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Title: 

453-01-1955-m4

Date: 

August 20, 2002

Type: 

Medical Fees

453-01-1955-m4

DECISION AND ORDER

I. SUMMARY

This consolidated proceeding involves nine cases in which requests for hearing were submitted by Scientific Therapy & Advanced Treatment (STAT) and Texas Mutual Insurance Company (TMI) from the findings and decisions of the Medical Review Division (MRD) of the Texas Workers’ Compensation Commission (Commission). STAT is a provider of durable medical equipment, including the BMR NT2000 (NT2000), which is the equipment at issue here. In each case, STAT provided an NT2000 to an injured worker at the prescription of a licensed physician and with preauthorization from TMI. The dispute in each case relates to the amount of reimbursement TMI is to pay STAT for the NT2000. MRD denied STAT additional reimbursement by TMI in eight cases and ordered additional payment in one case.

STAT and TMI each requested hearings in the cases in which they did not prevail. The issue in this docket, therefore, is determining the fair and reasonable reimbursement for the NT2000 in each of the nine cases in issue. After considering all of the evidence and arguments, the Administrative Law Judge (ALJ) concludes that STAT is entitled to be reimbursed $1,545 per NT2000 unit, for a total additional reimbursement of $5,565.00 for the nine cases.

II. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

This docket involves nine separate cases, consolidated for hearing and the issuance of a decision and order. The hearing commenced on May 28, 2002, in Austin, Texas, before ALJ Craig R. Bennett. The hearing did not conclude that day and, because of the parties’ scheduling difficulties, did not reconvene until July 18, 2002, at which time the hearing concluded and the record closed. TMI appeared and was represented by Katie Kidd, attorney. STAT appeared and was represented by Norman Darwin, attorney. The Commission neither appeared nor participated in this proceeding. There were no contested issues of jurisdiction or notice. Therefore, those matters are addressed in the findings of fact and conclusions of law without further discussion here.

III. DISCUSSION AND ANALYSIS

A. Background.

In each of the nine cases consolidated in this docket, the claimant sustained a work-related injury. The compensability of the injuries is not in dispute. Each claimant was prescribed an NT2000, which is a single item of durable medical equipment that has the functionality of both a neuromuscular stimulator (or NMES unit) and a TENS unit. TMI preauthorized the rental and purchase of the NT2000 for each claimant, although the extent of the preauthorization is in dispute and the wording of the actual preauthorization letters differ from case to case. STAT then billed TMI the sum of $2,195 for each NT2000. In its billing, STAT coded the NT2000 as miscellaneous medical equipment because of its dual functionality and the lack of a specific billing code for such dual function machines. TMI declined to reimburse the NT2000 at the billed rate and instead re-coded the NT2000 as either a neuromuscular stimulator or a TENS unit and reimbursed based on the maximum allowable reimbursement (MAR) for those types of units. STAT contested this decision by TMI, arguing that TMI did not have authority to change the billing code and reimburse at the lower rate. MRD considered STAT’s arguments, but ruled in favor of TMI in eight of the nine cases. In the other case, MRD ruled in favor of STAT and ordered additional reimbursement. In this docket, then, the disputed issue is whether STAT is entitled to additional reimbursement in each of the nine cases, beyond what TMI initially paid for the NT2000. Specific information on the individual claimants and cases is discussed below under the Findings of Fact section of this decision.

B. Applicable Law.

Workers’ compensation insurance covers all medically necessary health care, which includes all reasonable medical aid, examinations, treatments, diagnoses, evaluations, and services reasonably required by the nature of the compensable injury and reasonably intended to cure or relieve the effects naturally resulting from a compensable injury. It includes procedures designed to promote recovery or to enhance the injured worker’s ability to get or keep employment.[1]Certain medical items and services, however, require preauthorization before they can be provided. Both TENS and NMES units are durable medical equipment that require a medical prescription and preauthorization by the insurance carrier.[2] Once preauthorization is granted, the insurance carrier is generally liable to reimburse the procedure or item of medical equipment in accordance with the Act and the Commission’s rules.[3]Section 413.011 of the Act provides that the Commission by rule shall establish medical policies and guidelines relating to fees charged or paid for medical services for employees who suffer compensable injuries, including guidelines relating to payment of fees for specific medical treatments or services.[4] Where the Commission has not established a fee guideline, an insurance carrier shall reimburse at fair and reasonable rates as described in Section 413.011(d).[5] Moreover, when an insurance carrier is to pay a health care provider for treatments or services for which the Commission has not established an MAR, the carrier must “develop and consistently apply a methodology to determine fair and reasonable reimbursement amounts to ensure that similar procedures provided in similar circumstances receive similar reimbursement.”[6]

After a service or item has been preauthorized and provided, the medical provider is to bill the carrier its usual and customary charges, with a notation indicating the appropriate billing code for the service or item in issue. Prior to July 15, 2000, the Commission rules stated “[N]either the carrier nor the carrier’s agent shall change codes on the medical bills submitted by the provider without affording the provider the opportunity to submit additional documentation, prior to payment.”[7] Effective July 15, 2000, this rule was changed to allow the carrier to change the billing code only if it had the express agreement of the billing party. Absent compliance with this provision, the carrier is to either deny the bill on the basis of improper billing codes or pay the charge consistent with the billing code submitted.

Separate and specific billing codes are established for TENS units and neuromuscular stimulators. TENS units are coded as E0730 and neuromuscular stimulators (electronic shock units) are coded as E0745. Moreover, the Commission has established MARs for those types of units. However, no billing code exists specifically for a unit that has the functions of both a TENS unit and a neuromuscular stimulator. The Durable Medical Equipment (DME) Ground Rules provide that miscellaneous HCPCS code E1399 is used when no other HCPCS code is present for the DME or supplies provided to the injured worker. There is no MAR for items billed under E1399, and the DME Ground Rules state (under section IV relating to Nonlisted Items and Documentation of Procedure) that “if there is no pre-negotiated amount, [then the proper rate of reimbursement is] the fair and reasonable rate for the item described.”

C. STAT’s Arguments.

Because the NT2000 is a dual unit containing the functions of both a TENS unit and a neuromuscular stimulator, STAT argues it does not properly fall under a specific billing category. So, STAT billed it under E1399, which is the miscellaneous billing code. Items of durable medical equipment that are billed under E1399 are reimbursed at “fair and reasonable.” In this case, STAT presented evidence that its cost to purchase, store, market, and distribute the NT2000 is $1,973.33 per unit.[8] It charges $2,195 per unit, resulting in a profit of $221.67 per unit. STAT argues that this is a fair and reasonable profit on its expenditures of over $1,900 per unit. STAT presented evidence that, including cases in which it settled for much less in order to resolve a claim, its average reimbursement for the NT2000 is still $1,942.58.[9]

STAT acknowledges that the amount it seeks in reimbursement is more than that allowed under the Commission’s rules for a TENS unit or a neuromuscular stimulator (or even both combined), but asserts that the NT2000 provides additional benefits above those normally associated with either of those types of machines. In particular, STAT identifies the following additional benefits:[10]

  • portability (small and lightweight)
  • accessibility (easy to read display and programming)
  • clinician control (maintenance of the machine controller by the clinician prevents tampering by the patient; compliance meter allows clinician to confirm usage)
  • safety features (OSHA compliant; locked control preventing inadvertent change to settings; sensors that can identify if an electrode pad becomes loose)
  • other features (dual modalities; customized programming; submersible in water)

STAT argues that these benefits justify treatment of the NT2000 as more than a standard TENS unit or neuromuscular stimulator and justify a higher payment price for the NT2000 than that allowed for either a TENS unit or a neuromuscular stimulator.

STAT also contends that it was improper for TMI to change the billing code for the NT2000 to that of a neuromuscular stimulator and to reimburse at that rate. STAT points to the Commission’s rule 133.301(b) which provides that an insurance carrier is not allowed to change billing codes, unless the provider agrees or (under the former language of the rule) unless the carrier gives the provider the opportunity to provide further information in support of the billing code used. In this case, STAT argues that neither of these requirements were met, as STAT did not agree to the change in billing codes nor was it given the chance to provide additional information to TMI. Therefore, STAT contends that TMI’s method for calculating payment was unjustified, and it should be reimbursed for the NT2000 based on its costs and entitlement to a reasonable profit.

As further justification for its entitlement to receive $2,195 per NT2000 unit, STAT points out the fact that in its preauthorization request in each case it stated the intended billing code and the purchase price of the NT2000. In every instance, TMI preauthorized the purchase of the unit. Therefore, STAT contends that TMI should be responsible for paying the amount stated on the preauthorization request. Further, STAT notes that in another case before SOAH, the ALJ determined that $2,195 was an appropriate reimbursement amount for the NT2000.[11] For all of these reasons, STAT argues it is entitled to receive $2,195 per NT2000 unit.

D. TMI’s Arguments.

TMI points out that most of the prescription forms used by the doctors in prescribing the NT2000 indicate that it is not a TENS unit.[12] The prescriptions describe the NT2000 as a neuromuscular stimulator, and this is also the description contained on the preauthorization requests. Therefore, TMI argues, STAT sought and obtained preauthorization for a neuromuscular stimulator only, so reimbursement should be based on that allowed for neuromuscular stimulators. Moreover, TMI presented the testimony of Dr. Nicholas Tsourmas, who testified that there is little difference between a TENS unit and a neuromuscular stimulator, and both may often be used interchangeably for muscle or nerve injuries.[13] He went on to conclude that there was generally no reason to prescribe both a neuromuscular stimulator and a TENS unit for a particular patient. He also concluded that, in most of the cases at issue in this docket, a simple TENS unit would have sufficed for treating the patients’ conditions.[14]

TMI also disputes the alleged benefits of the NT2000. TMI notes that nothing in the record indicates that any of the supposed benefits were ever utilized for the patients in these cases.[15] Further, TMI notes that many of the benefits are illusory. For example, the evidence shows that the controller to the NT2000 is usually given to the patient to keep when the NT2000 is purchased, thus nullifying the supposed benefit of having a separate controller that can be maintained by the clinician.[16] TMI’s evidence also shows that there are other comparable dual units on the marketplace offering similar benefits that are reimbursed at $1,545.[17]

TMI dismisses STAT’s alleged costs as serving as a reasonable basis for calculating a fair and reasonable reimbursement. TMI points out that STAT is able to purchase the units at approximately $410 and the remaining $1,500 of their alleged costs are simply based on their sales and marketing costs and other expenses which may or may not be justified. Regardless of whether such costs are justified, TMI argues that it is not efficient cost control or utilization of medical care to pay $2,195 for a product that offers no greater benefits than other products that cost only $1,545, especially when two separate units providing TENS and neuromuscular stimulator functions could not be reimbursed at more than a total of $1,545 under the applicable MARs. Ultimately, TMI does not agree that STAT should be reimbursed even $1,545, though, because TMI contends that authorization was given only for a neuromuscular stimulator, reimbursement for which is capped at $1,050 according to the applicable MAR. So, TMI asserts that STAT should be reimbursed at no more than $1,050 per NT2000 unit.

E. ALJ’s Analysis.

It is undisputed that in each case in this docket, STAT billed for the NT2000 under billing code E1399. In each instance, TMI changed the billing code and reimbursed an amount less than that billed by STAT. The decision to change the billing code was in violation of 28 Tex. Admin. Code § 133.301(b) because there is no evidence that TMI either got STAT’s approval to change the code or gave STAT the opportunity to submit additional information to support the billing. So, TMI’s methodology for reimbursement, which is based on its change of the billing code and its classification of the NT2000 as a neuromuscular stimulator only, is neither lawful nor reasonable. Normally, in this situation, the ALJ would require TMI to reimburse according to the MAR for the billing code submitted by STAT; however, the miscellaneous billing code used by STAT has no MAR. Consequently, it is necessary to determine what the fair and reasonable payment should be under the circumstances.

TMI contends that all it preauthorized in each of the nine cases in this docket was a neuromuscular stimulator, and cites to language in some of the prescription forms stating that the NT2000 is “NOT A TENS UNIT.” The ALJ is not persuaded by TMI’s argument. TMI preauthorized the purchase of the NT2000 knowing how STAT intended to code it and what the purchase price was.[18] Under such circumstances, TMI should have either obtained more information prior to authorizing the unit or could have denied the unit contending that it was not medically necessary. Further, TMI’s decision to reimburse the NT2000 as a TENS unit in some cases and as a neuromuscular stimulator in other cases belies TMI’s position that it intended to only authorize a neuromuscular stimulator. Even TMI’s own expert testified that a TENS unit was the most appropriate treatment for the patients in many of the cases. Clearly, TMI’s actions reflect its knowledge that the unit served both the functions of a TENS unit and a neuromuscular stimulator, as well as its understanding that the unit was not used simply as a neuromuscular stimulator in the cases in issue. Given this knowledge, it was TMI’s responsibility to determine what was medically necessary prior to preauthorizing the unit. If a dual unit was not necessary, then TMI should not have preauthorized a dual unit. So, based on the evidence, the ALJ concludes that TMI preauthorized a dual unit and is responsible for reimbursing STAT based on that authorization.

Given the dual nature of the NT2000, it is appropriate for STAT to bill it under code E1399.[19] Because there is no MAR for a dual unit or items coded under E1399, reimbursement is based simply on the fair and reasonable standard set forth in the Act. In determining the fair and reasonable payment for the item, the ALJ concludes the functions of the item should be considered when calculating reimbursement. In this case, it is undisputed that the NT2000 has the functions of both a TENS unit and a neuromuscular stimulator. While STAT argues that the NT2000 provides other significant benefits as well, there is no dispute that the actual medical benefits to the patient are simply those comparable to a TENS unit and a neuromuscular stimulator. The other alleged benefits of the machine relate to convenience, ease of use, and safety. At the hearing, TMI successfully challenged most of these alleged benefits. The primary benefit TMI did not refute is the convenience of having dual functions in one machine, and the ALJ recognizes there may be times when that could benefit a patient. But, TMI showed that the other benefits of the NT2000 were mostly illusory and the medical functions of the NT2000 are comparable to neuromuscular stimulators and TENS units.

STAT argues that the fair and reasonable reimbursement should be based on its costs and reasonable profit margin, which it calculates to be a total of $2,195 per unit. TMI contends that the reimbursement should be based on the MAR for a neuromuscular stimulator ($1,050), or at most the MARs for each of the functionalities provided by the NT2000 (which is $495 for the TENS component and $1,050 for the neuromuscular stimulator component). In most cases where there is no MAR, the ALJ would agree with STAT’s approach. But where the machine is essentially a combination of two types of medical equipment, each of which has its own MAR, the ALJ finds it appropriate to calculate reimbursement based on the MARs for the individual functions. This is supported by the Act’s overarching focus on cost control and efficient utilization of health care.[20]

STAT has presented no persuasive justification for paying more for a dual unit than would be allowed for the two separate functions combined. Such an approach would encourage economic waste, not cost control.[21] If the functions of the NT2000 were provided by separate machines, the combined MAR would be $1,545. This is the best indicator of what is fair and reasonable under the circumstances. The ALJ sees no justification for requiring reimbursement in excess of this amount. The past SOAH decision cited by STAT is distinguishable because the issue in that case was preauthorization. Because that case solely involved a preauthorization dispute, any conclusions regarding the amount to be paid for the health care were not at issue in the proceeding and are not controlling here. While it is true that there may be convenience in having both functionalities in one unit, such units should also be less costly to ship and store, by virtue of the efficiencies of having only one unit instead of two. The parties have not presented evidence that would allow the ALJ to make a detailed analysis of the different expenses and savings associated with a dual machine versus two separate machines, so the ALJ does not attempt to engage in such analysis. Rather, STAT asserts that its costs and reasonable profit component are more than $1,545, which is the combined MARs for TENS units and neuromuscular stimulators. Because the ALJ concludes that the combined MARs should serve as a cap on what is considered fair and reasonable in this case, the ALJ concludes that STAT is entitled to be reimbursed $1,545 per machine.[22]

In two of the nine cases, TMI reimbursed at only $495, based on the MAR for a TENS unit. For those two cases, TMI’s reimbursement was deficient by $1,050 in each, or a total of $2,100. In the remaining seven cases, TMI reimbursed at $1,050, the MAR for a neuromuscular stimulator. For those cases, TMI’s reimbursement was deficient by $495 each, for a total of $3,465. Combined for these nine cases, then, TMI’s reimbursement was deficient by $5,565, and this is the total amount of additional reimbursement ordered by the ALJ.

IV. FINDINGS OF FACT

Case-Specific Findings

Docket No. 453-01-1955.M4

  1. On__________, claimant M.E. suffered a compensable injury while employed by an employer carrying workers’ compensation insurance underwritten by Texas Mutual Insurance Company or its predecessor (TMI).
  2. On January 3, 2000, Dr. Karen Johnston-Jones wrote M.E. a prescription to purchase a piece of durable medical equipment (NT2000) provided by STAT for the treatment of his injury. Prior to this, M.E. had rented the NT2000 for treatment.
  3. The language on the January 3, 2000 prescription read as follows: “BMR NT2000 NeuroMuscular Electrical Stimulator, NMES (THIS IS NOT A TENS UNIT).”
  4. On January 8, 2000, STAT requested preauthorization from TMI for this prescription.
  5. The language on the preauthorization request was as follows: “Purchase BMR NT2000 Neuromuscular Stimulator HCPCS Code E1399 price $2195.00.”
  6. TMI granted STAT’s preauthorization request for the NT2000.
  7. Shortly thereafter, STAT billed TMI for the NT2000, coded as E1399 and priced at $2,195.00.
  8. On January 18, 2000, TMI re-coded the NT2000 as E0745, which has a maximum allowable reimbursement (MAR) of $1,050.00. TMI authorized reimbursement for $1,050.00, subtracted $150.00 for the first month’s rental of the equipment, and reimbursed STAT $900.00.
  9. STAT sought additional reimbursement of $1,295.00 and submitted a request for dispute resolution on May 25, 2000. The Medical Review Division (MRD) of the Texas Workers’ Compensation Commission issued its Findings and Decision on December 28, 2000, ordering no additional reimbursement.
  10. STAT requested a hearing on January 15, 2001, and the Commission issued its original Notice of Hearing on February 12, 2001.

Docket No. 453-01-2237.M4

  1. On_____________, claimant E.P. suffered a compensable injury while employed by an employer carrying workers’ compensation insurance underwritten by TMI.
  2. On December 1, 1999, Dr. Anjali Jain wrote E.P. a prescription to purchase a piece of durable medical equipment (NT2000) provided by STAT for the treatment of his injury. Prior to this, E.P. had rented the NT2000 for treatment.
  3. The language on the December 1, 1999 prescription read as follows: “BMR NT2000 NeuroMuscular Electrical Stimulator, NMES (THIS IS NOT A TENS UNIT).”
  4. On December 2, 1999, STAT requested preauthorization from TMI for this prescription.
  5. The language on the preauthorization request was as follows: “Purchase BMR NT2000 Neuromuscular Stimulator, HCPCS Code E1399, purchase price $2195.00.”
  6. TMI granted STAT”s preauthorization request for the NT2000.
  7. Shortly thereafter, STAT billed TMI for the NT2000, coded as E1399 and priced at $2,195.00.
  8. On December 7, 1999, TMI re-coded the NT2000 as E0745, which has a MAR of $1,050.00. TMI authorized reimbursement for $1,050.00, subtracted $150.00 for the first month’s rental of the equipment, and reimbursed STAT $900.00.
  9. STAT sought additional reimbursement of $1,295.00 and submitted a request for dispute resolution on May 24, 2000. MRD issued its Findings and Decision on February 7, 2001, ordering no additional reimbursement.
  10. STAT requested a hearing on February 15, 2001, and the Commission issued its original Notice of Hearing on March 13, 2001.

Docket No. 453-01-2393.M4

  1. On___________, claimant L.F. suffered a compensable injury while employed by an employer carrying workers’ compensation insurance underwritten by TMI.
  2. On December 20, 1999, Dr. Linda Cordell wrote L.F. a prescription to purchase a piece of durable medical equipment (NT2000) provided by STAT for the treatment of his injury. Prior to this, L.F. had rented the NT2000 for treatment.
  3. The language on the December 20, 1999 prescription read as follows: “BMR NT2000 NeuroMuscular Electrical Stimulator, NMES (THIS IS NOT A TENS UNIT).”
  4. On December 20, 1999, STAT requested preauthorization from TMI for this prescription.
  5. The language on the preauthorization request was as follows: “Purchase BMR NT2000 Neuromuscular Stimulator, HCPCS Code E1399, purchase price $2195.00.”
  6. TMI granted STAT’s preauthorization request for the NT2000.
  7. Shortly thereafter, STAT billed TMI for the NT2000, coded as E1399 and priced at $2,195.00.
  8. On December 21, 1999, TMI re-coded the NT2000 as E0745, which has a MAR of $1,050.00. TMI authorized reimbursement for $1,050.00, subtracted $150.00 for the first month’s rental of the equipment, and reimbursed STAT $900.00.
  9. STAT sought additional reimbursement of $1,295.00 and submitted a request for dispute resolution on June 27, 2000. MRD issued its Findings and Decision on February 21, 2001, ordering no additional reimbursement.
  10. STAT requested a hearing on February 27, 2001, and the Commission issued its original Notice of Hearing on March 29, 2001.

Docket No. 453-01-2853.M4

  1. On_____________, claimant M.P. suffered a compensable injury while employed by an employer carrying workers’ compensation insurance underwritten by TMI.
  2. On June 23, 1999, Dr. David Hirsch wrote M.P. a prescription to purchase a piece of durable medical equipment (NT2000) provided by STAT for the treatment of her injury. Prior to this, M.P. had rented the NT2000 for treatment.
  3. The language on the June 23, 1999 prescription read as follows: “BMR NT2000 NeuroMuscular Electrical Stimulator, NMES (THIS IS NOT A TENS UNIT).”
  4. On June 24, 1999, STAT requested preauthorization from TMI for this prescription.
  5. The language on the preauthorization request was as follows: “Purchase BMR NT2000 Neuromuscular Stimulator, HCPCS Code E1399, purchase price $2195.00.”
  6. TMI granted STAT’s preauthorization request for the NT2000.
  7. Shortly thereafter, STAT billed TMI for the NT2000, coded as E1399 and priced at $2,195.00.
  8. On June 29, 1999, TMI re-coded the NT2000 as E0745, which has a MAR of $1,050.00. TMI authorized reimbursement for $1,050.00, subtracted $150.00 for the first month’s rental of the equipment, and reimbursed STAT $900.00.
  9. STAT sought additional reimbursement of $1,295.00 and submitted a request for dispute resolution on June 19, 2000. MRD issued its Amended Findings and Decision on April 9, 2001, ordering no additional reimbursement.
  10. STAT requested a hearing on April 9, 2001, and the Commission issued its original Notice of Hearing on May 11, 2001.

Docket No. 453-01-2210.M4

  1. On__________, claimant M.C. suffered a compensable injury while employed by an employer carrying workers= compensation insurance underwritten by TMI.
  2. On April 22, 1999, Dr. Dolores Contreras-Ubry wrote M.C. a prescription to purchase a piece of durable medical equipment (NT2000) provided by STAT for the treatment of her injury. Prior to this, M.C. had rented the NT2000 for treatment.
  3. The language on the April 22, 1999 prescription read as follows: “BMR NT2000 (Electric Neuro Muscular Stimulator).” This prescription did not contain the language distinguishing it from a TENS unit.
  4. On May 27, 1999, STAT requested preauthorization from TMI for this prescription.
  5. The language on the preauthorization request was as follows: “Purchase BMR NT2000 Neuromuscular Stimulator, HCPCS Code E1399, purchase price $2195.00.”
  6. TMI granted STAT’s preauthorization request for the NT2000.
  7. Shortly thereafter, STAT billed TMI for the NT2000, coded as E1399 and priced at $2,195.00.
  8. On October 14, 1999, TMI re-coded the NT2000 as E0745, which has a MAR of $1,050.00. TMI authorized reimbursement for $1,050.00, subtracted $150.00 for the first month’s rental of the equipment, and reimbursed STAT $900.00.
  9. STAT sought additional reimbursement of $1,295.00 and submitted a request for dispute resolution on March 25, 2001. MRD issued its Findings and Decision on February 6, 2001, ordering no additional reimbursement.
  10. STAT requested a hearing on February 13, 2001, and the Commission issued its original Notice of Hearing on March 12, 2001.

Docket No. 453-01-2429.M4

  1. On__________, claimant E.C. suffered a compensable injury while employed by an employer carrying workers’ compensation insurance underwritten by TMI.
  2. On October 1, 1998, Dr. Dennis Gutzman wrote E.C. a prescription to purchase a piece of durable medical equipment (NT2000) provided by STAT for the treatment of his injury. Prior to this, E.C. had rented the NT2000 for treatment.
  3. The language on the October 1, 1998 prescription read as follows: “BMR NT2000 (Electric Neuro Muscular Stimulator).” This prescription did not contain the language distinguishing it from a TENS unit.
  4. On October 8, 1998, STAT requested preauthorization from TMI for this prescription.
  5. The language on the preauthorization request was as follows: “BMR NT2000, purchase and supplies.”
  6. After TMI initially denied authorization on October 21, 1998, STAT requested a review by the Commission. TMI then granted STAT’s preauthorization request for the NT2000, pursuant to MRD’s order that TMI “pay the reasonable and necessary costs per the [TWCC] rules for the following treatments/services: Purchase of Neuromuscular Stimulator, costing $2195.00.”
  7. Thereafter, STAT billed TMI for the NT2000, coded as E1399 and priced at $2,195.00.
  8. On July 9, 1999, TMI re-coded the NT2000 as E0745, which has a MAR of $1,050.00. TMI authorized reimbursement for $1,050.00, subtracted $150.00 for the first month’s rental of the equipment, and reimbursed STAT $900.00.
  9. STAT sought additional reimbursement of $1,295.00 and submitted a request for dispute resolution on May 25, 2000. MRD issued its Findings and Decision on February 26, 2001, ordering no additional reimbursement.
  10. STAT requested a hearing on March 5, 2001, and the Commission issued its original Notice of Hearing on March 30, 2001.

Docket No. 453-01-2992.M4

  1. On___________, claimant G.M. suffered a compensable injury while employed by an employer carrying workers’ compensation insurance underwritten by TMI.
  2. On March 15, 1999, Dr. Joseph Nelson wrote G.M. a prescription to purchase a piece of durable medical equipment (NT2000) provided by STAT for the treatment of her injury. Prior to this, G.M. had rented the NT2000 for treatment.
  3. The language on the March 15, 1999 prescription read as follows: “BMR NT2000 (Electric Neuro Muscular Stimulator).” This prescription did not contain the language distinguishing it from a TENS unit.
  4. On June 8, 1999, STAT requested preauthorization from TMI for this prescription.
  5. The language on the preauthorization request was as follows: “BMR NT2000 Neuromuscular Stimulator, HCPCS code E1399, purchase price $2195.00.”
  6. TMI granted STAT’s preauthorization request for the NT2000.
  7. Thereafter, STAT billed TMI for the NT2000, coded as E1399 and priced at $2,195.00.
  8. On June 14, 1999, TMI re-coded the NT2000 as E0745, which has a MAR of $1,050.00. TMI authorized reimbursement for $1,050.00, subtracted $150.00 for the first month’s rental of the equipment, and reimbursed STAT $900.00.
  9. STAT sought additional reimbursement of $1,295.00 and submitted a request for dispute resolution on June 12, 2000. MRD issued its Amended Findings and Decision on March 30, 2001, ordering TMI to pay $1,295.00 additional reimbursement.
  10. TMI requested a hearing on April 24, 2001, and the Commission issued its original Notice of

Docket No. 453-01-3801.M4

  1. On __________, claimant S.A. suffered a compensable injury while employed by an employer carrying workers’ compensation insurance underwritten by TMI.
  2. On January 15, 2000, Dr. Dennis Gutzman wrote S.A. a prescription to purchase a piece of durable medical equipment (NT2000) provided by STAT for the treatment of his injury. Prior to this, S.A. had rented the NT2000 for treatment.
  3. The language on the January 15, 2000 prescription read as follows: “BMR NT2000 NeuroMuscular Electrical Stimulator (NMES).” This prescription did not contain the language distinguishing it from a TENS unit.
  4. On February 7, 2001, STAT requested preauthorization from TMI for this prescription.
  5. The language on the preauthorization request was as follows: “BMR NT2000 Neuromuscular Stimulator, HCPCS code E1399, purchase price $2195.00.”
  6. TMI granted STAT’s preauthorization request for the NT2000.
  7. Thereafter, STAT billed TMI for the NT2000, coded as E1399 and priced at $2,195.00.
  8. On February 9, 1999, TMI re-coded the NT2000 as E0730, which has a MAR of $495.00. TMI authorized reimbursement for $495.00, subtracted $150.00 for the first month’s rental of the equipment, and reimbursed STAT $345.00.
  9. STAT sought additional reimbursement of $1,850.00 and submitted a request for dispute resolution on May 29, 2001. MRD issued its Findings and Decision on July 13, 2001, ordering no additional reimbursement.
  10. STAT requested a hearing on July 18, 2001, and the Commission issued its original Notice of Hearing on August 13, 2001.

Docket No. 453-01-3778.M4

  1. On______________, claimant I.G. suffered a compensable injury while employed by an employer carrying workers’compensation insurance underwritten by TMI.
  2. On February 1, 2001, Dr. B.N. Lakshmikanth wrote I.G. a prescription to purchase a piece of durable medical equipment (NT2000) provided by STAT for the treatment of his injury. Prior to this, I.G. had rented the NT2000 for treatment.
  3. The language on the October 1, 1998 prescription read as follows: “BMR NT2000 NeuroMuscular Electrical Stimulator, NMES (THIS IS NOT A TENS UNIT).”
  4. On or about February 2, 2001, STAT requested preauthorization from TMI for this prescription.
  5. The language on the preauthorization request was as follows: “Purchase of BMR NT2000 Neuromuscular Stimulator.”
  6. TMI granted STAT’s preauthorization request for the NT2000.
  7. Thereafter, STAT billed TMI for the NT2000, coded as E1399 and priced at $2,195.00.
  8. February 20, 2001, TMI re-coded the NT2000 as E0730, which has a MAR of $495.00. TMI authorized reimbursement for $495.00, subtracted $150.00 for the first month’s rental of the equipment, and therefore reimbursed STAT $345.00.
  9. STAT sought additional reimbursement of $1,850.00 and submitted a request for dispute resolution on May 29, 2001. MRD issued its Findings and Decision on July 9, 2001, ordering no additional reimbursement.
  10. STAT requested a hearing on July 16, 2001, and the Commission issued its original Notice of Hearing on August 10, 2001.

Global Findings

  1. On August 22, 2001, TMI moved to consolidate seven of the cases. On October 4, 2001, the ALJ issued an order consolidating seven of the cases.
  2. On April 11, 2002, the parties submitted an agreed motion, in which they requested to consolidate two more cases with the seven cases previously consolidated. The ALJ issued an order on April 16, 2002 consolidating all nine cases and canceling all other hearings scheduled for these dockets.
  3. The hearing in this consolidated docket convened on May 28, 2002. TMI appeared and was represented by Katie Kidd, attorney. STAT appeared and was represented by Norman Darwin, attorney. The staff of the Commission filed a statement of matters asserted, but did not appear or participate. ALJ Craig R. Bennett presided. After a continuance, the hearing was completed and the record was closed on July 18, 2002.
  4. The NT2000 is a dual NMES/TENS unit, as approved by the FDA. There is no billing code specifically for such units. The NT2000 provides the functions of both NMES and TENS units in a single unit.
  5. Billing code E1399 is used for “miscellaneous” medical equipment. For billing code E1399, there is no MAR, but items are limited to reimbursement at fair and reasonable rates.
  6. Billing code E0745 is applicable to neuromuscular stimulators and has a MAR of $1,050.00.
  7. Billing code E0730 is applicable to TENS units and has a MAR of $495.00.
  8. TMI’s methodology for reimbursing STAT in seven of the nine cases was to (a) determine that the NT2000 was purely a neuromuscular stimulator and not a TENS unit, (b) re-code the equipment as such using code E0745, which has a MAR of $1,050.00, (c) authorize reimbursement in that amount, (d) subtract $150.00 for one month’s rental, and (e) pay STAT $900.00.
  9. In two of the nine cases, TMI’s methodology for reimbursing STAT was to (a) determine that the NT2000 was simply a TENS unit, (b) re-code the equipment as such using code E0730, which has a MAR of $495.00, (c) authorize reimbursement in that amount, (d) subtract $150.00 for one month’s rental, and (e) pay STAT $345.00.

100. STAT’s cost to purchase each NT2000 from the supplier is approximately $410.

V. CONCLUSIONS OF LAW

  1. The Texas Workers’ Compensation Commission has jurisdiction over this matter pursuant to the Texas Workers’ Compensation Act. Tex. Lab. Code Ann. § 413.031.
  2. The State Office of Administrative Hearings has jurisdiction over this proceeding, including the authority to issue a decision and order, pursuant to Tex. Lab. Code Ann. § 413.031(d) and Tex. Gov’t Code Ann. ch. 2003.
  3. In each case in issue in this proceeding, the request for a hearing was timely made pursuant to 28 Tex. Admin. Code § 148.3.
  4. Adequate and timely notice of the hearing was provided according to Tex. Gov’t Code Ann.§§ 2001.051 and 2001.052.
  5. Workers’ compensation insurance covers all medically necessary health care, which includes all reasonable medical aid, examinations, treatments, diagnoses, evaluations, and services reasonably required by the nature of the compensable injury, and reasonably intended to cure or relieve the effects naturally resulting from a compensable injury. It includes procedures designed to promote recovery or to enhance the injured worker’s ability to get or keep employment. Tex.Lab. Code Ann. § 401.011(19) and (31).
  6. Both TENS and NMES units each require a medical prescription and insurance preauthorization pursuant to 28 TAC § 134.600(h) (13).
  7. The Commission rules provide that reimbursement for services not identified in an established fee guideline shall be reimbursed atfair and reasonable rates as described in the Texas Workers’ Compensation Act until such time that specific guidelines are established by the commission. 28 TAC § 134.1(f).
  8. The Commission rules adopt by reference the TWCC Medical Fee Guidelines. 28 TAC § 134.201(a).
  9. Section 413.011 of the Guidelines and Medical Policies of the Act provides that:
    1. Guidelines for medical services fees must be fair and reasonable and designed to ensure the quality of medical care and to achieve effective medical cost control. The guidelines may not provide for payment of a fee in excess of the fee charged for similar treatment of an injured individual of an equivalent standard of living and paid by that individual or by someone acting on that individual’s behalf. The commission shall consider the increased security of payment afforded by this subtitle in establishing the fee guidelines. (Emphasis added)
  10. The Durable Medical Equipment (DME) Ground Rules state under “IV: Nonlisted Items and Documentation of Procedure” that ”if there is no pre-negotiated amount, [then the proper rate of reimbursement is] the fair and reasonable rate for the item described. Use the miscellaneous HCPCS code, E1399, when no other HCPCS code is present for the DME or supplies provided to the injured workers. When using E1399, a description of the unlisted equipment/supply is required.”
  11. STAT complied with the requirement stated in Conclusion of Law No. 10 by using billing code E1399 with the descriptor “NT2000, priced at $2195.00” when billing the NT2000.
  12. Prior to July 15, 2000, the Commission rules stated “[N]either the carrier nor the carrier’s agent shall change codes on the medical bills submitted by the provider without affording the provider the opportunity to submit additional documentation, prior to payment.” 28 TAC § 133.301(b). This version of the rule applies to eight of the nine cases at issue, where the dates on which TMI changed the code from E1399 to E0745 or E0730 occurred prior to July 15, 2000. (SOAH Docket Nos. 453-01-1955.M4; 453-01-2237.M4; 453-01-2393.M4; 453-01-2853.M4; 453-01-2210.M4; 453-01-2429.M4; 453-01-2992.M4; and 453-01-3801.M4).
  13. In regard to the eight cases discussed in Conclusion of Law No. 12, TMI did not comply with 28 TAC § 133.301(b), as there is no evidence that it afforded STAT the opportunity to submit additional documentation to justify the use of billing code E1399. As a result, TMI was not permitted to change the code and STAT is entitled to fair and reasonable reimbursement under billing code E1399.
  14. As of July 15, 2000, the Commission rules were amended to provide that “[N]either the insurance carrier nor the carrier’s agent shall change a billing code on a medical bill or reimburse treatment(s) and/or services(s) at another billing code’s value unless the insurance carrier contacts the sender of the bill and the sender agrees to the change.” 28 TAC § 133.301(b). This version of the rule applies to one of the nine cases, since the date on which TMI changed the code was February 20, 2001. (SOAH docket No. 453-01-3778.M4).
  15. In regard to the case discussed in Conclusion of Law No. 14, TMI did not comply with 28 TAC § 133.301(b) because no agreement was reached between STAT and TMI regarding the billing code or rate of reimbursement for the charge at issue in SOAH Docket No. 453-01-3778. As a result, TMI was not permitted to change the code and STAT is entitled to fair and reasonable reimbursement under billing code E1399.
  16. As to eight of the cases in this proceeding (SOAH Docket Nos. 453-01-1955.M4; 453-01-2237.M4; 453-01-2393.M4; 453-01-2853.M4; 453-01-2210.M4; 453-01-2429.M4; 453-01-3801.M4; and 453-01-3778.M4), STAT had the burden of proving by a preponderance of the evidence that the reimbursement amount offered by TMI was not fair and reasonable and that it was entitled to additional reimbursement. 28 Tex. Admin. Code § 148.21(h).
  17. STAT satisfied its burden in the eight cases listed in Conclusion of Law No. 16 of showing that the reimbursement methodology used by TMI was not consistent with the Commission’s rules and did not result in a fair and reasonable reimbursement.
  18. As to one of the cases in this proceeding (SOAH Docket No. 453-01-2992.M4), TMI had the burden of proving by a preponderance of the evidence that the reimbursement amount it offered to STAT was fair and reasonable. 28 Tex. Admin. Code §148.21(h).
  19. TMI has satisfied its burden, in SOAH Docket No. 453-01-2992.M4, of showing that the reimbursement amount sought by STAT was not fair and reasonable.
  20. The most appropriate indicator of what is fair and reasonable reimbursement for the NT2000 is the sum of the MARs for a TENS unit and a neuromuscular stimulator, which is a total of $1,545.
  21. Based on the foregoing findings of fact and conclusions of law, $1,545 is a fair and reasonable rate of reimbursement for the NT2000, which was properly coded as E1399 in the cases at issue in this docket.

ORDER

IT IS ORDERED that, for the nine cases at issue in this docket, Texas Mutual Insurance Company is to pay to Scientific Therapy & Advanced Treatment the total additional sum of $5,565.00 plus interest.

Signed this 20th day of August, 2002.

.

CRAIG R. BENNETT
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

  1. Tex. Lab. Code Ann. § 401.011(19) and (31). The Texas Workers’ Compensation Act is found at Tex. Lab. Code Ann. § 401.001et seq. and is hereafter referred to as “the Act.”↑
  2. 28 TAC§ 134.600(h)(11) (TENS units and all DME in excess of $500 must be preauthorized).↑
  3. 28 TAC § 134.600(b)(1)(B).↑
  4. § 413.011(d) of the Act. In 2001, the legislature amended § 413.011 so that § 413.011(b) became § 413.011(d), but the text is unchanged. The ALJ uses the current subsection (d) for reference herein.↑
  5. 28 TAC § 134.1(f).↑
  6. 28 TAC § 133.304(i)(1).↑
  7. 28 TAC § 133.301(b)(effective February 20, 1992).↑
  8. Ex. 10, attachment 5; Tr. Vol. 1, at 105:23 (transcript cites are in the format of “page:line”).↑
  9. Tr. Vol. 1, at 108. STAT’s calculation is also supported by a random sampling of reimbursements conducted by TMI which showed the average reimbursement per unit as being $1,900.04. Id.↑
  10. Ex. 10, attachment 1.↑
  11. See Ex. 10, attachment 4 (decision in SOAH Docket No. 453-99-2179).↑
  12. See, e.g., Ex. 2, at 00023.↑
  13. Tr. Vol. 1, at 138.↑
  14. Tr. Vol. 1, 149:16-22 and 159:9-24.↑
  15. Tr. Vol. 2, at 191:7-23.↑
  16. Tr. Vol. 1, at 38:4-8 and 63:23 – 64:12.↑
  17. Tr. Vol. 2, at 191-92 and 199:24 – 200:19.↑
  18. In all instances, the preauthorization request identified the NT2000 by name, and stated the price ($2,195) and intended billing code (E1399).↑
  19. Tr. Vol. 1, 151:9-19 and 152:16-20.↑
  20. Because the MARs for the different functionalities take into consideration the factors identified in the Act for determining what is fair and reasonable, the ALJ need not enumerate and discuss all of those factors here.↑
  21. The ALJ recognizes that there may be some cases where a dual device provides medical benefits in excess of the individual functionalities combined. In such a case, it might be fair and reasonable to reimburse for the dual device at a greater amount than the MARs for the individual functions. In this case, however, the evidence does not establish any significant benefit from the NT2000 that is greater than that available from the combined use of a TENS unit and a neuromuscular stimulator.↑
  22. This amount is supported by TMI’s evidence showing that another provider of comparable dual units accepts $1,545 as fair and reasonable payment for such units based on reasons similar to those cited by the ALJ in this case. Tr. Vol. 2, at 170-74. Moreover, given STAT’s cost of approximately $410 to purchase each NT2000, it is difficult to believe that $1,545 is unreasonably low as STAT alleges. TR. Vol. 1, 81:12-25; Tr. Vol. 2, 242:8-13.↑