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This rule set impacts payer communities, medical providers, medical practitioners, service companies, bill review
companies, and injured workers, which total more than 200,000 entities. All of these entities anticipate HCS rule
updates.
The proposed rule updates will allow providers and payers to use current coding and billing source documents as
opposed to continuing to utilize reference materials from 2023. Medical coding and billing reference materials are
updated yearly by the American Medical Association and the Centers for Medicare and Medicaid Services.
C. What is the desired outcome?
The overall desired outcome with these specific rule changes is to provide for standardized billing and payment
practices within the Michigan workers' compensation arena. Ultimately, by creating a standardized fee schedule at
reasonable reimbursement rates for practitioners near 140% of Medicare payments, the rules strive to maintain or
improve injured workers' access to appropriate medical care, while keeping costs to businesses as low as possible.
5. Identify the harm resulting from the behavior that the proposed rules are designed to alter and the likelihood
that the harm will occur in the absence of the rule.
The HCS rules are revised annually (MCL 418.315(2)) to maintain consistency with the determinations made each
year by the Center for Medicare & Medicaid Services (CMS). Harm could come from not updating the current rules,
as we would then not maintain consistency with national reimbursement rates set by CMS. This could impact
reimbursement rates for providers, negatively impact access to care for injured workers, and increase costs to
businesses. Being consistent with CMS rates allows the Workers' Compensation Health Care Services division to
avoid the costs of independently researching and compiling the statistical data necessary for developing
reimbursement figures. As a direct result of the Health Care Services approach taken here in Michigan, workers'
compensation medical costs are highly competitive compared to surrounding states.
A. What is the rationale for changing the rules instead of leaving them as currently written?
The HCS rules must be updated to maintain consistency with the determinations made each year by the Center for
Medicare & Medicaid Services (CMS). All of the involved entities within the workers' compensation medical benefit
community anticipate HCS rule updates.
6. Describe how the proposed rules protect the health, safety, and welfare of Michigan citizens while promoting a
regulatory environment in Michigan that is the least burdensome alternative for those required to comply.
There are no viable alternatives to the HCS rules. If the rules were not in place, there would be unchecked inflation of
reimbursement for medical services provided to injured workers, adversely affecting business due to increased costs
for workers' compensation. If the healthcare industry were to render services without government-mandated,
maximum allowable fees, there would be very little, if any, motivation for providers to contain costs. Without cost-
containment, the fees charged for services would escalate.
Updating the rules to use the most current CMS Relative Value Units (RVU) will result in a 3% increase in the
conversion factor resulting in a 4% increase in reimbursements for the Top 50 most frequently utilized Current
Procedure Technology (CPT) codes. Overall, though, the proposed changes maintain reimbursement rate levels for
the most frequent CPT codes near 140% of Medicare rates. This balances between the interests of businesses/payers
who prefer lower medical costs, with the interests of medical professionals who favor increased reimbursement rates.
Ultimately, the Agency's goal is a balanced system that ensures reasonable reimbursement rates, cost containment, and
above all, access to appropriate care for Michigan's injured workers.
7. Describe any rules in the affected rule set that are obsolete or unnecessary and can be rescinded.
R 418.10201 - Rescinding due to redundancy.
R 418.10206 - Rescinding due to redundancy.
Fiscal Impact on the Agency
Fiscal impact is an increase or decrease in expenditures from the current level of expenditures, i.e. hiring additional staff,
higher contract costs, programming costs, changes in reimbursements rates, etc. over and above what is currently
expended for that function. It does not include more intangible costs for benefits, such as opportunity costs, the value of
time saved or lost, etc., unless those issues result in a measurable impact on expenditures.
MCL 24.245(3)