The health-care payment system developed pursuant to this section shall be subject to the following procedures and requirements:

(1) The intent of the General Assembly in authorizing a health-care payment system is to reduce overall medical expenditures for the treatment of workers’ compensation-related injuries by 33% by January 31, 2017, and to reduce said expenditures by 20% by January 31, 2015.

(2) The health-care payment system shall include payment rates, instructions, guidelines, and payment guides and policies regarding application of the payment system. When completed, the payment system shall be published on the Internet at no charge to the user via a link from the Office of Workers’ Compensation website at http:

(3) The maximum allowable payment for health-care-related payments covered under this chapter shall be the lesser of the health-care provider’s actual charges or the fee set by the payment system.

a. The Workers’ Compensation Oversight Panel shall, by October 1, 2014, establish a fee schedule for all Delaware workers’ compensation funded procedures, treatments, and services based on the Resource Based Relative Value Scale (RBRVS), Medical Severity Diagnosis Related Group (MS-DRG), Ambulatory Payment Classification (APC), or equivalent scale used by the Centers for Medicare and Medicaid Services. The RBRVS, MS-DRG, APC, or other equivalent factor shall be multiplied by a Delaware-specific geographically-adjusted factor to ensure adequate participation by providers. The fee schedule and other savings from the health-care payment system shall result in a reduction of 20% in aggregate workers’ compensation medical expenses by the year beginning January 31, 2015, an additional reduction of 5% of 2014 expenses by the year beginning January 31, 2016, and an additional reduction of 8% of 2014 expenses by the year beginning January 31, 2017. The aggregate workers’ compensation medical expenses required by this paragraph shall be attained through reimbursement reductions of equal percentages among hospitals, ambulatory surgical centers, and other health-care providers; therefore, by January 31, 2015, the fee schedule and other savings from the health-care payment system shall reflect a reduction of 20% in workers’ compensation medical expenses paid to hospitals, a reduction of 20% in workers’ compensation medical expenses paid to ambulatory surgical centers, and a reduction of 20% in workers’ compensation medical expenses paid to other health-care providers. This formula shall also be used for the 5% reduction required by January 31, 2016, and the 8% reduction required by January 31, 2017.

b. In addition, by January 31, 2017, no individual procedure in Delaware paid for through the workers’ compensation system (as identified by HCPCS level 1 or level 2 code) shall be reimbursed at a rate greater than 200% of that reimbursed by the federal Medicare system, provided that radiology services may be reimbursed at up to 250% of the federal Medicare reimbursement and surgery services may be reimbursed at up to 300% of the federal Medicare reimbursement.

c. The Workers’ Compensation Oversight Panel shall report to the Governor and General Assembly by January 31, 2016, with respect to medical savings recognized as a result of this paragraph (3) and possible unforeseen consequences of the procedure-specific caps required by paragraphs (3)b. and (5) of this section, and the General Assembly may at that time reconsider the specific percentage caps required by paragraphs (3)b. and (5) of this section. The cost reductions required by paragraph (3)a. of this section shall be permanent, with the exception of inflation increases beginning in 2018 as permitted by paragraph (5) of this section.

(4) An independent actuary appointed by the Secretary of Labor shall verify for the Secretary that the fee schedule developed by the Workers’ Compensation Oversight Panel under paragraph (3) of this section complies with its requirements. If the fee schedule does not comply with its requirements, or is not completed by October 1, 2014, the Secretary of Labor shall promulgate a fee schedule meeting the requirements of paragraph (3) of this section by regulation.

(5) Beginning on January 1, 2018, the payment system will be adjusted yearly based on percentage changes to the Consumer Price Index-Urban, U.S. City Average, All Items, as published by the United States Bureau of Labor Statistics. Notwithstanding the annual CPI-Urban increase permitted by this paragraph, no individual procedure in Delaware paid for through the workers’ compensation system (as identified by HCPCS level 1 or level 2 code) shall be reimbursed at a rate greater than 200% of that reimbursed by the federal Medicare system, provided that radiology services may be reimbursed at up to 250% of the federal Medicare reimbursement and surgery services may be reimbursed at up to 300% of the federal Medicare reimbursement. The Workers’ Compensation Oversight Panel may, without consent of the General Assembly and Governor, reduce reimbursements for any procedures it deems appropriate, but cannot increase reimbursements beyond the amounts permitted by this chapter.

(6) Upon adoption of the health-care payment system, an employer and/or insurance carrier shall pay the lesser of the rate set forth by the payment system or the health-care provider’s actual charge. If an employer or insurance carrier contracts with a provider for the purpose of providing services under this chapter, the rate negotiated in any such contract shall prevail.

(7) The health-care payment system shall include provisions for health-care treatment and procedures performed outside the State of Delaware. Any health-care provider who is not licensed by the State of Delaware to provide medical services but is licensed in another state, and who is not certified under § 2322D of this title, may provide medical services without having to seek and obtain preauthorization for services that are reasonable, necessary and related to the employee’s work related injury or condition and have those services reimbursed at the lesser of:

a. The health-care provider’s usual and customary fee;

b. The maximum allowable fee pursuant to the Delaware workers’ compensation health-care payment system adopted pursuant to this section;

c. The maximum allowable fee pursuant to any workers’ compensation health-care payment system in the state in which the services at issue were rendered; or

d. If an employer or insurance carrier contracts with a provider for the purpose of providing services under this chapter, the rate negotiated to any such contract.

(8) Fees for nonclinical services, such as retrieving, copying and transmitting medical reports and records, testimony by affidavit, deposition or live testimony at any hearing or proceeding, or completion and transmission of any required report, form or documentation, and associated regulations and procedures for the determination of and verification of containment of fees, shall be developed and proposed by the Workers’ Compensation Oversight Panel, and adopted as part of the health-care payment system. Such fees shall be revised periodically on the recommendation of the Panel to reflect changes in the cost of providing such services. Following the adoption of the initial health-care payment system, adjustments to fees for nonclinical services shall be adopted by regulation of the Department of Labor pursuant to Chapter 101 of Title 29. The nonclinical service fees adopted pursuant to this paragraph shall apply to all services provided after the effective date of the regulation, regardless of the date of injury.

(9) As part of the health-care payment system, the Workers’ Compensation Oversight Panel shall adopt, recommend, and maintain a formulary and fee methodology for pharmacy services, prescription drugs and other pharmaceuticals. The formulary and fee methodology system developed by the Workers’ Compensation Oversight Panel for pharmacy services, prescription drugs and other pharmaceuticals shall include a mandated discount from average wholesale price that shall be defined by the State, a ban on repackaging fees, and adoption of a preferred drug list.

(10) The Workers’ Compensation Oversight Panel shall have the authority to adopt rules to require electronic medical billing and payment processes, to standardize the necessary medical documentation for billing adjudication, to provide for effective dates and compliance, and for further implementation of this section.

76 Del. Laws, c. 1, § 11; 76 Del. Laws, c. 143, §§ 1, 2; 77 Del. Laws, c. 94, §§ 1-4; 78 Del. Laws, c. 186, § 1; 78 Del. Laws, c. 391, § 1; 79 Del. Laws, c. 55, § 2; 79 Del. Laws, c. 312, § 2; 80 Del. Laws, c. 124, § 2.