Virginia Workers’ Compensation Fee Schedule: Prompt Payment Traps for the Unwary
Virginia law regarding prompt payment under the Fee Schedule seems simple enough. In essence, the workers’ compensation carrier/employer has 45 days after receipt of a medical bill itemization to:
- Contest the bill;
- Deny the bill;
- Notify the healthcare provider that the bill is considered incomplete.
If the employer/carrier does not contest, deny, or consider the bill incomplete, it must pay the healthcare provider in full within 60 days after receipt of the medical bill itemization. (§65.2-601(A) and (B)).
In those instances where the employer/carrier issues a notification to the healthcare provider, then notification must include the following information:
- “The reasons for contesting or denying the itemization, or the reasons the itemization is considered incomplete;
- If the itemization is considered incomplete, all additional information required to make a decision; and
- The remedies available to the healthcare provider if the healthcare provider disagrees.”
The statute was given gnarly teeth by the legislature, which gave the healthcare provider the right to get interest on the billed amount whenever the employer/carrier fails to meet the 45/60 day rule. See §65.2-605.1(C).
Interestingly, no interest is provided in those situations where the carrier/employer mistakenly pays a healthcare provider in any such claim to recover and an incorrectly made payment must be filed within one year when payment was made to the healthcare provider, unless there is fraud. §65.2-605.1(E).
The Effect of “Voluntary” Payment of Medical Bills
In a January 2019 Virginia Court of Appeals Decision, the court reversed a prior ruling of the Virginia Workers’ Compensation Commission, which found a healthcare provider’s claim for payment of its bill was time barred. Roanoke Ambulatory Surgery Center v. Bimbo Bakeries U.S.A., Inc., Record No. 1055-18-2, January 29, 2019; VLW No. 019-7-019, 9 PP.
A common, and often advisable, decision by workers’ compensation carriers and employers is to make “voluntary” payment of medical bills and sometimes indemnity payments pending an ongoing investigation of some aspect of the claim.
The Bimbo case emphasizes the impact the voluntary payments on the interpretation of prompt payment rule. Facts of Bimbo are as follows:
- The claimant was injured on February 23, 2015.
- Shortly after his injury, the claimant had two surgeries performed by Roanoke Ambulatory Surgery Center – one in the amount of $23,122 and another in the amount of $12,101, both which were billed to Bimbo.
- The first bill was submitted on June 12, 2015 and Bimbo only paid $4,863.10. At that time, it provided a “review analysis” stating that the bill exceeded the fair and reasonable amount for the geographical error and also objecting to the bill as being in excess of the amount allowed under Virginia State law.
- Shortly thereafter, Roanoke Ambulatory Surgery Center submitted its second bill for $12,101 to Bimbo, which responded on October 30, 2015, paying only $3,078.81 and providing another review analysis and objection.
- On June 27, 2016, the claimant timely submitted his Claim for Benefits.
- On July 28, 2017, the Virginia Workers’ Compensation Commission approved an agreement between the claimant and his employer (Bimbo) that included a lifetime medical benefits award for the claimant’s shoulder.
- On September 1, 2017, Roanoke Ambulatory Surgery Center filed its own claim with the Virginia Workers’ Compensation Commission requesting full payment for the medical services it provided to the claimant.
- Bimbo defended the claim arguing that §65.2-605.1 (F)(i) time barred the claim because the healthcare provider failed to file a claim within one year of the date Bimbo made partial payment.
- Interestingly, no proof was offered at that time on the issue of whether the medical fees were excessive. Apparently, Bimbo chose to only defend on its belief that the claim was time barred.
- The Virginia Workers’ Compensation Commission agreed with Bimbo and found that the healthcare provider’s claim was time barred by §65.2-605.1 (F)(i).
- The Roanoke Ambulatory Surgery Center then appealed to the Virginia Court of Appeals, which reversed the Full Commission, stating that §65.2-605.1(F)(i) does not apply because Bimbo contested/denied payment of the bill. In addition, §65.2-605.1(F)(ii) is the appropriate authority which applies to the fact and it allows the healthcare provider to file its claim within one year from the date on which the final medical award to the injured claimant was issued.
- Voluntary payments were made on the claimant’s behalf, but they were not an “award.” The award in this case was not entered until July 28, 2017. The healthcare provider filed its claim for full payment on September 1, 2017.
- Consequently, under §65.2-605.1(F)(ii) the claim was timely made.
- The ultimate result of the opinion was that Bimbo was required to pay the full amount of both of its bills, with interest, at the judgment rate of interest from the date payment was due.
The prompt payment rules, under Virginia Workers’ Compensation laws are fairly complex and require carefully considered analysis to the peculiar facts of each situation. Involuntary payments are allowed under Virginia law and, in fact, favored at times, they can affect the rights of various parties, including healthcare providers. Navigation of the technical requirements of the prompt payment law requires careful attention to detail and a deep understanding of Virginia law.