Section 329.3 of Title 12 NYCRR is amended to read as follows:

(a) The medical fee schedule for medical, physical therapy and occupational therapy services shall be the Official New York Workers' Compensation Medical Fee Schedule, updated [April 1, 2006] December 1, 2010, prepared by the Board and published by Ingenix, Inc., which is herein incorporated by reference.

(b) The Official New York Workers' Compensation Medical Fee Schedule incorporated by reference herein may be examined at the office of the Department of State, [41 State Street] One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231, the Legislative Library, the libraries of the New York State Supreme Court, and the district offices of the Board. Copies may be purchased from Ingenix, Inc., by writing to New York Workers' Compensation Medical Fee Schedule, c/o Ingenix, Inc., PO Box 27116, Salt Lake City, UT 84127-0116, or by telephone at 1-800-464-3649.

Section 333.2 of Title 12 NYCRR is amended to read as follows:

(a) The psychology fee schedule for psychology services shall be the Official New York Workers' Compensation Psychology Fee Schedule, updated [April 1, 2006] December 1, 2010, prepared by the Board and published by Ingenix, Inc., which is hereby incorporated herein by reference.

(b) The Official New York Workers' Compensation Psychology Fee Schedule incorporated by reference herein may be examined at the office of the Department of State, [41 State St.] One Commerce Plaza, 99 Washington Avenue, Albany, New York 12231, the Legislative Library, the libraries of the New York State Supreme Court, and the district offices of the Board. Copies may be purchased from Ingenix, Inc., by writing to New York Workers' Compensation Medical Fee Schedule, c/o Ingenix, Inc., PO Box 27116, Salt Lake City, UT 84127-0116, or by telephone at 1-800-464-3649.

Section 343.2 of Title 12 NYCRR is amended to read as follows:

(a) The podiatry fee schedule for podiatry services shall be the Official New York Workers' Compensation Podiatry Fee Schedule, updated [April 1, 2006] December 1, 2010, prepared by the Board and published by Ingenix, Inc., which is hereby incorporated herein by reference.

(b) The Official New York Workers' Compensation Podiatry Fee Schedule incorporated by reference herein may be examined at the office of the Department of State, [41 State Street] One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231, the Legislative Library, the libraries of the New York State Supreme Court, and the district offices of the Board. Copies may be purchased from Ingenix, Inc., by writing to New York Workers' Compensation Medical Fee Schedule, c/o Ingenix, Inc., PO Box 27116, Salt Lake City, UT 84127-0116, or by telephone at 1-800-464-3649.

Section 348.2 of Title 12 NYCRR is amended to read as follows:

(a) The chiropractic fee schedule for chiropractic services shall be the Official New York Workers' Compensation Chiropractic Fee Schedule, [First Edition, August 1996, amended September 1997] updated December 1, 2010, prepared by the Workers' Compensation Board and published by Ingenix, Inc. [Medicode Publications], which is herein incorporated by reference.

(b) The Official New York Workers' Compensation Chiropractic Fee Schedule incorporated by reference herein may be examined at the office of the Department of State, [41 State Street] One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231, the Legislative Library, the libraries of the New York State Supreme Court, and the district offices of the Workers' Compensation Board [in Albany, Binghamton, Brooklyn, Buffalo, Hempstead, Rochester and Syracuse]. Copies may be purchased from [Medicode] Ingenix, Inc., by writing to New York Workers' Compensation Medical Fee Schedule, c/o Ingenix, Inc., PO Box 27116, Salt Lake City, UT 84127-0116, or by telephone at 1-800-464-3649 [Medicode, Inc., Dept. CH 10928, Palatine, IL 60055-0928, or by telephone at 1-800-765-6023].

Section 401.2 of Title 12 NYCRR is amended to read as follows:

The fee schedule for medical treatment and care rendered under the Volunteer Firefighters' Benefit Law shall be the medical fee schedule in effect under the Workers' Compensation Law of the State of New York applicable to medical services, as set forth in sections 329.1 through 329.3 of this Title, on the date on which the medical services were rendered, regardless of the date of accident [on or after October 1, 1997 shall be the schedule of fees for medical treatment and care under the Workers' Compensation Law of the State of New York applicable to medical services rendered on or after October 1, 1997, as set forth in sections 329.1 through 329.3 of this Title]. This medical fee schedule is applicable in accordance with section 329.1 of this Title. [The fee schedule for medical treatment and care rendered under the Volunteer Firefighters' Benefit Law on a date prior to October 1, 1997 shall be the schedule of fees for medical treatment and care under the Workers' Compensation Law of the State of New York in effect on the date on which the medical services were rendered, regardless of the date of accident.]

Section 401.4 of Title 12 NYCRR is amended as follows:

The fee schedule for podiatry treatment and care rendered under the Volunteer Firefighters' Benefit Law [on or after October 1, 1997] shall be the schedule of fees for podiatry treatment and care under the Workers' Compensation Law of the State of New York [applicable to podiatry services rendered on or after October 1, 1997], as set forth in sections 343.1 and 343.2 of this Title, on the date on which the podiatry services were rendered, regardless of the date of accident. This podiatry fee schedule is applicable in accordance with the provisions of section 343.1 of this Title. [The fee schedule for podiatry treatment and care rendered under the Volunteer Firefighters' Benefit Law on a date prior to October 1, 1997 shall be the schedule of fees for podiatry treatment and care under the Workers' Compensation Law of the State of New York in effect on the date on which the podiatry services were rendered, regardless of the date of accident.]

Section 401.5 of Title 12 NYCRR is amended to read as follows:

The fee schedule for chiropractic treatment and care rendered under the Volunteer Firefighters' Benefit Law [on or after October 1, 1997] shall be the schedule of fees for chiropractic treatment and care under the Workers' Compensation Law of the State of New York [applicable to chiropractic services rendered on or October 1, 1997], as set forth in sections 348.1 and 348.2 of this Title, on the date on which the chiropractic services were rendered, regardless of the date of accident. This chiropractic fee schedule is applicable in accordance with the provisions of section 348.1 of this Title. [The fee schedule for chiropractic treatment and care rendered under the Volunteer Firefighters' Benefit Law on a date prior to October 1, 1997 shall be the schedule of fees for chiropractic treatment and care under the Workers' Compensation Law of the State of New York in effect on the date on which the chiropractic services were rendered, regardless of the date of accident.]

Section 401.6 of Title 12 NYCRR is amended to read as follows:

The fee schedule for psychological treatment and care rendered under the Volunteer Firefighters' Benefit Law [on or after October 1, 1997] shall be the schedule of fees for psychological treatment and care under the Workers' Compensation Law of the State of New York [applicable to psychology services rendered on or after October 1, 1997], as set forth in sections 333.1 and 333.2 of this Title, on the date on which the psychological services were rendered, regardless of the date of accident. This psychology fee schedule is applicable in accordance with the provisions of section 333.1 of this Title. [The fee schedule for psychological treatment and care rendered under the Volunteer Firefighters' Benefit Law on a date prior to October 1, 1997 shall be the schedule of fees for psychological treatment in effect on the date on which the psychological services were rendered, regardless of the date of the accident.]

Section 411.2 of Title 12 NYCRR is amended to read as follows:

The fee schedule for medical treatment and care rendered under the Volunteer Ambulance Workers' Benefit Law [on or after October 1, 1997] shall be the schedule of fees for medical treatment and care under the Workers' Compensation Law of the State of New York [applicable to medical services rendered on or after October 1, 1997], as set forth in sections 329.1 through 329.3 of this Title, on the date on which the medical services were rendered, regardless of the date of accident. This medical fee schedule is applicable in accordance with section 329.1 of this Title. [The fee schedule for medical treatment and care rendered under the Volunteer Ambulance Workers' Benefit Law on a date on or after January 1, 1989 and prior to October 1, 1997 shall be the schedule of fees for medical treatment and care under the Workers' Compensation Law of the State of New York in effect on the date on which the medical services were rendered, regardless of the date of accident.]

Section 411.4 of Title 12 NYCRR is amended to read as follows:

The fee schedule for podiatry treatment and care rendered under the Volunteer Ambulance Workers' Benefit Law [on or after October 1, 1997] shall be the schedule of fees for podiatry treatment and care under the Workers' Compensation Law of the State of New York [applicable to podiatry services rendered on or after October 1, 1997], as set forth in sections 343.1 and 343.2 of this Title, on the date on which the podiatry services were rendered, regardless of the date of accident. This podiatry fee schedule is applicable in accordance with section 343.1 of this Title. [The fee schedule for podiatry treatment and care rendered under the Volunteer Ambulance Workers' Benefit Law on a date prior October 1, 1997 shall be the schedule of fees for podiatry treatment and care under the Workers' Compensation Law of the State of New York in effect on the date on which the podiatry services were rendered, regardless of the date of accident.]

Section 411.5 of Title 12 NYCRR is amended to read as follows:

The fee schedule for chiropractic treatment and care rendered under the Volunteer Ambulance Workers' Benefit Law [on or after October 1, 1997] shall be the schedule of fees for chiropractic treatment and care under the Workers' Compensation Law of the State of New York [applicable to chiropractic services rendered on or after October 1, 1997], as set forth in sections 348.1 and 348.2 of this Title, on the date on which the chiropractic services were rendered, regardless of the date of accident. This chiropractic fee schedule is applicable in accordance with section 348.1 of this Title. [The fee schedule for chiropractic treatment and care rendered under the Volunteer Ambulance Workers' Benefit Law on a date on or after January 1, 1989 and prior to October 1, 1997 shall be the schedule of fees for chiropractic treatment and care under the Workers' Compensation Law of the State of New York in effect on the date on which the chiropractic services were rendered, regardless of the date of accident.]

Section 411.6 of Title 12 NYCRR is amended to read as follows:

The fee schedule for psychological treatment and care rendered under the Volunteer Ambulance Workers' Benefit Law [on or after October 1, 1997] shall be the schedule of fees for psychological treatment and care under the Workers' Compensation Law of the State of New York [applicable to psychological services rendered on or after October 1, 1997], as set forth in sections 333.1 and 333.2 of this Title, on the date on which the psychological services were rendered, regardless of the date of accident. This psychology fee schedule is applicable in accordance with section 333.1 of this Title. [The fee schedule for psychological treatment and care rendered under the Volunteer Ambulance Workers' Benefit Law on a date prior to October 1, 1997 shall be the schedule of fees for psychological treatment in effect on the date on which the psychological services were rendered, regardless of the date of accident.]

1. Statutory Authority

The Chair of the Workers' Compensation Board (WCB) is authorized to promulgate fee schedules governing the charges for medical treatment and care within the workers' compensation system. Workers' Compensation Law (WCL) § 117(1) authorizes the Chair to make reasonable regulations consistent with the provisions of the WCL and the Labor Law. WCL § 13(a) requires employers to promptly provide medical, surgical, other attendance or treatment, and nurse and hospital services, among other things to injured workers for as long as the nature of the injury requires. Subdivision (a) mandates that the Chair prepare and establish a schedule for the state, or schedules for different regions of the state, of the fees and charges for the medical treatment and care employers must provide. Such schedule or schedules must be promulgated by regulation. WCL §§ 13-k, 13-l, and 13-m authorize treatment by podiatrists, chiropractors and psychologists, respectively, within the appropriate scope of practice for injuries covered by the WCL and require the Chair to prepare and establish fee schedules for podiatry, chiropractic, and psychological services, respectively, through regulation.

WCL § 157(4) defines "this chapter" to include the Volunteer Firefighters' Benefit Law (VFBL) and Volunteer Ambulance Workers' Benefit Law (VAWBL). Section 16 of both the VFBL and VAWBL incorporates the provisions of WCL §§ 13 through 13-m and makes them applicable to injured volunteer firefighters, volunteer ambulance workers, and political subdivisions. Section 57 of both the VFBL and VAWBL provides that the provisions of WCL Article 7, of which WCL § 117 is part, are applicable to the VFBL and VAWBL as if fully set forth in those laws. Finally, section 58 of both the VFBL and VAWBL provides that all the powers and duties conferred upon the Chair by the WCL which are necessary to administer those laws are applicable to the VFBL and VAWBL.

2. Legislative Objectives

The WCL, and the VFBL and VAWBL through incorporation, require the Chair to set fee schedules for medical treatment provided to injured workers, volunteer firefighters, and volunteer ambulance workers. The proposed regulations incorporate by reference the latest versions of the workers' compensation fee schedules for medical, podiatry, chiropractic, and psychological treatment of injured or ill workers, volunteer firefighters, and volunteer ambulance workers. The updated fee schedules accomplish the following: (1) increase the fees for Evaluation and Management (E&M) service by 30%; (2) change the Chiropractic fee schedule to allow for separate billing of treatment modalities rather treating such treatment as part of E&M services; (3) modify ground rules to be consistent with the Medical Treatment Guidelines which will be effective at approximately the same time; (4) adjust for new, modified, and deleted Current Procedural Terminology (CPT) codes; and (5) minor typographical clarifications to the previous fee schedules.

3. Needs and Benefits

The workers' compensation fee schedules regulate the amount that providers can charge for medical treatment and care in the workers' compensation system. The Chair, in conjunction with Ingenix which publishes the fee schedules, periodically reviews and revises the fee schedules to reflect changes to the CPT codes made by the AMA and to make such other changes as deemed necessary or desirable.

The proposed regulations are necessary to implement the revisions to the fee schedules and to make them applicable to treatment provided under the WCL, VFBL, and VAWBL. Several Board regulations refer to the most recent workers' compensation fee schedule as the applicable fee schedule. The proposed regulatory amendments simply replace the April 1, 2006 version of the medical, podiatry, and psychology fee schedules, and the August 1996 version, amended September 1997, of the chiropractic fee schedule with the updated December 1, 2010, versions.

The increase to the Evaluation and Management (E&M) fee schedule in the updated December 1, 2010, versions is critical to ensuring high quality medical care in the workers' compensation system. E&M compensates all providers for office visits. The E&M services are critical to effective diagnosis, treatment, and recovery from workplace injuries. New York's E&M rates for workers' compensation have not increased in more than fifteen years, are the lowest in the country, and significantly below Medicare. A 30% increase will make workers' compensation rates more competitive and help retain and attract quality providers.

The existing Chiropractic fee schedule includes the following ground rule: "Fees for chiropractic treatment and modalities are included in the evaluation and management service billed." As a result, chiropractors do not have to identify the types of treatment and modalities provided in their billing. New Medical Treatment Guidelines that are proposed to go into effect this year set a mandatory standard of care for treatment of the back, neck, shoulder and knee. The guidelines recommend treatment, including limitations on the number and frequency of chiropractic treatment, according to treatment modality. In order to effectively monitor compliance with the medical treatment guidelines, the Chiropractic fee schedule must change from the current office visit-based billing to modality-based billing. Modality-based billing is used currently for physical medicine (including physical and occupational therapists) in New York and is the norm for reimbursement of chiropractic services in other states.

The medical treatment guidelines contain other recommendations and requirements that are inconsistent with existing fee schedule ground rules. For example, the guidelines include specific standards for when it is appropriate to repeat particular diagnostic tests. They also provide specific standards for when evaluation and reevaluation of a patient is recommended. The December 1, 2010, fee schedule modifies a number of fee schedule ground rules to make them consistent with the medical treatment guidelines and adds a ground rule clarifying that the medical treatment guidelines are to be followed unless a variance is approved. This will ensure consistent application and ease of use of both the guidelines and the fee schedule.

The schedules utilize standard CPT codes, which are developed by the American Medical Association (AMA). The AMA regularly reviews and revises its CPT codes to accurately reflect changes in medical procedures. The most recent revisions to the fee schedules will become effective December 1, 2010. The updated fee schedules add 283 new CPT codes, change 115 CPT codes, and delete 145 CPT codes, compared to the 2008 fee schedules.

The schedules make several changes to clarify existing ground rules. For example, the updated fee schedules add "relative value" to "units" in Ground Rule 8 of the Physical Medicine schedule to clarify the meaning of units. For each procedure, there is a Relative Value Unit (RVU) that is multiplied by a Conversion Factor (CF) to get a fee for the treatment. For example, 15 minutes of electrical stimulation is worth 2.45 RVU, or $15.90 in Region 1. In Physical Medicine, there is a Ground Rule that limits the provider to 8 RVUs per session ($51.92 in region 1), but it uses the term 8 "units." The term unit is sometimes misunderstood to mean a unit of treatment (i.e. one 15 minute "unit" of electrical stimulation). If that were the case, one could bill 8 units (120 minutes) of electrical stimulation for 19.6 RVUs or $127.20.

4. Costs

The increase in E&M fees is estimated to cost approximately $45 million throughout the system, but those costs are expected to be more than offset by cost reductions from reduced medical costs elsewhere in the system as a result of a number of changes including diagnostic treatment networks, medical treatment guidelines, and changes to the frequency of medical reports required for ongoing disability payments. Using the New York State Insurance Fund's medical payment data an estimate was developed of what the 30% increase would cost if there was no change in utilization. However, with the medical treatment guidelines, less utilization is expected.

The changes to the Chiropractic fee schedule allow chiropractors to bill for treatment modalities performed during the visit. Currently, chiropractors only bill by office visit. During a visit a chiropractor may perform more than one modality, which may result in higher maximum payments for a particular date of service, depending on the treatment modalities that are used. The maximum rates range between 30% and 42% higher than the corresponding rates in the previous fee schedule. The medical treatment guidelines include limits on chiropractic treatments that are expected to reduce the overall system cost of chiropractic care, notwithstanding the fee increases.

Medical providers, self-insured employers, insurance carriers, the State Insurance Fund, and third-party administrators will have to purchase the new fee schedules from Ingenix. The cost for all of the new fee schedules in hard copy is $85.00 plus the cost of shipping and tax, while the cost for the individual version of the chiropractic, podiatry, or psychology fee schedule will cost $25.00 plus the cost of shipping and tax for a hard copy version. The fee schedules can also be purchased on CD for $400.00 plus the cost of shipping and tax.

5. Local Government Mandates

The rule only imposes mandates on local governments, including some volunteer fire departments, which are self-insured. The mandates on local governments are the same as those imposed on private self-insured employers, insurance carriers, the State Insurance Fund, and third party administrators. Self-insured local governments will need to incorporate the new fee schedules into their processes to properly reimburse medical providers for services rendered.

6. Paperwork

There is no additional paperwork to be completed as a result of the proposed changes however payers and medical providers will need to acquire a copy of the new fee schedules.

7. Duplication

The proposed regulation does not duplicate or conflict with any state or federal requirements.

8. Alternatives

The Chair is required to set fee schedules by statute. The Chair considered increasing the E&M services by a smaller or greater amount. The Chair determined that 30% was the optimal increase for next year based on a balance of trying to keep workers' compensation rates reasonable while also ensuring that medical providers are paid a fair rate and continue to treat injured workers.

One alternative would be to continue to have chiropractors bill for an office visit rather than for the modalities performed during such visit. However, chiropractors would not be reporting the modalities performed and as the Medical Treatment Guidelines recommend treatment by modality, it would be impossible to track compliance with the guidelines. The Chair could have imposed an alternative reporting mechanism for treatment modalities that would not be tied to the reimbursement rate, but it would create additional burdens on both provider and payer.

Another alternative would have been to move to a relative value based fee schedule, such as Medicare, and increase reimbursements. Such a move requires careful study and consideration to ensure it provides appropriate reimbursements and its effects on the entire workers' compensation system. Over the next 12 to 18 months the entire fee schedule will be reviewed to determine the proper reimbursement to attract highly qualified providers and promote appropriate care of injured workers, without raising workers' compensation insurance rates to unreasonable levels. At this time the Chair does not have the information necessary to make such a change.

9. Federal Standards

There are no federal standards applicable to reimbursement amounts and ground rules for services to treat injuries and illnesses covered by the New York WCL. The Board's medical, podiatric, psycholigical, and chiropractic fee schedules rely on CPT codes, which are the standard medical procedure codes used for health care fee schedules. Medicare uses the Healthcare Common Procedure Coding System (HCPCS), which is also based on CPT codes. The actual reimbursement levels and the ground rules for calculating such fees are not identical to Medicare or any other system.

10. Compliance Schedule

The revised fee schedule will go into effect December 1, 2010.

1. Effect of Rule:

Small businesses and local governments whose only involvement with the workers' compensation system is that they are employers and are required to have coverage will not be affected by this rule. Small businesses and local governments are required to maintain workers' compensation coverage, either through an insurance policy or by self-insurance, as either a stand-alone self-insured employer or as a member of a group self-insurance trust. Generally, small businesses cannot afford to meet the requirements to be individually self-insured but rather purchase workers' compensation coverage from the State Insurance Fund or a private insurance carrier authorized to write workers' compensation insurance in New York or join a group self-insured trust. It is the entity providing coverage for the small employer that must comply with all of the provisions of this rulemaking, not the covered employer. Group self-insured trusts and third party administrators hired by private insurance carriers and group self-insured trusts may be small businesses impacted by this regulation. Medical Providers authorized by the Chair to treat claimants, some of whom may be small businesses, will be affected by this rule. The Chair authorizes over 20,000 medical providers to treat claimants.

The State Insurance Fund and all private insurance carriers are not small businesses and therefore the effect on them is not discussed in this document.

Approximately 2,511 political subdivisions currently participate as municipal employers in self-insured programs for workers' compensation coverage in New York State. Those local governments who are not self-insured and do not own and/or operate a hospital will not be affected by this rule.

The proposed rule updates the medical, podiatric, psychological, and chiropractic fee schedules ("fee schedules") that apply to all medical providers, insurers, self-insured employers, group self-insurance trusts, and third-party administrators. The updated fee schedules accomplish the following: (1) increase the fees for Evaluation and Management (E&M) service by 30%; (2) changing the Chiropractic fee schedule to allow for separate billing of treatment modalities rather than treating such treatment as part of E&M services; (3) modifying ground rules to be consistent with the Medical Treatment Guidelines that are expected to be adopted in October 2010; (4) adjusting for new, modified, and deleted Current Procedural Terminology (CPT) codes; and (5) minor typographical clarifications to the previous fee schedules.

2. Compliance Requirements:

The workers' compensation fee schedules are mandatory for all medical providers, insurance carriers, self-insured employers, group self-insurance trusts, and third-party administrators. Medical providers will be required to bill in accordance with the updated fee schedules and payers will be required to pay according to them. Chiropractors will now be required to bill by modalities.

3. Professional Services:

It is not expected that the updated fee schedules will create any additional need for professional services. Many self-insured local governments and group self-insurance trusts already utilize third party administrators or other professional services to assist with the calculation of payments under the fee schedules. The updated fee schedules do not significantly change the nature of the medical fee schedules and do not impose any greater need for professional services.

4. Compliance Costs:

The updated fee schedules entail some additional costs for medical services in the form of higher Evaluation and Management and modified chiropractic fees. The additional costs are expected to be more than offset by savings from other workers' compensation medical reforms, including medical treatment guidelines and diagnostic imaging networks. In addition, competitive reimbursement rates are essential to attracting high quality medical providers, which are necessary to prevent over utilization of medical care and speed return to work.

The changes to the Chiropractic fee schedule allow chiropractors to bill for the modalities performed during the visit, up to a cap set in the fee schedule. During a visit a chiropractor will usually perform more than one modality. Under the new fee schedule the chiropractor will bill for each modality up to the set caps which will result in higher maximum payments for a particular date of service, depending on the treatment modalities that are used. The maximum rates range between 30% and 42% higher than the corresponding rates in the previous fee schedule, which only allowed for billing for an office visit. The medical treatment guidelines include limits on chiropractic treatments that are expected to reduce the overall system cost of chiropractic care, notwithstanding the fee increases.

Medical providers, self-insured employers, insurance carriers, the State Insurance Fund, and third-party administrators will have to purchase the new fee schedules from Ingenix. The cost for all of the new fee schedules in hard copy is $85.00 plus the cost of shipping and tax, while the cost for the individual version of the chiropractic, podiatry, or psychology fee schedule will cost $25.00 plus the cost of shipping and tax for a hard copy version. The fee schedules can also be purchased on CD for $400.00 plus the cost of shipping and tax.

5. Economic and Technological Feasibility:

There are no additional implementation or technology costs to comply with this rule. Small businesses and local governments are already subject to the fee schedules and the changes to the fee schedules do not impose any significant implementation or technological burdens. Ingenix produces the workers' compensation fee schedule for the Board and will have updated fee schedules available for purchase before the effective date.

6. Minimizing Adverse Impact:

The Chair considered increasing the reimbursement for E&M services by a smaller and greater amount. The Chair determined that 30% was the optimal increase for next year based on a balance of trying to keep workers' compensation rates in check while also ensuring that medical providers are paid a fair rate and continue to treat injured workers.

Due to the provisions in the medical treatment guidelines, the Chiropractic Fee Schedule must be modified to alter the manner in which chiropractors bill for their services. Allowing chiropractors to bill by treatment modality enables providers and payers to effectively track compliance with the treatment guidelines. The Chair could have imposed an alternative reporting mechanism for treatment modalities that would not be tied to the reimbursement rate, but it would create additional burdens on both provider and payer.

The proposed regulations should have no adverse impact on medical providers, self-insured employers, group self-insured trusts, and third-party administrators who are small businesses or local governments. The additional cost associated with higher reimbursement rates should be more than offset by the elimination of unnecessary and ineffective treatment as a result of the medical treatment guidelines. Also, competitive reimbursement rates are necessary to retain and attract high quality providers who are cost-efficient because they assist injured workers to recover and return to work without prescribing unnecessary treatment for their own personal gain.

7. Small Business and Local Government Participation:

The Chair solicited input from the Business Council of the State of New York (BCSNY), the state AFL-CIO, the Medical Society of the State of New York (MSSNY), the New York State Chiropractic Association (NYSCA). Many of the members of the MSSNY, BCSNY, and NYSCA are small businesses. The Chair also solicited input from the New York State Association of Counties (NYSAC), Association of Towns of the State of New York, New York Conference of Mayors (NYCOM), New York State Association of Self-Insured Counties (NYSASIC), and New York City Law Department.

1. Types and estimated numbers of rural areas:

This rule incorporating the medical, podiatric, psychological, and chiropractic fee schedules ("fee schedules") will apply to all medical providers authorized to treat workers' compensation claimants, insurance carriers, the State Insurance Fund, self-insured employers, self-insured local governments, group self-insured trusts, and third party administrators across the state. These individuals and entities exist and do business in all rural areas of the state.

2. Reporting, recordkeeping and other compliance requirements:

The workers' compensation fee schedules are mandatory for all medical providers, insurance carriers, self-insured employers, group self-insurance trusts, and third-party administrators, including those in rural areas. Medical providers will be required to bill in accordance with the updated fee schedules and payers will be required to pay according to them. Chiropractors will now be required to bill by modalities. The new fee schedules do not create any new reporting, recordkeeping or other compliance requirements.

3. Costs:

The fee schedules break the state into four regions. The reimbursement rate is different for each region. The rural areas of the state are in Region I which provides the lowest reimbursement, while NYC comprises Region IV which provides the highest reimbursement. The proposed regulations raise the reimbursement level for Evaluation and Management (E&M) services 30%, including those provided in rural areas, and change the reimbursement methodology for chiropractic services. The additional costs are estimated at approximately $45 million per year and are expected to be more than offset by savings from additional workers' compensation medical reforms, including medical treatment guidelines and diagnostic imaging networks.

The proposed regulations would modify the billing and reimbursement methodology for chiropractic services, including those in rural areas. Currently, chiropractors bill by office visit and not by the treatment modalities performed. The new Chiropractic Fee Schedule allows chiropractors bill for each modality performed, up to the set cap. This changes increases the maximum reimbursement for a single office visit by 30-42%, depending on the type of visit (initial evaluation, reevaluation, or treatment only), but will be more than offset by the reduction in unnecessary chiropractic services as a result of the medical treatment guidelines.

Medical providers, self-insured employers, insurance carriers, the State Insurance Fund, and third-party administrators, including those in rural areas, will have to purchase the new fee schedules from Ingenix. The cost for all of the new fee schedules in hard copy is $85.00 plus the cost of shipping and tax, while the cost for the individual version of the chiropractic, podiatry, or psychology fee schedule will cost $25.00 plus the cost of shipping and tax for a hard copy version. The fee schedules can also be purchased on CD for $400.00 plus the cost of shipping and tax.

4. Minimizing adverse impact:

The Chair considered increasing the reimbursement for E&M services by a smaller and greater amount. The Chair determined that 30% was the optimal increase for next year based on a balance of trying to keep workers' compensation rates in check while also ensuring that medical providers are paid a fair rate and continue to treat injured workers. The 30% increase is the same across all of the state, including rural areas. The Chair did not consider increasing the reimbursement for E&M by different percentages due to location because the fee schedules are already divided into four regions with greater reimbursements for suburban and urban areas.

Due to the provisions in the medical treatment guidelines, the Chiropractic Fee Schedule must be modified to alter the manner in which chiropractors bill for their services. Allowing chiropractors to bill by treatment modality enables providers and payers to effectively track compliance with the treatment guidelines. The Chair could have imposed an alternative reporting mechanism for treatment modalities that would not be tied to the reimbursement rate, but it would create additional burdens on both provider and payer.

The proposed regulations should have no adverse impact on claimants, carriers, self-insured employers, and medical providers in any part of the state, including rural areas. The additional cost associated with higher reimbursement rates should be more than offset by the elimination of unnecessary and ineffective treatment as a result of the medical treatment guidelines. Also, competitive reimbursement rates are necessary to retain and attract high quality providers who are cost-efficient because they assist injured workers to recover and return to work without prescribing unnecessary treatment for their own personal gain.

5. Rural area participation:

The Chair solicited input from the Medical Society of the State of New York (MSSNY) and the New York State Chiropractic Association (NYSCA). Both organizations have members all across the state, including rural areas. MSSNY has indicated that an E&M increase is critical to retaining quality medical providers, particularly in rural areas. The Chair also sought input from the Business Council of the State of New York (BCSNY) and the state AFL-CIO, both of which represent organizations and members in rural areas. Finally, the Chair solicited input from the New York State Association of Counties (NYSAC), Association of Towns of the State of New York, New York Conference of Mayors (NYCOM), and New York State Association of Self-Insured Counties (NYSASIC), which have members in rural areas of the state.

The proposed rule will not have an adverse impact on jobs. This rule incorporates updated medical, psychological, podiatric, and chiropractic fee schedules as the controlling fee schedules for all treatment provided under the Workers' Compensation Law, the Volunteer Firefighters' Benefit Law and the Volunteer Ambulance Workers' Benefit Law. The updated fee schedules include an increase of 30% for the reimbursement of Evaluation & Management (E & M) services, except for chiropractic and physical medicine services, and modifies the ground rules to permit chiropractors to bill by modalities rather than just for an office visit. The increase in the reimbursement for E & M services is necessary as the reimbursement rate is the lowest workers' compensation fee schedules in the United States and is significantly lower than Medicare. Competitive reimbursement rates are necessary to retain and attract high quality providers who are cost-efficient because they assist injured workers to recover and return to work without prescribing unnecessary treatment for their own personal gain. The medical treatment guidelines being adopted by the Chair reference chiropractic services by modalities not by office visit. Therefore, so that the chiropractic fee schedule is consistent with the medical treatment guidelines, it must modified to permit chiropractors to report and bill by modality rather than by office visit alone. While these changes are expected to increase costs by approximately $45 million, such increase will be more than offset by savings from other changes such as the implementation of medical treatment guidelines and disagnostic networks.