Minnesota Chapter American Physical Therapy Association

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Change in Work Comp Reimbursement Methodology

The mechanism for reimbursement in the Minnesota Workers Comp system has changed as of October 1, 2005. The system is still based on Medicare’s RVRBS system, which assigns a relative value unit (RVU) to each treatment procedure or modality. Maximum fees are based on the multiplication of the assigned RVU and the conversion factor. Prior to October 1, there was one conversion factor (dollar amount) used for all medical professionals. However, because previous legislation dictated that not all medical professionals should be paid the same, a “scaling” factor was developed to further modify the relative value placed on a service for PM&R and chiropractic. This effectively reduced the overall payment for some individuals even though the same code was being used.

The change that occurred on October 1 was the elimination of the scaling factor and establishment of separate conversion factors for four categories of health care provider. They are:
• Medical/Surgical $76.31
• Pathology/Laboratory $63.72
• PM&R $66.16
• Chiropractor $48.08

The statute required that there be no overall change in the maximum fees. The removal of the scaling factors was offset by the establishment of the new conversion factors.

The new law also mandated that the net effect, in cost to the system, be neutral. Because the chiropractic conversion factor increased, as permitted by the new law, there will be no annual adjustments to the other conversion factors. This also means that the conversion factors for the other three categories of medical practitioner cannot be lowered to offset the increase in the chiropractic conversion factor. The chiropractic conversion factor will increase to 72% of the Medical/Surgical rate. The first half of that change is reflected in the current rate and the second adjustment will occur on October 1, 2006.

Reimbursement for Physical Therapy services will now be calculated with the relative value of a modality or service multiplied by $66.16. It should be noted, that although the RVU system is used, the relative values in place are not the current (2006) values. The Department of Labor & Industry (DOLI) is still using the relative values from 1998 (except for 97140, which was added in 1999).

For further information, please consult the DOLI website. PM&R starts on page 245.

Questions? Please feel free to contact Dan Wolfe, PT, at wolfdog@therapypartners.com