Legislative Memo

Lev Ginsburg
Director of Government Afairs
T 518.465.7511 x207


S.4559-B (Robach)/ A.6686-B (Wright)



Increased Reimbursement for Certain Procedures for Workers’ Compensation Claimants



June 13, 2011


The Business Council of NYS opposes S. 4559-B/A. 6686-B, which would provide a higher reimbursement rate for certain procedures than the APR-DRG inpatient hospital fee schedule adopted by the Workers’ Compensation Board.  This bill is substantially similar to one vetoed by Governor Paterson in 2010, and the Veto Message No. 6795 remains valid today.   This legislation does nothing to improve care or outcomes for workers’ compensation claimants; rather it proposes to provide to a very selective group of health care providers whose procedures utilize implantable hardware with an increased reimbursement rate  -- and only for when these procedures are used to treat workers’ compensation claimants.  

The Department of Health was authorized by state statute to implement a new hospital inpatient payment system in 2009, to provide a more equitable and fair payment method for services being rendered in New York.  The Department has acknowledged that in adopting this methodology for the specific CPT codes identified in this bill, that they did not include data from workers’ compensation claimants.  DOH estimates that workers’ compensation claimants represent about 20% of the overall pool of individuals in New York who receive these procedures each year.   While Medicare has negotiated a blended rate for these procedures which reflects the cost of the hardware and the surgery necessary to implant it, no one at DOH has validated that in fact the APR-DRG for these procedures would be adjusted upward once the workers’ compensation data is included in the mix.  In other words, the APR-DRG may be accurate, in which case this bill would not just increase costs, but increase costs because a select group of providers do not like how the data sorted out.  

The Department of Health has committed to adjusting the data to include workers’ compensation claimants data in the mix by the end of this calendar year which should address the concern of those providers who feel the APR-DRG shortchanges them on the cost of the hardware.  This bill not only reimburses at 100% of the cost of the hardware – thus negating any potential benefit from forcing the provider to negotiate a discounted bulk purchase rate for the hardware – but it also adds an administrative fee on top of the undiscounted cost of the hardware.  This cost will get passed along in premiums – borne solely by employers across New York State.

As the issue is not new – a similar bill was vetoed last year – it is unfortunate the Department of Health did not move last year to ensure the data set for the APR-DRG in these codes was inclusive of workers’ compensation claimant data.  This way the system would have been at least aware of whether or not the APR-DRG is an accurate reflection of the costs of treatment, inclusive of the hardware. But to solve the problem of agency omission by passing along the costs to employers along with an administrative fee is inappropriate.

For these reasons, The Business Council opposes this bill.