NOV. 7, 2008
:NWLP
11/5/08
10:05 AM
Page 10
Workers’ comp division files proposed
rules on medical fees to care providers
Proposal would prohibit
PPO contracts with
providers, but allow
providers to offer
discounts
SALEM — A flap over how much
insurance companies pay health care
providers for treating injured workers
in Oregon may soon be over.
Health care providers (doctors,
physical therapists and others) began
disputing the amounts some insurance
companies were reimbursing them for
treating injured workers.
Insurance companies argued that
they were paying health care providers
the amounts spelled out in their pre-
ferred provider organization (PPO)
contracts. PPOs are popular in the pri-
vate sector because in exchange for
discounted fees, the network directs
patients to their practices.
In the no-fault workers’ comp sys-
tem, insurers are suppose to pay med-
ical bills in one of three ways: At the
provider’s normal fee; at the amount
set by law under the Oregon medical
fee schedule (if it is less than the nor-
mal fee); or at the rate contracted with
a provider enrolled in a state-certified
managed care organization (MCO).
MCO rates typically are lower than
both the medical fee schedule and the
provider’s normal rate. MCOs were al-
lowed into Oregon’s workers’ comp
system as part of a controversial major
overhaul in 1990. The state regulates
MCOs (all four of them) to ensure that
injured workers are getting good care.
PPOs are not regulated.
In an attempt to settle the medical
fee dispute, Oregon’s Workers’ Com-
pensation Division initially ruled that
the PPO rates should not have been
applied, and ordered the insurers to
pay the difference between the PPO
discount and the state-mandated fee
schedule.
That prompted one of the nation’s
largest PPOs — Coventry Health
Care of Maryland — to threaten to
quit doing business in Oregon.
Subsequently, the Workers’ Comp
Division issued a temporary emer-
gency order that then allowed insur-
ance companies to use PPO rates in
workers’ comp cases.
The emergency order angered
health care providers, who said they
would quit taking injured workers as
patients if paid the lower rates.
Stuck in the middle of the contro-
versy were injured workers. Organized
labor stepped in on their behalf.
Union officials were outraged that
the emergency order came with little
or no input from them or from man-
agement — the two key players in the
workers’ comp system.
“This ruling is not in anyone’s in-
terest — not the state’s, not the em-
ployer’s, and certainly not the injured
worker’s,” said State Rep. Brad Witt, a
union rep for United Food and Com-
mercial Workers Local 555 who had
already begun preparing legislation to
have the emergency order overturned.
After studying the issue and receiv-
ing feedback from a variety of parties,
the Workers’Comp Division developed
the new proposed rules to replace the
emergency rules.
Specifically, the new proposed rules
do the following:
• Disallow fee discounts for medical
services that are part of contracts be-
tween providers and PPOs.
• Allow providers to enter into fee
discount agreements if they choose.
• Sets requirements for those fee dis-
count agreements, including the follow-
ing:
1. The agreement must be directly
Ridgeline Montessori employees
reaffirm AFT representation
EUGENE—Teachers and staff at
Ridgeline Montessori Public Charter
School again chose the American Fed-
eration of Teachers (AFT) as their
union representative in mail ballots
counted Oct. 29. The election was
conducted by the Oregon Employment
Relations Board (ERB).
A majority of employees previously
chose AFT by signing authorization
cards, but the employer refused to rec-
ognize them.
Oregon’s “card check” law allows
union representation without an elec-
tion if a majority of eligible bargaining
unit employees sign union authoriza-
tion cards. Under this law, even if the
criteria are met, employees can still re-
quest that the ERB hold an election if
30 percent of the bargaining unit sup-
ports having an election. This was the
case at Ridgeline Montessori.
PAGE 10
“Employees at Ridgeline demon-
strated their desire to form a union in
September when a majority designated
the union with signed authorization
cards,” said Mark Schwebke, president
of AFT-Oregon. “This vote reaffirms
the wishes of Ridgeline staff and
proves as well that the card-check
process accurately conveys the will of
the workers.”
Some 87 percent of eligible em-
ployees participated in the mail ballot
election. Nearly two-thirds voted for
AFT representation.
Teachers and staff at Ridgeline,
which serves over 220 students in
grades K-8, formed the Eugene Char-
ter School Professionals to represent
them, which is the newest of 20 locals
in AFT-Oregon, an affiliate of the
AFL-CIO.
between the provider and the insurer or
self-insured employer and must only
apply to workers’ compensation.
2. The agreement must be in a stan-
dard format and registered with the
Workers’ Compensation Division.
3. The maximum discount allowed
is 10 percent below the medical fee
schedule.
4. Either party may terminate the
agreement by providing 30 days writ-
ten notice.
5. Continue to allow discounts to
providers as part of managed care or-
ganization (MCO) contracts.
6. Continue to allow network dis-
counts for durable medical equipment,
ambulatory surgical centers, hospitals
(excluding rural hospitals), and pre-
scription drugs.
Bob Shiprack, executive director of
the Oregon State Building and Con-
struction Trades Council and co-chair
of the Management-Labor Advisory
Council on Workers’ Compensation,
said he is satisfied with the proposal.
“It makes clear what you can and
cannot do. It’s like we thought it was
before the emergency order was im-
plemented,” he said.
Public hearings on the proposed
rules are scheduled for Nov. 20 at 5 p.m.
and Nov. 24, at 1:30 p.m. at the Labor
and Industries Building in Salem, and
the public is invited to submit written
testimony on the rules through Nov. 26.
To read the proposed rules, go to:
http://wcd.oregon.gov/policy/rules/rule
s.html#proprules.
Once the division reviews the pub-
lic testimony, it will file the final ver-
sion of the rules, which will take effect
Jan. 1, 2009.
For more information or to comment
on the rules: Contact Fred Bruyns at
503-947-7717; fax: 503-947-7581; e-
mail: fred.h.bruyns@state.or.us
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NORTHWEST LABOR PRESS
NOVEMBER 7, 2008