Inpatient Hospital Fee Schedule

This Inpatient Hospital Fee Schedule is applicable for all inpatient medical, surgical, rehabilitation, and/or psychiatric services rendered in a hospital to injured workers under the ARKANSAS WORKERS' COMPENSATION ACT. This Inpatient Hospital Fee Schedule is established pursuant to ARK. CODE ANN. 11-9-517 (1987).

I. GENERAL GROUND RULES

A. General Information

1. Reimbursements shall be determined for services rendered in accordance with this fee schedule and shall be considered to be inclusive unless otherwise noted.

2. Reimbursement for a compensable workers' compensation claim shall be the lesser of the hospital's usual and customary charges or the maximum amount allowed under the Inpatient Fee Schedule.

3. All inpatient hospital care must be reviewed under the PROFESSIONAL HEALTH CARE REVIEW PROGRAM required by COMMISSION RULE 30.

4. Inpatient hospitals shall be grouped into the following separate peer groupings:

  PEER GROUP 1       HOSPITALS 1 - 49 BEDS
  PEER GROUP 2       HOSPITALS 50 - 99 BEDS
  PEER GROUP 3       HOSPITALS 100 - 199   BEDS
  PEER GROUP 4       HOSPITALS 200 - 399 BEDS
  PEER GROUP 5       HOSPITALS 400+ BEDS
  PEER GROUP 6       REHABILITATION HOSPITALS
  PEER GROUP 7       PSYCHIATRIC HOSPITALS

5. For each inpatient claim submitted, the provider shall assign a DIAGNOSIS RELATED GROUP (DRG) code from the attached listing which appropriately reflects the patient's primary cause of hospitalization.

6. The inpatient hospital fee schedule shall become effective SEPTEMBER 15, 1993 and shall be updated annually.

7. Ongoing analysis will be conducted as to the projected savings of this schedule, as well as any impact on patient services. (An overall review of this schedule will be conducted within 6 months of implementation date.)

8. Preauthorization is required for specific inpatient services.

B. Definitions

DRG - One of 492 classifications of diagnosis in which patients demonstrate similar resource consumption and length of stay patterns.

INPATIENT SERVICES - Services rendered to a person who is formally admitted to a hospital and whose length of stay exceeds 23 hours.

INSTITUTIONAL SERVICES - All non-physician services rendered within the institution by an agent of the institution.

LENGTH OF STAY (LOS) - Number of days of admission where patient appears on midnight census. Last day of stay shall count as an admission day if it is medically necessary for the patient to remain in the hospital beyond 12:00 noon.

MEDICAL ADMISSION - Any hospital admission where the primary services rendered are not surgical, psychiatric, or rehabilitative in nature.

STOP-LOSS PAYMENT (SLP) - An independent method of payment for an unusually costly or lengthy stay.

STOP-LOSS REIMBURSEMENT FACTOR (SLRF) - A factor established by the Commission to be used as a multiplier to establish a reimbursement amount when total hospital charges have exceeded specific stop-loss thresholds.

STOP-LOSS THRESHOLD (SLT) - Threshold of total charges established by the Commission, beyond which reimbursement is calculated by multiplying the applicable Stop-Loss Reimbursement Factor times the total charges identifying that particular threshold.

SURGICAL ADMISSION - Any hospital admission where the primary services rendered are not medical, psychiatric or rehabilitative in nature.

TRANSFERS BETWEEN FACILITIES - To move or remove a patient from one facility to another for a purpose related to obtaining or continuing medical care. May or may not involve a change in the admittance status of the patient, i.e. patient transported from one facility to another to obtain specific care, diagnostic testing, or other medical services not available in facility in which patient has been admitted. Includes costs related to transportation of patient to obtain medical care [Medical Dispute Resolution definition derived from the definition provided for "transfer" in the Black's Law Dictionary, 5th Edition, ed. Henry Campbell Black, M.A. (St. Paul, MN: West Publishing Company, 1979)].

WORKERS' COMPENSATION STANDARD PER DIEM AMOUNT (SPDA) - A standardized per diem amount established for the reimbursement of hospitals for services rendered.

This section defines the reimbursement procedures and calculations for inpatient health care services by all hospitals.

A. General Information

1. For each inpatient claim submitted, the provider shall assign a DIAGNOSIS RELATED GROUP (DRG) code from the attached listing which appropriately reflects the patient's primary cause for hospitalization. Hospitals within each peer group shall be paid a maximum amount per inpatient day.

2. The maximum per diem rate to be used in calculating the reimbursement rate is as follows:

    PEER GROUP 1    $   828.00
    PEER GROUP 2         969.00
    PEER GROUP 3      1,180.00
    PEER GROUP 4      1,338.00
    PEER GROUP 5      1,567.00
    PEER GROUP 6      1,166.00
    PEER GROUP 7         677.00

3. The Inpatient Fee Schedule allows for independent reimbursement on a case-by-case basis if the particular care exceeds the Stop-Loss Threshold.

B. Reimbursement Calculations

1. Explanation

a. Each admission is assigned an appropriate DRG.

b. The applicable Standard Per Diem Amount (SPDA) is multiplied by theLength Of Stay (LOS) for that admission.

c. The Workers' Compensation Reimbursement Amount (WCRA) is the total amount of reimbursement to be made for that particular admission.

2. Formula

LOS X SPDA = WCRA

3. Example

DRG 222: KNEE PROCEDURES W/O CC

HOSPITAL PEER GROUP: 3
MAX. RATE PER DAY: $1,180
NUMBER BILLED DAYS: 9
BILLED CHARGES: $21,750

Maximum Allowable Payment: $10,620

C. Stop-Loss Method

Stop-loss is an independent reimbursement factor established to ensure fair and reasonable compensation to the hospital for unusually costly services rendered during treatment to an injured worker.

1. Explanation

a. To be eligible for stop loss payment, the total allowed charges for a hospital admission must exceed the hospital maximum payment, as determined by the hospital maximum payment rate per day, by at least $10,000.

b. This stop-loss threshold is established to ensure compensation for unusually extensive services required during an admission.

c. Once the allowed charges reach the stop-loss threshold, reimbursement for all additional charges shall be made based on a stop-loss payment factor of 80%.

d. The additional charges are multiplied by the Stop-Loss Reimbursement Factor (SLRF) and added to the maximum allowable payment.

2. Formula

(ADDITIONAL CHARGES X SLRF) + MAXIMUM ALLOWABLE PAYMENT = WCRA

3. Example

DRG 222: KNEE PROCEDURES W/O CC

HOSPITAL PEER GROUP: 3
MAX. RATE PER DAY: $1,180
NUMBER BILLED DAYS: 9
BILLED CHARGES: $21,750

Maximum Allowable Payment For
Normal DRG Stay           $10,620

Versus: Billed Charges $21,750

Amount Payable Before Stop-Loss,
Lower of Charge vs Maximum Allowable...........................................   $10,620

Total Difference,
Charges vs Payments    $11,130

Difference Over & Above $10,000 Stop-Loss, $1,130
Payable at 80%.....................................   $ 904

TOTAL PAYMENT
DUE HOSPITAL                                   $11,524

D. Billing For Inpatient Admissions

1. All bills for inpatient institutional services should be submitted on the standard UB-82 (HCFA 1450) form or any revision to that form.

III. PREAUTHORIZATION

A. Procedures For Requesting Preauthorization

1. The insurance carrier is liable for the reasonable and necessary medical costs relating to the health care treatments and services listed in subsection (7) of this section required to treat a compensable injury, when any of the following situations occur:

(a) there is a documented life-threatening degree of a medical emergency necessitating one of the treatments or services listed in subsection (7) of this section;

(b) the treating doctor, his/her designated representative, or injured employee has received preauthorization from the carrier prior to the health care treatments or services; or

(c) when ordered by the Commission.

2. The insurance carrier shall designate an accessible direct telephone number, and may also designate a facsimile number for use by the treating doctor or the injured employee to request preauthorization during normal business hours. The direct number shall be answered or the facsimile responded to, by the carrier's agent who is delegated to approve or deny requests for preauthorization, within the time limits established in subsection (4) of this section.

3. Prior to the date of proposed treatment or services, the treating doctor, or his/her designated representative, shall notify the insurance carrier's delegated agent, by telephone or transmission of a facsimile, of the recommended treatment or service listed in subsection (7) of this section. Notification shall include the medical information to substantiate the need for the treatment or service recommended. If requested to do so by the carrier, the treating doctor shall also notify the insurance carrier of the location and estimated date of the recommended treatment or service, and the name of the health care provider performing the treatment or service, if other than the treating doctor. Designated representative includes, but is not limited to, office staff, hospitals, etc.

4. Within three working days of the treating doctor's request for preauthorization, the insurance carrier's delegated agent shall notify the treating doctor, by telephone or transmission of a facsimile, of the insurance carrier's decision to grant or deny preauthorization. When the insurance carrier approves preauthorization, the insurance carrier shall send written approval, or if denying preauthorization, shall send documentation identifying the reasons for denial. Notification shall be sent to the injured employee, the injured employee's representative if known, and the treating doctor, or the treating doctor's designated representative, within 24 hours after notification of denial or approval.

5. The insurance carrier must maintain accurate records to reflect information regarding the preauthorization request and approval/denial process.

6. If a dispute arises over denial of preauthorization by the insurance carrier, the doctor or the injured employee may proceed to Preauthorization Medical Dispute Resolution.

7. The health care treatments and services requiring preauthorization are: all nonemergency hospitalizations, and transfers between facilities.

8. A failure to respond and a denial of a preauthorization request must be handled according to the following procedures:

a. When an insurance carrier or self-insured employer fails to respond to a preauthorization request, the treating doctor or designated representative must call the Medical Cost Containment Division with detailed information if:

(1) Verbal response is not received within 3 working days from date of completed request (do not count first day);

(2) Written confirmation is not sent within 24 hours from verbal notification.

b. When a request for pre-authorization is denied, a request for review may be submitted to the Medical Cost Containment Division of the Arkansas Workers' Compensation Commission.

(1) All documents and copies of documents submitted as part of the request shall be legible. The request shall include the following information:

(a) The claimant's full name, address, and social security number;

(b) the workers' compensation number assigned to the claim by the commission, if known;

(c) the date and nature of the injury or illness;

(d) the employer's name and address;

(e) the insurance carrier's name and address;

(f) the health care provider's name, address, Federal Tax Identification number, and professional license number;

(g) copies of all written communications and memoranda relating to the dispute;

(h) documentation indicating efforts have been made to attempt to resolve this dispute between the parties;

(i) copies of all medical bills, which are disputed, as originally submitted to the insurance carrier;

(j) a summary of the requesting party's position regarding the dispute; and

(k) the date of this request.

(2) On the same date of submission to the commission, the requesting party shall send a copy of the request, by certified mail, to the responding party, hereafter referred to as "RESPONDENT".

(3) When the request is received by the Medical Cost Containment Division, all parties will be notified by certified mail, return receipt requested. All parties shall have thirty (30) days from the date of receipt of notification to submit the following information to the Administrator:

(a) The information listed in subsection (1) of this rule; if applicable, copies of all medical audit summaries and peer review reports, that are related to this dispute, from the insurance carrier, auditing company, etc.;

(b) response to the requestor's position regarding the dispute;

(c) a summary of the Respondent's position regarding the dispute; and,

(d) the date of the response.

(4) The Medical Cost Containment Division may request additional information from either party to review the medical issues in the dispute. Requested information should be forwarded to the Division of Medical Review at the commission within 10 days of receipt of request.

(5) The Medical Cost Containment Division shall proceed with the review after all required and requested information has been received.

(6) Upon completion of the review, the decision of the Medical Cost Containment Division will be forwarded to the disputing parties, the employee and the employee's representative.

(7) Any party feeling aggrieved by the order of the Administrator shall have 10 days from the date of notification to appeal the ruling to an Administrative Law Judge of the Arkansas Workers' Compensation Commission. Notice of appeal shall be filed with the Deputy Executive Director of the Arkansas Workers' Compensation Commission. The notice of appeal shall contain the following:

(a) a copy of the Administrative Order appealed from; and

(b) copies of all materials submitted to the Medical Cost Containment Administrator.

(8) The appealing party shall mail a copy of all materials which are filed in the appeal to each opposing party. No response to the appeal of the Administrator's order is required. A decision must be entered by the Administrator before any appeal may be brought.

IV. OTHER SERVICES

A. Outpatient Services

1. When services are unavailable on an outpatient basis, the attached schedule is hereby adopted.

2. Unavailability must be determined based upon the Commission's traditional reasonableness standard.

B. Pharmacy Services

1. Pharmaceutical services rendered as part of inpatient care are considered inclusive within the inpatient fee schedule and will not be reimbursed separately.

2. All retail pharmaceutical services rendered will be reimbursed in accordance with the Pharmacy Schedule.

C. Professional Services

1. All non-institutional professional services will be reimbursed in accordance with the Arkansas Workers' Compensation Medical Fee Schedule.

State of Arkansas
Workers' Compensation Commission
324 Spring Street
P.O. Box 950
Little Rock, Arkansas 72203-0950
Telephone 1-501-682-3930 / 1-800-622-4472
Legal Advisor Direct 1-800-250-2511
Arkansas Relay System TDD 1-800-285-1131