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What are the costs of hospital services?

| May 29, 2015 | Workers' Compensation |

Connecticut’s workers’ compensation provides for employer liability for hospital care for injuries. However, courts have to determine whether hospital rates are based upon whether rates are contingent on what the hospital’s actual costs to provide medical services or on the hospital’s published rates that it is required to charge any payer under state law.

Workers’ compensation law in the state provides reimbursement based on the cost of the actual services the hospital provides. There is no legal guidance on how these rates are determined, however. Because this differs widely, the state imposed this fee publication requirement.

Hospitals in Connecticut may set their own rates but are required to file fee schedules and are prohibited from departing from these rates except when a payer negotiated for different rates or the legislature provided for different rates. Hospitals face monetary penalties, in fact, for charging payers below these rates. This helps assure that workers’ compensation does not pay the difference between the published rates and what the hospital actually charges.

The Connecticut state Supreme Court found that determining the actual costs of services is problematic under the workers’ compensation system. The current scope and extent of medical services would lead to inconsistent results. It therefore found that public health scheme controlling hospital rates for payers generally controls payment of compensation claims.

Requiring payment with the published costs is consistent with the intent of the state’s workers’ compensation law that employers pay the same rates as members of the general public. It provides prompt and efficient resolution in the compensation proceeding and avoids litigating the cost of medical expenses in each workers’ compensation proceeding.

Workers’ compensation claims may present complexities on many issues even where the subject, such as the cost of medical treatment, may appear simplistic. Prompt legal advice can help assure that a work accident victim receives lost wages and payment of health care.

Source: State of Connecticut Judicial Branch, “Carabello v. Electric Boat Corp. (SC 19182, March 17, 2015), Accessed May 24, 2015

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