Medical Fee Schedule Coming to Virginia in January 2018

By: Lauren Ebersole Hutcheson, Esq.

Historically, in Virginia, an employer’s pecuniary liability for medical, surgical and hospital treatment has been limited to the prevailing rate in the community to determine the reasonableness of the charge pursuant to Va. Code 65.2-605. The uncertainty of the prevailing rate in the community resulted in numerous claims filed by medical providers against employers and carriers for reimbursement of write-offs. As of March 2016, Virginia was one of only 7 states to be without a standardized fee schedule.

On March 7, 2016, Governor Terry McAuliffe approved legislation enacted by the Virginia General Assembly that paved the way for Medical Fee Schedules to be utilized in Virginia Worker’s Compensation claims. Chapters 279 and 290 (amended) of the 2016 Acts of Assembly and Chapter 478 of the 2017 Virginia Acts of Assembly of the Commonwealth of Virginia set forth the statutory framework for the Virginia Worker’s Compensation to follow in drafting a Medical Fee Schedule.

Beginning September 1, 2016, the Virginia Worker’s Compensation Commission embarked on researching, collaborating and advising on the provisions of a Medical Fee Schedule. Numerous meetings were held to discuss drafts of fee schedules and as of April 10, 2017, a proposed Medical Fee Schedule, as preliminarily approved by the Commission, was posted on the Commission’s website for public viewing and comment.  The public comment period will close on May 10, 2017, and then the Regulatory Advisory Panel will reconvene to review the comments and make any substantive changes. A public hearing will then be held on May 23, 2017, with the implementation of the Medical Fee Schedule scheduled to occur in January 2018.

Once the Medical Fee Schedule is implemented, it will apply to health care services provided to an injured person for any dates of service on or after January 1, 2018, regardless of the date of injury. Therefore, even if you have a claimant with a date of injury proceeding January 1, 2018, you would still be able to utilize the Medical Fee Schedule for any treatment incurred after its implementation.

It is important to note that the Medical Fee Schedule will apply to “health care providers, hospitals, and ambulatory surgical centers rendering health care services to injured employees.”  It does NOT apply to:

  • Health care services subject to a written contract between a health care provider and an employer or insurance carrier;
  • Health care services for which voluntary payments in excess of the reimbursement levels of the MFS are made by a self-insured employer or an insurance carrier;
  • Retail or mail order prescription drugs;
  • Air ambulances;
  • Durable medical equipment dispensed through a retail DME provider;
  • Facility services associated with a traumatic injury;
  • Professional services associated with a traumatic injury;
  • Facility services associated with a serious burn; and
  • Professional services associated with a serious burn.

Most notably, the Medical Fee Schedule will not supersede any written contract that an employer or carrier may have with a health care provider.  Virginia has historically permitted employers and carriers to engage in entering into agreements for fee reimbursement in workers’ compensation cases to alleviate the uncertainty of the prevailing rate in the community. As such, employers and carriers will need to review any contracts that they have with medical providers in Virginia prior to January 2018 to determine whether it is in their best interests to continue with the contracts or transition to the Medical Fee Schedule.

In light of the above, it is important to remember the following:

  1. Virginia’s Medical Fee Schedule will go into effect in January 2018;
  2. It will apply to all dates of service after January 1, 2018, regardless of the date of injury;
  3. The Medical Fee Schedule will not apply if the employer or carrier has a written contract with a health care provider setting forth rates of service;
  4.  Review the proposed Medical Fee Schedule here and provide any comments you may have before May 23, 2017.

Ideally, once the Medical Fee Schedule is in place, it will reduce the number of claims filed by health care providers for reimbursement of write-offs that were previously disputed. It will also hopefully assist in evaluating potential future medical costs in the settlement of claims with ongoing injuries and treatment.