Carrier Prevails in Medical Bill Dispute

In the absence of a reimbursement agreement with the medical provider, workers' compensation carriers in Virginia are required to pay medical providers according to the prevailing community rate as provided by Va. Code Section 65.2-605 and Rule 14 of the Virginia Workers' Comensation Commission Rule 14.  In a dispute, the carrier bears the burden of establishing that the charges do not meet the community standard.  This is a difficult burden that often requires reliance on statistical experts and the existence of accurate and up-to-date rate databases that correspond to the community in question.  A recent decision out of the Virginia Worker's Compensation Commission, Hill v. VDOT-NOVA District Management, JCN 2099265 (Feb. 1, 2013), indicates that such complicated statistical data may no longer be necessary for a carrier to prevail in a provider fee dispute. 

In Hill, the carrier successfully defended a provider's reimbursement claim using the testimony of a doctor from the same area of Northern Virginia who practiced in the same specialty field as the claimant's provider.  In 2008, the claimant's neurosurgeon performed a fusion surgery on the claimant with the assistance of a physician's assistant.  The medical provider's office then billed the physician's assistant's work to the carrier at 95% of the surgeon's rate (more than $20,000).  The carrier paid only a portion of the bill on the grounds that the physician's assistant's charges exceeded the usual, customary, and reasonable rate for the community.  The provider filed a claim for the balance of the bill.

The carrier hired another neurosurgeon from the area to review the disputed charges.  In his deposition, the carrier's neurosurgeon testified that 20% was the upper limit of charges for physician's assistant's based upon his inquiries with the majority of other medical practices in the area.  Noteably, the carrier's neurosurgeon admitted that had no statistical date samples to support his conclusion. The Commission acknowledged that while the prevailing rate typically has been established through expert statistical analysis, "we have never held that this was the only manner in which the prevailing community rate could be ascertained."  The Hill decision shows that a doctor's testimony may be used to successfully defend a medical provider claim where the doctor has significant knowledge regarding the prevailing rate in the community for similiar proceedures and fully explains the basis for that knowledge.