Medical-Only Disputes Default Orders Relating to Necessity of Treatment

July 20, 1995

TO: All Worker's Compensation Insurance Carriers and Self-Insured Employers

Bulletin regarding late payment of medical claims re: Medical-Only Disputes Default Orders Relating to Necessity of Treatment

The purpose of this correspondence is to advise you that the Worker's Compensation Division is strictly enforcing the 60-day notice requirement relating to disputes about the medical necessity of treatment to cure and relieve the effects of an injury as provided in Wis. Admin. Code, section Ind 80.73 (3). This includes the default order provision in sec. Ind 80.73 (3) (c).

To dispute the necessity of treatment, Ind 80.73 (3) (a) requires an insurance carrier or self-insured employer to explain to a health-care provider the reason it believes the treatment was unnecessary within 60 days of receiving a provider's bill for treatment. Under Ind 80.73 (3) (b), if there are extraordinary circumstances, the insurer or self-insured employer may request that the Department extend the 60-day notice period by another 60 days. Finally, Ind 80.73 (3) (c) authorizes (but does not require) the Department to issue a default order for the full amount in dispute if the insurer fails to properly respond within these 60-day time periods.

These provisions, effective January 1, 1992, were the result of several years of negotiations between the Worker's Compensation Advisory Council and representatives of the Wisconsin State Medical Society, the Wisconsin Hospital Association and the Wisconsin Chiropractic Association. Initially, the Department issued very few default orders because providers and insurers were not familiar with the new law.

However, health care providers continue to complain that some insurance carriers and self-insured employers are extremely slow in responding to their bills The State Medical Society and the Wisconsin Chiropractic Association recently recommended a series of statutory changes to the Worker's Compensation Advisory Council, including a 45-day response period for necessity of treatment disputes. Instead, after several meetings, the Advisory Council, the Medical Society and the Chiropractic Association agreed that the Department should more vigorously exercise its current discretion to issue default orders if an insurer or self-insurer fails to respond to a health-care provider's bill within 60 days.

Therefore, if an insurer or self-insurer has not responded to a health-care provider's bill within 60 days, the Department will issue a default order for the medical bill, if requested to do so by the provider, unless the insurer or self- insurer:

Requested a 60-day extension from the Department under Ind 80.73 (3) (b); or,
Notified the provider that the insurer or self-insurer is disputing liability for the worker's compensation claim alleged by the employee (discussed below).

Disputes regarding liability (or the extent of liability). Section 102.16 (2m) of the Wisconsin Statutes and sec. Ind 80.73 of the Wisconsin Administrative Code govern the process for resolving a dispute about the necessity of medical treatment to cure and relieve the effects of the injury when other issues are not in dispute.

Where the medical dispute involves a claim for which the insurer or self-insurer is disputing liability (or the extent of liability) for the injury, it should explain that fact to the provider within 60 days of receiving the provider's bill or risk a default order for the entire disputed amount under Ind 80.73 (3) (c).

When the insurance carrier or self-insured employer gives the health-care provider timely notice (that is, notice within 60 days of receiving the provider's bill) denying liability for the claim, the carrier or self-insurer is not expected to respond to the particular points raised in Ind 80.73 (3) (a) 1 to 8. In particular, Ind 80.73 (3) (a) 5, relating to the reason the medical treatment was not necessary, will then be resolved as part of the regular hearing process on the liability issues under s. 102.17, Stats., not the dispute resolution process for "medical only" disputes under s. 102.16 (2m), Stats., and Ind 80.73.

If you have any questions, please contact the Medical Dispute Resolution Unit at (608) 266-1340.

Sincerely,

Gregory Krohm, Administrator
Worker's Compensation Division