What if the Medicare fee schedule does not have a rate for the service you provide? You look to Section 3157(7)(a) for the second fee cap largely applicable to post-acute providers. This fee cap will apply when 3157(2) does not (there is no Medicare rate for your coded service or there is no code). This fee cap is referred to as the “55% schedule” because it provides that a provider will receive at most 55% of its 1/1/19 charge master for that same service. If no 1/1/19 charge master, you receive at most, 55% of your average charge as of 1/1/19 for that service. The maximum percentage decreases to 54% in 2022, and 52.5% in 2023. To be clear, this appears to mean that those whose services are not covered by Medicare, and those who were not in business as of 1/1/19, will be covered by NEITHER fee cap under the amended Act. This has extremely important potential for business planning. Stated another way: new businesses providing non-Medicare services appear to not be covered by the 55% fee cap.
Importantly, keep in mind that both “fee schedules” will operate as “fee caps” because the legislature essentially stated as such in both (2) and (7)(a) indicating that the schedules provide the most that is recoverable. So, 200% Medicare or 55% charge master/average charge is the maximum payment; it is not mandated as the actual payment amount. Thus, insurers may argue that less than 200% Medicare or less than 55% charge master/average charge is reasonable.
2. When do the new fee regulations go into effect?
Unless there is a legislative change, fee caps become effective on 7/1/21. Remarkably, for the first time in the history of No-Fault insurance, not only will there be fee caps other than “reasonable and customary” but one of them is linked to another system, Medicare, as discussed above.
3. What should you be doing now to prepare?
While it may be appealing, the “ostrich in the sand” approach is one I do not recommend when it comes to preparing for the advent of the new fee regulations. The fee caps will redefine the No-Fault landscape and the providers who are prepared to meet the administrative and financial challenges are the providers poised to weather the storm. So, right now, you should be evaluating whether your services may be coded and if those codes have associated Medicare rates. If not, you should determine if you had a charge master on 1/1/19. If no charge master, ask: what was your average charge for each service you provided on 1/1/19? Consider whether there are services you provide now that were not on a charge master and may be so new that there was no 1/1/19 average charge. Those services should be reimbursed under the general rule of MCL 500.3157(1): reasonable and customary charge.
Consider also these five things as you work to understand what may be your reimbursable rate maximum after 7/1/21:
a. If you have a coded service for which there is a Medicare associated rate, that rate should apply without limitation regarding Medicare rules. Section 3157(15) defines “Medicare” for purposes of the No-Fault Act to mean the fee for service without regard to Medicare’s limitations. Of course, there are new limitations under the No-Fault Act to contend with: the Utilization Review provision and the rules promulgated by DIFS.
b. Your reimbursement rate will fluctuate as the Medicare rate adjusts. Section 3157(8) addresses this point specifically. So, if your reimbursement is tied to Medicare, it will adjust as Medicare rates adjust. Also, be mindful that codes change, are deleted, and revised on an annual basis. What may not be coded today, may be coded next year. Likewise, there may be other codes that could apply to your services now or later, dependent on code changes promulgated by the American Medical Association or CMS.
c. 200% Medicare is not permitted to exceed your average charge on 1/1/19. Section 3157(8) makes this point. Thus, even if the Medicare fee schedule applies to your service, whether you provided that service on 1/1/19 is significant because the average charge for the service as of that date is a cap on reimbursement from the insurer.
d. Your charge master or average charge adjusts annually by the Medical care Component of the Consumer Price Index. If you are subject to the 55% fee cap, the percentage recovery decreases to 54% in 2022 and 52.5% in 2023 and thereafter. However, your charge master or average charge is also supposed to adjust annually by the percentage change in the Medical Care Component of the Consumer Price Index for the year preceding the adjustment.
e. Neither Medicare fee schedule nor 55% fee cap may apply to you. What fee regulation applies to your service on and after 7/1/21 when: there is no Medicare associated rate for your service, you had no charge master on 1/1/19, you had no average charge for the service on 1/1/19, and you were not in business on 1/1/19? In this situation, it appears that you default to the general rule of MCL 500.3157(1): reasonable and customary charge. For business planning purposes, this point may be particularly important as new businesses providing non-Medicare services appear to not be covered by the 55% fee cap.
As we move forward, know that Miller & Tischler stands ready to navigate the new fee regulations for your specific case and all matters. We welcome your questions and to see how we can put our expertise to work for you.
Maureen H. Kinsella
Miller & Tischler, PC