Minutes of January 13 and February 17, 2004

The Minutes of January 13, and February 17, 2004, meetings were approved as written.

Medical Fees – Dave Gribskov

Dave Gribskov, subcommittee Chair, recapped the activities of the Medical Fee Task Force since its inception almost two years ago. The Task Force's recommendation to the Advisory Committee is for the Industrial Commission to replace its existing outdated Medata database for determining maximum allowable amounts for medical fee disputes with a database created by the Industrial Commission from actual Idaho provider charges as documented by payors, following these recommended steps:

1. Obtain the actual charges submitted in 2003 from the State Insurance Fund, Liberty Northwest Insurance Corp., and Corvel. This data provides a majority of the Idaho provider charges or data could be requested from all payors.

2. Use the criteria established by the Task Force to scrub the data.

3. Separate the data CPT codes in seven service categories: (a) Surgery, (b) Pathology/Lab, (c) Medicine, (d) Radiology, (e) Physical Medicine, (f) Anesthesia, (7) Evaluation and Management.

4. For each category, determine a Gross Conversion Factor based upon the "Average" or "Average Plus %" of the charges of each category.

5. Multiply the Gross Conversion Factor by the American Medical Association's (AMA) Relative Value Units (RVU) to determine the maximum allowable for an individual charge identified by its CPT code.

6. Make the database of maximum allowable charges available to payors.

7. Update the database by annually updating the AMA RVUs and request payors provide new charge data every three years.

8. Consider a "cost of living' adjustment annually that could be based on the change of the average state wage.

Mr. Gribskov added that the Task Force was unable to arrive at a consensus on whether to use the "average" or an "average plus a percentage" as the basis for the maximum allowable charges.

Ron Hodge with the Idaho Medical Association and a member of the Task Force discussed the issues he had with the method used in arriving at the conversion factors in establishing the medical fee schedule. His concern was that by adding together RVUs in each of the categories, (for example, a seven hour neurosurgical procedure with a five minute simple laceration repair) the values would be skewed and not used as Medicare and Medicaid intended. Mr. Hodge felt that this methodology would increase disputes as a result of devaluation of complex procedures and overvaluation of simple procedures.

Steve Millard suggested that Ron Hodge present the information contained in the recommendation by the Task Force to members of the medical association who have expertise in this area. The Committee members and Mr. Hodge agreed. Mr. Hodge will report back to the Advisory Committee at the next meeting.

Mike Taylor with NCCI reported that Idaho's medical costs have increased significantly, but indemnity costs within the state have declined. Mr. Taylor also stated that medical fee schedules implemented in other states tend to increase utilization.

Commissioner Limbaugh reported that the Industrial Commission would have a more accurate financial picture after fiscal year-end, June 30. He stated that even though premium taxes increased approximately 16%, which could result in approximately $1,000,000, it is unknown at this time if sureties increased their rates. He also reported that the Industrial Commission has had to use a million dollars of its savings each year to fund the Division of Building Safety's inspection programs. The Division of Building Safety began the fiscal year with a credit; however, since their base appropriation was not reduced, the Division of Building Safety could request the entire appropriation next fiscal year.

Christi Simon, Chief of the Commission’s Employer Compliance Bureau, gave a presentation on the Compliance Bureau's responsibilities and duties. Ms. Simon also reported on the accomplishments of the bureau over the past year, including an increase in the number of referrals (up 12%), and an increase in collections of more than $140,000 over last year from employers who do not have workers' compensation insurance coverage. Senator Andreason inquired if current legislation was adequate for the Compliance Bureau to perform its duties. Ms. Simon indicated that it would be beneficial to have legislation that would allow the Industrial Commission to close down a business that fails or refuses to comply with the insurance requirements of the Workers’ Compensation Law, without having to go to court. Additional staff to conduct more investigations would also be beneficial.

Commissioner Kile reported that there has been some movement on a limited basis to exclude worker's compensation claims from bankruptcy proceedings.

Mr. Barrett reported that he is still working on starting an uninsured employers fund.

Keith Hutchinson presented a letter he drafted as discussed in previous Advisory Committee meetings requesting representatives of the Idaho Medical Association meet with Advisory Committee members and Commissioners to discuss the high fees that some physicians are charging for their depositions and conferences. After discussion by the group, Chairman Whigam asked whether the Committee had reached consensus. It was the consensus of the Advisory Committee to submit the letter to the Industrial Commission for approval.

Legislative Issues – Alan Gardner presented the issue of clarifying the Advisory Committee's charter to establish that the Advisory Committee not be an approval body or initial screening body for legislation. Mr. Gardner stated that his recollection of the original intent of the charter was not to screen and pass judgment on every piece of legislation that affects Worker's Compensation laws, but rather review proposed legislation that is voluntarily brought to the Advisory Committee.

Senator Andreason reported that he prefers bills have consensus from those who understand the bills before the bill is submitted. The committee that Senator Andreason chairs is able to act on bills more efficiently when they have consensus from those affected by the bill.

Theresa Molitor of IACI agreed with Mr. Gardner and wanted the legislature to be informed that the Industrial Commission's Advisory Committee has no right to require review of proposed legislation.

After lengthy discussion and differing points of view, it was agreed that the Advisory Committee Charter be amended to clarify that proposed legislation affecting Workers' Compensation laws is not required to be reviewed by the Advisory Committee prior to submission to the legislature. However, if, as a courtesy, legislation is brought to the Committee, the Advisory Committee will review it for consensus. Commissioner Limbaugh suggested adding a sentence to the charter to clarify that "no consensus" means neutrality, and the members agreed.

The Industrial Commission received a letter from John Goedde, currently a Senator and board member of the State Insurance Fund, voicing his concern with the billings allowed by the Industrial Commission for certain appliances used in surgery and his perception that Idaho businesses are shouldering the cost shifting in workers' compensation rates. Jack Barrett suggested that a meeting be set up with Senator Goedde and representatives from the Industrial Commission, Advisory Committee, and Task Force to discuss his concerns. The members agreed.

Discussion was held to allow special members voting privileges. However, since special members would include individuals appointed for subcommittees, voting could be swayed to the benefit of special interests. The members also felt that the legislators who participate in Advisory Committee meetings might be put in a conflict of interest situation on certain issues before the Committee. Consensus of the members was not to change the charter.

Discussion was held on increasing the membership to possibly include a member of the State Insurance Fund since they insure a large portion of the state, or to other agencies. Consensus of the membership was not to change the charter.

The members agreed that Representative Robert Schaefer of Nampa should be contacted for a recommendation of another Representative who would be willing to participate in the Advisory Committee meetings.

Commissioner Limbaugh reported that the Industrial Commission is working on re-drafting a presentation for legislators. The purpose of the presentation is to familiarize the legislators with the role of the Industrial Commission and the importance of our Advisory Committee. Commissioner Limbaugh requested ideas and help in presenting the information to the legislature from Advisory Committee members.

Kim Day, Public Information Officer for the Industrial Commission, informed members of the Annual Workers' Compensation Seminar being held September 29, 2004. Mr. Day announced that Richard Pimentel with Milt Wright & Associates, Inc., a nationally renowned expert in the workers' compensation arena would be the keynote speaker. Mr. Day asked that speaker and agenda item suggestions be forwarded to kday@iic.idaho.gov.

Elections are scheduled for the next Advisory Meeting August 2004. There are eight positions on the Advisory Committee that are expiring. (2 Defense Attorneys, 2 Claimant Attorneys, 1 Employer Rep., 1 Medical Rep., 1 Worker Rep., and 1 Insurance Rep.) The Nominating Committee was given the task to determine how to alleviate the unequal distribution of expiring terms. The nominating Committee will also be soliciting nominees to fill these positions.

Topics for discussion at the next meeting are:

• Medical Fee Database Report – Ron Hodge
• Update on Meeting with Senator John Goedde
• Commission Finances
• Elections
• Update on Meeting Regarding Physician Deposition Fees