New Developments in Workers' Compensation - Changes Coming to Reimbursement Rates in Massachusetts – Fee Schedule to be Updated for First Time in a Decade

On April 11, 2018, the Commonwealth of Massachusetts Executive Office of Health and Human Services (“EOHHS”) hosted a listening session on Rate Review and Rate Development for Workers’ Compensation Payments in Massachusetts. Public Consulting Group, Inc. (“PCG“), has been contracted by EOHHS to review the rate structure for the Massachusetts workers' compensation program, and has been tasked with: reviewing the current regulations establishing rates for healthcare services under the Massachusetts Workers' Compensation Act; evaluating and development rate setting methodologies; and developing proposed rates for healthcare services. The fee schedule was last updated in 2009.

In the first phase of this undertaking, due to be completed in early 2019, PCG has been gathering information from various stakeholders, including EOHHS, the Department of Industrial Accidents, the Department of Public Health, the healthcare services board, and various health care provider groups. 

At the listening session, stakeholders expressed concern that fundamental revisions are necessary to the current workers' compensation reimbursement system. Reimbursement rates for medical services in Massachusetts are the lowest in the region, at 13% below Medicaid reimbursement rates. Stakeholders expressed concern that the low rates are highly problematic, as it results in providers not accepting workers’ compensation patients, injured workers severely lacking in treatment options, and insurers spending a considerable amount of time and cost negotiating rates with providers. Additionally stakeholders hypothesized that the access problems result in longer recovery times for injured workers, with concomitant lengthened indemnity payment costs to insurers.

Healthcare providers expressed concerns that the low reimbursement rates in Massachusetts have had the unintended consequence of pushing the occupational medicine specialty out of Massachusetts because the practices are not financially viable within the present fee schedule. Providers shared experiences that clinics have closed throughout the state, and those that remain are forced to take on injured workers as loss leaders. Additionally, they expressed concern that the present rate schedule provides more favorable rates for surgical intervention over preventative medicine. Stakeholders opined that the disparity in reimbursement rates, similarly to the problems with access, has resulted in longer recovery times for injured workers and higher costs to insurers.

PCG offered little hope that the structural problems identified by the stakeholders would be addressed in its rate revision work. Its representative advised that it will promulgate recommendations for immediate changes to the fee schedule by June 30, 2018, to take effect in early 2019. While PCG stated that its dual goals are to revise rates and to develop improved rate setting methodologies, its representative advised at the end of the day, its undertaking is to address rate revisions rather than systemic transformation.

Chartwell Law will remain an advocate for insurers in the Massachusetts market, and looks forward to providing guidance and information as changes are proposed and implemented in the coming months.