Hospital scores reimbursement for entire bill of $4 million

In Arkansas, the total reimbursement allowed under the inpatient hospital fee schedule is determined by first performing the per diem method calculation and then the stop-loss method calculation. These figures are added for the total reimbursement allowed under the fee schedule, and the 150 percent multiplier is applied.

Case name: CNA Insurance Co. v. Arkansas Children's Hospital, No. CA10-1136 (Ark. Ct. App. 11/09/11).

Ruling: The Arkansas Court of Appeals held that a hospital was entitled to full reimbursement for the extraordinary medical services it rendered to an injured worker.

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What it means: In Arkansas, the total reimbursement allowed under the inpatient hospital fee schedule is determined by first performing the per diem method calculation and then the stop-loss method calculation. These figures are added for the total reimbursement allowed under the fee schedule, and the 150 percent multiplier is applied.

Summary: A worker suffered severe burns when he fell into salt water that was 200 degrees Fahrenheit. He was admitted to a certified burn treatment facility where he stayed for 200 days. The final bill for his care was more than $4 million. The employer's insurer accepted the claim as compensable, but it left an unpaid balance of more than $800,000, claiming it paid all it was required to. The Arkansas Court of Appeal held that the hospital was entitled to full reimbursement for the extraordinary medical services it provided to the worker.

The inpatient hospital fee schedule contains two steps for calculating medical care provider reimbursements, including the per diem method and the stop-loss method. When extraordinary services resulting from major burns or an injury requiring an extended period of intensive care are rendered, a greater fee may be allowed up to 150 percent of the fee schedule.

The insurer argued that paying the full amount of the hospital's bill would go against the legislative intent to contain medical costs. The court explained that the 150 percent multiplier is applied to the total fee schedule allowance.

The court said that the rules do not require containment of every workers' compensation cost. Also, drafters of the rules contemplated circumstances where providers would be paid the full amount of their bills. The court noted that a workers' compensation case involving medical expense of more than $4 million is "a rare circumstance."

Read more at the WorkersComp Forum homepage.

December 12, 2011

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