Physician Fee Schedule
Pursuant to KRS 342.035(1), the Commissioner of the Department of Workers' Claims is required to promulgate administrative regulations to adopt a schedule of fees for the purpose of ensuring that all fees, charges, and reimbursements under KRS 342.020 shall be fair, current, and reasonable. The medical fee schedule for physicians is reviewed and updated every two years on July 1. The current version became effective July 1, 2018. The 2018 medical fee schedule was established using medical billing data provided by FAIR Health, Inc., an independent, non-profit organization that collects data for and manages the nation's largest database of privately billed health insurance claims. The fee schedule may be purchased by ordering a copy from the Department online or conventionally through the following links:
Contact Pamela Knight
Hospital Fee Schedule
The Hospital Fee Schedule (cost-to-charge ratio) governs the reimbursement for hospital charges in workers’ compensation claims and these ratios are modified April 1st of each year. The calculations are determined by utilizing applicable figures taken from each facility’s cost report (HCFA-2552) on file with the Cabinet for Health and Family Services (CHFS).
Current Hospital Cost-to-Charge Ratios
The Cost-to-Charge ratio for Out-of-State Hospitals changes frequently- please check back often to ensure that you have the most up to date information possible.
Contacts Shari Lafoe
Shari.Lafoe@ky.gov Sherry Wilson
Of all the medical cost-containment measures enacted in the amendment of KRS 342.020 in 1994, managed care is of the most historical significance. For the first time employers were granted input into the matter of physician selection through managed care plans approved by the commissioner.
Employees still have choice of physician but within the confines of the provider network. (803 KAR 25:110) The Administrative Regulation establishing the standards for managed care plans was adopted on July 15, 1994. The first plan was approved in October and by November 1994, Kentucky workers were being treated under approved plans.
Managed care emphasizes controlling utilization through gatekeeper physicians, pre-certification of services, strong case management and coordination of medical treatment and return-to-work policies. Internal grievance procedures are required.
Managed care affords insuring interests a strong voice in selecting network providers.
Any managed care system may file a managed care plan for approval with the commissioner of the Department of Workers' Claims. Systems may operate more than one managed care plan. Employers and insurers may contract with multiple systems in order to maximize employee access. There is no application form nor application fee. Applications for certification must contain all the components of the regulation.
Plans are reviewed for compliance with the regulation. Some of the key requirements are:
- Identify the system and its components. Identify the key personnel including plan administrator, medical director (must have a Kentucky medical license) and case manager (must hold Kentucky certification).
- Demonstrate financial ability and professional expertise to perform all necessary functions. If applicants have previously provided managed care or similar services in the commonwealth, they must provide a summary of the administrative and medical services provided and a list of representative entities. If the applicant does not provide managed care in Kentucky, a performance bond or cash surety deposit of $500,000 will be required. A copy of the most recent audited financial statement is also required.
- The plan must demonstrate it will provide prompt and effective access to qualified medical services. The employees must have adequate choice and convenient geographic access to gatekeepers, specialists and facilities.
- Maintain a professional malpractice policy with limits of no less than $500,000 for an occurrence of professional negligence.
Conditions pre-requisite to out-of-plan provider access are:
- Emergency. Emergency means those medical services required for the immediate diagnosis or treatment of a medical condition that if not immediately diagnosed or treated could lead to serious physical or mental disability or death, or medical services that are immediately necessary to alleviate severe pain. "Emergency care" does not include follow-up care, except when immediate care is required to avoid serious disability or death. Employees who receive emergency care may elect to remain under the care of that physician as long as he or she complies with the utilization review and reporting requirements of the plan. Reimbursement of the non-plan providers will be at the level prescribed by applicable workers' compensation fee schedules.
- When referred by gatekeeper.
- When authorized treatment is unavailable within the plan.
- For a second opinion when surgery is recommended.
- When treatment is received for a work-related injury or disease prior to the plan being implemented with that employer, an employee may continue with that physician until treatment ends or until he or she changes physicians. Then the employee must choose a physician within the plan.
The plan must have the following:
- A grievance procedure.
- Utilization review and medical bill audit.
- Contracted medical fees.
The Plan must provide specimens of information materials and a toll-free phone number available 24 hours a day to inform all parties about plan operations, after-office-hours care and 24-hour access to emergency care.
The Plan must provide aggressive case management to coordinate the delivery of health services and return-to-work policies to promote an appropriate, prompt return to work and facilitate communication among the employee, employer and health care providers.
The plan must also describe the circumstances under which injured employees shall be subject to case management and the services to be provided.
Statutes and Regulations
Medical treatment at expense of employer -- Selection of physician and hospital -- Payment -- Managed health care system -- Artificial members and braces -- Waiver of privilege -- Disclosure of interest in referrals.
Medical treatment at expense of employer-Selection of physician and hospital-Payment-Managed healthcare system-Artificial members and braces-Waiver of privilege-Disclosure of interest in referrals.
Contacts Peggy Harper
Managed Care Reporting Requirements
803 KAR 25:110, Section 11 - Reporting
Each managed health care system having a certified managed care plan shall submit:
- An annual report to the commissioner on or before April 15 containing the following information for the previous year:
- Number of employees treated by the managed care plan;
- Number of employers and employees covered by the managed care plan; and
- Number of grievances filed, and summary of action;
- On or before April 15 and October 15 of each year, a copy of the provider directory of participating medical providers shall be provided to the commissioner.
Approved Managed Care Organizations
Workers’ Compensation Managed Care is intended to enable employers to better regulate costs while also providing high-quality medical care by utilizing gatekeeper and specialist physicians, permitting pre-certification of services, maintaining aggressive case management and ensuring coordination of medical treatment.
Approved Managed Care Organizations
The Vocational Rehabilitation Program is a partnership between the Kentucky Department of Workers' Claims, an injured worker and local educational institutions. The goal of this partnership is to ensure the injured worker has the skills necessary to return to gainful employment. Tara Aziz
The Department of Workers' Claims' medical schedulers are responsible for the coordination of scheduling university evaluations at the University of Kentucky, the University of Louisville and Commonwealth Respiratory Consultants, pursuant to KRS 342.315. Examinations are conducted in all hearing loss claims, occupational disease claims and in claims by order of an administrative law judge.
Timely scheduling of university evaluations by the universities and preparing and sending reports are elements that are critical to the success of the program.
Statutes and Regulations
Medical evaluations by university medical schools -- Procedures -- Report -- Payment of costs -- Performance assessment of medical schools.
Contacts Shari Lafoe
Shari.Lafoe@ky.gov Sherry Wilson
Sherry.Wilson@ky.gov Tina Gaines
As part of the 1994 workers' compensation reform, KRS 342.035 required the commissioner of the Department of Workers' Claims to promulgate administrative regulations governing medical provider utilization review activities conducted by an insurance carrier, group self-insurer or self-insured employer. 803 KAR 25:190, requiring every individual self-insured employer, group self-insurance fund and insurance carrier to implement a utilization review and medical bill audit program and submit a written plan describing the program to the commissioner for approval, became effective Sept. 19, 1995.
In response to issues raised by medical providers and medical payment obligors, the regulation was revisited during the last quarter of 1997. Amendments to the regulation were promulgated and became effective June 15, 1998.
Legislative changes dealing with private review agent certification necessitated the most recent regulatory amendment effective March 19, 2001.
Utilization Review and Medical Bill Audit Approved Vendor List
Statutes and Regulations
803 KAR 25:096
Selection of physicians, treatment plans and statements for medical services.
Medical fee schedule -- Review and updating -- Action for excess fees -- Effect of failure to submit to or follow surgical or medical treatment or advice -- Fee schedule for medical testimony -- Other medical matters -- Medical fee schedule for registered nurse first assistants.
Contact Pamela Knight
Pamela.Knight@ky.gov Tina Gillis
Medical Services FAQ
- What is utilization review?
Utilization review is generally defined as a review of the medical necessity and appropriateness of medical treatment and services. It is defined for the workers' compensation process as "a review of the medical necessity and appropriateness of medical care and services for purposes of recommending payments for compensable injuries or diseases." Medical services that are rendered or requested for incidents that are noncompensable under KRS Chapter 342 are not subject to utilization review under this administrative regulation. In other words, the assessment of the medical necessity and appropriateness of medical treatment and services is ultimately for purposes of determining the availability of payment for those treatments or services. Medical necessity includes a review of the setting, frequency and intensity of the treatment or service.
- What is medical bill audit?
Medical bill audit is the review of all medical bills for services that have been provided to assure compliance with adopted fee schedules. Also, every injured employee must designate a physician pursuant to 803 KAR 25:096. The medical bill audit process must confirm that a physician has been designated.
- Who is required to implement a utilization review program?
All insurance carriers who write workers' compensation insurance in Kentucky, individual self-insured employers and group self-insurance funds must implement a utilization review and medical bill audit program. A written plan describing the program must be filed with the commissioner of the Department of Workers' Claims for approval prior to implementation of the program. Utilization review for an employer that has contracted with an approved Managed Care Organization (MCO) will be carried out within the MCO.
- How does the utilization review process work?
- First level - review
- Once a claim is selected for review, medical personnel review the treatment or service for medical necessity and appropriateness. Only licensed physicians, registered or practical nurses, medical records technicians or other medically trained personnel can approve utilization review decisions. The decisions are based on recognized treatment protocols and standards such as the low back pain practice parameter. Utilization review must begin immediately upon notice of a claim selection criteria. An initial decision must be rendered within two working days, if preauthorization, and within 10 days if retrospective in nature. There is a provision for expedited utilization review wherein a decision is rendered in 24 hours.
- If the initial reviewer detects a problem, the claim is referred to a licensed physician. Only licensed physicians can render denials. A written notice of denial entitled "UTILIZATION REVIEW - NOTICE OF DENIAL" must be issued to the treating physician and the employee within 10 days of the initiation of utilization review.
- A notice of denial must include a statement of the reasons for denial, the name, state of licensure and medical license number of the reviewer and a statement of reconsideration rights. The notice of denial must include the reason for the denial and a statement of appeal rights. Notice of the right to appeal must also be provided to anyone aggrieved by the initial decision and decisions upon appeal must be in writing.
- Second level - appeal
A party adversely affected by the initial decision may appeal the decision within the utilization review program. The aggrieved party must request reconsideration within 14 days of receipt of the written notice of denial. A review of the initial utilization review decision must be conducted by a different reviewer of at least the same qualifications as the initial reviewer. The decision must be rendered within 10 days of the request for appeal and must be entitled "UTILIZATION REVIEW - RECONSIDERATION DECISION." If the reconsideration decision is made by an appropriate specialist or sub-specialist, the decision is the final utilization review decision and must be entitled "FINAL UTILIZATION REVIEW DECISION."
- Third level - specialist review
If a party remains unsatisfied with the decision upon appeal, specialty or sub-specialty review may be requested. The right to request specialty review exists only when a specialist has not previously reviewed the matter.
- What claims must be selected for utilization review?
Compensable claims are subject to utilization review when any of the following occur:
- A medical provider requests pre-authorization of a medical treatment or procedure;
- Notification of a surgical procedure or resident placement pursuant to an 803 KAR 25:096 treatment plan is received;
The total medical cost cumulatively exceed $3,000;
- The total lost work days cumulatively exceed thirty (30) days; or
- An administrative law judge orders a review.
These are minimum criteria. Some utilization review programs review additional claims based on the program's own internal criteria.
- What claims are subject to utilization review?
The following claims are subject to review:
- Utilization review must be applied to all open claims (those claims that have not been concluded by the entry of a final award or settlement) and concluded claims (those claims that have been concluded by the entry of a final award or settlement and the employer or carrier is responsible for the claimant's medical treatment) where: (1) lost work days exceed 30, and the employee remains off work, irrespective of the date of injury; or (2) the records indicate that for the previous one-year period the total medical expenses total $3,000 or more;
- Utilization review must be applied to all concluded claims where compensability has been determined and the payment obligor is responsible for medical expenses for the cure and relief of the work-related injury; or
- Utilization review must be applied in any case where a medical provider requests preauthorization and in any case upon notification of a surgical procedure or resident placement pursuant to a KAR 25:096 treatment plan.
KRS 342.035 to allow an insurance carrier or self-insured employer to waive utilization review.House Bill 2 of the 2018 Regular Session of the General Assembly amended
- 803 KAR 25:096, Selection of Physicians and Treatment Plans
Utilization review programs must include a process to assure compliance with the requirements of 803 KAR 25:096 that a physician is designated by the injured employee and that treatment plans are obtained when required.
- How will utilization review affect 803 KAR 25:012, Medical Fee Disputes?
- The request to resolve medical fee disputes, Form 112, has been amended to include a question concerning whether utilization review has been performed. The initial notice of denial and final appeal decision with supporting medical opinions are required attachments to the Form 112.
- Some utilization review programs include an independent medical exam of the patient in certain situations as part of the utilization review process. If such an independent medical exam has been performed, the medical report should also be attached to the Form 112.
- If utilization review is applicable and has not been completed, the medical fee dispute will not be subject to adjudication by an administrative law judge.
- How will utilization review interact with KRS 342.020(1)?
The employer's obligation to render payment for medical treatment and services within 30 days of receipt of a statement for services is tolled during the utilization review process. Following utilization review, the obligation to render payment will be within 30 days of the final utilization review decision.
- Pre-certification - not a synonym for utilization review
Utilization review can occur retrospectively, concurrently or prospectively. In Kentucky's workers' compensation program, "pre-certification" is not a synonym for utilization review, as is often the case in general health care. In Kentucky much of the mandatory utilization review is "retrospective"--i.e., after the medical treatment has been delivered and a bill for services has been generated. Arguments are often made that this frustrates the expectation for utilization review to effectively prevent unnecessary medical services and waste and that utilization review is most effective when it includes "pre" and "concurrent" review. In "pre" and "concurrent" review, proposed treatment is reviewed before services are rendered and before the patient's condition is altered. However, KRS 342 does not authorize such broad preauthorization in workers' compensation cases. 803 KAR 25:096
, Selection of Physicians and Treatment Plans, requires treatment plans to be submitted to the payment obligor in advance of certain medical services (i.e., elective surgeries and resident work hardening, pain management and rehabilitation programs).
The following guideline should be used to determine whether prospective, concurrent or retrospective utilization review is required:
- Claims are subject to utilization review upon:
- A medical provider's request for preauthorization;
- Notification of a surgical procedure or resident placement pursuant to an 803 KAR 25:096 treatment plan;
- Total medical costs reaching $3,000; or,
- Total lost work days exceeding 30.
- A carrier is required to perform pre-authorization only in situations where a medical provider requests it. See the first bulleted item directly above.
- A carrier may require pre-authorization in situations where a treatment plan must be prepared and furnished to the employer under 803 KAR 25:096:
- Seven days in advance of an elective surgical procedure; and,
- Placement in a resident work hardening, pain management or medical rehabilitation program. See the second bulleted item directly above.
Any entity that fails to comply with utilization review and medical bill audit regulations may be fined by the commissioner of the Department of Workers' Claims pursuant to KRS 342.990(7)(e). Additionally, group self-insurance funds and individual self-insured employers that fail to implement a utilization review and medical bill audit plan place their self-insurance certification in jeopardy. Insurance carriers that fail to comply with 803 KAR 25:190 may be reported to the Kentucky Office of Insurance.
- Am I eligible for Vocational Rehabilitation Benefits?
Any injured worker may apply for vocational rehabilitation services. You may be eligible for retraining benefits if you have recovered from a work-related injury, but have not regained the physical capacity to return to the job you held before your injury. Kentucky's workers' compensation laws determine who is eligible for vocational rehabilitation services. Vocational rehabilitation may be voluntarily provided by the employer or awarded by an Administrative Law Judge in a litigated claim.
- Where do I go from here?
The first step on your road to rehabilitation is to contact the Department of Workers' Claims at 1-800-554-8601. Our experienced vocational rehabilitation staff will guide you through the process.
If you are an eligible candidate, you will be referred to an evaluation center nearest to your home. After reviewing the results of the evaluation, the specialist will then work with you to map out your rehabilitation goals and establish a plan to help you reach them.
- What are my responsibilities?
- Take an active role in the development and completion of your rehabilitation program;
- Promptly attend all scheduled meetings, appointments and interviews;
- Participate in all requested vocational testing;
- Keep the vocational rehabilitation specialist informed of any changes in phone number, address, medical condition or any other pertinent information.
- How will I benefit?
- Payment of direct school expenses such as tuition, textbooks and required fees for an initial period of 52 weeks;
- Additional training, when justified, may be awarded by an administrative law judge on a case-by-case basis;
- Other educational expenses such as transportation and room and board can be approved on a case-by-case basis;
- Awarded income benefits may be accelerated to provide an increase in weekly benefits during training.
If a provider of medical services or treatment makes a referral for medical services or treatment to a provider or entity in which the medical provider making the referral has an investment interest, the referring provider shall disclose that investment interest to the employee, the Commissioner of the Department of Workers’ Claims, and the employer’s insurer or the party responsible for payment for the services within thirty (30) days from the date the referral was made. Pursuant to KRS 342.020(9).