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Insurers challenge proposed hospital inpatient payment rules

hospital reimbursement

A group of insurance companies is asking the Florida Division of Administrative Hearings to analyze the validity of proposed hospital reimbursement rules and determine whether the methods used by the Division of Workers’ Compensation to establish maximum reimbursement allowances were “arbitrary and capricious.”

Normandy Insurance Co., Zenith Insurance Co., Bridgefield Employers Insurance Co., Bridgefield Casualty Insurance Co., BusinessFirst Insurance Co. and RetailFirst Insurance Co. are asking the Administrative Hearings Division to review certain provisions of the proposed 2020 edition of the Florida Workers’ Compensation Reimbursement Manual for Hospitals, which has not become effective.

The challenge specifically addresses the newly proposed inpatient maximum reimbursement allowances and the definitions and criteria for their application. The insurers are also challenging as overly vague a provision dealing with emergency services and care.

The proposed fee schedule would pay $7,000 per day for hospitalizations not involving surgery or intensive care, $11,000 per day for every day of a stay where surgery was performed and $13,000 per day for intensive care.

The current hospital reimbursement manual authorizes payments ranging from $2,283.40 per day to $3,850.33 per day. It also includes a “stop loss” provision that requires the insurer to pay 75% of the billed charge if a hospital charges more than a certain threshold amount.

The Three-Member Panel endorsed the new methodology in December 2020.

The insurers say they generally agree with the proposed reimbursement model, but not the proposed daily payments.

WorkCompCentral is a sister publication of Business Insurance. More stories here.