How Worker's Comp Claims Work
Main Points
What is worker's compensation
The process for worker's compensation
Processing a worker's compensation claim
Worker’s compensation, also known as workman’s compensation or workers’ comp, is a specialized type of medical insurance that covers treatment for injuries incurred on the job. Commercial workers’ comp policies may be purchased by employers, though in some states, the policies and programs are administered by the states. Professional medical billers are aware of the workers’ comp plans in their states, the requirements and guidelines necessary for billing these medical claims to these plans, and the plans’ limitations.
Unlike most other health insurance policies, workers’ compensation medical claims are processed manually. The industry standard for most other third-party payers is for medical claims to be processed automatically through electronic data interchange. Because of the specific nature of workers’ comp, greater oversight is administered by the plans to ensure that the treatment received is work-related and injury-specific. This article provides general information that is not exhaustive. Benefits vary by geographical location and type of coverage offered.
When an employee is injured on the job, he or she files a claim with his or her employer’s workers’ comp carrier. This is handled through the employer’s Human Resources Department, and this is usually the end of the employer’s involvement in the process, though some companies do administer their own workers’ compensation policies.
Once a claim is filed, the date of injury is established and the employee is assigned a claim number. This number acts as the equivalent of an insurance ID number when filing medical claims for reimbursement. The employee is also assigned an adjuster by the workers’ compensation carrier. An adjuster is a specialist who coordinates the employee’s care, authorizes treatment, and reviews the employee's progress to full restoration of their former health status.
A workers’ comp adjuster may authorize services from the employee’s regular primary care provider, or the employee may be directed to receive medically necessary services from the carrier’s own network of providers.
Once authorization is obtained, the employee becomes a healthcare provider’s patient for the course of care. The patient provides his or her claim number, the date of injury, and the information required to file a claim to the appropriate payer. The patient’s private health insurance is not billed for services that are covered by workers’ compensation, however, non-related services that are received in conjunction with authorized services are billed to the patient’s own insurance.
Armed with the required information, the provider or the provider’s staff works with the adjuster to develop an appropriate treatment plan with set goals to restore full function to the patient.
As with other healthcare claims, workers’ comp claims are submitted using the CMS-1500 claim form.
Unlike other healthcare claims, workers’ comp claims do not normally have an equivalent format to allow for electronic submission. This is because workers’ comp claims are submitted with a copy of the office notes that document the treatment that is described on the healthcare claim.
When completing the CMS-1500, medical billers fill in the fields that indicate that the patient’s condition is work-related, and the date of injury is included. Instead of an insurance ID number, the patient’s claim number is supplied to the payer to ensure that the appropriate injury is being treated and paid for. When commercial or government healthcare plans receive claims that are marked as work-related, these claims are put on hold until the insurer can determine if workers’ compensation will cover the costs of services provided.
When a paper CMS-1500 is received with the appropriate progress notes, the adjuster reviews the charges and supplied documentation to ensure that the services were related to the injury in question, and to ensure that the services were previously authorized as conforming to the agreed-up treatment plan. Services that are unrelated or unauthorized are denied payment, and the patient cannot be held liable for the expenses incurred. These charges cannot be billed to the patient’s personal insurance since they occurred under the jurisdiction of the workers’ comp plan.
When the charges are found to be appropriate, the adjuster reprices the charges in accordance with the carrier’s fee schedule. Like other insurance coverage, healthcare providers are not allowed to bill patients for the balance between the fee schedule and the full amount of charges submitted. Workers‘ comp insurance does not normally include co-insurance or co-payments. Instead, providers agree to accept the fee schedule rates as payment in full for services rendered.
Like other healthcare claims that are submitted on paper via the mail, claim turnaround time from submission to payment is typically forty-five days. Workers‘ comp healthcare claims require greater attention to detail than commercial claims submitted electronically. The CMS-1500 must be completely legible and all fields must be completed with the claim form aligned with the printer.
Misaligned claims may prevent claims from being legibly scanned upon receipt, and correct information in the wrong fields may delay processing. Additionally, since copies of a provider’s progress notes must accompany each claim form, the copies must be legible, they must be complete, and they must pertain to the codes included on the form. Submitting claims without appropriate documentation will delay prompt payment.
Many medical practices do not encounter workers’ compensation claims due to the nature of their specialty. Other specialties, such as orthopedics or physical therapy, deal with workers’ comp companies on a regular basis. Professional medical billers have the training to deal with a wide variety of third-party payers. Even in offices that do not see a large number of workers’ comp patients, well-trained billers are prepared to deal with the contingencies and needs of workers’ comp claims, and to receive reimbursement for medically necessary services.
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