Stung by Workers' (Non) Comp

May 1, 2004

Get advance guarantees of payment from patients' employers or insurers for out-of-state claims

It looked like a straightforward case. The patient needed spine surgery. Even though the injury occurred at her previous job in Texas -- some 4,000 miles away -- the surgeons at Anchorage (Alaska) Fracture & Orthopedic Clinic had received all the necessary approvals from Texas workers' compensation officials.

Or so they thought.

The Anchorage doctors and their staff were hardly new to workers' compensation --  it accounts for nearly a fifth of their payer mix. What they didn't know was that although the surgery was performed in Alaska, approval was guided by the rules of the Texas Workers' Compensation Board.

"We followed all the rules for an Alaska workers' compensation claim but Texas has special rules for spine surgeries. You need to file a special form to start the spine surgery authorization process and it's mandatory to get a second opinion for those surgeries," says Beth A. Balen, the practice's administrator. Unfortunately, no one they'd talked to in Texas had mentioned those requirements and Anchorage Fracture & Orthopedic Clinic had done neither. As a result, the Texas Board refused to pay the claim and the physicians were out their $11,000 fee.

"The Texas Workers' Comp Board made it clear that we would be violating the rules if we pursued the patient, and that we would be subject to fines and penalties if we tried to collect, so we got nothing for the surgery and neither did the hospital, the anesthesiologist, and others participating in the procedure," Balen says.

Although Balen's staff had contacted the company that carried the insurance policy for the former Texan's employer, a series of bureaucratic stumbles steered them to the wrong office to get an approval. "We never even got to the company that handled surgery preauthorization for the patient's insurance carrier," she says.

Medical practices in Alaska, Nevada, and other states that attract large numbers of newcomers are more likely to deal with out-of-state claims, but problems can occur anywhere. Michael Pulaski, administrator for Peachtree Orthopaedics in Atlanta, says his staff takes great care to get advance guarantees of payment from patients' employers or insurers for out-of-state claims. "It's an extra hoop or two, but it pays," he says.

Tough lessons learned

Balen recommends medical practices take these steps when patients claim their injury is covered by another state's workers' compensation insurance:

  • Require front-desk staff to alert your billing department whenever patients with out-of-state workers' compensation insurance schedule appointments.
  • Assign one person in the billing department to handle workers' compensation authorizations. Call the patient's insurance adjuster and case manager before you provide any services.
  • Contact the other state's workers' compensation board before performing any pricey services. Ask officials to explain the rules and send any required authorizations and forms; otherwise you are relying on an insurance company's interpretation of the rules, which, Balen learned too late, might be dead wrong.
  • Double-check what patients tell you about their insurance coverage.
  • Pick up the telephone. State Web sites are useful but sometimes out-of-date.

"Never assume that you know how to deal with an out-of-state claim," says Balen, who has not run into any problems with out-of-state workers' compensation claims since the Texas claim. "Always verify, even if you think you know the rules."

Robert Redling is editor, practice management, for Physicians Practice. Have a story for Physician Beware? Write to him at rredling@physicianspractice.com.