Legal Insights

Commonwealth Court Limits Payments to Chiropractors

April 24, 2018
By: Patrick R. Byrne

The Commonwealth Court of Pennsylvania issued a significant decision April 11, 2018, involving an issue of first impression with regard to the Medical Cost Containment Regulations governing payment to chiropractors under the Workers’ Compensation Act. At issue in Sedgwick Claims Management Services, Inc. v. Bureau of Workers’ Compensation, Fee Review Hearing Office (Piszel and Bucks County Pain Center, No. 1033 C.D. 2017 (Pa. Cmwlth. 2018) was a Fee Review Decision that ordered payment of thirty-nine office visit charges billed in addition to charges for chiropractic treatment at the same visits.

The Court held whether these same-day office visit charges constituted "a significant and separately identifiable service performed in addition to the other procedure" would determine whether payment was due. The decision has implications for employers, workers' compensation insurers, and third-party administrators. A copy of the Opinion is available here.

The appeal stems from a 2005 workers’ compensation claim for bilateral shoulder injuries. Although the indemnity claim settled in 2012, medical benefits remained open, and the Claimant treated three times per week with chiropractor Michael Piszel, D.C. Between October 2015 and April 2016, he submitted billing for thirty-nine visits which included charges for both chiropractic procedures performed at each visit, as well as office visit charges of $78.00 at each visit. Sedgwick paid for the procedures but denied the office visit charges. The provider filed nine applications for fee review of the denied charges, resulting in administrative determinations from the Bureau that upheld Sedgwick’s denial and rejected the provider’s claims for payment. The provider requested a hearing before a Hearing Officer, where the nine determinations were consolidated for hearing.

The Hearing Officer accepted evidence that included an affidavit from the provider, in which he averred that he performed an evaluation of the patient at each visit, in addition to providing the separately billed treatment. The progress notes from the visits in question were also submitted into evidence. The Hearing Officer issued a decision vacating the Bureau’s administrative determinations and ordering payment of the thirty-nine office visit charges. He found the chiropractor’s affidavit credible with regard to what was done at each visit. Importantly, the Commonwealth Court notes the Hearing Officer failed to make any factual findings concerning the nature of the same-day examinations and evaluations and failed to make factual findings whether any of them were “non-routine or involved new medical conditions or evaluations for new or different treatment.”  Instead, the Hearing Officer concluded that Sedgwick failed to explain what was meant by the phrase “significant and separately identifiable service” and failed to prove by a preponderance of the evidence that the procedures billed by the provider included the value of office visits.

On appeal to the Commonwealth Court, Sedgwick argued Section 127.105(e) of the Medical Cost Containment Regulations prohibits billing for same-day office visit charges for routine examinations and evaluations where there is no new medical condition. The language of Section 127.105(e) at issue is: “Payment shall be made for an office visit provided on the same day as another procedure only when the office visit represents a significant and separately identifiable service performed in addition to the other procedure.” 34 Pa. Code § 127.105(e) (emphasis added).

The Court notes the burden of proof in these matters is on the Employer/Insurer to prove by a preponderance of the evidence that it paid the provider the full amount to which it was entitled.

Because this was a case of first impression, the Court applied principles of statutory construction to interpret the meaning of this particular regulation. More importantly, because the Medical Cost Containment Regulations are based in part on the federal Medicare Statute and its billing and payment limitations and requirements, the Court looked for guidance in federal Medicare case law and agency interpretation of identical language concerning same-day office charges in the Medicare statute. Citing several examples from Medicare case law, the Court concluded that an examination or evaluation performed on the same day as a separate procedure does not constitute a significant and separately identifiable procedure, unless it involves a new medical condition, a change in medical condition, or other circumstances that require an examination and assessment above and beyond the usual examination and evaluation for the treatment performed that date. The Court further held that the clear intent of Section 127.105(e) was to make payment for same-day examinations the exception, not the rule. To permit payment for office visit charges for same-day examinations “performed on a routine basis without special circumstances unique to the patient’s condition or nature of the treatment session would effectively read this limiting language out of the regulation.”

Because the Hearing Officer failed to make factual findings as to whether there was a new medical condition, a change in the medical condition, or some other circumstance that required an examination other than routine, the Court vacated the decision and remanded the matter to the Fee Review Hearing Office for a determination whether the provider’s charges for the office visits at issue met these requirements.

How does this ruling impact your practice?

• The decision is limited to interpretation of Section 127.105(e) governing payment to chiropractors. When reviewing bills from chiropractor offices, be aware of separate charges for office visits, which will be denoted with the modifier -25. Based on this ruling, those charges should be denied unless the corresponding treatment note describes a truly new condition, change in condition, or unique circumstance that warrants a separate examination.
• As savvy providers become aware of this decision and adapt to it, be wary of treatment notes that suggest some new condition, change in condition, or other circumstance recorded in the notes to attempt to justify the additional, unnecessary billing.
• This is a perfect time to review the Medical Cost Containment Regulations with your staff, as well as any third party bill reviewers, to ensure they are aware of these limitations and understand that payment of same-day office charges must be the exception, not the rule.