Court Sets Proof Standard for Medical Bill Review

A challenging aspect of a workers' compensation hearing is the determination of what is the reasonable value of medical services.  The Indiana Appellate Court has now established proof standards to implement legislative criteria. Washington Township Fire Department v. Beltway Surgery Center, No. 93A02-0811-EX-1006 (Ind. Ct. Appeals 2009)

The Indiana Act provides for the valuation of medical services by using a billing review service to calculate the pecuniary liability to a medical provider based on the 80th percentile standard. Ind. Code Section 22-3-3-52.  The Court determined that the employer has the burden of proof to establish excessive charges,

Ind. Code Section 22-3-3-52:

(a) A billing review service shall adhere to the following requirements to determine the pecuniary liability of an employer or an employer‟s insurance carrier for a specific service or product covered under worker‟s compensation: 

(1) The formation of a billing review standard, and any subsequent analysis or revision of the standard, must use data that is based on the medical service provider billing charges as submitted to the employer and the employer‟s insurance carrier from the same community. This subdivision does not apply when a unique or specialized service or product does not have sufficient comparative data to allow for a reasonable comparison. 

(2) Data used to determine pecuniary liability must be compiled on or before June 30 and December 31 of each year. 

(3) Billing review standards must be revised for prospective future payments of medical service provider bills to provide for payment of the charges at a rate not more than the charges made by eighty percent (80%) of the medical service providers during the prior six (6) months within the same community. The data used to perform the analysis and revision of the billing review standards may not be more than two (2) years old and must be periodically updated by a representative inflationary or deflationary factor. Reimbursement for these charges may not exceed the actual charge invoiced by the medical service provider. 7 

(4) The billing review standard shall include the billing charges of all hospitals in the applicable community for the service or product.