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February 16, 2012
An effort by the South Carolina Workers’ Compensation Commission (WCC) for the authority to adopt a fee schedule that isn’t tied to Medicare’s pricing system appears to be dead for the 2012 legislative session because of fears over what future commissions might do, officials confirmed on Wednesday.
A special subcommittee of the Senate Judiciary Committee met on Wednesday morning and took no action on proposed Regulation 67-1302(A), which the commission voted to send to the South Carolina Legislature for approval last September.
Under South Carolina’s Administrate Procedures Act, lawmakers must approve changes to state regulations, vote them down or allow them to take effect without action.
Senate Judiciary Subcommittee Chairman Larry Martin, R-Pickens, said in an interview following the committee meeting that the regulation has no chance of approval by the full Senate in its present form, and that he had no suggestions for changing the proposed regulation.
He said the subcommittee is planning a second hearing, during which it will probably pass a resolution recommending that the proposed rule be withdrawn.
“It looks like the business community is pretty unanimously opposed to the regulation and has expressed serious concerns about what the commission may or may not do in the future,” Martin said.
He said he expects the full Senate to support a proposal to order the rule be withdrawn.
The South Carolina Small Business Chamber of Commerce and the South Carolina Small Business Regulatory Review Committee opposed the rule. The groups demanded last year that the commission provide an economic impact statement and regulatory flexibility analysis before going forward with the regulation.
WCC Executive Director Gary Cannon, who testified in favor of the rules change on Wednesday, said the proposed regulation would have no impact without further action by the commission at a later date.
The current regulation sets maximum reimbursements for physicians’ fees based on the Resource-Based Relative Value Scale (RBRVS) used by Medicare, plus a single South Carolina conversion factor for services provided by all types of physicians except anesthesiologists, who are paid using a different method.
The state’s orthopedic surgeons, pain management doctors and neurologists have called on the commission to create multiple conversion factors or scrap the Medicare-based schedule altogether. They argue the Medicare RBRVS system tends to penalize specialists.
The proposed regulation removes the requirement that maximum allowable payments be “based on a relative value scale and conversion factor set by the commission.”
Frank Knapp, president of the South Carolina Small Business Chamber of Commerce, told the panel on Wednesday that the rules change will boost workers’ compensation premiums in the state. He called on lawmakers to exercise their authority to deny the rule.
The National Council on Compensation Insurance (NCCI) earlier this week submitted a proposal to increase loss costs by 7.3%. That recommendation was not based on the fee schedule, but on increasing indemnity and medical claims costs.
“This ensures that special interest medical providers are not exerting undue influence over the commission as to compensation that would directly benefit only them, as opposed to all providers, and add significant cost to the system,” Knapp said.
The South Carolina Orthopaedic Society did not return a telephone call from WorkCompCentral, but has warned lawmakers that some orthopedic surgeons may pull out of the workers’ compensation system if payments aren’t increased.
Cannon said the commission has no plans to come back to lawmakers with a revised rule.
“The biggest argument I came away with today was the unknown factor,” Cannon said. “While they trust the current commission with regard to the fee schedule, there is fear about what future commissions may do.”
South Carolina gives lawmakers 120 legislative days to approve a state regulatory change, vote it down or allow it to take effect without action.
The regulation would take effect automatically if the House and Senate don’t vote to withdraw it by May 9.
The Senate meeting announcement and a link to the proposed regulation are here.