No. 42298 (Amendment): Rule R590-267. Personal Injury Protection Relative Value Study Rule

(Amendment)

DAR File No.: 42298
Filed: 11/01/2017 05:47:28 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The change updates the conversion factors and publications for use in 2018.

Summary of the rule or change:

The change adds conversion factors and publications for physicians and dentists to use when determining the reasonable value of services provided to patients on or after 01/01/2018, and removes the factors and publications that were to be used from 2014 through 2015.

Statutory or constitutional authorization for this rule:

• Subsection 31A-22-307(2)
• Subsection 31A-2-201(3)

This rule or change incorporates by reference the following material:

• Updates Relative Values for Dentists, published by Optum 360, 2017
• Updates Relative Values for Physicians, published by Optum 360, 2017

Anticipated cost or savings to:

the state budget:

The Department of Insurance (Department) will be required to purchase two hard copies of the RVD 2017 at $260 each and two copies of the RVP 2017 at $330 each. These publications are incorporated by reference. One copy will be maintained by the Department and one copy will be maintained by the Office of Administrative Rules per rulemaking requirements.

local governments:

There will be no cost or savings to local governments. The rule covers the method by which providers determine the reasonable value of services they provide to consumers.

small businesses:

Medical, dental, and chiropractic offices that provide services for individuals insured in auto accidents may purchase individually, or as a group, the RVD 2017 or RVP 2017 publication that is incorporated by reference in the rule. The cost of the RVD 2017 is $260 for a hard copy. The cost of the RVP 2017 is $330 for a hard copy. By using the publication with the conversion factors in the rule, they will be able to determine the reasonable charges for services they provide to those injured in automobile accidents.

persons other than small businesses, businesses, or local governmental entities:

Auto insurers, or those they contract with to service their claims, and health care providers may purchase the RVD 2017 or RVP 2017 publication that is incorporated by reference in the rule. The cost of the RVD 2017 is $260 for a hard copy. The cost of the RVP 2017 is $330 for a hard copy. By using the publication with the conversion factors in the rule, they will be able to determine the reasonable charges of medical and dental services they are required to reimburse providers for treatment under personal injury protection coverage in Utah.

Compliance costs for affected persons:

Affected persons may purchase the RVD 2017 or RVP 2017 publication that is incorporated by reference in the rule. The cost of the RVD 2017 is $260 for a hard copy, while the RVP 2017 is $330 for a hard copy. The Department is sensitive to this compliance cost and it expects to arrange a 50% discount for purchasers with a Utah address, as has been arranged in prior years, to help ameliorate any adverse costs on small businesses. Additionally, as required by rulemaking guidelines, both publications will be available for review by affected persons at the Insurance Department and the Office of Administrative Rules at no charge.

Comments by the department head on the fiscal impact the rule may have on businesses:

I. WHETHER A FISCAL IMPACT TO BUSINESS IS EXPECTED AS A RESULT OF THE PROPOSED RULE AND, IF SO, A DESCRIPTION OF WHY: A number of businesses will have a fiscal impact as a result of this rule. Small businesses (including medical, dental, and chiropractic offices) and larger businesses (such as auto and health insurers) may choose to purchase the RVD 2017 or RVP 2017 publication that is incorporated by reference in the rule. The cost of the RVD 2017 is $260 for a hard copy. The cost of the RVP 2017 is $330 for a hard copy. The Department is sensitive to this compliance cost and it expects to arrange a 50% discount for purchasers with a Utah address, as has been arranged in prior years, to help ameliorate any adverse costs on small businesses. Additionally, as required by rulemaking guidelines, both publications will be available for review by affected persons at the Insurance Department and the Office of Administrative Rules at no charge. II. AN ESTIMATE OF THE TOTAL NUMBER OF BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: Approximately 4,061 businesses in Utah may be impacted by the rule. This includes physician, dental, and chiropractic offices, as well as medical and auto insurers. III. AN ESTIMATE OF THE SMALL BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: Approximately 3,896 small businesses in Utah may be impacted by the rule. This includes physician, dental, and chiropractic offices which generally have fewer than 50 employees. The Department is sensitive to this compliance cost and it expects to arrange a 50% discount for purchasers with a Utah address, as has been arranged in prior years, to help ameliorate any adverse costs on small businesses. Additionally, as required by rulemaking guidelines, both publications will be available for review by affected persons at the Insurance Department and the Office of Administrative Rules at no charge. IV. A DESCRIPTION OF THE SOURCES OF COST OR SAVINGS AS WELL AS THE EXPECTED NET SAVINGS OR COST TO BUSINESS ESTABLISHMENTS AND SMALL BUSINESS ESTABLISHMENTS AS A RESULT OF THE PROPOSED RULE OVER A ONE-YEAR PERIOD, IDENTIFYING ONE-TIME AND ONGOING COSTS: Affected persons may purchase the RVD 2017 or RVP 2017 publication that is incorporated by reference in the rule. The cost of the RVD 2017 is $260 for a hard copy, while the RVP 2017 is $330 for a hard copy. Small businesses (physicians, dentists, chiropractors) are likely to purchase one publication or the other, depending on their specialization. The net one-time cost for small businesses as a whole may be $1,166,890. Larger businesses (insurers) may purchase both publications. The net one-time cost for larger businesses as a whole may be $97,350. The net one-time cost for all affected persons (small businesses and large businesses) may be $1,264,240. However, the Department expects to arrange a 50% discount for purchasers with a Utah address, as has been arranged in prior years. This discount will reduce the expected costs significantly. It is also important to note that the Department makes its copies of the RVD and RVP available to any affected parties for free viewing in the Department's offices. V. DEPARTMENT HEAD'S COMMENTS ON THE ANALYSIS: This analysis represents the Insurance Department's best estimate of the maximum fiscal impact this rule amendment may have on businesses. Because the analysis did not include the expected 50% discount, the actual impact is expected to be much lower. Affected persons are also welcome to review both publications at the Department's offices at no cost.

Todd E. Kiser, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Steve Gooch at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/15/2017

This rule may become effective on:

12/22/2017

Authorized by:

Steve Gooch, Information Specialist

RULE TEXT

Appendix: Regulatory Impact Analysis for Small and Non-Small Businesses

FY 2018

FY 2019

FY 2020

Fiscal Costs

State Government

$1,180

$0

$1,180

Local Government

$0

$0

$0

Small Businesses

$1,166,890

$0

$1,166,890

Non-Small Businesses

$97,350

$0

$97,350

Other Persons

$0

$0

$0

Total Fiscal Costs:

$1,265,420

$0

$1,265,420

Fiscal Benefits

State Government

$0

$0

$0

Local Government

$0

$0

$0

Small Businesses

$0

$0

$0

Non-Small Businesses

$0

$0

$0

Other Persons

$0

$0

$0

Total Fiscal Benefits:

$0

$0

$0

Net Fiscal Benefits:

-$1,265,420

$0

-$1,265,420

 

The provisions of the rule are in effect for 2018 and 2019. It is expected that businesses will purchase the RVP or RVD in FY 2018, and will not have any additional costs in FY 2019. The rule will be amended for 2020 using updated data, and using updated versions of the RVP and RVD.

 

In performing the thorough fiscal analysis, the Department used the following NAICS classifications:

621111 -- Offices of Physicians (except Mental Health Specialists)

621210 -- Offices of Dentists

621310 -- Offices of Chiropractors

524126 -- Direct Property and Casualty Insurance Carriers

524114 -- Direct Health and Medical Insurance Carriers

 

 

R590. Insurance, Administration.

R590-267. Personal Injury Protection Relative Value Study Rule.

R590-267-1. Authority.

This rule is promulgated by the insurance commissioner pursuant to Subsections 31A-2-201(3) and 31A-22-307(2).

 

R590-267-2. Purpose.

(1) The purpose of this rule is to establish a reasonable value of services and accommodations for the diagnosis, care, recovery, or rehabilitation of an injured person under automobile personal injury protection coverage as described in Subsection 31A-22-307(1)(a).

(2) As required by Subsection 31A-22-307(2), the reasonable value is based on the 75th percentile of medical, dental, and chiropractic charges, as they presently exist in the most populous county in this State.

 

R590-267-3. Scope.

This rule applies to services and accommodations provided:

(1) under automobile personal injury protection coverage as described in Subsection 31A-22-307(1)(a); and

(2) on or after January 1, 2014.

 

R590-267-4. Definitions.

(1) As used in this rule "Conversion Factor" means a multiplier used to convert the relative value unit or units of a service or a procedure to a reimbursement rate.

(2) As used in this rule "RVD [2015]2017" means [2015]2017 Edition of the Relative Values for Dentists published by Optum360, 2525 Lake Park Blvd., Salt Lake City, UT 84120; phone: [phone]; email: [e-mail]; website: www.optumcoding.com.

(3) As used in this rule "RVD [2013]2015" means [2013]2015 Edition of the Relative Values for Dentists published by [Relative Values Studies, Inc., 12301 N. Grant St., Suite 230, Thornton, CO, 80241; phone: [phone]; email: [e-mail]; website: www.rvsdata.com]Optum360, 2525 Lake Park Blvd., Salt Lake City, UT 84120; phone: [phone]; email: [e-mail]; website: www.optumcoding.com.

(4) As used in this rule "RVP [2015]2017" means [2015]2017 Edition of the Relative Values for Physicians published by Optum360, 2525 Lake Park Blvd., Salt Lake City, UT 84120; phone: [phone]; email: [e-mail]; website: www.optumcoding.com.

(5) As used in this rule "RVP [2013]2015" means [2013]2015 Edition of the Relative Values for Physicians published by Optum 360, 2525 Lake Park Blvd., Salt Lake City, UT 84120; phone: [phone]; email: [e-mail]; website: www.optumcoding.com.

(6) As used in this rule "Relative Value Unit" means a numerical value assigned to a medical or dental procedure as published in RVP and RVD respectively.

(7) The publications identified in Subsections R590-267-4(2), (3), (4), and (5) are hereby incorporated by reference within this rule.

 

R590-267-5. Conversion Factors.

(1)(a) The following conversion factors shall be used with RVP [2015]2017 to determine the reasonable value of medical services or accommodations provided on or after January 1, [2016]2018:

(i) anesthesia, [97.13]99.27;

(ii) surgery, [200.00]225.90;

(iii) radiology, [35.84]37.50;

(iv) pathology, [24.29]25.00;

(v) medicine, [11.67]13.00;

(vi) evaluation and management, [13.16]14.65.

(b) The conversion factor used with RVD [2015]2017 to determine the reasonable value of dental services or accommodations provided on or after January 1, [2016]2018 shall be [60.00]63.00.

(2)(a) The following conversion factors shall be used with RVP [2013]2015 to determine the reasonable value of medical services or accommodations provided from January 1, [2014]2016 through December 31, [2015]2017:

(i) anesthesia, [91.57]97.13;

(ii) surgery, [180.00]200.00;

(iii) radiology, [35.18]35.84;

(iv) pathology, [23.85]24.29;

(v) medicine, [10.87]11.67;

(vi) evaluation and management, [11.85]13.16.

(b) The conversion factor used with RVD [2013]2015 to determine the reasonable value of dental services or accommodations provided from January 1, [2014]2016 through December 31, [2015]2017 shall be [55.00]60.00.

 

R590-267-6. Fee Schedule.

The reasonable value of any service or accommodation shall be calculated by multiplying the relative value unit assigned to the service or accommodation by the applicable conversion factor prescribed in R590-267-5.

 

R590-267-7. Penalties.

A person found to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.

 

R590-267-8. Severability.

If any provision of this rule or its application to any person or situation is held to be invalid, that invalidity shall not affect any other provision or application of this rule which can be given effect without the invalid provision or application, and to this end the provisions of this rule are declared to be severable.

 

KEY: relative value study

Date of Enactment or Last Substantive Amendment: [January 1, 2016]2017

Authorizing, and Implemented or Interpreted Law: 31A-2-201(3); 31A-22-307(2)

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