DECISION AND ORDER

Texas Mutual Insurance Company (Carrier) requested a hearing to contest the November 13, 2003, Findings and Decision of the Texas Workers= Compensation Commission (Commission) authorizing reimbursement for expanded problem-focused office visits,^[1] aquatic therapy,^[2] electrical stimulation,^[3] massage therapy,^[4]and ultrasound^[5] provided by First Rio Valley Medical, P.A. (Provider) to Claimant from June 11, 2003, through June 25, 2003, (Disputed Services) in the amount of $2,092.00. Carrier has the burden to show 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.^[6]

This decision denies the relief sought by Carrier and grants reimbursement to Provider 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, and on February 21, 2005, the deposition was admitted and the record closed.

I. BACKGROUND

___ (Claimant), a 44-year-old female, sustained a work-related injury on ___, when a chair slipped backwards from beneath her as she stood up. Claimant fell hard on her buttocks with the chair flipping over on top of her.^[7] Claimant had undergone lower back surgery the previous month on October 18, 2000. Her surgeon subsequently ordered an MRI of her lumbar spine and determined Claimant need a second surgery.

On August 16, 2001, Claimant had a second surgery on her lumbar spine. Provider conducted an initial examination of Claimant of December 7, 2001.^[8] Claimant continued treatment with Provider off and on for the next several years.^[9] Ultimately, Gilbert Meadows, M.D., an orthopedic surgeon, recommended the Claimant undergo a third surgery, which was performed on January 30, 2003.

Several months after her third back surgery, on May 22, 2003, Dr. Meadows released Claimant to engage in physical therapy. Claimant elected to return to Provider for treatment.^[10] However, before Claimant’s appointment with Provider she was in an automobile accident.^[11] On May 27, 2003, Claimant came to Provider complaining of pain in her lumbar and cervical spine.^[12] Between June 11, 2003 and June 25, 2003, Provider conducted expanded problem-focused office visits and treated Claimant with one-on-one aquatic therapy, electrical stimulation, massage therapy, and ultrasound. On June 11, 2003, Claimant reported a reduction in pain and had an increase in her range of motion and her ability to do the exercises.^[13] However, her pain level remained the same through the end of the Dispute Service period.^[14]

On August 8, 2003, Dr. Meadows conducted a follow-up visit with Claimant. She had significant redness and swelling in her right toe and both knees which he believed was unrelated to

her compensble injury. However, her leg symptoms (which he did not describe) were related to a combination of radiculopathy from scarring and her diabetes. According to Dr. Howell, Claimant Aremains totally disabled. Although Dr. Meadows was no longer treating compensation patients, he recognized that Claimant had Alegitimate problems.^[15]

II. LEGAL ISSUE

Pursuant to 28 Tex. Admin. Code (TAC) ‘133.304(c), when a carrier denies payment, the carrier must send an explanation of benefit (EOB) to the appropriate party with the proper exception code and Asufficient 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.

Crrier denied payment to Provider for services provided from June 11, 2003, through June 25, 2003, under payment exception code AU for Aunnecessary treatment (without peer review).^[16] Carrier’s explanation for denying these services was set out in Carrier’s rationale code ARG, described on the EOB 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.^[17] Provider requested reconsideration and asked Carrier to clarify the protocol used to deny the claim. Carrier responded by reissuing the EOBs, and adding payment exception code AO for Adenial after reconsideration with a rationale code of AYO for Areimbursement was reduced or denied after reconsideration of treatment/service billed.^[18] Carrier did not disclose its criteria and guidelines to Provider.

Dr. Howell testified tht the explanation provided by Carrier for rationale code ARG did not tell him why Carrier found the services to be unnecessary treatment.^[19] He was unaware of any healthcare provided to Claimant that exceeded any published medically accepted utilization review criteria.^[20] Provider filed its request for reconsideration seeking more information to explain why Carrier had denied these claims.

Carrier did not retain Dr. DeFoyd until December 2004. Dr. DeFoyd was not involved in Carrier’s initial decision to deny this claim, nor does he know what Carrier’s criteria and guidelines

sy that are referenced in the EOBs.^[21] When asked if he knew the protocol Carrier used to deny a procedure based on the AU” payment denial code, Dr. DeFoyd stated he was not an employee of Carrier’s and he did not know the process Carrier followed.^[22] Dr. Tsourmas, Carrier’s expert and medical director, testified that he believed Carrier’s guidelines track the medical guidelines. However, when Dr. Tsourmas was asked to explain Carrier’s ARG modifier, he could not do so.^[23]

Even after Provider requested clarification, Carrier did not provide a sufficient explanation for denying Provider’s claim. 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 did not furnish Provider with the relevant portions of its criteria and guidelines in response to Provider’s request for the same.

Carrier cannot substitute at a much later date a reason or an explanation 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 now to 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 may not now create one to deny the claim based on lack of medical necessity.

III. WERE THE DISPUTED MEDICAL SERVICES

MEDICALLY UNNECESSARY?

A. IRO Decision and Medical Records

Because of the number of surgeries involved and intervening incidents, the following is a brief chronology of events:

10-18-00 First lumbar surgery

___ Claimant fell out of chair and sustained compensable injury

8-16-01 Second lumbar surgery

4-11-02 Reached MMI

2-3-03 Third lumbar surgery

5-25-03 Car Accident

6-11 to 25-03 Disputed Services

On April 11, 2002, Howard Bernstein, M.D. conducted a comprehensive evaluation of Claimant’s medical condition to determine whether she had reached Maximum Medical Improvement (MMI), and to determine her impairment rating. After completing a comprehensive evaluation, Dr. Bernstein reported a 10 percent impairment rating. According to Dr. Bernstein, Claimant reached MMI on April 11, 2002.^[24]

On October 31, 2003, the Independent Review Organization (IRO) determined that the Disputed Services were medically necessary. According to the IRO, Provider’s documentation:

. . . more than adequately established the medical necessity of the post-operative conservative care. The only question that remained was the compensability of the care, as the treatments in question immediately followed a motor vehicle accident (MVA).

However, after careful review, the documentation sufficiently addressed this issue and adequately established that the intervening injury (MVA) did not aggravate the underlying compensable injury. Therefore, the care submitted was both reasonable and medically necessary.^[25]

On June 5, 2003, Dr. Howell met with Claimant to review the results of her MRI taken after her third surgery and subsequent car accident. No acute changes were noted on the MRI. Dr. Howell found that the car accident had not affected Claimant’s compensable injury. Claimant reported increased pain when reaching, sitting, lifting bending, standing and walking. Claimant was taking Ultram for pain and Trazodone HCL as a relaxant, as well as other medications for her diabetes. Claimant reported moderate and constant pain in her lower back and numbness in her right leg and left foot. Dr. Howell’s diagnoses included post-operative status to the lumbar spine and cervical hyperflexion and extension syndrome. His treatment included one-on-one aquatic therapy for an hour, massage therapy, electrical stimulation, and ultrasound for three times a week, for four weeks.^[26]

B. Carrier’s Position and Evidence

Dr. Tsourmas, an orthopedic surgeon, reviewed Provider’s medical records to assess the medical necessity of the Disputed Services. Dr. Tsourmas has referred patients for aquatic therapy when they suffered with lower extremity issues, such as a broken bone, and need the buoyancy of the water. He agrees that while a patient has to be careful with weight bearing exercises, aquatic therapy

is useful for the short term. However, he contends that 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.^[27] Transitioning a patient from aquatic to land-based therapy may overlap, but not for more than a few weeks.^[28]

After reviewing Claimant’s medical records, Dr. Tsourmas opined that Claimant’s third surgery did not necessitate aquatic therapy because it was four months after the spinal fusion. According to Dr. Tsourmas, the fusion had matured so Claimant did not need to be in an unweighted environment.^[29] By the end of the third month, Dr. Tsourmas contends, Claimant was ready for an active home land-based program irrespective of her diabetes. Dr. Tsourmas believes that the pain Claimant was experiencing when she came to see Provider was caused by the automobile accident because the MRI taken of the lumbar spine before and after the accident were the same.^[30]

Dr. DeFoyd prctices at the Spine and Rehab Center and treats spinal injuries.^[31] Dr. DeFoyd reviewed the Claimant’s medical records, including those admitted into evidence, although he did not participate in Carrier’s decision to deny these claims and was retained to review Claimant’s medical records long after this claim arose. Under cross-examination, Dr. DeFoyd acknowledged that he had not reviewed Carrier’s guidelines and criteria referenced in the rationale code ARG in forming his opinions, and he did not know what they were.^[32] Dr. DeFoyd admitted that he did not know what Carrier meant by the term Aand/or in the definition of ARG, arguing that he had not prepared the EOBs and could not explain what the Carrier meant by its rationale code or what its guidelines provided.^[33]

Dr. DeFoyd agreed with Dr. Tsourmas that the treatment provided to Claimant in June 2003 was due to the car accident and not the compensable injury. On July 21, 2003, Claimant’s back pain was almost gone, which indicated to Dr. DeFoyd that Claimant’s pain was due to the acute

exacerbation of her spine when she was in the car accident.^[34] If the aquatic therapy were not medically necessary to treat the compensable injury, Dr. DeFoyd opined, than the office visits to evaluate her condition were not medically necessary.^[35]

Mr. Ball currently serves as a dispute analyst, but began with Carrier as a nurse on an audit team reviewing spinal surgery and hospital bills. Mr. Ball affirmed that for each time Carrier received a bill from Provider, it issued an EOB, but he did not testify that Carrier ever provided an explanation for denying the claims other than that described above.

C. Provider’s Position and Evidence

Dr. Howell, Provider’s owner, has been a licensed chiropractor in Texas since October 1990. The clinic is a 12,300-square-foot facility with a junior Olympic indoor pool (77,000 gallons), a 1,000-square-foot gym with modern weight lifting equipment, massage therapy rooms, examination rooms, physical therapy rooms, an adjusting room, reception area, administrative offices, bathrooms with six showers, a return-to-work area, and a chronic pain management area.^[36]

Dr. Howell testified that just before Claimant came to see him following her third spinal surgery, she was involved in a car accident.^[37] Dr. Howell maintains that Claimant’s compensable injury and her resulting surgeries necessitated the aquatic therapy. As a result of the therapy, Claimant flexibility and range of motion improved and her pain decreased. Dr. Howell testified that he put Claimant in one-on-one aquatic therapy because Claimant was a diabetic, suffered with hydrophobia, could not swim, and was on heavy pain and anti-inflammatory medications.^[38] Dr. Howell explained that because Claimant could not swim and was afraid of the water, Claimant did not feel safe enough to do the aquatic therapy in a group setting or independently.

Dr. Howell explained that, in general, doing aerobic exercises in the water promotes physical conditioning which in turn Acreates positive health conditions.^[39] In addition, Dr. Howell maintained, aquatic therapy improves a patient’s psychological mood and reduces depression.^[40] According to Dr. Howell, patients warm up in the deep end of the pool to encourage the secretion of synovial fluidBa fluid that helps lubricate the joint. After the warm up, the patient begins exercises that include, among other things, running forward, backward, and sideways, to use all the major muscle groups in the body.

D. ALJ’s Analysis

Crrier was required to show by a preponderance of the evidence that it properly denied Provider’s claims for services provided to Claimant due to a lack of medical necessity. Under the Commission’s rules, Carrier is required to provide an explanation for why it determined Provider’s medical services were not medically necessary at the time it issues the EOB. Carrier’s explanation codes ARG, and its definition, provided no explanation as it relied upon Carrier’s confidential criteria and guidelines which Carrier chose not to disclose. Carrier’s own expert, Dr. Tsourmas, was unable to explain what Carrier meant in its definition of ARG, and neither expert knew what Carrier’s criteria and guidelines were. Despite Provider’s request for clarification about what guidelines Carrier was referring to, Carrier failed to provide this information.

The ALJ notes that neither of Carrier’s experts could testify about why Carrier denied Provider’s claims at the time Carrier denied the claims, particularly since neither knew what Carrier’s criteria and guidelines provided. Carrier chose not to offer any evidence explaining what its proprietary criteria and guidelines stated or to clarify the rationale for denying the claims other than the global statement that they were not medically necessary. Consequently, the ALJ finds Carrier failed to show by a preponderance of the evidence why it denied Provider’s claims.

In addition, the ALJ finds Carrier failed to show by a preponderance of the evidence that the Disputed Services provided by Provider to June 11, 2003, through June 25, 2002, were not medically necessary. Carrier’s experts argued that the car accident, not the compensable injury, caused the need for aquatic therapy and passive therapy. However, Carrier offered no evidence to show that Claimant was in the type of car accident that would have caused the type of pain she experienced but for her compensable injury. Moreover, the IRO considered this issue and found that the compensable injury, not the car accident, created the need for the Disputed Services.

As for the treatments provided, Claimant has undergone three spinal surgeries and was coming in for therapy when she was in an automobile accident. She had no other active physical therapy following the third surgery besides walking and gentle stretches. To improve Claimant’s physical condition given that she was recovering from a third spinal surgery, Dr. Howell performed limited passive therapy, conducted office visits to assess Claimant’s condition, and placed Claimant in aquatic therapy. With this regimen, Claimant’s pain levels and range of motion improved. Therefore, the ALJ finds that Carrier failed to carry its burden of proof and Provider is entitled to recover the amount due for the Disputed Services.

IV. FINDINGS OF FACT

1. ___ (Claimant), a 44-year-old female, sustained a work-related injury to her lower back on ___, when a chair slipped out from underneath her as she stood up. She fell to the floor with the chair flipping over on top of her (the compensable injury).
2. On October 18, 2000, prior to her compensable injury, Claimant had spinal surgery to her lumbar region.
3. On August 16, 2001, Claimant underwent a second surgery to her lumbar spine as a result of the compensable injury.
4. Claimant was placed on physical therapy, but it caused her such pain it was discontinued.
5. Claimant presented to Robert S. Howell, D.C., at First Rio Valley Medical, P.A. (Provider) with complaints of constant pain in her neck and lower back.
6. Provider treated Claimant with passive modalities, one-on-one aquatic therapy and land-based exercises.
7. On February 2, 2003, Claimant underwent a third surgery to her lumbar spine as a result of her compensable injury.
8. Claimant was released by her orthopedic surgeon to participate in active physical therapy in May 2003.
9. Claimant elected to get treatment for her physical therapy from Provider.
10. Prior to her appointment with Provider, Claimant was in an automobile accident on May 25, 2003.
11. Provider examined Claimant on June 5, 2003, and determined from an MRI that the car accident had not affected her compensable injury.
12. Provider diagnosed Claimant as being post-operative and having cervical hyperflexion or extension syndrome.
13. To treat Claimant’s compensable injury, Provider recommended Claimant receive an hour of one-on-one aquatic therapy, massage therapy, electrical stimulation, and ultrasound three times a week for four weeks.
14. Provider requested reimbursement for the expanded problem focused office visits, aquatic therapy, electrical stimulation, massage therapy, and ultrasound provided to Claimant from June 11, 2003, through June 25, 2003, (Disputed Services) in the amount of $2,092.00.
15. Crrier denied reimbursement for the Disputed Services under the payment exception code AU, for Aunnecessary treatment (without peer review).
16. On the EOBs denying these Disputed Services, Carrier used the rationale code ARG,and its definition for this code, as its explanation to Provider for denying the claims.
17. Crrier defined ARG on the EOB as the treatment/service provided exceeds accepted utilization review criteria and/or reimbursement guidelines for severity of injury, intensity of service and appropriateness care.
18. Carrier refused to disclose to Provider the relevant utilization review criteria and/or reimbursement guidelines asserting they were proprietary and confidential.
19. Carrier’s failure to disclose to Provider the relevant utilization review criteria and reimbursement guidelines rendered Carrier’s explanation insufficient for Provider to understand Carrier reason(s) for denying Provider’s claims.
20. Provider filed a request for reconsideration of the Disputed Services with Carrier and asked Carrier to identify what guidelines it was using as a basis to deny the claims and to explain the rationale behind its denial of the Disputed Services.
21. Carrier denied the requests for reconsideration, and failed to provide any additional information regarding the rationale behind its denial of the disputed claims, including the contents of the criteria and guidelines it relied upon.
22. The condition of Claimant’s lumbar spine after three spine surgeries rendered her disabled.
23. Claimant required one-on-one therapy so Provider could show her how to do the exercises, make sure she did them properly, monitor her, and ensure she did not harm herself.
24. Claimant required the office visits in conjunction with the therapies to assess Claimant’s condition and progress and adjust her treatment.
25. On October 31, 2003, an independent review organization (IRO) concluded that the Disputed Services were medically necessary to treat the compensable injury and were not the result of the car accident.
26. By Decision dated November 13, 2003, based on the IRO decision, the Texas Workers= Compensation Commission (Commission) Medical Review Division determined the Disputed Services were medically necessary and granted Provider reimbursement.
27. Carrier timely requested a hearing to contest the Commission’s decision.
28. 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.
29. 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 February 21, 2005.
30. For the dates of service in question, Carrier failed to show that the Disputed Services were not medically necessary to treat Claimant’s compensable injury.

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. 28 TAC ‘ 133.304(c).
7. Carrier’s explanation for denying the claims from June 11, 2003, through June 25, 2003, 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 June 11, 2003, through June 25, 2003, Carrier is required to provide reimbursement.
9. Based on the Findings of Fact, Carrier failed to demonstrate that the Disputed Services were not reasonable and medically necessary for the treatment of Claimant’s compensable injury.
10. Based upon the Findings of Fact and Conclusions of Law, Provider is entitled to reimbursement for the Disputed Services 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 June 11, 2003, through June 25, 2003, in the amount of $2,092.00, plus any and all applicable interest.

Signed April 19, 2005.

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

1. CPT Code 99213.↑
2. CPT Code 97113.↑
3. CPT Code 97032.↑
4. CPT Code 97124.↑
5. CPT Code 97035.↑
6. The last column setting out the reasons for denying the claims is not dispositive of that issue. The log does, however, list the correct dates, CPT codes, and description of services that are in dispute.↑
7. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell at Vol II, 64.↑
8. Joint Ex. 10, Tab 1 at 76-87.↑
9. Carrier’s Global Ex. 15, Tab 5.↑
10. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell, Vol II at 80.↑
11. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell, Vol II at 87-89.↑
12. Joint Ex. 10, Tab 1 at 88.↑
13. Joint Ex. 10, Tab 1 at 109.↑
14. Joint Ex. 10, Tab 1 at 139.↑
15. Joint Ex. 10, Tab 1 at 153.↑
16. Joint Ex. 10, Tab 1 at 13-25.↑
17. Joint Ex. 10, Tab 1 at 24.↑
18. Joint Ex.10, Tab 1 at 27-38.↑
19. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell at Vol II, 9.↑
20. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell at Vol II, 11-12.↑
21. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 52 and 557-564.↑
22. Ex 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 178.↑
23. Ex. 16, Tab 3, Prefiled Testimony of Dr. Tsourmas at 57-58.↑
24. Joint Ex. 10, Tab 3 at 234.↑
25. Joint Ex. 10, Tab 1 at 180.↑
26. Joint Ex. 10, Tab 1 at 90-91.↑
27. Ex. 16, Tab 3, Prefiled Testimony of Dr. Tsourmas at 19-20.↑
28. Ex. 16, Tab 3, Prefiled Testimony of Dr. Tsourmas at 28.↑
29. Ex. 16, Tab 3, Prefiled Testimony of Dr. Tsourmas at 94.↑
30. Ex. 16, Tab 3, Prefiled Testimony of Dr. Tsourmas at 98-99.↑
31. Dr. DeFoyd has been a chiropractor for 18 years. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 9.↑
32. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 556-558.↑
33. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 563-564.↑
34. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 491-494.↑
35. Ex. 16, Tab 1, Prefiled Testimony of Dr. DeFoyd at 485.↑
36. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell Vol I at 5-6.↑
37. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell Vol II at 88-89.↑
38. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell Vol II at 109-114.↑
39. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell Vol II at 17.↑
40. Ex. 16, Tab 4, Prefiled Testimony of Dr. Howell Vol II at 19.↑