Despite earlier decisions concluding that downcoding of provider's bills for TMR treatment was appropriate, it's still necessary for insurer to demonstrate compliance with procedural requirements in §127.207 of medical cost containment regulations.

This is a case involving multiple fee review applications that were dismissed by a hearing officer on the basis of prior decisions from another hearing officer that upheld identical downcoding by the insurer in previous challenges from East Coast TMR. The hearing officer concluded that, because the downcoding issue had already been decided in the insurer's favor, the providers were collaterally estopped from challenging future downcoding for TMR services.

On appeal to the Commonwealth Court, the providers argued that a non-waivable prerequisite to downcoding is that the insurer strictly comply with the procedural requirements set forth in the regulations. According to the providers, the hearing officer erred because he did not conduct a hearing on the question of whether there was compliance with the regulations. In the provider's view, the issue of the insurer's compliance with the regulations is one that will vary factually in every case. The insurer responded by arguing that, because earlier decisions concluded that the downcoding of provider's bills for TMR treatment was appropriate, the insurer does not need to demonstrate compliance with the procedural requirements set forth in the regulations.

The Commonwealth Court reluctantly agreed with the provider's position and reversed the hearing officer's decision. According to the court, the language of the regulations is very clear. Before downcoding, an insurer must comply with the regulations. Otherwise, an application for fee review will be found in favor of the provider.

Case Law Alerts, 3rd Quarter 2013