RULES AND REGULATIONS
INSURANCE DEPARTMENT
[31 PA. CODE CH. 167]
Workers' Compensation Act Provider Fees
[34 Pa.B. 6405] The Insurance Department (Department) adopts Chapter 167 (relating to Workers' Compensation Act--provider fees) to read as set forth in Annex A.
Statutory Authority
This final-form rulemaking is adopted under the general authority of sections 205, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412) and section 306(f.1)(3)(i) of the Workers' Compensation Act (act) (77 P. S. § 531(3)(i)).
Comments and Response
Notice of proposed rulemaking was published at 34 Pa.B. 3255 (June 26, 2004) with a 30-day comment period. During the 30-day comment period, comments were received from the Pennsylvania Medical Society, the Pennsylvania Association of Nurse Anesthetists and the Insurance Federation of Pennsylvania, Inc. (IFP). During its regulatory review, the Independent Regulatory Review Commission (IRRC) did not submit comments to the Department. No changes were made to Annex A in this final-form rulemaking.
The Pennsylvania Medical Society and the Pennsylvania Association of Nurse Anesthetists both supported the proposed rulemaking. The IFP raised several issues with the proposed rulemaking.
The Department's response to the issues raised by the IFP is as follows.
The IFP states that the Department has not made or supported a determination that the current reimbursement level for anesthesiologists is unreasonable. The IFP's overriding objections to the regulations are its assertions that the Department failed to make the findings required under section 306(f.1)(3)(i) and (v) of the act to justify the proposed increase and that the proposed increase is counter to the general goal of the act, which the IFP asserts is medical cost containment. The IFP also objects because the Department's determination to increase the reimbursement rate for anesthesiologists was based solely on its review of data that was submitted by the Pennsylvania Society of Anesthesiologists (PSA).
Under an extensive review process, the Department did make the determination that the PSA had satisfied the statutory criteria to have the workers' compensation anesthesiology conversion factor reviewed for reasonableness in accordance with section 306(f.1)(3)(v) of the act. Further, after reviewing the data and expert reports submitted by the PSA, the Department ultimately determined that the existing workers' compensation reimbursement rate for anesthesiologists was not reasonable and that a new rate should be established by regulation in accordance with section 306(f.1)(3)(i) and (v) of the act. As the petitioner, the PSA was required to submit data to the Department in support of its request for the issuance of a regulation. In doing so, the PSA did not preselect the data in any way but submitted all data that it could obtain. Further, the data submitted by the PSA was extensive, credible and persuasive and, together with the expert reports, fully supports the Department's determination to establish a new reimbursement rate for anesthesiologists under the Workers' Compensation Program (Program).
The IFP stated that the proposed reimbursement level is unreasonable and contrary to the goals of the act.
The revised reimbursement rate established by the Department is reasonable in light of the data and expert reports submitted to the Department by the PSA, which demonstrated that the disparity between anesthesia allowances under the workers' compensation and private managed care systems was substantially and patently disproportionate to disparities for other providers. The revised reimbursement rate is based on an average of reimbursement rates in the private managed care market and, as such, is not unreasonable. Because the PSA satisfied the explicit criteria for relief set forth in the act, the Department believes that it would not be appropriate to deny the PSA relief based on the general goal of cost containment, which the IFP asserts to be the purpose of the act.
The IFP asserts that the Department's reliance on section 306(f.1)(3)(v) of the act is misplaced.
The Department believes that section 306(f.1)(3)(v) of the act is clear and, together with section 306(f.1)(3)(i) of the act, provides the Commissioner with statutory authority to promulgate this final-form rulemaking.
The IFP also states that the Department's proposed regulation fails to comply with the requirements of the Regulatory Review Act (71 P. S. §§ 745.1--745.15).
The IFP appears to assert that the Department's determination that the existing reimbursement rate was not reasonable should have been included in the body of the regulation itself. Under the act, however, only the new reimbursement rate is to be promulgated by regulations following the Department's determination that an existing rate is not reasonable. In promulgating this final-form rulemaking, the Department has fully complied with the requirements of the Regulatory Review Act, including publishing a proposed rulemaking in the Pennsylvania Bulletin and accepting public comments thereon.
Affected Parties
The final-form rulemaking will affect all anesthesiologists who provide anesthesia services to persons whose care is reimbursed under the Program when the anesthesia conversion factor is a basis for reimbursement. It will also affect all insurers and others who directly or indirectly assume responsibility for the costs of medical care provided under the Program.
Fiscal Impact
State Government
There will be no increase in cost to the Department due to the adoption of Chapter 167.
General Public
There will be no fiscal impact to the public.
Political Subdivisions
The final-form rulemaking will not impose additional costs on political subdivisions.
Private Sector
There is minimal fiscal impact as a result of the final-form rulemaking. There is no specific data available identifying the precise costs associated with the cost of anesthesiology benefits under the workers' compensation system. However, it is known that the expenses resulting from medical benefits are approximately 45% of total loss expenses. In addition, the loss expenses resulting from anesthesiology is a minor cost in comparison to the total costs of surgical expenses. Therefore even though Chapter 167 will increase the reimbursement of anesthesiology expenses by 63%, it should affect the overall costs only minimally.
Paperwork
There is no anticipated additional paperwork expected as a result of this final-form rulemaking.
Effectiveness/Sunset Date
The rulemaking will become effective upon adoption and publication in the Pennsylvania Bulletin. The Department continues to monitor the effectiveness of regulations on a triennial basis; therefore, no sunset date has been assigned.
Contact Person
Questions regarding this final-form rulemaking should be directed to Peter J. Salvatore, Regulatory Coordinator, Office of Special Projects, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-4429, psalvatore@state.pa.us, fax (717) 705-3873.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on October 19, 2004, the Department submitted a copy of the proposed rulemaking to IRRC and to the Chairpersons of the House Insurance Committee and the Senate Banking and Insurance Committee. In addition to the submitted proposed rulemaking, the Department provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Department. A copy of that material is available to the public upon request.
In preparing this final-form rulemaking, the Department considered all comments received from IRRC, the Committees and the public.
This final-form rulemaking was deemed approved by the House and Senate Committees on November 17, 2004. In accordance with section 5a(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), IRRC met on November 18, 2004, and deemed approved the final-form rulemaking in accordance with section 5a(e) of the Regulatory Review Act.
Findings
The Commissioner finds that:
(1) Public notice of intention to adopt this rulemaking as amended by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) The adoption of this rulemaking in the manner provided in this order is necessary and appropriate for the administration and enforcement of the authorizing statutes.
Order
The Commissioner, acting under the authorizing statutes, orders that:
(a) The regulations of the Department, 31 Pa. Code, are amended by adding §§ 167.1 and 167.2 to read as set forth in Annex A.
(b) The Commissioner shall submit this order and Annex A to the Office of General Counsel and Office of Attorney General for approval as to form and legality as required by law.
(c) The Commissioner shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) The regulation adopted by this order shall take effect upon final publication in the Pennsylvania Bulletin.
M. DIANE KOKEN,
Insurance Commissioner(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 34 Pa.B. 6476 (December 4, 2004).)
Fiscal Note: Fiscal Note 11-222 remains valid for the adoption of the subject regulations.
Annex A
TITLE 31. INSURANCE
PART VIII. MISCELLANEOUS PROVISIONS
CHAPTER 167. WORKERS' COMPENSATION ACT--PROVIDER FEES Sec.
167.1. Purpose. 167.2. Payment for anesthesia services. § 167.1. Purpose.
The purpose of this chapter is to set the allowance for anesthesia services provided to patients under the Workers' Compensation Act (77 P. S. §§ 1--2626) when the allowance utilizes the anesthesia conversion factor.
§ 167.2. Payment for anesthesia services.
The Workers' Compensation Part B Fee Schedule shall be amended by multiplying the anesthesia conversion factor applicable to Codes 100-1999 by a multiplier of 1.632. The Fee Schedule, as amended, shall apply to anesthesia services provided in all regions after December 4, 2004.
[Pa.B. Doc. No. 04-2138. Filed for public inspection December 3, 2004, 9:00 a.m.]
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