Bulletin 97-11
July 3, 1997

Inpatient Hospital Fee Schedule Delayed Pending Revision of Regulations

The implementation of the Inpatient Hospital Fee Schedule will be delayed until the regulations are amended to specifically incorporate the Medicare factors which are referenced in the current regulations, DWC Administrative Director Casey L. Young announced.

The implementation of this schedule has been held up by litigation brought by Community Care Network (CCN), who has argued that the instruction book published by DWC, which specifically set forth the referenced factors, should have been adopted in the regulatory process. While DWC has prevailed in the litigation to date, Young said he wanted to remove any doubt as to the validity of the fee schedule before putting it into effect.

CCN and DWC have agreed to a settlement of the litigation: CCN will drop all suits, including an appeal now pending in the Court of Appeal and a writ petition pending in the Supreme Court. DWC will propose amendments to the Inpatient Hospital Fee Schedule to expressly incorporate Medicare factors. Until those amendments take effect, the Inpatient Hospital Fee Schedule will not be in force. The earliest the Inpatient Hospital Fee Schedule will be back is January 1, 1998.

"To date, the litigation has been primarily over the issue of the proper jurisdiction for CCN to bring their challenge," Young said. "When they bring their challenge in the proper forum, there is some risk they will prevail. We decided to go ahead and amend the regulation to place the referenced factors directly into the fee schedule. Once this is done, the legal issue raised in this litigation will disappear and the schedule can go into effect without challenge."