                                 CODE OF VIRGINIA

LIABILITY OF EMPLOYER FOR MEDICAL SERVICES ORDERED BY COMMISSION; FEE SCHEDULES
FOR MEDICAL SERVICES; MALPRACTICE; ASSISTANTS-AT-SURGERY; CODING (§ 65.2-605)

A. As used in this section, unless the context requires a different meaning:
			&#8220;Burn center&#8221; means a treatment facility designated as a burn
center pursuant to the verification program jointly administered by the American
Burn Association and the American College of Surgeons and verified by the
Commonwealth.
			&#8220;Categories of providers of fee scheduled medical services&#8221;
means:

   1. Physicians exclusive of surgeons;

   2. Surgeons;

   3. Type One teaching hospitals;

   4. Hospitals, exclusive of Type One teaching hospitals;

   5. Ambulatory surgical centers;

   6. Providers of outpatient medical services not covered by subdivision 1, 2,
   or 5; and

   7. Purveyors of miscellaneous items and any other providers not described in
   subdivisions 1 through 6, as established by the Commission in regulations
   adopted pursuant to subsection C.
   				&#8220;Codes&#8221; means, as applicable, CPT codes, HCPCS codes, DRG
   classifications, or revenue codes.
   				&#8220;CPT codes&#8221; means the medical and surgical identifying codes
   using the Physicians&#8217; Current Procedural Terminology published by the
   American Medical Association.
   				&#8220;Diagnosis related group&#8221; or &#8220;DRG&#8221; means the
   system of classifying in-patient hospital stays adopted for use with the
   Inpatient Prospective Payment System.
   				&#8220;Fee scheduled medical service&#8221; means a medical service
   exclusive of a medical service provided in the treatment of a traumatic injury
   or serious burn.
   				&#8220;Health Care Common Procedure Coding System codes&#8221; or
   &#8220;HCPCS codes&#8221; means the medical coding system, including all
   subsets of codes by alphabetical letter, used to report hospital outpatient
   and certain physician services as published by the National Uniform Billing
   Committee, including Temporary National Code (Non-Medicare) S0000-S-9999.
   				&#8220;Level I or Level II trauma center&#8221; means a hospital in the
   Commonwealth designated by the Board of Health as a Level I trauma center or a
   Level II trauma center pursuant to the Statewide Emergency Medical Services
   Plan developed in accordance with &#xA7; 32.1-111.3.
   				&#8220;Medical community&#8221; means one of the following six regions of
   the Commonwealth:

   1. Northern region, consisting of the area for which three-digit ZIP code
   prefixes 201 and 220 through 223 have been assigned by the U.S. Postal
   Service.

   2. Northwest region, consisting of the area for which three-digit ZIP code
   prefixes 224 through 229 have been assigned by the U.S. Postal Service.

   3. Central region, consisting of the area for which three-digit ZIP code
   prefixes 230, 231, 232, 238, and 239 have been assigned by the U.S. Postal
   Service.

   4. Eastern region, consisting of the area for which three-digit ZIP code
   prefixes 233 through 237 have been assigned by the U.S. Postal Service.

   5. Near Southwest region, consisting of the area for which three-digit ZIP
   code prefixes 240, 241, 244, and 245 have been assigned by the U.S. Postal
   Service.

   6. Far Southwest region, consisting of the area for which three-digit ZIP code
   prefixes 242, 243, and 246 have been assigned by the U.S. Postal Service.
   				The applicable community for providers of medical services rendered in the
   Commonwealth shall be determined by the zip code of the location where the
   services were rendered. The applicable community for providers of medical
   services rendered outside of the Commonwealth shall be determined by the zip
   code of the principal place of business of the employer if located in the
   Commonwealth or, if no such location exists, the zip code of the location
   where the Commission hearing regarding a dispute concerning the services would
   be conducted.
   				&#8220;Medical service&#8221; means any medical, surgical, or hospital
   service required to be provided to an injured person pursuant to this title.
   				&#8220;Medical service provided for the treatment of a serious burn&#8221;
   includes any professional service rendered during the dates of service of the
   admission or transfer to a burn center.
   				&#8220;Medical service provided for the treatment of a traumatic
   injury&#8221; includes any professional service rendered during the dates of
   service of the admission or transfer to a Level I or Level II trauma center.
   				&#8220;Miscellaneous items&#8221; means medical services provided under
   this title that are not included within subdivisions 1 through 6 of the
   definition of categories of providers of fee scheduled medical services.
   &#8220;Miscellaneous items&#8221; does not include (i) pharmaceuticals that
   are dispensed by providers, other than hospitals or Type One teaching
   hospitals as part of inpatient or outpatient medical services, or dispensed as
   part of fee scheduled medical services at an ambulatory surgical center or
   (ii) durable medical equipment dispensed at retail.
   				&#8220;New type of technology&#8221; means an item resulting or derived
   from an advance in medical technology, including an implantable medical device
   or an item of medical equipment, that is supplied by a third party, provided
   that the item has been cleared or approved by the federal Food and Drug
   Administration (FDA) after the transition date and prior to the date of the
   provision of the medical service using the item.
   				&#8220;Physician&#8221; means a person licensed to practice medicine or
   osteopathy in the Commonwealth pursuant to Chapter 29 (&#xA7; 54.1-2900 et
   seq.) of Title 54.1.
   				&#8220;Professional service&#8221; means any medical or surgical service
   required to be provided to an injured person pursuant to this title that is
   provided by a physician or any health care practitioner licensed, accredited,
   or certified to perform the service consistent with state law.
   				&#8220;Provider&#8221; means a person licensed by the Commonwealth to
   provide a medical service to a claimant under this title.
   				&#8220;Reimbursement objective&#8221; means the average of all
   reimbursements and other amounts paid to providers in the same category of
   providers of fee scheduled medical services in the same medical community for
   providing a fee scheduled medical service to a claimant under this title
   during the most recent period preceding the transition date for which
   statistically reliable data is available as determined by the Commission.
   				&#8220;Revenue codes&#8221; means a method of coding used by hospitals or
   health care systems to identify the department in which medical service was
   rendered to the patient or the type of item or equipment used in the delivery
   of medical services.
   				&#8220;Serious burn&#8221; means a burn for which admission or transfer to
   a burn center is medically necessary.
   				&#8220;Transition date&#8221; means the date the regulations of the
   Commission adopting initial Virginia fee schedules for medical services
   pursuant to subsection C become effective.
   				&#8220;Traumatic injury&#8221; means an injury for which admission or
   transfer to a Level I or Level II trauma center is medically necessary and
   that is assigned a DRG number of 003, 004, 011, 012, 013, 025 through 029,
   082, 085, 453, 454, 455, 459, 460, 463, 464, 465, 474, 475, 483, 500, 507,
   510, 515, 516, 570, 856, 857, 862, 901, 904, 907, 908, 955 through 959, 963,
   998, or 999. Claimants who die in an emergency room of trauma or burn before
   admission shall be deemed to be claimants who incurred a traumatic injury.
   				&#8220;Type One teaching hospital&#8221; means a hospital that was a
   state-owned teaching hospital on January 1, 1996.
   				&#8220;Virginia fee schedule&#8221; means a schedule of maximum fees for
   fee scheduled medical services for the medical community where the fee
   scheduled medical service is provided, as initially adopted by the Commission
   pursuant to subsection C and as adjusted as provided in subsection D.

B. The pecuniary liability of the employer for a:

   1. Medical, surgical, and hospital service herein required when ordered by the
   Commission that is provided to an injured person prior to the transition date,
   regardless of the date of injury, shall be limited absent a contract providing
   otherwise, to such charges as prevail in the same community for similar
   treatment when such treatment is paid for by the injured person. As used in
   this subdivision, &#8220;same community&#8221; for providers of medical
   services rendered outside of the Commonwealth shall be deemed to be the
   principal place of business of the employer if located in the Commonwealth or,
   if no such location exists, the location where the Commission hearing
   regarding the dispute is conducted;

   2. Fee scheduled medical service provided on or after the transition date,
   regardless of the date of injury, shall be limited to:
   				a. The amount provided for the payment for the fee scheduled medical
   service as set forth in a contract under which the provider has agreed to
   accept a specified amount in payment for the service provided, which amount
   may be less than or exceed the maximum amount for the service as set forth in
   the applicable Virginia fee schedule;
   				b. In the absence of a contract described in subdivision 2 a, the lesser
   of the billing amount or the amount for the fee scheduled medical service as
   set forth in the applicable Virginia fee schedule that is in effect on the
   date the service is provided, subject to an increase approved by the
   Commission pursuant to subsection H; or
   				c. In the absence of (i) a contract described in subdivision 2 a and (ii)
   a provision in a Virginia fee schedule that sets forth a maximum amount for
   the medical service on the date it is provided, the maximum amount determined
   by the Commission as provided in subsection E; and

   3. Medical service provided on or after the transition date for the treatment
   of a traumatic injury or serious burn, regardless of the date of injury, shall
   be limited to:
   				a. The amount provided for the payment for the medical service provided
   for the treatment of the traumatic injury or serious burn as set forth in a
   contract under which the provider has agreed to accept a specified amount in
   payment for the service provided, which amount may be less than or exceed the
   maximum amount for the service calculated pursuant to subdivision 3 b; or
   				b. In the absence of a contract described in subdivision 3 a, an amount
   equal to 80 percent of the provider&#8217;s charge for the service based on
   the provider&#8217;s charge master or schedule of fees; however, if the
   compensability under this title of a claim for traumatic injury or serious
   burn is contested and after a hearing on the claim on its merits or after
   abandonment of a defense by the employer or insurance carrier, benefits for
   medical services are awarded and inure to the benefit of a third-party
   insurance carrier or health care provider and the Commission awards to the
   claimant&#8217;s attorney a fee pursuant to subsection B of &#xA7; 65.2-714,
   then the pecuniary liability of the employer for the service provided shall be
   limited to 100 percent of the provider&#8217;s charge for the service based on
   the provider&#8217;s charge master or schedule of fees.

C. The Commission shall adopt regulations establishing initial Virginia fee
schedules for fee scheduled medical services as follows:

   1. The Commission&#8217;s regulations that establish the initial Virginia fee
   schedules shall be effective on January 1, 2018.

   2. Separate initial Virginia fee schedules shall be established for fee
   scheduled medical services (i) provided by each category of providers of fee
   scheduled medical services and (ii) within each of the medical communities to
   reflect the variations among the medical communities as provided in
   subdivision 3, for each category of providers of fee scheduled medical
   services.

   3. The Virginia fee schedules for each medical community shall reflect
   variations among medical communities in (i) all reimbursements and other
   amounts paid to providers for fee scheduled medical services among the medical
   communities and (ii) the extent to which the number of providers within the
   various medical communities is adequate to meet the needs of injured workers.

   4. In establishing the initial Virginia fee schedules for fee scheduled
   medical services, the Commission shall establish the maximum fee for each fee
   scheduled medical service at a level that approximates the reimbursement
   objective for each category of providers of fee scheduled medical services
   among the medical communities. The Commission shall retain a firm with
   nationwide experience and actuarial expertise in the development of
   workers&#8217; compensation fee schedules to assist the Commission in
   establishing the initial Virginia fee schedules. The Commission shall consult
   with the regulatory advisory panel established pursuant to subdivision F 2
   prior to retaining such firm. Such firm shall be retained to assist the
   Commission in developing the Virginia fee schedules by recommending a
   methodology that will provide, at reasonable cost to the Commission,
   statistically valid estimates of the reimbursement objective for fee scheduled
   medical services within the medical communities, based on available data or,
   if the necessary data is not available, by recommending the optimal
   methodology for obtaining the necessary data. The Commission shall consult
   with the regulatory advisory panel prior to adopting any such methodology.
   Such methodology may, but is not required to, be based on applicable codes.
   The estimates of the reimbursement objective for fee scheduled medical
   services shall be derived from data on all reimbursements and other amounts
   paid to providers for fee scheduled medical services provided pursuant to this
   title during 2014 and 2015, to the extent available.

D. The Commission shall review Virginia fee schedules during the year that
follows the transition date and biennially thereafter and, if necessary, adjust
the Virginia fee schedules in order to address (i) inflation or deflation as
reflected in the medical care component of the Consumer Price Index for All
Urban Consumers (CPI-U) for the South as published by the Bureau of Labor
Statistics of the U.S. Department of Labor; (ii) access to fee scheduled medical
services; (iii) errors in calculations made in preparing the Virginia fee
schedules; and (iv) incentives for providers. The Commission shall not adjust a
Virginia fee schedule in a manner that reduces fees on an existing schedule
unless such a reduction is based on deflation or a finding by the Commission
that advances in technology or errors in calculations made in preparing the
Virginia fee schedules justify a reduction in fees.

E. The maximum pecuniary liability of the employer for a fee scheduled medical
service that is not included in a Virginia fee schedule when it is provided
shall be determined by the Commission. The Commission&#8217;s determination of
the employer&#8217;s maximum pecuniary liability for such fee scheduled medical
service shall be effective until the Commission sets a maximum fee for the fee
scheduled medical service and incorporates such maximum fee into an adjusted
Virginia fee schedule adopted pursuant to subsection D. If the fee scheduled
medical service is not included in a Virginia fee schedule because it is:

   1. A new type of technology, the employer&#8217;s maximum pecuniary liability
   shall not exceed 130 percent of the provider&#8217;s invoiced cost for such
   device, as evidenced by a copy of the invoice. If the new type of technology
   has not been cleared or approved by the FDA prior to such date, then the
   provider shall not be entitled to payment or reimbursement therefor unless the
   employer or its insurer agree; or

   2. A new type of procedure that has not been assigned a billing code, the
   employer&#8217;s maximum pecuniary liability shall not exceed 80 percent of
   the provider&#8217;s charge for the service based on the provider&#8217;s
   charge master or schedule of fees, provided the employer and the provider
   mutually agree to the provision of such procedure.

F. The Commission shall:

   1. Provide public access to information regarding the Virginia fee schedules
   for medical services, by categories of providers of fee scheduled medical
   services and for each medical community, through the Commission&#8217;s
   website. No information provided on the website shall be provider-specific or
   disclose or release the identity of any provider; and

   2. Utilize a 10-member regulatory advisory panel to assist in the development
   of regulations adopting initial Virginia fee schedules pursuant to subsection
   C, in adjusting initial Virginia fee schedules pursuant to subsection D, and
   on all matters involving or related to the fee schedule as deemed necessary by
   the Commission. One member of the regulatory advisory panel shall be selected
   by the Commission from each of the following: (i) the American Insurance
   Association; (ii) the Property and Casualty Insurers Association of America;
   (iii) the Virginia Self-Insurers Association, Inc.; (iv) the Medical Society
   of Virginia; (v) the Virginia Hospital and Healthcare Association; (vi) a Type
   One teaching hospital; (vii) the Virginia Orthopaedic Society; (viii) the
   Virginia Trial Lawyers Association; (ix) a group self-insurance association
   representing employers; and (x) a local government group self-insurance pool
   formed under Chapter 27 (&#xA7; 15.2-2700 et seq.) of Title 15.2. The
   Commission shall meet with the regulatory advisory panel and consider the
   recommendations of its members in its development of the Virginia fee
   schedules pursuant to subsections C and D.

G. The Commission&#8217;s retaining of a firm with nationwide experience and
actuarial expertise in the development of workers&#8217; compensation fee
schedules to assist the Commission in developing the Virginia fee schedules
pursuant to subsections C and D shall be exempt from the provisions of the
Virginia Public Procurement Act (&#xA7; 2.2-4300 et seq.), provided the
Commission shall issue a request for proposals that requires submission by a
bidder of evidence that it satisfies the conditions for eligibility established
in this subsection and in subdivision C 4. Records and information relating to
payments or reimbursements to providers that is obtained by or furnished to the
Commission by such firm or any other person shall (i) be for the exclusive use
of the Commission in the course of the Commission&#8217;s development of fee
schedules and related regulations and (ii) shall remain confidential and shall
not be subject to the provisions of the Virginia Freedom of Information Act
(&#xA7; 2.2-3700 et seq.).

H. When the total charges of a hospital or Type One teaching hospital, based on
such provider&#8217;s charge master, for inpatient hospital services covered by
a DRG code exceed the charge outlier threshold, then the Commission shall
establish the maximum fee for such scheduled inpatient hospital services at an
amount equal to the total of (i) the maximum fee for the service as set forth in
the applicable fee schedule and (ii) initially equal to 80 percent of the
provider&#8217;s total charges for the service in excess of the charge outlier
threshold. The charge outlier threshold for such services initially shall equal
300 percent of the maximum fee for the service set forth in the applicable fee
schedule; however, the Commission, in consultation with the firm retained
pursuant to subdivision C 4, is authorized on a biennial basis to adjust such
percentage if it finds that the number of such claims for which the total
charges of the hospital or Type One teaching hospital exceed the charge outlier
threshold is less than five percent or to increase such percentage if such
number is greater than 10 percent of all such claims.

I. No provider shall use a different charge master or schedule of fees for any
medical service provided under this title than the provider uses for health care
services provided to patients who are not claimants under this title.

J. The employer shall not be liable in damages for malpractice by a physician or
surgeon furnished by him pursuant to the provisions of &#xA7; 65.2-603, but the
consequences of any such malpractice shall be deemed part of the injury
resulting from the accident and shall be compensated for as such.

K. The Commission shall determine the number and geographic area of communities
across the Commonwealth. In establishing the communities, the Commission shall
consider the ability to obtain relevant data based on geographic area and such
other criteria as are consistent with the purposes of this title. The Commission
shall use the communities established pursuant to this subsection in determining
charges that prevail in the same community for treatment provided prior to the
transition date.

L. The pecuniary liability of the employer for treatment of a medical service
that is rendered on or after July 1, 2014, by:

   1. An advanced practice registered nurse or physician assistant serving as an
   assistant-at-surgery shall be limited to no more than 20 percent of the
   reimbursement due to the physician performing the surgery; and

   2. An assistant surgeon in the same specialty as the primary surgeon shall be
   limited to no more than 50 percent of the reimbursement due to the primary
   physician performing the surgery.

M. Multiple procedures completed on a single surgical site associated with a
medical service rendered on or after July 1, 2014, shall be coded and billed
with appropriate CPT codes and modifiers and paid according to the National
Correct Coding Initiative rules and the CPT codes as in effect at the time the
health care was provided to the claimant.

N. The CPT code and National Correct Coding Initiative rules, as in effect at
the time a medical service was provided to the claimant, shall serve as the
basis for processing a health care provider&#8217;s billing form or itemization
for such items as global and comprehensive billing and the unbundling of medical
services. Hospital in-patient medical services shall be coded and billed through
the International Statistical Classification of Diseases and Related Health
Problems as in effect at the time the medical service was provided to the
claimant.

HISTORY: Code 1950, § 65-86; 1968, c. 660, § 65.1-89; 1991, c. 355; 2014, c.
670; 2015, c. 456; 2016, cc. 279, 290; 2017, c. 478; 2018, c. 261; 2023, c. 183.