HB 515

Under existing law, the total liability of an employer for the treatment of and medicine for injuries arising out and in the course of employment is limited

This bill would provide that when an employer has contracted with a physician, pharmacy, or pharmacy benefit management company for the purpose of providing workers' compensation prescription benefits at a contracted price that is less than the maximum fee schedule or prevailing rate, the employer's liability is limited to the contracted rate when other providers of prescription benefits are used

This bill would also provide that a provider of workers' compensation prescription benefits that is not a party to the contract with the employer may dispense medication to an employee of the employer only if the provider dispenses the prescription benefits at the contracted rate and deems payment of the contracted rate to be reimbursement in full

Relating to workers' compensation; to amend Sections 25-5-77, 25-5-293, and 25-5-314, Code of Alabama 1975, to provide further for the total liability of an employer with regard to the payment of prescription benefits; and to provide further for the payment of certain workers' compensation prescription benefits.

Section 1

Sections 25-5-77, 25-5-293, and 25-5-314, Code of Alabama 1975, are amended to read as follows:

§25-5-77.

(a)(1) In addition to the compensation provided in this article and Article 4 of this chapter, the employer, where applicable, shall pay the actual cost of the repair, refitting, or replacement of artificial members damaged as the result of an accident arising out of and in the course of employment, and the employer, except as otherwise provided in this amendatory act, shall pay an amount not to exceed the prevailing rate or maximum schedule of fees as established herein of reasonably necessary medical and surgical treatment and attention, physical rehabilitation, medicine, medical and surgical supplies, crutches, artificial members, and other apparatus as the result of an accident arising out of and in the course of the employment, as may be obtained by the injured employee or, in case of death, obtained during the period occurring between the time of the injury and the employee's death therefrom. If the employee is dissatisfied with the initial treating physician selected by the employer and if further treatment is required, the employee may so advise the employer, and the employee shall be entitled to select a second physician from a panel or list of four physicians selected by the employer. If surgery is required and if the employee is dissatisfied with the designated surgeon, he or she may so advise the employer, and the employee shall be entitled to select a second surgeon from a panel or list of four surgeons selected by the employer. If four physicians or surgeons are not available to be listed, the employer shall include on the list as many as are available. The four physicians or surgeons selected by the employer hereunder shall not be from or members of the same firm, partnership, or professional corporation.

(2) The total liability of the employer shall, unless otherwise provided in this chapter, not exceed the lesser of the following:

a. The prevailing rate. or the

b. The maximum schedule of fees as established herein.

c. For medications, the contracted rates, fees, or levels of reimbursement agreed upon between an employer, workers' compensation insurance carrier, self-insured employer, or group fund and any physician, pharmacy, or pharmacy benefit management company.

(3) When an employer has contracted with a physician, pharmacy, or pharmacy benefit management company for the purposes of filling or dispensing any medication to an employee at a rate lower than the maximum fee schedule or the prevailing rate, the contracted rates, fees, or level of reimbursement agreed upon between the parties shall be deemed to be reimbursement in full. A provider of workers' compensation prescription benefits that is not a party to the contract with the employer may dispense medication to an employee of the employer only if the provider dispenses the prescription benefits at the contracted rate and deems payment of the contracted rate to be reimbursement in full.

Notwithstanding the foregoing (4) Subdivisions (1), (2), and (3) notwithstanding, in ascertaining the prevailing rate of reimbursement or payment with regard to participating hospitals and ambulatory surgical centers or outpatient rehabilitation centers licensed by the State of Alabama, as well as diagnostic facilities accredited by the Commission on Accreditation of Rehabilitation Facilities, the prevailing rate shall be negotiated with each individual hospital, ambulatory surgical center, licensed outpatient rehabilitation facility, or diagnostic facility based on that institution's treatment of comparable type cases for the 12-month period immediately preceding August 1, 1992. These rates shall be updated every 12 months thereafter. Initial rates shall be established within six months of August 1, 1992.

(5) For those non-participating hospitals, the prevailing rate shall be determined by a committee. In the first year following August 1, 1992, the committee shall be composed of five members. The secretary shall appoint one member from the Department of Labor and two members from the community in which the non-participating hospital is located. The non-participating hospital shall appoint two members. This committee shall by a majority vote establish the maximum rates of reimbursement or payment for the non-participating hospital, and the hospital shall be bound for one year by the determined rates of reimbursement or payment for workers' compensation cases. If, following the first year after the rates were established by this committee, the hospital is again non-participating, then another committee shall be appointed. This second committee shall have three members selected by the non-participating hospital and two members selected by the secretary. The committee composition shall alternate as above described each year the hospital is non-participating. The total liability of the employer shall not exceed the rates established by the committee. This committee, in determining the rates of reimbursement or payments to the hospital, may consider such factors as the size, staffing, and medical equipment of the hospital, and any other factors which the committee may consider relevant.

(6) If an insurer of the employee or a benefit association has paid or is liable for the employee's medical, surgical, and hospital service or for a part thereof, or if the employee is entitled to the same or a part thereof, from any source whatever by virtue of any agreement or understanding or law, state or federal, without any loss of benefit to the employee, the employer shall not be required to pay any part of the expense. If the benefits are insufficient to pay all the employee's expense, the employer shall be liable for the deficiency only. All cases of dispute as to the necessity and value of the services shall be determined by the tribunal having jurisdiction of the claim of the injured employee for compensation.

(b) If requested to do so by the employer, the injured employee shall submit to examination by the employer's physician at all reasonable times, but the employee shall have the right to have a physician of his or her own selection present at the examination, in which case the employee shall be liable to the physician of his or her own selection for his or her services. The employer shall pay for the services of the physician making the examination at the instance of the employer. If a dispute arises as to the injury, or as to the extent of the disability therefrom, the court may, at the instance of either party or of its own motion, appoint a neutral physician of good standing and ability to make an examination of the injured employee and to report his or her findings to the court, the expense of which examination shall be borne equally by the parties. If the injured employee refuses to comply with reasonable request for examination, or refuses to accept the medical service or physical rehabilitation, which the employer elects to furnish under this chapter, the employee's right to compensation shall be suspended and no compensation shall be payable for the period of the refusal. A physician whose services are furnished or paid for by the employer, or a physician of the injured employee who treats or makes or is present at any examination of an injured employee may be required to testify as to any knowledge obtained by him or her in the course of the treatment or examination as the treatment or examination related to the injury or the disability arising therefrom. The physician shall, upon written request of the injured employee or his or her employer and without consent of or notice to the employee or employer not making the request, furnish the injured employee or his or her employer a written statement of his or her professional opinion as to the extent of the injury and disability. In all death claims where the cause of death is obscure or is disputed, any interested party may require an autopsy, the cost of which is to be borne by the party demanding the autopsy. The term "physicians" shall include medical doctor, surgeon, and chiropractor. A hospital, medical clinic, rehabilitation service, or other person or entity providing treatment to an employee or providing facilities at which the employee receives treatment shall, upon the written request of the employee or of the employer, furnish, at a reasonable cost, the employee or the employer a copy of the records, including X-rays and laboratory reports, relating to the treatment of the injured employee. The copy may be furnished without the consent of or notice to the employee or employer not making the request. A physician, hospital, medical clinic, rehabilitation service, or other person or entity providing written statement of professional opinion or copies of records pursuant to this subsection shall not be liable to any person for a claim arising out of the release of medical information concerning the employee.

(c) If the employer so elects, the employee shall submit to and undergo vocational rehabilitation at the employer's expense through a vocational rehabilitation specialist, who shall be qualified to render competent vocational rehabilitation service. If an employee who is unable in the opinion of the treating physician to return to his or her former employment shall request vocational rehabilitation and if both a vocational rehabilitation specialist and a treating physician, the cost of whose service is the obligation of the employer under this section, shall express their opinions in writing that in the judgment of each of them vocational rehabilitation is reasonably calculated to restore the employee to gainful employment and is in the best interest of the employee, the cost of the rehabilitation shall be borne by the employer. The cost, where rehabilitation requires residence at or near a facility or institution away from the employee's customary residence, shall include reasonable charges for the employee's necessary board, lodging, and travel.

(d) If an employee refuses, without the consent of the court, to accept vocational rehabilitation at the employer's request, the refusal shall result in loss of compensation for the period of refusal.

(e) All disputes with regard to vocational rehabilitation may be submitted to the court for resolution.

(f) The employer shall pay mileage costs to and from medical and rehabilitation providers at the same rate as provided by law for official state travel.

(g) In a compensable workers' compensation claim, the injured employee shall not be liable for payment of any authorized and compensable medical expenses associated with the workers' compensation claim.

(h) All undisputed medical reimbursements or payments shall be made within 25 working days of receipt of claims in the form specified in Section 25-5-3. There shall be added to any undisputed medical invoice which is not paid within 25 working days an amount equal to 10 percent of the unpaid balance.

If the employer or insurer responsible for payment of the claim fails to add the additional 10 percent to the claim as required by this section, the person, firm, corporation, or partnership providing the medical service for which payment has been delayed beyond the period specified in this section may file a written complaint stating that fact with the secretary. Upon investigation, if the secretary determines that the facts stated in the complaint are true, then in that event the secretary shall order the employer or insurer to pay to the provider the amount of the claim and any applicable penalty, and in addition may assess a civil monetary penalty in amount not to exceed $500 against the employer or insurer, payment of which shall be made to the secretary within 30 days of the notice of assessment.

(i) Any party, including a health care provider, is entitled to a review by an ombudsman of medical services that are provided or for which authorization of payment is sought if any party or the health care provider has any of the following:

(1) Been denied payment or had the charge reduced for medical services rendered.

(2) Been denied authorization for the payment of services requested or performed when authorization is required.

(3) Been ordered by the secretary to refund payments received for the provision of medical services.

(4) A party to a medical dispute that remains unresolved after a review of medical services as provided by this section may petition the court for relief.

(5) In any review under this subsection of medical services provided by a physician, any party to a dispute may request that the ombudsman consult with an independent medical expert for the purpose of obtaining advice and consultation on the resolution of any issue involving medical practice. If such a request is made, the ombudsman shall select an independent medical expert from among a list of at least three names provided by the Workers' Compensation Medical Services Board in a medical specialty appropriate to the issues raised in the dispute and shall secure a written opinion from the independent medical expert. In rendering a decision or recommendation, the ombudsman shall give full consideration to the opinion of the independent medical expert but shall not be bound by that opinion. The independent medical expert shall be compensated at a rate set by the Workers' Compensation Medical Services Board and approved by the secretary.

§25-5-293.

(a) The Secretary of the Department of Labor may prescribe rules and regulations for the purpose of conducting continuing education seminars for all personnel associated with workers' compensation claims and collect registration fees in order to cover the related expenditures. The secretary may adopt rules and regulations setting continuing education standards for workers' compensation claims personnel employed by insurance companies and self-insured employers and groups.

(b) The secretary shall file annually with the Governor and the presiding officer of each house of the Legislature a complete and detailed written report accounting for all funds received and disbursed during the preceding fiscal year. The annual report shall be in the form and reported in the time provided by law.

(c) The secretary shall establish reasonable charges to recover expenses for services not required by law or rule provided to persons requesting the services from the Department of Labor.

(d) The secretary shall appoint appropriate advisory committees on workers' compensation matters, including: An advisory committee consisting of three administrators who are members of the Alabama Hospital Association, who shall be selected by the secretary from nominations submitted by the Alabama Hospital Association; an advisory committee consisting of three chiropractors who are members in good standing with the Alabama State Chiropractic Association, who shall be selected by the secretary from nominations submitted by the Alabama State Chiropractic Association; an advisory committee consisting of three pharmacists who are members in good standing with the Alabama Pharmaceutical Association who shall be selected by the secretary from nominations submitted by the Alabama Pharmaceutical Association; and an advisory committee consisting of three optometrists who are members in good standing with the Alabama Optometric Association who shall be selected by the secretary from nominations submitted by the Alabama Optometric Association. These committees shall guide the secretary and make recommendations to ascertain the prevailing rate of reimbursement or payment of medical costs in the State of Alabama. These committees shall make recommendations with regard to the implementation of all other rules and regulations, including, but not limited to, utilization review by like peers. These committees shall also advise and guide the secretary in determining all other rules and regulations required to accomplish the intent of the Legislature in assuring the quality of medical care and achieving medical cost control.

The secretary shall also appoint a vocational rehabilitation advisory committee consisting of at least five professional licensed rehabilitation specialists. These rehabilitation specialists shall be selected by the secretary from nominations from the rehabilitation associations in the State of Alabama, including, but not limited to, the Alabama Physical Therapy Association. The committee shall guide the secretary and make recommendations to ascertain the prevailing rate of reimbursement or payment of rehabilitation costs in the State of Alabama. The committee shall also make recommendations with regard to the implementation of all other rules and regulations, including but not limited to, utilization review, and with regard to rehabilitation policies as provided by this article. The committee shall also advise and guide the secretary in determining all other rules and regulations required to accomplish the intent of the Legislature in assuring the quality of rehabilitation care and achieving rehabilitation cost control.

(e)(1) The secretary shall appoint an advisory committee consisting of attorneys who are members in good standing of the Alabama State Bar. This committee shall guide and assist the secretary in creating and promulgating rules and regulations for the efficient administration of the Ombudsman Program. (2) Members of the advisory committee shall receive State of Alabama mileage expense which shall be paid by the Department of Labor.

(f) It is the intent of the Legislature that final reimbursements related to workers' compensation claims be commensurate and in line with the prevailing rate of reimbursement or payment in the State of Alabama, or as otherwise provided in this article. The secretary shall conduct field audits as necessary to assist the private sector to gain compliance with the legislative intent. The department shall develop administrative rules to facilitate implementation and continuity of the legislative intent of this article. The secretary, except as otherwise provided in this article, shall not establish the prevailing rate of payment or reimbursement, but may collect data which are construed to be statistically significant as defined by an independent, disinterested consultant. By definition, the prevailing rate of payment or reimbursement is self-defining and self-setting and shall be updated annually. The secretary may create a statistically valid data base from which prevailing rates of reimbursement or payment shall be ascertained. Except as otherwise provided herein, the prevailing rate of reimbursement or payment for medical services provided under this article shall be effective 30 days after the prevailing rate of reimbursement or payment is discovered, but in no event earlier than six months from May 19, 1992.

(g)(1) Insurance carriers and self-insurers, individual and group, are required to make appropriate payment for services provided under this article. Unless otherwise provided in this article, an insurance carrier or self-insurer, individual or group, shall not pay more than the lesser of the following:

a. The applicable prevailing rate of reimbursement for medical services.

b. With regard to medication, the rates, fees, or levels of reimbursement agreed upon between the employer, workers' compensation carrier, self-insured employer, or group fund and the physician, pharmacy, or pharmacy benefit management company.

(2) When an employer has contracted with a physician, pharmacy, or pharmacy benefit management company for the purposes of filling or dispensing any medication to an employee at a rate lower than the maximum fee schedule or the prevailing rate, the contracted rates, fees, or level of reimbursement agreed upon between the parties shall be deemed to be reimbursement in full. A provider of workers' compensation prescription benefits that is not a party to the contract with the employer may dispense medication to an employee of the employer only if the provider dispenses the prescription benefits at the contracted rate and deems payment of the contracted rate to be reimbursement in full.

(3) Insurance carriers and self-insurers, individual and group, may have utilization review and medical bill screenings. Utilization review and bill screening shall be performed by qualified individuals or entities to insure the integrity of the services and the quality of cost containment.

(4) It is the express legislative intent of this article to ensure that the highest quality health care is available to employees who become injured or ill as the result of employment, at an appropriate rate of provider reimbursement. All insurers, claims adjusters, self-administered employers, and any entity involved in the administration or payment of workers' compensation claims may, but are not required to, implement utilization review and bill screening for health services provided to employees covered under this article. In this regard, employers' liability for reimbursement shall be limited to the prevailing rate or maximum fee schedule established by the Workers' Compensation Services Board for similar treatment. There is a conclusive presumption that the rates, fees, or levels of reimbursement for medication agreed upon between the employer, workers' compensation insurance carrier, self-insured employer, or group fund and the physician, pharmacy, or pharmacy benefit management company are reasonably necessary.

(5) Services provided that are deemed not medically necessary are not reimbursable and the employer is held harmless. In no event is the employee responsible or held liable for any charges associated with an authorized workers' compensation claim.

(6) To ensure compliance of providers, insurance carriers, and self-insurers, the secretary may provide by rule for the review and audit of insurance carriers and self-insurers, individual and group, of payments for medical services. The secretary may maintain a statewide data base from insurance carriers and self-insurers, individual and group, on medical charges, actual payments, and adjudication methods for use in administering this article.

(h) Claims payors, and insurers operating in Alabama shall, at the secretary's request, provide the secretary such data as he or she deems necessary to evaluate costs and quality. The data shall be provided in the form and content to the secretary's specifications and in a manner deemed timely by the secretary. The secretary may gather from health care claims intermediaries that operate in Alabama any claims data related to diagnoses and procedures encountered in the treatment of workers'-compensation-type injury and illness in Alabama. Results from all data gathered shall be made available to employers or their representatives for use in decisions regarding the direction of care or to determine appropriateness of reimbursement.

(i) Beginning immediately after May 19, 1992, and to be completed within six months thereafter, the secretary may engage an independent firm to identify the initial costs for the program. These initial expenses shall include, but not be limited to, the establishment of a data base to determine prevailing rates, and the conducting of cost analysis for appropriate reimbursement rates to hospitals and other facilities.

(j) A person who performs services for the secretary pertaining to the policies of any advisory committee or board is immune from civil liability against any claim arising out of, or related to, any decision made in good faith, and without malice, and predicated upon information which was then available to the person. Immunity from liability under this section does not apply to a person providing medical treatment to an injured employee.

(k) Notwithstanding any other provision of this section to the contrary, it is the intent of this section that any and all utilization review, bill screening, medical necessity determinations, or audits which relate to the services of physicians as defined in Section 25-5-310 shall only be conducted under and in accordance with policies, guidelines, or regulations which have been jointly approved by the Workers' Compensation Medical Services Board and the secretary under the provisions of Section 25-5-312, as and when such policies, guidelines, criteria, and regulations are adopted in a final and effective form pursuant to the Alabama Administrative Procedure Act. Not later than six months from May 19, 1992, the secretary, with the approval of the board, shall publish a notice of the intended action in Alabama Administrative Monthly to adopt initial policies, guidelines, criteria, or regulations for utilization review, medical necessity determinations, and bill screenings; however, each insurer, self-insured employer, claims administrator, or other payor may continue utilization review, medical necessity determinations, and bill screenings unaffected by this article during the first six months from May 19, 1992, or until such policies, guidelines, criteria, or regulations may become effective in a final adopted form within that initial six-month period. If such above referenced pending policies, guidelines, criteria, or regulations have not become effective in a final form pursuant to the Administrative Procedure Act after six months from May 19, 1992, then until such time as they are finally adopted, each insurer, self-insured employer, or claims administrator shall conduct utilization review, medical necessity determinations, and bill screenings in a manner that is consistent with similar practices of a majority of commercial insurance companies authorized to issue policies of health insurance in this state. Any amendments, including additions or deletions, to the initial policies, guidelines, criteria, or regulations shall be adopted in accordance with the requirements of this section and Section 25-5-312.

§25-5-314.

(a) Notwithstanding any other provisions of this article to the contrary, any employer, workers' compensation insurance carrier, self-insured employer, or group fund, may contract with physicians, hospitals, and any other health care provider for the provision of medical services to injured workers at any rates, fees, or levels of reimbursement which shall be mutually agreed upon between the physician, hospitals, and any other health care provider and the employer, workers' compensation insurance carrier, self-insured employer, or group fund.

(b)(1) Any employer, workers' compensation insurance carrier, self-insured employer, or group fund may contract with a physician, pharmacy, or pharmacy benefit management company for the provision of medicine, prescription medication, or pharmaceuticals to injured workers at any rate, fee, or level of reimbursement mutually agreed upon between the physician, pharmacy, or pharmacy benefit management company and the employer, workers' compensation insurance carrier, self-insured employer, or group fund.

(2) There is a conclusive presumption that the rates, fees, or levels of reimbursement agreed upon between the employer, workers' compensation insurance carrier, self-insured employer, or group fund and the physician, pharmacy, or pharmacy benefit management company are the reasonably necessary rates, fees, or levels of reimbursement notwithstanding the prevailing rate or the fee schedule contemplated by Section 25-5-313.

(3) When an employer has contracted with a physician, pharmacy, or pharmacy benefit management company for the purposes of filling or dispensing any medication to an employee at a rate lower than the maximum fee schedule or the prevailing rate, the contracted rates, fees, or level of reimbursement agreed upon between the parties shall be deemed to be reimbursement in full. A provider of workers' compensation prescription benefits that is not a party to the contract with the employer may dispense medication to an employee of the employer only if the provider dispenses the prescription benefits at the contracted rate and deems payment of the contracted rate to be reimbursement in full."

Section 2

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.