DEPARTMENT OF , LABOR AND INDUSTRY Payment accuracy and timeliness in the Minnesota workers’ compensation Hospital Outpatient Fee Schedule (HOFS) January 15, 2021 Minnesota Department of Labor and Industry Research and Statistics 443 Lafayette Road North St. Paul, MN 55155 (651) 284-5XXX
[email protected] www.dli.mn.gov/about-department/news-and-media/hofs This report cost approximately $60,000 to prepare. Upon request, this material will be made available in an alternative format such as audio, Braille or large print. Executive summary Background In compliance with a legislative mandate, this report analyzes the accuracy and timeliness of payments from insurers to hospitals under the Minnesota workers’ compensation Hospital Outpatient Fee Schedule (HOFS), which took effect Oct. 1, 2018. The statute stipulates that the Workers’ Compensation Advisory Council (WCAC) shall, on the basis of the study results, “consider whether there is a minimum 80-percent compliance in timeliness and accuracy of payments” and whether statutory amendments are appropriate, relating, at minimum, to a “maximum ten-percent reduction in payments under HOFS and an increase in indemnity benefits to injured workers.”1 HOFS was enacted in response to continuing concerns over rapid cost increases in the prior system for reimbursing workers’ compensation hospital outpatient costs. That system was primarily charge-based,2 so payments tended to grow in proportion to hospital charges, which had grown substantially faster than general prices and wages. HOFS, by contrast, uses some of the main features of the Medicare Outpatient Prospective Payment System. HOFS applies to outpatient visits that involve one or more of some 3,000 major surgical procedures and/or an emergency department (ED) exam.