DECISION AND ORDER

I.INTRODUCTION

Hudspeth County (“petitioner”) challenged a decision by an Independent Review Organization (“IRO”), issued on behalf of the Texas Workers’ Compensation Commission (“commission”) in a preauthorization dispute. The IRO found that Petitioner improperly denied preauthorization for a total knee replacement, intended to provide relief for ___ (“respondent”), a claimant suffering from a compensable injury under the workers’ compensation laws of Texas.

Petitioner now seeks summary disposition, contrary to the decision of the IRO, on grounds that Respondent actually obtained the disputed knee replacement before the IRO issued its decision in favor of preauthorization for the procedure. This decision concludes that summary disposition in favor of Petitioner is appropriate in this case.

II. JURISDICTION AND NOTICE

The Commission has jurisdiction over this matter pursuant to § 413.031 of the Act. The State Office of Administrative Hearings (“SOAH”) has jurisdiction over matters related to the hearing in this proceeding, including the authority to issue a decision and order, pursuant to § 413.031(k) of the Act and TEX. GOV’T CODE ANN. ch. 2003. No party challenged jurisdiction or notice.

III. STATEMENT OF THE CASE

The hearing in this docket was initially scheduled for July 22, 2004. However, the hearing was continued on the basis of an “Agreed Motion for Continuance,” which reflected Respondent’s awareness of the proceeding at that time. Petitioner subsequently sought and obtained two additional continuances. These additional motions were granted and the parties were properly issued notice by SOAH of the hearing’s rescheduling.

The hearing was convened on November 10, 2004, at SOAH facilities in Austin, Texas. Administrative Law Judge (“ALJ”) Mike Rogan presided. Petitioner was represented by Mark Sickles, Attorney. Respondent did not appear and was not represented at the hearing. After presentation of argument by Petitioner, the hearing was adjourned.^[1]

The ALJ then issued an “Order Extending Hearing Process,” in order to assure that Respondent (who has not filed any pleadings with SOAH in this case) was fully apprised of the proceeding and to allow Petitioner an opportunity to re-urge the Motion for Summary Disposition that it had submitted earlier in the proceeding. The ALJ’s order allowed Petitioner until November 22, 2004, to submit a motion seeking reconsideration of its previous request for summary disposition. Petitioner filed such a motion on that date.

Under SOAH rules (and as further noted in the ALJ’s order), Respondent was allowed 20 days after the filing of Petitioner’s new motion for summary disposition in which to submit a response to the motion, explaining his position on the issue. Respondent did not submit such a response and has not done so as of the date of this Decision and Order.

After the hearing on November 10, 2004, both Petitioner and SOAH personnel contacted Respondent’s residence in an effort to ascertain whether he had been apprised of this proceeding and the hearing. Those inquiries indicated that he had been so apprised.

The record developed in the case revealed that Respondent, on ___, suffered a compensable injury to his left knee. After suffering persistent pain, Respondent sought preauthorization for a total knee replacement from Petitioner, the Respondent’s self-insured employer. Petitioner denied preauthorization on November 7, 2003. Respondent then sought dispute resolution review before the Commission.

The IRO to which the Commission referred the dispute issued a decision on May 20, 2004, concluding that the requested surgery was medically necessary to treat Respondent’s work-related injury, in accordance with §§ 408.021 and 401.011(19) of the Texas Workers’ Compensation Act (“the Act”), TEX. LABOR CODE ANN. ch. 401 et seq. Petitioner then made a timely request for review of the IRO decision before SOAH.

IV. THE PARTIES’ EVIDENCE AND ARGUMENTS

Respondent did not participate in the scheduled evidentiary hearing and provided no explanation to SOAH or the Commission, either before or after the hearing, for that failure to appear. Moreover, Respondent has submitted to SOAH no pleadings or documents pertaining to the case. However, since Respondent prevailed in the IRO proceeding related to this dispute, Petitioner bears the burden of proof in this SOAH proceeding and must demonstrate by a preponderance of the evidence that the IRO’s determination was incorrect.

With its most recent motion for summary disposition, Petitioner submitted documentation (i.e., an “operative note” from Del Sol Medical Center in El Paso) indicating that Respondent underwent a total replacement of the left knee, which was performed by Joseph Neustein, M.D., on February 5, 2004. Thus, Petitioner noted, the service at issue in this case was performed after Petitioner denied Respondent’s request for preauthorization but before the Commission or its Medical Review Division made any determination as to the legitimacy of that request.

Petitioner argued that the Act makes an insurance carrier liable for treatments requiring preauthorization in very limited circumstances. Specifically, § 413.014(d) of the Act states:

The insurance company is not liable for those specified treatments and services requiring preauthorization unless preauthorization is sought by the claimant or healthcare provider and either obtained from the insurance company or ordered by the Commission.

Commission Rule 134.600(b), which implements the quoted statute, adds emergencies (as defined in Rule 133.1) to the “situations” in which a carrier is liable for medical care that must otherwise be preauthorized. However, Petitioner asserted, no emergency existed in this case. Petitioner concluded that neither the Commission nor SOAH has the authority “to retroactively preauthorize services which have already been performed” and cited several SOAH decisions that have strictly upheld this principle.^[2]

V. ANALYSIS

The ALJ finds that the prevailing view, as reflected in SOAH decisions, is that an insurer is not liable for reimbursement of services requiring preauthorization, if such services have been provided before the Commission (or its designated agent) actually approves such preauthorization. This appears to be the logically inevitable interpretation of § 413.014(d) of the Act, which imposes liability only if preauthorization is both “sought by the claimant” and “either obtained from the insurance company or ordered by the Commission.” That is, a claimant must formally initiate the process of seeking preauthorization and must see it through to formal approval before obtaining the services at issue. “Preauthorization” is not specifically defined in the statute or rules, but in the context of § 413.014(d), it clearly means a grant of authority that precedes the actual performance of the authorized action. By limiting liability to instances in which preauthorization is both “sought” and “obtained,” then, § 413.014(d) emphasizes that the entire approval process must be completed before services subject to preauthorization become properly reimbursable.

An exception exists, of course, for emergencies. But on the question of whether the knee replacement in this case was an emergency (and on most other issues in this case, as well), the record contains little evidence. However, the IRO’s report in the case contains no indication of a pending emergency in its discussion of the patient’s history or in its rationale for decision. It does note, though, that the patient “reportedly suffers from chronic pain.” By contrast, Rule 133.1 defines an “emergency,” for purposes of Rule 134.600(b), as a “sudden onset of a medical condition manifesting itself by acute [emphasis added] symptoms of sufficient severity, including severe pain, that the absence of immediate medical attention could reasonably be expected to result in placing the patient’s health . . . in serious jeopardy . . .”

A SOAH ALJ may issue a proposal for decision without an evidentiary hearing “if the pleadings, affidavits, materials obtained by discovery, admissions, matters officially noticed, stipulations, or evidence of record shows there is no genuine issue as to any material fact and that a party is entitled to a decision in its favor as a matter of law.”^[3] In keeping with standards for judicial

summary judgment, all doubts about the existence of a genuine issue of material fact must be resolved against the movant, and all evidence favorable to the non-movant must be accepted as true.^[4]

In the ALJ’s evaluation, significant evidence demonstrates that Respondent received the disputed knee replacement months before the Commission approved the preauthorization of such services. Some evidence also indicates the lack of an emergency necessitating performance of the knee replacement prior to preauthorization. The record contains no contrary evidence on either of these points. Moreover, because an emergency’s existence would represent an agency-created exception to the statutory requirement for preauthorization, would create an inequitable burden-of-proof problem for a party seeking to definitely disprove it, and realistically could be established (in the terms required by Rule 133.1) only through information controlled by a claimant’s health provider, the ALJ perceives that any assertion of emergency constitutes something like an affirmative defense B i.e., an element upon which the proponent must make a prima facie showing before the burden of proof on that element shifts to the party with the overall burden of proof in the dispute. In this case, of course, Respondent has presented no evidence in support of his position, and the ALJ thus believes that even slight evidence is sufficient to entitle Petitioner to prevail on the issue of whether an emergency may have existed.

VI. CONCLUSION

The ALJ finds that, under the record provided in this case, Respondent failed to satisfy the regulatory prerequisites for preauthorization and therefore is not entitled to reimbursement for the disputed services, contrary to the IRO’s prior decision in the case (which was predicated on the assumption that Respondent was still awaiting such services when the decision was issued). Petitioner has presented uncontroverted evidence that warrants summary disposition of this action in its favor.

VII. FINDINGS OF FACT

1. On September 11, 2002, a claimant (“Respondent”) suffered an injury to his left knee, which was a compensable injury under the Texas Workers’ Compensation Act (“the Act”), TEX. LABOR CODE ANN. ch. 401 et seq.
2. When Respondent continued to experience persistent pain after his injury, his health care providers proposed a total left knee replacement.
3. Respondent requested preauthorization from Hudspeth County (“Petitioner”) –Respondent’s self-insured employer – for total left knee replacement surgery.
4. Petitioner denied the request for preauthorization on November 7, 2003.
5. Respondent made a timely request to the Medical Review Division (“MRD”) of the Texas Workers’ Compensation Commission (“Commission”) for medical dispute resolution with respect to the requested knee replacement.
6. In a decision dated May 14, 2004 (issued May 20, 2004), in dispute resolution docket No. M2-04-0925-01, the Independent Review Organization (“IRO”) to which the MRD referred the dispute overruled Petitioner’s denial of preauthorization, concluding that the requested knee replacement was medically necessary to treat claimant’s work-related injury.
7. The IRO’s decision noted that Respondent suffered from “chronic pain,” discussed the disputed knee replacement as a prospective measure to address Respondent’s injury, and included no indication that an emergency need for the knee replacement existed.
8. Petitioner requested in timely manner a hearing with the State Office of Administrative Hearings (“SOAH”), seeking review and reversal of the IRO decision regarding preauthorization.
9. The Commission mailed notice of the hearing’s setting to the parties at their addresses on June 25, 2004.
10. On July 15, 2004, Petitioner submitted to SOAH an Agreed Motion for Continuance, seeking to reschedule the hearing. The motion noted that Respondent had been consulted and was not opposed to the continuance. The motion was subsequently granted and the parties were properly issued notice of the rescheduled hearing by SOAH.
11. The hearing in this matter was subsequently continued two more times, upon Petitioner’s motion, with proper issuance of notice by SOAH.
12. A hearing in this matter was convened on November 10, 2004, in Austin, Texas, before an Administrative Law Judge (“ALJ”) with SOAH. Petitioner appeared and presented argument. However, Respondent did not appear and provided no explanation to SOAH or the Commission, either before or after the hearing, for that failure to appear.
13. Following the hearing, the ALJ issued an “Order Extending Hearing Process,” in order to assure that Respondent (who has not filed any pleadings with SOAH in this case) was fully apprised of the proceeding and to allow Petitioner an opportunity to re-urge the Motion for Summary Disposition that it had submitted earlier in the proceeding
14. Petitioner submitted an “Amended Motion for Summary Judgment and Dismissal” on November 22, 2004, the designated deadline for such filings.
15. Respondent did not submit any response to the motion noted in Finding of Fact No. 14, either within 20 days of the motion’s filing or as of the date of this Decision and Order.
16. Respondent underwent a total replacement of the left knee, which was performed by Joseph Neustein, M.D., at Del Sol Medical Center in El Paso, Texas, on February 5, 2004.
17. Respondent underwent a total replacement of the left knee, which was performed by Joseph Neustein, M.D., at Del Sol Medical Center in El Paso, Texas on February 5, 2004.

VIII. CONCLUSIONS OF LAW

1. The Commission has jurisdiction related to this matter pursuant to § 413.031 of the Act.
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 §413.031(k) of the Act and TEX. GOV’T CODE ANN. ch. 2003.
3. Adequate and timely notice of the hearing was provided in accordance with TEX. GOV’T CODE ANN. §§ 2001.051 and 2001.052.
4. Petitioner, the party seeking relief, bore the burden of proof in this case, pursuant to 28 TEX. ADMIN. CODE (“TAC”) § 148.21(h).
5. The services at issue in this action, as noted in Finding of Fact No. 2, require preauthorization, pursuant to the Act and 28 TAC § 134.600.
6. Based upon the foregoing Findings of Fact, Respondent’s claim for reimbursement failed to satisfy § 413.014(d) of the Act, which provides that an insurer is not liable for those specified treatments and services requiring preauthorization unless preauthorization is both sought by the claimant or healthcare provider and either obtained from the insurance company or ordered by the Commission before such services are actually provided.
7. Consistent with 1 TAC §155.57, Petitioner submitted pleadings and evidence entitling it to summary disposition in its favor with respect to the issues of preauthorization or reimbursement for the disputed services, and Respondent received his prescribed opportunity to oppose Petitioner’s motion for summary disposition
8. Based upon the foregoing Findings of Fact and Conclusions of Law, the Findings and Decision of the IRO, issued in this matter on May 20, 2004, are incorrect; Petitioner should not be required to preauthorize or reimburse the left knee replacement sought by Respondent.

ORDER

IT IS THEREFORE, ORDERED that preauthorization or reimbursement for a total left knee replacement, as sought by ___ (a claimant who has suffered a compensable injury) from Hudspeth County, is denied.

Signed January 5, 2005.

MIKE ROGAN
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1. The staff of the Commission formally elected not to participate in this proceeding, although it filed a general “Statement of Matters Asserted” with the notice of the hearing.↑
2. Petitioner cited, among others, SOAH Docket No. 453-96-0085.M2 (ALJ Norman, July 1996), SOAH Docket No. 453-95-0435.M2 (ALJ Elkins, August 1996), SOAH Docket No. 453-99-1354.M4 (ALJ Zukauckas, April 2000), and SOAH Docket No. 453-99-0160.M2 (ALJ Pacey, July 1999).↑
3. 1 Tex. Admin. Code (TAC) § 155.57(a).↑
4. Cate v. Dover Corp., 790 S.W. 2d 559, 562 ( Tex. 1990); Montgomery v. Kennedy, 669 S.W. 2d 309, 311 (Tex. 1984).↑