(3)(e). That same sub-rule goes on to say: “The person making the review may choose any amount to set the reasonableness of a charge.” [Emphasis added] The reviewer’s determination must be made in writing and specify the facts relied upon.
No guiding standard or methodology for determining the reasonableness of the fee is set forth in either law or rule. So a reviewer appears to have significant discretion in determining a “reasonable” fee amount. Nothing in the rule precludes a reviewer from using UCR or any other methodology in assessing what that amount should be. The provider is bound by the reviewer’s determination. Iowa Code Section 85.27(3).
Fee Setting Based on National Databases
If a workers’ compensation carrier uses another company to reprice the fees being paid, and the repriced fees are based on a national database that does not include upward adjustments to reflect WC administrative costs, it is possible the repriced amounts set for WC fees may result in payments that are too low.
Use of ICD-10 by WC Carriers
Carriers writing only workers’ compensation insurance are not required to convert to ICD-10, while payers writing multiple lines will need to convert. Iowa is one of 26 states that has not adopted legislation requiring ICD-10 billing for physicians and hospitals for WC.