The Workers’ Compensation and

Social Security Disability Firm

215-568-7500
A Medical Practitioner’s Guide to
Pennsylvania Workers’ Compensation

Pond, Lehocky, Stern & Giordano

30 South 17th St, 17th Floor
Philadelphia, PA 19103
Pondlehocky.com
 The law firm of Pond Lehocky Stern Giordano is committed to ensuring that our
clients receive the appropriate medical treatment to which they are entitled, and that
their treating doctors are properly compensated in a prompt manner by the workers’
compensation insurance carriers.

This booklet is designed to provide an overview of the workers’ compensation

claimant’s right to medical treatment, and to advise medical practitioners of their rights
and reporting requirements with regard to treatment and billing in connection with a
workers’ compensation claim.

We appreciate the service that you provide our clients. If you have any questions
beyond the scope of this booklet, you are encouraged to contact Pond Lehocky Stern
Giordano so that we can assist you.
The Injured Workers’ Right to Medical Treatment

The Pa. Workers’ Compensation Act, in Section 306 (f.1)(1)(i), provides that the workers’ compensation
insurance carrier shall provide payment for reasonable surgical and medical services rendered in connection
with the treatment of a work injury.

Submission of Medical Bills and Documentation to Workers’ Compensation Carrier

Section 306 (f.1) (2) provides that any medical provider who treats an injured worker must file periodic reports
with the workers’ compensation carrier on a Medical Report Form (a copy of the Medical Report Form is
included in this Guide). The Medical Report Form must be filed within 10 days of commencing treatment and at
least once a month thereafter as long as treatment continues.

The medical provider, upon providing medical treatment to the injured worker, should forward its bill to the
workers’ compensation carrier along with a CMS (formerly HCFA~ insurance claim form arid the supporting
medical documentation (office notes, operative reports, diagnostic test results, etc.). A blank CMS claim form is
included in this Guide.

Payment Medical Bills by the Workers’ Compensation Insurance Carrier

The workers’ compensation carrier is required to make payment within 30 days of receipt of the bill and
supporting medical documentation from the medical provider.

Pursuant to the Act and its medical cost containment regulations, the reimbursement rates for medical bills on a
workers’ compensation claim are calculated from a base Medicare-associated rate and subsequent annual
increases as determined by the Pa. Bureau of Labor and Industry. If a Medicare reimbursement rate does not
exist for the service in question, payment shall be at 80% of the amount most often charged for the service by
similar medical providers in that geographic area.

Fee Review Procedure

If the medical provider wishes to dispute the amount and/or timeliness of the payment of medical expenses, the
provider must file an Application for Fee Review Pursuant to Section 306 (f. 1). The Application must be filed
no more than 30 days following notification of a disputed treatment or 90 days following the original billing
date of the treatment which is the subject of the dispute, whichever is later.
Carrier’s Right to Review, Deny and Challenge Payment of Medical Bills

Until the injured worker’s claim is either voluntarily accepted by the carrier or is grat~tedby the Workers’
Compensation Judge, the carrier is under no obligation to approve, contest, Or pay for any medical treatment
received by the injured worker. A medical provider giving treatment to an injured worker with a pending claim
must wait until resolution of that claim to seek payment. The medical provider is advised, however, to send the
bill and records to the carrier while the claim itself is being contested.

Utilization Review (Treatment Denied as Unreasonable and/or Unnecessary)

On an open (accepted) workers’ compensation claim, the carrier may file a Utilization Review Request
in connection with any bill that is forwarded. The Utilization Review procedure is used to contest the
reasonableness and/or necessity of the treatment in question.

The Utilization Review Request must be filed by the carrier within 30 days of receipt of a properly
submitted bill with supporting medical documentation. The Utilization Review Request will be
forwarded by the Bureau to a Utilization Review Organization (URO). The URO will request and
review medical records from the worker’s treating doctors. The URO will also accept a written
statement from the injured worker. The URO will make a determination solely as to whether the
rendered treatment is reasonable and necessary for the recognized work injury. Any party(the doctor, the
injured worker, the insurance carrier) has a right to appeal the determination to a Workers’
Compensation Judge by filing a Petition to Review Utilization Review Determination. Note that if the
medical provider being reviewed fails to provide records to the URO, the URO must issue a
determination that the treatment is not reasonable and necessary and, furthermore, such
determinations :may not be reviewed by a workers’ compensation judge.

Treatment Denied as Unrelated

In addition to challenging payment for treatment as unreasonable or unnecessary, the carrier may deny
payment by alleging that the treatment is not related to the work injury. In such instances, the medical
provider should consult with a workers’ compensation attorney regarding the appropriate course of
action, which is usually a Petition for Penalties or a Petition to Review Compensation Benefits to
expand the description of the work injury.

It has been long understood that the workers compensation insurance carrier was under no obligation to pre-
approve any medical treatment. That is, medical providers have had to render treatment and then submit their
bill without knowing if the carrier will contest the bill or pay it. However a couple of recent Commonwealth
Court cases, McLaughlin v. WCAB (St. Francis House), 808 A. 2d 285 (PA Cmnwlth 2002) and Brenner vs
WCAB (Drexel Industries), 856 A. 2d 213 (PA Cmwlth. 2004), have apparently placed some burden on the
carrier to either formally contest or pre-approve treatment for the recognized work injury. It is not yet clear on
what practical effect these decisions will have or how the workers compensation judge will interpret them.
The Employer/Carrier’s Limited Right to Control the Injured Workers’ Medical Treatment

The Pennsylvania Workers’ Compensation Act gives employers the right to establish a list of designated health
care providers. When the list is properly posted and proper acknowledgment forms are signed, injured workers
must seek treatment for the work injury or illness with one of the employer’s designated providers for 90 days
from the date of the first medical treatment. There are some specific guidelines provided in the Act for these
lists, including:

1. The employer must provide a clearly written notice to employee of the employee’s rights and
duties.
2. The notice must be signed by the employee a) at the time of hire, b) whenever changes are made
in the list, and c) at the time of injury.
3. The list must contain at least six providers; three of the six providers must be physicians.
4. Listed providers must be geographically accessible.
5. Listed providers must contain specialties appropriate for the anticipated work-related medical
problems of the employee.
6. If a particular specialty is not on the list and the specialty care is reasonable and necessary for
treatment of the work injury, the employee will be allowed to treat with a health care provider of his
or her choosing.

At the end of the 90-day period or when the claimant is discharged from care by the panel doctor the claimant
- -

can treat with a doctor of his/her own choosing.

In practice very few employers in Pennsylvania will meet the above posting and acknowledgement
requirements to compel an injured worker to treat with the employer’s panel doctor for the first 90 days of
treatment. The Pennsylvania Commonwealth Court, in Pennsylvania Department of Corrections v. WCAB
(Kirchner), 805 A.2d 633 (Pa. Cmwlth. 2002), clearly detailed the strict requirements that the employer must
meet in order to maintain control over the employ choice of medical providers during the first 90 days of
treatment.
Payment of Medical Bills Through the Worker’s Private Health Insurance

Frequently, an injured worker whose claim is not accepted will seek to use his private health insurance until the
claim is accepted. Many private health insurers have balked at paying for medical services that are allegedly
related to a work injury. The Department of Labor and Industry, in a memo from the Director of the Bureau of
Workers’ Compensation, has made it clear that the private health insurers must pay for such treatment if the
claim is not currently accepted or granted. A copy of the Bureau’s memo is included in this Guide.

In a related matter, the Commonwealth Court has ruled that when a private health insurer pays for medical bills
and the workers’ compensation claim is subsequently accepted or granted, the workers’ compensation carrier
must reimburse the private health insurer at the exact rate the private health insurer paid the medical provider
(not merely the reimbursement schedule rate). [See Furnival State Machinery/Transamerica Insurance Group v.
WCAB (Slye) and Villanova University v. WCAB (Mantle).]

Payment of Interest on Medical Bills

Interest is payable on medical expenses.

The Pa. Bureau of Workers’ Compensation, in its Fall 2004 newsletter, issued an advisory to workers’
compensation carriers that interest must be paid on medical bill payments when payment is made after the
inquired 30-day time frame. The Bureau cautioned that failure by the carrier to pay interest may subject them to
penalties and referral to the Insurance Department for further action.

A Utilization Review Organization has authority to order the carrier to pay interest to the provider on
reasonable and necessary outstanding bills.

Medical Billing Codes

It is important that the medical practitioner be aware of what specific injury is recognized on a workers’
compensation claim and that the appropriate diagnosis codes are used when submitting bills to the insurance
carrier.
WORKERS’ COMPENSATION SETTLEMENTS - MEDICARE APPROVAL

If a claimant is eligible for Medicare benefits at the time of settlement (or if the claimant expects to be eligible
within 30 months of settlement), that claimant is required to obtain Medicare approval in order to move forward
with the settlement. Centers for Medicare Services (CMS) is concerned about having liability for claimant’s
medical bills related to the work injury transferred to Medicare after the Workers’~ compensation case is settled
and, therefore, CMS may require a Medicare Set Aside Trust. Claimant must submit medical documentation,
including narrative reports from his/her doctors, indicating any anticipated future treatment for the work injury
and its associated costs. CMS will consider this information to determine what portion of the settlement money
must be placed in a Set Aside Trust. The claimant must then pay for any medical bills incurred after the date of
settlement with the funds in the Medicare Set Aside Trust. Once the Set Aside Trust is exhausted, then
Medicare will become responsible for bills for the work injury.

Frequently, claimant’s attorney will contact the claimant’s treating doctor regarding creating a lifetime care plan
for the patient to be presented to CMS. This lifetime care plan is critical in helping CMS determine the amount
necessary for a Set Aside Trust and ensuring that the Claimant’s interests are protected and that future medical
bills are paid. The prompt cooperation of claimant’s treating doctor is essential in helping the claimant move
forward with the resolution of his or her claim.
Medical Report Form
CMS Form
Bureau Memo Regarding Coverage Disputes Between WC Carriers
and Private Health Insurers
Notice of Compensation Payable
Notice of Workers’ Compensation Denial
Application for Fee Review