Article: Hospital Reimbursements; BWC wrongly cut rates

HOSPITAL REIMBURSEMENTS

BWC wrongly cut rates, judge rules

Saturday, December 10, 2005

Catherine Candisky

THE COLUMBUS DISPATCH

A Franklin County judge has found that the Ohio Bureau of Workers’ Compensation failed to follow state rule-making procedures when it slashed the rates paid to hospitals for treating injured workers by $50 million.

The decision could wind up costing the state millions.

Common Pleas Judge Charles A. Schneider ruled Thursday that the bureau erred by not filing proper notice of its proposal and sending it to the Joint Committee on Agency Rule and Review for approval as required under state law.

Officials for the Ohio Hospital Association, which filed the lawsuit against the bureau, said Schneider’s decision ensures they will get the opportunity to argue against the rate reduction.

"These cuts have consequences. Ohio hospitals are compelled to challenge any effort to reduce payments for the care they provide because all of us are affected when shrinking payments produce longer wait times for care or result in some services being lost," James R. Castle, president and chief executive officer for the hospital association, said in a release.

The association represents 170 hospitals and 40 health systems statewide.

The state plans to appeal the decision, which affects rates set from Oct. 1 through 2006.

"We feel that the court has split hairs," said bureau spokesman Jeremy Jackson. "If we can determine the criteria for setting the rates, we should be able to set the rates."

For now, the reduced rates will remain in effect. If the bureau loses its appeal and the commission rejects the new fee schedule, the state will repay the hospitals, Jackson said.

In August, the bureau announced a plan to cut reimbursement rates to hospitals to 55 percent of the fees billed for inpatient care and 50 percent for outpatient services, effective Oct. 1. The plan, state officials said, was to pay an amount closer to the hospitals’ actual cost.

Gov. Bob Taft ordered the action after The Dispatch reported that hospitals had been making an average profit of 50 percent on workers’ compensation cases, far higher than their margins for treating patients with private insurance or government benefits such as Medicaid.