DECISION AND ORDER

Texas Mutual Insurance Company (Carrier) requested a hearing to contest the July 29, 2003, Findings and Decision of the Texas Workers= Compensation Commission (Commission) authorizing reimbursement of $2,682.00 to First Rio Valley Medical, P.A. (Provider) for established patient focused office visits,^[1] aquatic therapy,^[2] massage therapy,^[3] therapeutic exercises,^[4] phonophoresis,^[5] phonophoresis cream,^[6] and a functional capacity evaluation,^[7] provided from January 28, 2002, through May 29, 2002 (Disputed Services).^[8] Carrier has the burden of showing by a preponderance of the evidence that the Disputed Services were not medically necessary. A copy of the claims log showing the dates and services in dispute is attached as Appendix AA.^[9]

This decision denies relief sought by Carrier and grants reimbursement for the Disputed Services.

The hearing convened on February 2, 2005, before Administrative Law Judge (ALJ) Catherine C. Egan. Attorneys Chris Trickey and Tom Hudson represented Carrier. Attorney Keith Gilbert represented Provider. William DeFoyd, D.C.; Nicholas Tsourmas, M.D.; and Alfred Ball testified for Carrier. Robert S. Howell, D.C., Provider’s owner, testified for Provider. There were no contested issues of notice or jurisdiction.

The hearing adjourned. At the request of the parties, the record remained open for the filing of briefs regarding the admission of a deposition and other items. On February 16, 2005, Carrier filed a brief in support of the admission of the deposition of Sam Allen, D.C. Provider filed no response; on February 21, 2005, the deposition was admitted and the record closed.

I. BACKGROUND

___. (Claimant), a 58-year-old Hispanic female, sustained a work-related injury on ___, when she tripped over an electrical cord and fell to the ground.^[10] She reported sharp pain over the low back region, which radiated into her right leg. On November 26, 2001, she went to Dr. Howell at Provider’s clinic for treatment.^[11] Following an examination, Dr. Howell diagnosed Claimant as having a possible displacement of lumbar intervertebral disc without myelopathy, facet syndrome, myalgia and myositis, and thoracic or lumbosacral neuritis or radiculitis.^[12] He initiated conservative chiropractic care that included joint mobilization, massage therapy, and electrical muscle stimulation. Aquatic therapy was initiated in December 21, 2001. The only services relevant to this proceeding cover a four-month period of time from January 28, 2002, through May 29, 2002.

II. LEGAL ISSUE

Pursuant to 28 Tex. Admin. Code (TAC) § 133.304(c), when a carrier denies payment, the carrier must send an EOB to the appropriate party with the proper exception code and “sufficient explanation to allow the sender to understand the reason(s) for the insurance carrier’s action(s). A generic statement that simply states a conclusion such as ‘not sufficiently documented’ or other similar phrases with no further description of the reason for the reduction or denial of payment does not satisfy the requirements of this section.”

These disputed claims began in January 2002, after Carrier changed its coding. Although Provider contends that Carrier did not issue EOBs for March 4, 2002, and April 3, 2002, through May 29, 2002, Carrier maintains it denied the Disputed Services under payment exception code “U” for services that were “unnecessary treatment (without peer review).”^[13] For the explanation, Carrier used the rationale codes “T2″ and “RG”which are described on the EOBs as “the treatment/service provided exceeds medically accepted utilization review criteria and/or reimbursement guidelines established for severity of injury, intensity of service and appropriateness of care.”^[14]

Provider filed a request for reconsideration with Carrier on the denied claims. Dr. Howell argued that the rationale provided by Carrier in the EOBs did not tell him why the claims were denied and asked Carrier for clarification.^[15] Carrier refused to disclose the relevant protocols, criteria, and guidelines to Provider. Carrier did not retain Dr. Tsourmas or Dr. DeFoyd until late in 2004, well after this contested case proceeding began. Obviously, neither of them was involved in Carrier’s decision to deny this claim nor could they testify as to the meaning of the criteria and guidelines Carrier relied upon in the EOBs.^[16]

Mr. Ball currently serves as Carrier’s dispute analyst, but began as a nurse on an audit team reviewing spinal surgery and hospital bills. Mr. Ball affirmed that each time Carrier received a bill from Provider it issued an EOB. Mr. Ball explained that Carrier’s medically accepted utilization review criteria and its reimbursement guidelines established for severity, intensity, and appropriateness of care are “proprietary and confidential.” Neither of them was given to Provider.^[17] Although Mr. Ball agreed that under Rule 133.304(c) Carrier had a duty to provide Provider with a sufficient explanation to allow Provider to understand the reason or reasons Carrier denied the claims, he believes Carrier satisfied this requirement in its responses to Provider’s requests for reconsideration.^[18]

Even after Provider requested clarification, Carrier did not provide a sufficient explanation for denying Provider’s claim other than to use the brief rationale codes listed above that failed to clarify what protocols, guidelines and criteria Carrier relied upon in denying these claims. The

Commission’s rules required Carrier to provide on the EOB a sufficient explanation to allow Provider to understand the reason(s) for Carrier’s denial.

Carrier cannot substitute at a much later date a reason or an explanation for asserting that the service or treatment was unnecessary treatment other than that provided by Carrier when it denied the claims. The physicians who testified at the hearing on behalf of Carrier were unable to testify regarding Carrier’s criteria and guidelines referenced in the EOBs. Under the Commission’s rules, Carrier’s explanation was insufficient. The ALJ will not permit Carrier to now substitute an explanation that was not furnished in compliance with 28 TAC § 133.304(c). Therefore, where Carrier failed to timely submit a sufficient explanation of its denial, it is now barred from denying the claim based on lack of medical necessity.

III. WERE THE DISPUTED MEDICAL SERVICES

MEDICALLY UNNECESSARY?

A. IRO Opinion and the Medical Record

The IRO issued a revised decision on March 10, 2003, disagreeing with Carrier’s decision to deny the functional capacity evaluation (FCE) and the therapeutic exercises and office visits through April 1, 2002.^[19] However, MRD determined that medical necessity was not the only issue to be resolved and required the parties to submit additional documentation. Following the receipt and review of this information, MRD found Provider was entitled to additional reimbursement. Carrier appealed the entirety of this decision without limitation; therefore, all of the IRO’s decision with respect to medical necessity is in issue.

Dr. Howell noted in his initil evaluation that he was initiating aquatic therapy to minimize the stress to the injured area while increasing Claimant’s range of motion. On December 28, 2001, Claimant underwent lower extremity electro-diagnostic studies which showed a right S1 nerve root impairment and suggested a right S1 neuropathy. An MRI scan taken on January 9, 2002, showed Adisc degeneration at L4-5 with 2 mm of central disk protrusion, and disc degeneration at L5-S1 with no protrusion.^[20]

On January 15, 2002, following an examination, Dr. Howell noted that Claimant was exhibiting chronic sprain/strain injury to the lumbar spine and continued aquatic therapy three times weekly for another four weeks. At the same time, Claimant was placed on one-to-one physical therapy for physical stretching and cardiovascular exercises. Dr. Howell documented that the one-

on-one supervision was necessary because Claimant had no formalized training and needed spotting to avoid re-injuring herself. Once Claimant demonstrated that she could handle the increased demands of land-based exercises, he would begin having her do weight bearing exercises.

On January 28, 2002, Claimant reported to Provider that she believed the pool therapy and gym exercises helped relieve her pain the most.^[21] On February 18, 2002, Dr. Howell documented that Claimant had shown significant improvement with the treatment plan. The pain in Claimant’s lumbar spine area was reduced as indicated by the Oswestry pain scale and both her strength and range of motion had improved. Dr. Howell prescribed further aquatic therapy, physical therapy, and phonophoresis.^[22] On May 28, 2002, Provider reported that Claimant was no longer improving and referred her for physical performance evaluation.^[23]

In general, the aquatic therapy included running forward, backward, and sideways in the pool, using a ball to turn from side to side, raising her arms from under the water to the surface from various positions, lowering her arms from the surface to underwater at times using a float.

Provider’s explanation for aquatic therapy included the following:

The medical necessity of aquatic therapy is simple. It is a commonly accepted fact in the medical community that healing tissues should never be overstressed. If Claimant were subjected to active therapy (resistive/progressive) exercise too quickly, the consequences may be detrimental. Re-injury, increased pain, and decreased range of motion are the most common side effects. This will of course increase the amount of time it takes to heal the soft tissues. The longer the time it takes to heal the more costly it is. This is not the goal of the TWCC or the guidelines it uses. By placing Claimant in water, her body weight or the affected area weight is reduced and stress is minimized significantly. By minimizing the stress on the injured area, range of motion will usually increase because the gravity factor is lowered therefore allowing for the naturally occurring sticking points of conventional progressive weights to be overcome with much more ease.^[24]

B. Carrier’s Position and Evidence

Dr. Tsourmas, an orthopedic surgeon who works for Carrier as a medical director, reviewed Provider’s medical records to assess the medical necessity of the services in dispute. According to Dr. Tsourmas, he has referred patients to aquatic therapy when they suffered with lower extremity issues, such as a broken bone. He opined that during the time that a patient has to be careful with weight bearing exercises for the short term, aquatic therapy is useful. However the patient should progress to a land-based program as soon as it can be tolerated because it is Amore efficacious regarding producing results with range of motion and strength.^[25] Transitioning a patient from aquatic to land-based therapy may overlap, but not for more than a few weeksBACertainly not months or B or longer.^[26]

As for this Claimant, Dr. Tsourmas testified that Claimant suffered with a protruded disc in her lower back. She had months of therapy, but no surgery. Following the passive modalities provided by Provider in November and December, Dr. Howell opined, Claimant did not require aquatic therapy.^[27]

Dr. DeFoyd, Carrier’s expert witness, practices at the Spine and Rehab Center and treats spinal injuries.^[28] Dr. DeFoyd reviewed the Claimant’s medical records including those admitted into evidence. Dr. DeFoyd maintains that land-based therapy is preferable to aquatic therapy for several reasons. First, humans function on land, not in water. Second, it is easier to encourage a patient to do a home program if the exercises do not require a pool. Finally, land-based exercise programs are generally less costly than aquatic programs. Aquatic therapy is used in cases in which the patient cannot tolerate a land-based program because of weight bearing intolerance.^[29]

Dr. DeFoyd opined that Claimant did not require aquatic therapy at allBnot even in a group setting.^[30] Dr. DeFoyd noted that Dr. Howell’s initial evaluation of Claimant did not include any evaluation of Claimant’s ability to tolerate land-based therapy. Without such, he maintains Provider failed to show aquatic therapy was necessary. Dr. DeFoyd further excepts to Dr. Howell’s indication

that Claimant’s lack of formalized training justified the need for one-on-one therapy. All that was necessary, he explained, was for Provider to show Claimant how to do the therapy and make sure Claimant could do it correctly so Claimant could begin doing the exercises independently.

As for land-based physical therapy, Dr. DeFoyd opined that after the initial explanation of how to perform the exercises, it was not medically necessary to provide this therapy one-on-one. According to Dr. DeFoyd, the exercise program was repetitive.^[31] Dr. DeFoyd also reviewed the office visits in dispute and found them not to be medically necessary. Dr. DeFoyd commented that Provider’s office notes were repetitive, providing little additional information and using the same language for each visit. More importantly, the notes show that Claimant was not getting better yet her treatment remained the same despite the office visits, he said.

As for the massage therapy, Dr. DeFoyd stated that this passive treatment was medically unnecessary as well. Claimant had already undergone passive modalities without any improvement. Continuing passive therapy, he argues, was not likely to be beneficial.^[32] Phonophoresis was performed in May 2002, even though it is a passive modality. This too, Dr. DeFoyd stated, was medically unnecessary because it was not likely to cure or relieve the effect of Claimant’s injury or increase her ability to obtain or retain employment.^[33]

Under cross-examination, Dr. DeFoyd stressed that he did not think any therapy was necessary. Dr. DeFoyd argued, AI think the treatment was adverse, actually had a – – a negative effect upon the patient. I think that the Claimant’s case is actually a good example of that. This is a situation where a woman has a prolonged disability, ineffective treatment that’s recounted by multiple people, and that’s harmful to her. So I think that’s adverse.^[34] Dr. DeFoyd further clarified that if only one patient could come in for group therapy, if the patient did not medically require one-on-one therapy, it should be billed as group therapy.^[35]

C. Provider’s Position and Evidence

Dr. Howell, Provider’s owner, has been a licensed chiropractor in Texas since October 1990. Provider’s clinic is a 12,300-square-foot facility with a junior Olympic indoor pool (77,000 gallons), a 1000-square-foot gym with modern weight lifting equipment, massage therapy rooms, examination rooms, physical therapy rooms, an adjusting room, a reception area, administrative offices, bathrooms with six showers, a return-to-work area, and a chronic pain management area.^[36]

Dr. Howell explained that Claimant was older than the normal patient, now 61 years old, and suffers with diabetes and high blood pressure. He diagnosed her as having Adisplacement of the lumbar intervertebral disc, facet syndrome, myalgia and myositis and thoracic or lumboscral neuritis or radicultis.^[37] To treat her pain, Claimant was taking Celebrex, an anti-inflammatory pain reliever, and Skelaxin, a muscle relaxer.^[38] Dr. Howell testified that because she was older, suffered with diabetes, high blood pressure, had limited range of motion in her lumbar spine, was heavily medicated, a non-swimmer and in severe pain, one-on-one therapy was justified.^[39] Under Provider’s treatment regimens, Dr. Howell maintains, Claimant’s range of motion and strength improved and her pain decreased.

D. ALJ’s Analysis

Crrier was required to show by a preponderance of the evidence that when it denied Provider’s claims for services provided to Claimant, the services were not medically necessary. Under the Commission’s rules, Carrier is required to provide an explanation for why it determined Provider’s medical services were not medically necessary. In January 2002, Carrier explanation codes AT2″ and ARG with the same definition provided no explanation to Provider as the explanation refers back to Carrier’s confidential criteria and guidelines which Carrier chooses not to disclose to Provider.

The LJ finds that neither of Carrier’s experts could testify about why Carrier denied Provider’s claims at the time Carrier denied the claims because neither knew what the explanation codes referred to, specifically the content of Carrier’s criteria and guidelines. Carrier chose not to offer any evidence explaining what its Aproprietary guidelines stated or to timely clarify to Provider what its rationale was for denying the claims other than the global statement that they were not

medically necessary. Consequently, the ALJ finds that Carrier failed to properly raise and preserve a medical necessity denial for the Disputed Services provided by Provider. The ALJ further finds that Carrier failed to show why it denied Provider’s claims as unnecessary treatment between January 28, 2002, and May 29, 2002, and therefore failed to show by a preponderance of the evidence why the Provider’s services from January 28, 2002 through May 29, 2002, in the amount of $2,682.00 were not medically necessary.

IV. FINDINGS OF FACT

1. Claimant, a 58-year-old female, sustained a work-related injury to her lower spine on ___, when she tripped over an electrical cord and fell to the ground (compensable injury).
2. Claimant sought treatment from Robert Howell, D.C., First Rio Valley Medical, P.A. (Provider), who initiated conservative chiropractic care that included joint mobilization, massage therapy, land-based therapy and aquatic therapy.
3. Provider’s diagnoses for Claimamt included possible displacement of lumbar intervertebral disc without myelopathy, facet syndrome, myalgia and myositis, and thoracic or lumbosacral neuritis or radiculitis.
4. In December 2001, Provider placed Claimant in a one-to-one therapeutic exercise program and an aquatic therapy program.
5. Provider requested reimbursement for aquatic therapy, massage therapy, therapeutic exercises, phonophoresis, phonophoresis cream, and a functional capacity evaluation provided to Claimant to treat her compensable injury from January 28, 2002, through May 29, 2002, (Disputed Services).
6. Texs Mutual Insurance Company (Carrier) denied reimbursement for the Disputed Services on the explanation of benefits (EOB) utilizing the denial code AU, which stands for unnecessary treatment (without peer review).
7. On the EOBs for the Disputed Services, Crrier used the rationale codes AT2″ and ARG and the definition for both as its explanation to Provider for denying the claims.
8. Both rtionale codes AT2″ and ARG are defined as the treatment/ services provided exceeds medically accepted utilization review criteria and/or reimbursement guidelines for severity of injury, intensity of service, and appropriateness of care.
9. Carrier refused to disclose to Provider the relevant protocols, utilization review criteria and/or reimbursement guidelines, asserting they were proprietary and confidential.
10. By failing to disclose to Provider the relevant protocols, utilization review criteria and/or reimbursement guidelines, Carrier’s explanation was insufficient for Provider to understand Carrier’s reason(s) for the denial of these claims.
11. Provider filed a request for reconsideration with Carrier and asked Carrier to identify what criteria and guidelines it was using as a basis to deny the claim and to explain the rationale behind its denial of the disputed services.
12. Carrier did not pay for the Disputed Services and failed to provide the contents of the protocols, criteria and guidelines it relied upon in denying these claims to Provider.
13. By decision dated March 10, 2003, an independent review organization (IRO), determined a portion of the Disputed Services were medically necessary.
14. By decision dated July 29, 2003, the Medical Review Division of the Texas Workers= Compensation Commission (Commission) granted Respondent reimbursement for the Disputed Services.
15. Carrier timely requested a hearing to contest the Commission’s decision.
16. All parties received not less than 10 days notice of the time, place, and nature of the hearing; the legal authority and jurisdiction under which the hearing was to be held; the particular sections of the statutes and rules involved; and a short, plain statement of matters asserted.
17. A hearing was convened by Administrative Law Judge Catherine C. Egan on February 2, 2005, in the hearing rooms of the State Office of Administrative Hearings. The hearing adjourned and the record closed on February 21, 2005.
18. Carrier failed to provide Dr. Howell with a sufficient explanation for denying Provider’s claims.
19. For the dates of service from January 28, 2002, through May 29, 2002, Carrier failed to show that the Disputed Services were not medically necessary to treat Claimant’s compensable injury.
20. The Disputed Services provided by Provider to Claimant were medically necessary.

V. CONCLUSIONS OF LAW

1. The Texas Workers’ Compensation Commission has jurisdiction to decide the issue presented pursuant to the Texas Workers’ Compensation Act, Tex. Lab. Code Ann. ‘ 413.031.
2. The State Office of Administrative Hearings has jurisdiction over matters related to the hearing in this proceeding, including the authority to issue a decision and order, pursuant to Tex. Lab. Code Ann. ‘ 413.031(k) and Tex. Gov=t. Code Ann. ch. 2003.
3. Carrier timely requested a hearing in this matter pursuant to 28 Tex. Admin. Code (TAC) ” 102.7 and 148.3.
4. Notice of the hearing was proper and complied with the requirements of Tex. Gov=t. Code Ann. ch. 2001.
5. Carrier had the burden of proof in this matter, which was the preponderance of evidence standard. 28 TAC ” 148.21(h) and (i); 1 TAC ‘ 155.41(b).
6. When an insurance carrier makes or denies payment on a medical bill, the carrier must include on the EOB the correct payment exception code and a sufficient explanation to allow the sender (Provider) to understand the reason for the Carrier’s action. A general statement that simply states a conclusion is not sufficient. 28TAC’ 133.304(c).
7. Carrier’s explanation for denying the claims from January 28, 2002, though May 29, 2002, was legally inadequate as it failed to deny reimbursement in compliance with the Commission’s rules.
8. Because Carrier never denied reimbursement in compliance with the Commission’s rules for the disputed services from January 28, 2002, through May 29, 2002, Carrier is required to provide reimbursement.
9. Carrier failed to demonstrate that the Disputed Services from January 28, 2002, through May 29, 2002, were not reasonable and medically necessary for the treatment of Claimant’s compensable injury.
10. Provider is entitled to reimbursement for the Disputed Services from January 28, 2002, through May 29, 2002, as they were reasonable and medically necessary.

ORDER

THEREFOREIT IS ORDERED that Texas Mutual Insurance Company reimburse First Rio Valley Medical, P.A., for the Disputed Services provided to Claimant from January 28, 2002 through May 29, 2002, in the amount of $2,682.00, plus any and all applicable interest.

Signed April 19, 2005.

CATHERINE C. EGAN
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1. CPT Code 99211.↑
2. CPT Code 97113.↑
3. CPT Code 97124.↑
4. CPT Code 97110.↑
5. CPT Code 97139-PH.↑
6. CPT Code 99070-PH.↑
7. CPT Code 97750-FC.↑
8. By decision dated March 10, 2003, an independent review organization determined that some of the Disputed Services were medically necessary, but all others were excessive and medically unnecessary. MRD re-evaluated some of the claims and found additional services were medically necessary. Joint Ex. 7, Tab 3 at 527-532.↑
9. The final column on the claims log is in dispute and is not dispositive of any issue in this matter.↑
10. Joint Ex. 7, Tab 3 at 533-543.↑
11. Joint Ex. 7, Tab 1 at 41-49.↑
12. Joint Ex. 7, Tab 1 at 47.↑
13. Joint Ex. 7, Tab 1 at 272-351; Tab 4 at 1-18.↑
14. Joint Ex. 7, Tab 1 at 0272-351.↑
15. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell at Vol II, 9.↑
16. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 52; Tab 3, Prefiled Testimony of Dr. Tsourmas at 57-58.↑
17. Ex. 16, Tab 2, Prefiled Testimony of Mr. Ball at 25-26.↑
18. Ex. 16, Tab 2, Prefiled Testimony of Mr. Ball at 27-28.↑
19. Joint Ex. 7, Tab 3 at 532.↑
20. Joint Ex. 7, Tab 1 at 178.↑
21. Joint Ex. 7, Tab 1 at 51.↑
22. Joint Ex. 7, Tab 1 at 247-259.↑
23. Joint Ex. 7, Tab 1 at 180.↑
24. Joint Ex. 7, Tab 1 at 233.↑
25. Ex..16, Tab 3, Prefiled Testimony of Dr. Tsourmas at 19-20.↑
26. Ex. 16, Tab 3, Prefiled Testimony of Dr. Tsourmas at 28.↑
27. Ex. 16, Tab 3, Prefiled Testimony of Dr. Tsourmas at 80-81.↑
28. Dr. DeFoyd has been a chiropractor for 18 years. Ex. 16, Tab 1, Prefiled Testimony at 9.↑
29. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 21-24.↑
30. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 106.↑
31. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 146.↑
32. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 151.↑
33. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 155.↑
34. Ex. 16, Tb 1, Prefiled Testimony of Dr. DeFoyd at 182. The ALJ removed Claimant’s name and inserted the word AClaimant to maintain the confidentiality of the patient’s name.↑
35. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 193.↑
36. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell at Vol. I at 5-6.↑
37. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell at Vol. II at 126.↑
38. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell at Vol. II at 127.↑
39. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell at Vol. II at 137.↑