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ORDER GRANTING PLEA IN JURISDICTION

The Texas Workers’ Compensation Commission filed a Plea in Jurisdiction seeking Summary Dispositions in the above cases. The cases were consolidated into one hearing with five other cases involving the same parties and similar facts, but the Plea in Jurisdiction involves only the two cases numbered above. The entire group of seven cases was referred to mediation but no settlement was reached and the hearing on the plea and the merits of the cases was held on December 21, 2001. The record closed on January 25, 2002. The Fund argued that the Commission has jurisdiction to order the refund of the amounts it has already paid to Dr. Harph. The Commission and Dr. Harph disagreed.

The facts concerning the medical payment and request for the refund are not in dispute; therefore, they are addressed in the Findings of Fact without further discussion here.

The Plea in Jurisdiction is granted because the Commission and, therefore, SOAH does not have jurisdiction because the health care provider was not denied payment or paid a reduced amount for those services, as is required for jurisdiction under TEX. LABOR CODE §413.031(a)(1) and because the Fund did not send a Notice of Medical Payment Dispute regarding those services, as is required by TEX. LABOR CODE §408.027(d) and 28 TAC §133.304.

FINDINGS OF FACT

  1. In both Docket Nos. 453-99-1533.M4 and 453-00-1809.M4 Dr. Harph billed CPT Codes 22558-22, 22585-22, and (twice in each case) 22845-65.
  2. The Texas Workers’ Compensation Insurance Fund (the Fund) paid various amounts for these services.
  3. The Fund requested a refund of the above payments from Dr. Harph.
  4. The Fund did not provide Dr. Harph with a report explaining the reasons for the reduction or denial of payment ( Notice of Payment Dispute).
  5. Dr. Harph requested a hearing on this matter on July 19, 1999.
  6. The hearing was convened December 21, 2001, at the offices of the State Office of Administrative Hearings in Austin, Texas. Administrative Law Judge John H. Beeler presided. Carrier appeared through its attorney, Jeff Boggess. Dr. Harph appeared by telephone and represented himself. The Commission was represented by its assistant general counsel, Timothy Riley. The hearing concluded that same day, but the record was left open to allow the parties to file written arguments. The record closed on January 25, 2002.

CONCLUSIONS OF LAW

  1. The issue of a refund is not properly before the Commission because the Fund did not deny payment or pay a reduced amount for the services for which it sought a refund. TEX. LABOR CODE §413.031(a).
  2. The refund issue is not properly before the Commission and the State Office of Administrative hearings because no Notice of Payment Dispute was provided to Dr. Harph. TEX. LABOR CODE §408.027(d).
  3. Dr. Harph should not be ordered to refund amounts previously paid to him by the Fund for services rendered in Docket Nos 453-99-1533.M4 and 453-00-1809.M4.

ORDER

IT IS, THEREFORE, ORDERED that the request of Petitioner, Texas Workers' Compensation Insurance Fund, for a refund of monies paid to Dr. Harph is denied.

Signed this 25th day of March, 2020.

JOHN H. BEELER

Administrative Law Judge
State Office of Administrative Hearings

DECISION AND ORDER

Injured worker________[1] (Claimant) has appealed a decision of the Medical Review Division (MRD) of the Texas Workers= Compensation Commission (the Commission) denying reimbursement of $323.00 she paid for immunotherapy and intradermal skin tests provided to her from June 15, 2001, through September 7, 2001, by her treating physician. The MRD's denial of payment was based on its review of a decision made by an independent review organization (IRO) physician who found the disputed treatment was not medically necessary to treat Claimant's compensable injury. As set out below, the Administrative Law Judge (ALJ) finds Claimant did not substantiate the medical necessity of the disputed treatment and is not entitled to reimbursement.

I. NOTICE, JURISDICTION AND VENUE

There were no contested issues regarding notice, jurisdiction or venue. Therefore, those matters are addressed in the Findings of Fact and Conclusions of Law without further discussion here.

II. STATEMENT OF THE CASE

ALJ Sharon Cloninger convened the hearing in this matter on July 24, 2003, at the State Office of Administrative Hearings (SOAH) in the William P. Clements Building, 300 West 15th Street, Fourth Floor, Austin, Texas. Claimant represented herself with assistance from Barton Levy, an ombudsman provided by the Commission at Claimant's request. Facility Insurance Company (Carrier) was represented by Steve Tipton, attorney. The hearing adjourned and the record closed that same day.

The issue before the ALJ is whether the immunotherapy and intradermal skin tests in question were medically necessary to treat Claimant's compensable injury.

III. EVIDENCE PRESENTED

Claimant testified on her own behalf and called William Rea, M.D.,[2] her treating physician, to testify by telephone. Edward Peters, M.D., testified on behalf of Carrier. Petitioner offered two exhibits, which were admitted. Carrier offered 18 exhibits, which were admitted.

A. Background

On________, Claimant was a third-grade teacher in the ____ Independent School District when she sustained a compensable injury from handling methanol[3] and inhaling methanol fumes contained in duplicating fluid. Within 24 hours of the exposure, Claimant developed circular headaches, nausea, a vomiting sensation, chest tightness and a sensation of wheezing in her throat. She returned to work briefly, but has not worked since February 28, 1992. Her symptoms recur when she is around paint fumes and other odors. (Carrier's Ex. 10).

In 1993, after being treated by a series of doctors, Claimant was referred to Dr. Rea at the Environmental Health Center in Dallas. He diagnosed her to have multiple chemical sensitivities. From June 15, 2001, through September 7, 2001, he provided her with eight immunotherapy treatments and two intradermal skin tests. She states the immunotherapy and testing are prescribed by Dr. Rea to control the headaches and seizure disorder caused by the brain injury she sustained from the methanol exposure. She states skin testing is required to determine the correct dosage for immunotherapy. (Pet. Ex. 1).[4]

B. Medical Necessity of Treatment

Claimant

Claimant said she has been treated for her compensable injury by approximately seven doctors, who all found her symptoms to be the result of her exposure to methanol. She said Stevan Cordas, D.O., a doctor designated by the Commission, found her to have a 25 percent impairment based on his independent neuropsychological testing and her reported seizure activity. She said she continues to suffer from debilitating headaches, which can be triggered by exposure to molds, chemicals and grasses, and which are relieved by immunotherapy. She said that when she does not have immunotherapy treatment, she is in bed for days with headaches.

Dr. Rea

Dr. Rea said diagnostic studies conducted on Claimant through the years indicate her to have neurotoxicity, which he continues to treat by having her avoid exposure to toxic substances such as car exhaust, copying machines, and pesticides; by using heat therapy to cause her to sweat out toxic substances in her system; and by using nutrition. He said he also uses neutralization injections, which he said are similar to allergy shots, to neutralize the effects of toxic substances on her system.

Dr. Peters

Dr. Peters is Board Certified in Internal Medicine, Pulmonary/Critical Care Medicine, and Allergy/Immunology. He testified that Claimant's current condition and symptoms are not related to the methanol exposure itself, because the effects of inhaling methanol fumes and handling methanol do not last for years. He said his opinion is based partly on the fact that a week before the hearing, he searched the National Institutes of Health website which cross-references thousands of articles, and could find nothing regarding the long-term effects of methanol exposure. He said there is nothing in the literature to support that methanol exposure causes an immuno response.

He allowed that Claimant's symptoms are real, but said they could not be the result of the methanol exposure. He said the use of neutralization injections is not supported by any peer review studies, and is outside the standard of care. He said the diagnosis of multiple chemical sensitivity is not a recognized diagnosis. He said Claimant needs to be seen and cared for by a doctor who will do something within the standard of care to treat her condition. He said that while allergists and immunologists use injections all the time, Dr. Rea's doses and the frequency of those doses administered to Claimant are not consistent with accepted medical care. Dr. Peters agrees with position statements included in Carrier's exhibits 1-18 that the treatments Dr. Rea is using for Claimant are not effective.

Dr. Peters agrees with Thomas Kurt, M.D.[5], who examined Claimant on July 27, 1992, and found that because methanol is not capable of producing a continued toxic health effect, Claimant suffers from odor-triggered panic attack symptoms, initially associated with her methanol exposure. (Carrier's Ex. 10).

Documentary evidence

Dr. Cordas examined Claimant at the Commission's request and reported on June 17, 1994, that his findings agree with those of neuropsychologists that Claimant suffers from residual neurologic dysfunction that persists and apparently did not predate her compensable injury. He said the dysfunction is independent of the multiple chemical sensitivity, which is not compensable. (Petitioner's Ex. 1).

According to a December 1992 report that appeared in JAMA (Journal of the American Medical Association), there are no accurate, reproducible, well-controlled studies that support the contention that Multiple Chemical Sensitivity Syndrome is a significant disease or that the diagnostic tests and the treatments used have any therapeutic value. (Carrier's Ex. 3).

The American Academy of Allergy and Immunology has concluded there is no clear evidence for a cause-and-effect relationship between symptoms and environmental exposure, and thus no evidence to support the use of a multiple chemical sensitivity as a diagnostic entity. (Carrier's Ex. 8).

Dr. Peters' peer review report dated September 27, 2000, states that in patients who have chronic methanol intoxication, abnormalities on CT scan and MRI have been reported. He notes that Claimant's MRI was normal on November 8, 1993, and her CT scan was normal on October 24, 1995, leading him to conclude there is no substantive evidence that links the occupational exposure to methanol to Claimant's chronic medical complaints.

In a January 11, 2001 letter responding to a peer review, Dr. Rea explains that Claimant was frequently complaining of severe headaches as a result of her chronic sinusitis. It is for this reason that we started her on skin testing to determine her specific sensitivities and to undergo antigen neutralization shots to build up immune tolerance and consequently reduce symptoms. The patient was extremely sensitive to a number of foods and inhalants which were the reasons we had to have her undergo extensive skin testing for full coverage. The patient was asymptomatic as long as she was on neutralization shots. (Petitioner's Ex. 1).

C. Closing arguments

Claimant's argument

Claimant argued that her compensable injury is neurotoxicity, a diagnosis with which the Commission's designated doctor concurred. Claimant is seeking reimbursement for the immunotherapy and intradermal tests because the disputed treatments give her relief from headaches.

Carrier's argument

There is no scientific evidence supporting Dr. Rea's position that the immunotherapy and intradermal skin tests are medically necessary to treat Claimant's condition. There is nothing in the literature to support that immunotherapy cures headaches. Claimant's EEG is normal and her MRI is normal. There is no explanation regarding how her toxic profiles are related to her methanol exposure.

IV. LEGAL STANDARDS

Section 408.021 of Texas Labor Code Ann. provides as follows:

(a)An employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed. The employee is specifically entitled to health care that:

  1. cures or relieves the effects naturally resulting from the compensable injury;
  2. promotes recovery; or
  3. enhances the ability of the employee to return to or retain employment.

. . .

V. DISCUSSION AND ORDER

Claimant did not prove the disputed treatments are medically necessary to treat her compensable injury, which according to the Commission's designated doctor is residual neurologic dysfunction. Dr. Rea states in his January 11, 2000 letter that he is using the immunotherapy and skin tests to treat Claimant's headaches resulting from her chronic sinusitis. There is no evidence that Claimant's exposure to methanol caused her to have chronic sinusitis resulting in headaches. Since the disputed treatment is for headaches unrelated to Claimant's compensable injury, there is no medical necessity for the treatment pursuant to Tex. Labor Code Ann. ' 408.021. Even if the immunotherapy and intradermal skin tests relieve Claimant's headaches, as she testified, the treatment is not reimbursable because it is not medically necessary to treat her compensable injury.

VI. FINDINGS OF FACT

  1. On________,_____ (Claimant) sustained a work-related injury when she inhaled fumes from and handled duplicating fluid containing methanol.
  2. On the date of the injury, Claimant's employer was the _____ Independent School District and its workers' compensation carrier was Facility Insurance Company (Carrier).
  3. Within 24 hours of the contact with the duplicating fluid, Claimant suffered circular headaches, nausea, a vomiting sensation, chest tightness and a wheezing sensation in her throat.
  4. Claimant suffers from residual neurologic dysfunction as a result of her compensable injury.
  5. William Rea, M.D., provided immunotherapy and intradermal skin tests from June 15, 2001 to September 7, 2001, to treat Claimant's headaches associated with her chronic sinusitis.
  6. Claimant paid Dr. Rea $323.00 for the treatment listed in Finding of Fact No. 5.
  7. Claimant sought reimbursement from Carrier for the provided medical services.
  8. Carrier denied reimbursement on the grounds that the disputed treatment was not medically necessary.
  9. An independent review organization (IRO) reviewed the medical dispute and found the treatment was not medically necessary.
  10. On March 13, 2003, after reviewing the IRO decision, the Medical Review Division (MRD) of the Texas Workers= Compensation Commission (the Commission) issued a decision denying reimbursement for the immunotherapy and intradermal skin tests provided June 15, 2001, through September 7, 2001, because the treatment was not found to be medically necessary.
  11. Petitioner filed a timely request for hearing on March 25, 2003.
  12. Notice of the hearing was sent to all parties on April 29, 2003.
  13. The notice contained a statement of the time, place, and nature of the hearing; a statement of the legal authority and jurisdiction under which the hearing was to be held; a reference to the particular sections of the statutes and rules involved; and a short, plain statement of the matters asserted.
  14. Administrative Law Judge (ALJ) Sharon Cloninger convened a hearing in this matter on July 24, 2003, at the State Office of Administrative Hearings (SOAH) in the William P. Clements Building, 300 West 15th, Austin, Texas. Claimant represented herself, with assistance from Barton Levy, an ombudsman provided by the Commission at Claimant's request. Fidelity Insurance Company (Carrier) was represented by Steve Tipton. Following the presentation of evidence, the hearing adjourned and the record closed that same day.
  15. Claimant's chronic sinusitis is not a result of her exposure to methanol.
  16. Immunotherapy and intradermal skin tests are not medically necessary to treat Claimant's compensable injury.

VII.CONCLUSIONS OF LAW

  1. The Texas Workers' Compensation Commission (Commission) has jurisdiction over this matter pursuant to the Texas Workers' Compensation Act (the 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 the Act '413.031(d), TEX. GOV'T CODE ANN. Ch. 2003.
  3. Adequate and timely notice of the hearing was provided to the parties in accordance with Gov't Code 2001.051 and 2001.052.
  4. Petitioner has the burden of proving by a preponderance of the evidence that it should prevail in this matter. 28 Tex. Admin. Code (TAC) ' 148.21(h).
  5. Under the Commission's rules, the IRO's decision has presumptive weight in all appeals from reviews of retrospective medical necessity disputes. 28 TAC ' 133.308(v).
  6. An employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed. Tex. Lab. Code Ann. ' 408.021(a).
  7. Petitioner has not met her burden of proving the immunotherapy and intradermal skin tests were medically necessary within the meaning of Tex. Lab. CODE ANN. ' 408.021.
  8. Based upon Findings of Fact Nos. 1-6 and 15-16, andConclusion of Law No. 7,Petitioner is not entitled to $323.00 in reimbursement from Carrier for the disputed treatments.

ORDER

Based on the above Findings of Fact and Conclusions of Law, it is ordered that_____ is not entitled to reimbursement from Facility Insurance Company for the disputed treatment.

Signed this 22nd day of March, 2020.

SHARON CLONINGER

Administrative Law Judge
State Office of Administrative Hearings

  1. To protect Claimant's identity, her initials will be used in this Decision and Order.
  2. As a preliminary matter, the parties addressed Carrier's Motion to Strike Dr. Rea's testimony as to the nature and cause of Claimant's alleged injuries, on the grounds that Dr. Rea has no reasonable scientific basis for his opinion. The ALJ ruled that Dr. Rea could not testify as an expert, but could testify as to his diagnosis and treatment of Claimant.
  3. Methanol is a light volatile pungent flammable poisonous liquid alcohol used especially as a solvent, antifreeze, or denaturant for ethyl alcohol and in the synthesis of other chemicals. Called also methyl alcohol, wood alcohol. Merriam-Webster's Medical Dictionary (1995), p. 415.
  4. The pages in Petitioner's Exhibit 1 are not numbered
  5. Dr. Kurt is a Diplomate of the American Board of Medical Toxicology.

DECISION AND ORDER

I. Background and Procedural History

The Clinic for Special Surgery (the Clinic or Petitioner) is an ambulatory surgical center (ASC). Patient ____ was treated at the Clinic with an epidural steroid injection. The Clinic submitted a bill for $2,840.48 to Hartford Fire Insurance (Hartford) for services rendered to___ Hartford paid the Clinic $2,236.00. The Clinic requested dispute resolution. The Medical Review Division (MRD) of the Texas Worker’s Compensation Commission (Commission) declined to order additional payment, and the Petitioner appealed the decision.

The rate of reimbursement for ASCs is in dispute because the Commission does not currently have a guideline mandating a fixed amount for ASC charges for outpatient procedures. The services are to be reimbursed at a fair and reasonable rate.

The Administrative Law Judge (ALJ) convened a hearing on January 28, 2002. No party appeared. The ALJ took judicial notice of the notice to the Petitioner (Ex. 1) and the certified record (Ex. 2). Based on the evidence, the ALJ finds that Petitioner failed to carry its burden of proving it is entitled to additional reimbursement.

II. Findings of Fact

  1. On_________, ____ suffered a compensable injury and was employed at the time by an employer carrying workers’ compensation insurance underwritten by Hartford.
  2. On May 24, 2000, Daniel K. Boatright, D.O., used the Clinic’s facilities to treat____ with a fluoroscopically-guided epidural steroid injection.
  3. The Clinic requested reimbursement of $2,840.48, its usual and customary fee, from Hartford.
  4. Hartford paid the Clinic $2,236.00 for the services, as being fair and reasonable payment.
  5. The Clinic sought additional reimbursement of $604.48 and submitted a request for dispute-resolution on April 23, 2001. The MRD issued its Findings and Decision on October 24, 2001, denying additional reimbursement.
  6. The Clinic requested a hearing on October 31, 2001, and the Commission issued its Notice of Hearing on November 27, 2001.
  7. Administrative Law Judge Katherine Smith convened the hearing on the disputed hearing January 28, 2002, and the record closed the same day. No party appeared or requested an appearance by telephone.
  8. The Clinic provided explanation of benefits or reimbursement (EOBs) from other carriers showing that other carriers have been willing to reimburse 100% of the Clinic’s usual and customary charges for the same and similar services provided by the Clinic.
  9. Showing what other carriers have been willing to pay is not evidence of effective medical cost control and is not evidence of amounts paid on behalf of managed care patients of ASCs or on behalf of other non-workers’ compensation patients with an equivalent standard of living.
  10. The EOBs provided by the Clinic do not support additional reimbursement.

III. Conclusions of Law

  1. The Texas Workers’ Compensation Commission has jurisdiction to decide the issue presented pursuant to the Texas Workers’ Compensation Act. Tex. Labor Code Ann. § 413.031 (Vernon 1996).
  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. Labor Code Ann. § 413.031(d) and Tex. Gov’t Code Ann., ch. 2003 (Vernon 2000).
  3. Adequate and timely notice of the hearing was provided according to Tex. Gov’t Code Ann.§§ 2001.051 & 2001.052 (Vernon 2000).
  4. 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).
  5. The Clinic had the burden of proving by a preponderance of the evidence that it was entitled to additional reimbursement. 28 Tex. Admin. Code (TAC) § 148.21(h).
  6. The Commission rules provide, “Reimbursement for services not identified in an established fee guideline shall be reimbursed at fair and reasonable rates as described in the Texas Workers’ Compensation Act, Section 8.21(b), until such time that specific guidelines are established by the commission.” (Emphasis added.) 28 TAC § 134.1(f). (Section 8.21(b) is now codified as § 413.011(b) of the Texas Labor Code.).
  7. Section 413.011 of the Guidelines and Medical Policies of the Texas Labor Code 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.)
    2. A “usual and customary” charge may be the same as a “fair and reasonable” one only if there is evidence that the factors set out in § 413.011 of the Texas Labor Code are also met; that is, that the charge achieves effective medical cost control, takes into account payments made to others with an equivalent standard of living, and considers the increased security of payment.28 TAC § 133.(8).
    3. Based on Findings of Fact Nos. 8-10 and Conclusions of Law Nos. 6-8, the Clinic failed to meet its burden of proof that its charges are fair and reasonable. Tex. Labor Code Ann. § 413.011(b).

ORDER

IT IS, THEREFORE, ORDERED that the appeal of the Clinic for Special Surgery Center requesting additional reimbursement for the services provided is DENIED.

Signed this 13th day of March, 2020.

.

KATHERINE L. SMITH

Administrative Law Judge
State Office of Administrative Hearings

DECISION AND ORDER

I. DISCUSSION

Ernie V. Fields, D.C. (Petitioner) requested a hearing to contest the Findings and Decision of the Texas Workers’Compensation Commission (Commission) denying Petitioner reimbursement from South Plains School Worker’s Compensation Program (Respondent) for work conditioning. Petitioner also disputed the decision of the independent review organization (IRO), Envoy Medical Systems, L.P., that the physical performance tests[1] performed April 20, 2004, and June 24, 2004, were not medically necessary

The Administrative Law Judge (ALJ) concludes that Petitioner should be reimbursed for neither the work conditioning program nor the physical performance tests.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY.

The hearing convened on January 4, 2006, before ALJ Stephen J. Pacey. Steven Tipton represented Respondent. Dr. Fields appeared pro se. There were no contested issues of notice or jurisdiction. The hearing adjourned the same day, but the parties were allowed additional time to file documents, and the record closed on January 12, 2006.

II. Discussion

__ (claimant) was injured on___, when she slipped on a heavily waxed floor. On June 30, 2004, Respondent preauthorized a work-conditioning program to be conducted four sessions a week for five weeks. The preauthorization was for treatment of the left hip and shoulder.[2] At a benefit contested case hearing held on November 8, 2004, the hearing officer concluded that there was no causal relationship between the injury of ___and injuries to the left hip or shoulder.[3] The hearing officer stated the compensable injury of___, does not include injury to the left hip and left shoulder.

Respondent denied reimbursement, and Petitioner filed a medical dispute. The Medical Dispute Division (MRD) submitted the question of medical necessity of the physical performance tests to the IRO who concluded that the physical performance tests were not medically necessary. The MRD did not refer the work conditioning to the IRO. In a decision dated February 22, 2005, the MRD decided the work-conditioning dispute. It determined that the work conditioning was preauthorized but denied reimbursement on the basis that reimbursement could not be determined because the Petitioner did not provide HCFAs[4] for review. Petitioner then requested a hearing and attached the HCFAs.

III. ANALYSIS

Petitioner failed to prove that he should be reimbursed for the work conditioning or the physical performance testing. Petitioner relied upon his preauthorization, but the preauthorization was for an injury that was not caused by the accident. There had been a final adjudication that the injury to the left hip and shoulder was not compensable. The rule, 28 Tex. Admin. Code (TAC) § 134.600(c) states in pertinent part:

(c) The carrier is not liable under subparagraphs (b)(1)(B) or (C) of this section if there has been a final adjudication that the injury is not compensable or that the health care was provided for a condition unrelated to the compensable injury.

The fact that the Respondent’s preauthorization did not consider compensability is appropriate by rule. 28 TAC § 134.600(f) prohibits the Carrier from considering anything but medically necessity when making a determination on preauthorization. The rule states inpertinentpart:

(f) The carrier shall:

(1) approve or deny requests for preauthorization or concurrent review based solely upon the reasonable and necessary medical health care required to treat the injury, regardless of:

(A) unresolved issues of compensability, extent of or relatedness to the compensable injury;

The MRD made the right decision in denying reimbursement for the work-conditioning program but for the wrong reason. The MRD ignored the Commission’s own order in a contested case hearing where the hearing examiner specifically held that the hip and shoulder were not compensable. The preauthorization was for the hip and shoulder. Under the rules, Petitioner cannot be reimbursed for a injury that is not compensable. It is axiomatic that testing for an injury that is not compensable is not medically necessary. Consequently, Petitioner failed to prove that he should be paid for the tests that the IRO held were not medically necessary.

III. FINDINGS OF FACT

  1. On February 11, 2005, an independent review organization (IRO), Envoy Medical Systems, LLC, determined that the physical performance tests administered by South Plains School Workers’ Comp Program (Petitioner) to __(Claimant) were not medically necessary.
  2. On June 30, 2004, South Plains School Workers’ Comp Program (Respondent) preauthorized a work conditioning program for treatment of the left hip and shoulder to be conducted four sessions a week for five weeks.
  3. On February 22, 2005, the Medical Review Division (MRD) found that reimbursement could not be determined because Petitioner did not provide HCFAs for review.
  4. On March 11, 2005, Petitioner contested the Commission and IRO decisions.
  5. At a Commission benefit contested case hearing held on November 8, 2004, the hearing officer concluded that there was no causal relationship between the injury of March 16, 2004 and injuries to the left hip or shoulder and that the compensable injury did not include injury to the left hip and shoulder.
  6. Respondent denied reimbursement to treatments for work conditioning and the physical performance testing on the basis that the injuries were not compensable.
  7. The physical performance testing was not reimbursable because they were performed to determine the extent of an injury that was not compensable.
  8. Neither the work conditioning nor the physical performance testing were reimbursable on the basis of a final adjudication that the injury was not compensable.
  9. The Commission issued a notice of hearing on April 4, 2005, that included the date, time, and location of the hearing, the applicable states under which the hearing would be conducted, and a short, plain statement of matters asserted.
  10. A hearing was convened by Administrative Law Judge Stephen J. Pacey on January 4, 2006, in the hearing rooms of the State Office of Administrative Hearings. The hearing adjourned that same day, and after the Respondent submitted additional documents, the record closed on January 12, 2006.

IV. 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. Petitioner 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. Petitioner’s treatments and testing were not medically necessary on the basis that the injury was not compensable.
  6. Petitioner 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).
  7. Based upon the Findings of Fact and Conclusions of Law, Respondent proved by a preponderance of the evidence that Respondent’ denial of reimbursement to Petitioner for work conditioning and physical performance testing was proper because the treatments were performed on an injury that was not compensable.

ORDER

THEREFOREIT IS ORDERED that South Plains School Workers’ Comp Program is not required to reimburse Ernie V. Fields, D.C., for either the work conditioning or physical performance testing.

Signed March 9, 2006.

STEPHEN J. PACEY

ADMINISTRATIVE LAW JUDGE
STATE OFFICE OF ADMINISTRATIVE HEARINGS

  1. CPT Code 97750.
  2. Petitioner’s Exhibit 1.
  3. Respondent’s Exhibit 1 at page 30.
  4. Health Care Financing Administration. This are the forms Providers utilize for billing.

DECISION AND ORDER

Vista Hospital of Dallas (Vista) requested a hearing to contest a decision by the Medical Review Division (MRD) of the Texas Department of Insurance, Division of Workers’ Compensation (Division), denying additional reimbursement to Vista for surgery and a hospital stay provided to Claimant, an injured worker.[1] American Home Assurance Company (Carrier) had paid Vista $24,190.60. Vista sought an additional $88,643.11. Carrier denied payment based on its assertions that Vista inappropriately calculated its charges on the basis of the ACIHFG Stop-Loss Exception;[2] some of the services were not medically necessary; some of the services were not appropriately documented; and some of the services were improperly “unbundled,” rather than being included with other services as part of a global charge (G Issue). The Administrative Law Judges (ALJs) find that the Stop-Loss Methodology should be followed in this proceeding and that additional reimbursement in the amount of $88,643.11, plus applicable interest, should be ordered.

I. PROCEDURAL HISTORY, NOTICE, AND JURISDICTION

The MRD issued its decision on August 23, 2005. Vista filed a timely and sufficient request for hearing. Notice of the hearing was appropriately issued to the parties, and the hearing convened and concluded on May 23, 2007. Prior to issuance of a decision, the case was joined with other stop-loss cases for reasons of efficiency.[3]

II.DISCUSSION

A. Background

It is undisputed that Claimant was admitted to Vista on July 2, 2004, for spine surgery because of a central herniated disk at his L5-S1 spinal level, with marked disk degeneration and disk space collapse at L5-S1. He underwent a 360 degree spinal fusion at L5-S1 with implants. He was discharged on July 6, 2004.

On May 27, 2004, Carrier preauthorized a two-day hospital stay between May 27, 2004, and June 30, 2004.[4] Subsequently, it authorized an additional two-day stay.[5]

Vista billed Carrier $151,172.80 of which Carrier paid $24,190.60. There was no applicable maximum allowable reimbursement (MAR) schedule or specific services contract. Vista waived its $727.85 G Issue reimbursement request.

B.Issues

Summary of Positions and ALJs’ Decision

The ALJs will order reimbursement in accordance with the following calculation:

Amount billed

$151,172.80

Less G Issue-related charges

727.85

Remaining Charges

150,444.95

Stop loss amount (75% x 150,444.95)

112,833.71

Less amount paid by Carrier

24,190.60

Amount owed to Vista (net of interest)

$88,643.11

En Banc Panel Decision

When a hospital’s total audited bill is greater than $40,000, the ACIHFG Stop-Loss Methodology applies, and the hospital is reimbursed at 75% of its total audited bill. The purpose of the Stop-Loss Methodology is “to ensure fair and reasonable compensation to the hospital for unusually costly services rendered during treatment to an injured worker.”[6] The following legal issues in this case were decided by a SOAH En Banc Panel[7](En Banc Panel), and those determinations are incorporated herein. The ALJs agree with those determinations. Legal arguments related to these issues will not be addressed, other than in the Conclusions of Law.

Finally, in reply to a request for clarification, the En Banc Panel found that when referring to a hospital’s usual and customary charges, the rules refer to the provider’s own usual and customary charges, rather than to charges that are an average or median of other hospitals’ charges.[8] Thus, Vista is required to charge its usual and customary charges.

Explanation of Benefits (EOB

In accordance with the En Banc Panel’s decision, reasons for denying a claim that were not provided to a provider before a request for medical dispute resolution may not be considered. As indicated above, in its EOB, Carrier challenged Vista’s charges on three bases, in addition to the G Issue charges for which Vista is not pursing reimbursement.

Carrier’s first reason for denial is that the charge should be reduced because the ACIHFG Stop-Loss Exception does not apply to this case. This is contrary to the En Banc Panel’s ruling that the exception applies when total audited charges exceed $40,000, based on the provider’s usual and customary charges. In this case, total audited charges exceeded $40,000 and testimony from Vista witness Rita Morales established that the services Vista billed[9] were for the same charge as its usual and customary charge for each patient regardless of the service or payer. On these bases, the Stop-Loss Exception applies and Vista’s reimbursement should be determined in accordance with its terms.

A second ground for denial stated in Carrier’s EOB was that some services were medically unnecessary. Carrier argued that once an insurance carrier raises the issue of medically unnecessary services as a reason for denial in its EOB, a provider has the burden of proving that the services were medically necessary. The ALJs conclude that Carrier is barred from raising the medical necessity issue. As indicated above, Carrier preauthorized Claimant’s hospitalization and surgery for a 360 degree spinal fusion with inpatient stay of two days and then preauthorized an additional two days.[10] The Division’s rules at 28 TAC § 133.301(a) (effective at the time of this dispute) provide that when a service is preauthorized, an insurance carrier is not permitted to retrospectively review the medical necessity of the service.

Carrier contended that some of the services provided were medically unnecessary even though the surgery and length of stay were preauthorized and that some of the services were not included in the preauthorization. As previously discussed, however, Rule 133.307(j)(2) states that a reason for denial not presented to the provider before a request for medical dispute resolution may not be considered. All of the insurers participating in the proceeding that led to the En Banc Panel’s decision recognized that subsection (j)(2) limits the reasons for denying a claim that an insurance carrier may assert at medical dispute resolution or at hearing. To the extent Carrier now contends that some of the services Vista provided were outside the ambit of its preauthorization, it is not permitted to do so under Rule 133.307(j)(2) because it did not assert that reason before Vista’s request for medical dispute resolution.[11]

In addition, on the basis of other related law, the ALJs conclude that Carrier’s assertion of a lack of medical necessity, based on any assertion that its preauthorization did not apply, is impermissible. Labor Code § 408.027(e) (formerly 408.027(d)) provides:

(e) If an insurance carrier disputes the amount of payment or the health care provider's entitlement to payment, the insurance carrier shall send to the division, the health care provider, and the injured employee a report that sufficiently explains the reasons for the reduction or denial of payment for health care services provided to the employee. The insurance carrier is entitled to a hearing as provided by Section 413.031(d).

The Division’s rules at 28 TAC § 133.304(c) (effective at the time of the dispute at issue) provide:

(c)At the time an insurance carrier makes payment or denies payment on a medical bill, the insurance carrier shall send, in the form and manner prescribed by the Commission, the explanation of benefits to the appropriate parties. The explanation of benefits shall include the correct payment exception codes required by the Commission’s instructions, and shall provide sufficient explanation to allow the sender to understand the reason(s) for the insurance carrier’s actions. A generic statement that simply states a conclusion such as “non sufficiently documented” or other similar phrases with no further description of the reason for the reduction or denial does not satisfy the requirements of this section.

Subsections (c), (k), (l), and (m) of 28 TAC § 133.304 (effective at the time of this dispute at issue) provide a process whereby a provider and an insurance carrier inform each other of their reasons for submitting or denying a claim, including a requirement that providers request reconsideration of a denied claim before submitting a request for medical dispute resolution. The rules provide time limitations for the insurance carrier and provider to take action.[12] This process is obviously thwarted if the insurance carrier never provides an understandable reason for its decision. Because Carrier failed to follow Labor Code 408.027(e) and Rule 133.304(c) by informing Vista prior to medical dispute resolution of any assertion that not all the services at issue were preauthorized, it may not now assert that ground for denial.

Carrier’s assertion of a lack of medical necessity was inadequate for a third related reason. Carrier witness Dana Retrum testified that she could not tell which of the over 350 specifically-identified Vista services[13] Carrier denied as not medically necessary. Although Ms. Retrum could see that Carrier denied certain dollar amounts under certain billing codes, she could not tell which of Vista’s numerous charges under a particular billing code were denied. There was virtually no explanation of why the services were determined to be medically unnecessary.[14] Thus, even if Carrier’s challenge to the medical necessity of some of the services were not barred for other reasons, Carrier’s explanation was inadequate under applicable law[15] for this additional reason. As a result, it may not assert this ground for denial.

A third ground for denial, stated under an “N” denial code in Carrier’s EOB, was that certain services were not properly documented. The ALJs conclude that Labor Code 408.027(e) and Rules 133.304(c) and 133.307(j)(2) prevent Carrier from asserting the N code issue. Both of Carrier’s witnesses, Carol Galimore and Dana Retrum, and Vista witness Rita Morales testified they could not tell which of the Vista charges the N denial code referred to. Ms. Retrum agreed it was probably impossible for Vista to figure out which charges were denied on that basis.

Construing Labor Code § 408.027(e) and Rules 133.304(c) and 133.307(j)(2) together demonstrates that Carrier’s N-code denial failed to satisfy the Rule 133.307(j)(2) provision that new or additional denial reasons not presented before a request for medical dispute resolution may not be subsequently considered. The above-described testimony showed that Carrier did not comply with the Labor Code § 408.027(e) or Rule 133.304(c) requirements that an understandable explanation of the reasons or reasons for the insurance carrier’s actions be provided. Labor Code § 408.027(e) and Rules 133.304(c) and 133.307(j)(2) should be read together to achieve a consistent result, i.e., the reason for denial required by Rule 133.302(j)(2) must be understandable.[16]

Carrier’s N-code denial should also be barred for the separate but related reason that the denial failed to comply with the requirements of Labor Code § 408.027 and Rule 133.304(c).[17]

III.FINDINGS OF FACT

  1. Claimant sustained a compensable injury in the course and scope of his employment.
  2. Claimant’s employer had workers’ compensation insurance coverage with American Home Insurance Company (Carrier).
  3. Claimant was admitted to Vista Hospital of Dallas (Vista) on July 2, 2004, for spine surgery because of a central herniated disk at his L5-S1 spinal level and marked disk degeneration and disk space collapse at L5-S1.
  4. Claimant underwent a 360 degree spinal fusion at L5-S1 with implants.
  5. Claimant was discharged on July 6, 2004.
  6. On May 27, 2004, Carrier preauthorized a two-day hospital stay between May 27, 2004, and June 30, 2004.
  7. Carrier subsequently authorized an additional two-day stay.
  8. Vista billed Carrier $151,172.80 for the preauthorized services of which Carrier paid $24,190.60.
  9. Vista requested medical dispute resolution.
  10. On August 23, 2005, the Texas Workers’ Compensation Commission Medical Review Division (MRD) issued its Findings and Decision, holding that no further reimbursement was owed by Carrier.
  11. Vista requested a hearing not more than 20 days after receiving the MRD decision.
  12. 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 the matters asserted.
  13. All parties had an opportunity to respond and present evidence and argument on each issue involved in the case.
  14. Vista waived its reimbursement request of $727.85 relating to Carrier’s denial of certain services based on its assertion that the services were improperly unbundled rather than being included in a global charge with other charges.
  15. Other reasons Carrier asserted as grounds for denying the charges were that the 1997 Acute Care Inpatient Hospital Fee Guideline (ACIHFG) Stop-Loss Exception did not apply to Vista’s charge; some of the services were medically unnecessary; and some of the services were not properly documented.
  16. Vista’s total audited charges were in excess of $40,000.
  17. Vista billed its usual and customary charges.
  18. There was no applicable maximum allowable reimbursement (MAR) schedule or specific services contract.
  19. Carrier failed to state as a reason for denying any of the claims prior to medical dispute resolution that the services at issue were not included within the scope of its preauthorization.
  20. Vista failed to state as a reason for denying any of the claims prior to medical dispute resolution that its preauthorization did not apply to the July 2, 2004 surgery and hospital admission.
  21. Carrier did not identify which of the over 350 specific Vista charges it asserted were medically unnecessary.
  22. Carrier did not identify which of the over 350 specific Vista charges it asserted were not properly documented.
  23. Vista’s billed amount of $151,172.80, less $727.85, multiplied times 75 percent equals $112,833.71.
  24. 112,833.71 less $24,190.60 equals $88,643.11.

IV.CONCLUSIONS OF LAW

  1. 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. §§ 402.073 and 413.031(k) and Tex. Gov’t Code Ann. ch. 2003.
  2. Vista timely requested a hearing, as specified in 28 Tex. Admin. Code (TAC) §148.3.
  3. Proper and timely notice of the hearing was provided to the parties according to Tex. Gov’t Code Ann. §§ 2001.051 and 2001.052.
  4. Vista had the burden of proof in this proceeding pursuant 28 TAC § 148.21(h) and (i).
  5. All eligible items, including the items listed in 28 TAC § 134.401(c)(4), are included in the calculation of the $40,000 Stop-Loss Threshold. 28 TAC § 134.401.
  6. In determining whether the Stop-Loss Threshold has been met, all eligible items are included at the hospital’s usual and customary charges in the absence of an applicable MAR or a specific contract. 28 TAC § 134.401.
  7. The carve-out reimbursement amounts contained in 28 TAC § 134.401(c)(4) are not used to calculate whether the Stop-Loss Threshold has been met. 28 TAC § 134.401.
  8. When the Stop-Loss Reimbursement Methodology applies to a workers’ compensation admission, all eligible items, including items listed in 28 TAC § 134.401(c)(4), are reimbursed at 75% of their post-audit amount. 28 TAC § 134.401.
  9. Under the Stop-Loss Reimbursement Methodology, items listed in 28 TAC § 134.401(c)(4) are not reimbursed at the carve-out amounts provided in that section when the Stop-Loss Reimbursement Methodology applies. 28 TAC § 134.401.
  10. Carriers’ audit rights are not limited by 28 TAC § 134.401(c)(6)(A)(v) when the Stop-Loss Reimbursement Methodology applies. In such cases, carriers may audit in accordance with 28 TAC § 134.401(b)(2)(C). 28 TAC § 134.401.
  11. Pursuant to 28 TAC § 133.307(j)(2), any defense or reason for denial of a claim not asserted by a carrier before a request for medical dispute resolution may not be considered at the hearing before SOAH, whether or not it arises out of an audit. 28 TAC § 133.307 (effective at the time of the dispute at issue.)
  12. There is no additional requirement for a hospital to separately establish that any or all of the services were unusually costly or unusually extensive in order to for a provider to establish eligibility to apply the Stop-Loss Reimbursement Methodology. 28 TAC § 134.401.
  13. The Stop-Loss Reimbursement Methodology applies in this case.
  14. Carrier’s assertion that some of the services were not medically necessary should not be considered at the hearing. Tex. Lab. Code Ann. § 408.027(e); 133.304(c) (effective at the time of this dispute); and 28 TAC § 133.307(j)(2) (effective at the time of this dispute).
  15. Carrier’s assertion that some of the services were not properly documented should not be considered at the hearing. Tex. Lab. Code Ann. § 408.027(e); 28 TAC §§ 133.301(a) (effective at the time of this dispute); 133.304(c) (effective at the time of this dispute); and 28 TAC § 133.307(j)(2) (effective at the time of this dispute).
  16. Carrier should pay Vista $88,643.11, plus any applicable interest.

ORDER

It is hereby ORDERED that American Home Insurance Company reimburse the Vista Hospital of Dallas the additional sum of $88,643.11, plus any applicable interest, for services provided to Claimant.

Signed 27, 2007.

JAMES W. NORMAN

ADMINISTRATIVE LAW JUDGE
STATE OFFICE OF ADMINISTRATIVEHEARINGS

  1. In its August 23, 2005 order, MRD concluded that the Stop-Loss Exceptions of the Division’s 1997 Acute Care Inpatient Hospital Fee Guideline (ACIHFG), 28 Tex. Admin. Code (TAC) § 134.401, did not apply to this case because Vista’s services were not unusually costly as contemplated by the ACIHFG.
  2. The 1997 ACIHFG established a general reimbursement scheme for all inpatient services provided by an acute care hospital for medical and/or surgical admissions using a service-related standard per diem amount. Independent reimbursement is allowed on a case‑by‑case basis if the particular case exceeds the stop‑loss threshold as described in paragraph (6) of 28 TAC § 134.401(c). This independent reimbursement mechanism, the Stop-Loss Method or Stop-Loss Methodology, is sometimes referred to as the Stop-Loss Exception or the Stop-Loss Rule.
  3. Beginning in 2003, the Division began referring a significant number of ACIHFG cases to SOAH. Between 2003 and August 31, 2005, approximately 885 ACIHFG cases were referred to SOAH for contested case hearings on issues including the Stop-Loss Exception, audits, and the reimbursement of implantables. In order to efficiently and economically manage this growing number of cases, SOAH in late 2004 and early 2005 began to join the cases into a stop-loss Docket, and the cases were abated. By the close of the 2005 regular legislative session, SOAH realized a finite, but still unknown, number of stop-loss cases would be referred to SOAH by the Division through August 31, 2005.
  4. Ex. 1 at 69-70.
  5. Ex. 1 at 71-72.
  6. 28 Tex. Admin. Code (TAC) § 134.401(c)(6).
  7. En Banc Panel Order in Consolidated Stop Loss Legal Issues Docket, issued January 12, 2007.
  8. Letter from Catherine C. Egan dated February 23, 2007.
  9. Ex. 1 at 4-14.
  10. Carrier pointed out that the initial preauthorization was for services to be performed between May 27, 2004, and June 30, 2004 (Ex. 1 at 69), but that the services were not performed until July 2, 2004. Ms. Morales agreed with questions from Carrier that the July 2 procedure was not preauthorized. Carrier did not argue this matter in closing. The ALJs are not persuaded by any assertion that the July 2-3 procedure was not preauthorized because Carrier did not include that reason in its EOB as a ground of denial. Under 28 TAC § 133.307(j)(2) (effective at the time of this dispute), a reason for denial not presented to the provider before a request for medical dispute resolution may not be considered. In addition, based on the fact that the Carrier extended the preauthorization for two additional days with full knowledge of the initial two-day stay and date of surgery, the ALJs conclude that Carrier waived any claim that the initial procedure and two-day stay were not preauthorized, i.e., the additional two-day preauthorization is inconsistent with a position that the initial two-day stay was not authorized.
  11. Ex. 1 at 55-59.
  12. The evidence shows that Vista sent its bill to Carrier and that Carrier received it on September 21, 2004. Ex. 1 at 24-25. Vista witness Rita Morales testified that when Carrier did not respond, Vista resent the bill on October 18, 2004. Vista faxed a “Request for Reconsideration” on November 10, 2004. Ex. 1 at 4-15, 29.
  13. Ex. 1 at 4-14.
  14. At one place under the UY (medically unnecessary) denial code, Carrier asserted that $20.45 worth of convenience items, under billing code 270, were not allowed under the guidelines, but again, it did not identify which of the numerous billing code 270 charges it was referring to. There was no specific $20.45 billing code 270 charge in Vista’s bills. Ex. 1 at 4-14. A frequent reason for Carrier’s denial of charges on the basis of medical necessity was the non-medical necessity rationale of “overcharge and/or excessive amount for services rendered.” Ex. 1 at 56-58. Rather than being a medical necessity issue, this assertion appears to be subsumed within the issue of whether to apply the Stop-Loss Exception.
  15. Labor Code 408.027(e); Rules 133.304(c) and 133.307(j)(2).
  16. Construing Rule 133.302(j)(2) to require that grounds for denying a claim that were not stated before medical dispute resolution may not be considered, but not requiring the grounds to be stated in an understandable fashion would lead to contradictory results between the practical functioning of the rule and its intended effect.
  17. As a separate consideration, 28 TAC § 133.301(d)(1) and (5) provides that when an insurance carrier requests additional documentation, it must indicate the specific documentation it is requesting and make the request not later than the 14th day after the receipt of a medical bill. Carrier did not do so in this case.

DECISION AND ORDER

Paul J. Harph (Provider) appealed the findings and decisions of the Texas Workers’ Compensation Commission’s (Commission) Medical Review Division (MRD) in the above causes. The findings and decisions denied reimbursement for surgical procedures performed by Dr. Harph. The issues presented relate to the applicability of modifiers -65 and -22, under the Commission’s medical fee guidelines, to the surgical procedure used. In this decision, the Administrative Law Judge (ALJ) find that Provider is not entitled to reimbursement.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There were no contested issues of jurisdiction, notice or venue. Therefore, those issues are addressed in the findings of fact and conclusions of law without further discussion here.

The hearing in this matter was held December 20, 2001, at the Hearings Facility of the State Office of Administrative Hearings, Stephen F. Austin Building, Suite 1100, 1700 North Congress Avenue, Austin, Texas, with ALJ John H. Beeler presiding. Texas Workers’ Compensation Insurance Fund (the Fund) appeared through its attorney, Jeff Boggess. Provider appeared by telephone and represented himself. The Commission was represented by its assistant general counsel, Timothy Riley. After the introduction of evidence and arguments, the hearing concluded the same day. The record closed on January 25, 2002, after the parties submitted written closing arguments.

II. DISCUSSION

A. Modifier -65

The facts in all of the consolidated cases are basically the same. Though they involve different patients and, therefore, to a small extent different situations, the differences are not significant to the issues here. It is undisputed that the Medical Fee Guideline (MFG) applies to this case. What is in dispute is what payment the MFG allows for the procedure Dr. Harph performed in each case. Each of the patients underwent spinal surgery. The actual procedure done to the spine was the work of a surgeon other than Dr. Harph. Dr. Harph did the approach, or anterior instrumentation. The Fund’s position is that anterior instrumentation is not a primary, but a secondary procedure under the MFG (Surgery Ground Rule I.E.1):

Posterior or anterior instrumentation (codes 22840-22845) is listed separately in addition to code(s) for fracture, dislocation or arthrodesis of the spine (codes 22305-22812). The instrumentation codes should be listed as a secondary procedure, without further reduction . . . .

In addition, the MFG has a special rule that mandates the use of the co-surgeon modifier for arthrodesis, when the surgical approach is performed by a different surgeon. Surgery Ground Rule I.E.2.d. states:

When anterior arthrodesis approach is performed by a different surgeon, both surgeons bill using the anterior arthrodesis CPT code with modifier -65.

Without that rule, the Fund contends, modifier 65 would not even be available for the arthrodesis. That is because the approach, performed by the vascular surgeon, and the fusion itself, performed by the orthopedic surgeon, are not separate procedures.

The MFG’s explanation of modifier -65 is set forth below:

Co-surgeons: If two surgeons each perform separate procedures through the same incision, the total value for each surgeon’s primary procedure shall be reimbursed at 75% of the MAR for each primary surgical procedure. Each surgeon’s primary procedure shall be identified by adding the modifier “-65” to the procedure code.

There is no special rule mandating the use of modifier 65 for instrumentation. Therefore, in the Fund’s view, the co-surgeon modifier is not available for that procedure and it can only pay 100% of MAR. It paid that amount to the primary doctor on the theory that he was the orthopedic surgeon and actually performed the instrumentation. Dr. Harph exposed the vertebrae in preparation for the orthopedic surgeon’s work. Because Dr. Harph was performing a secondary procedure, his payment should come from an agreement between himself and the primary surgeon.

Dr. Harph’s position is that the surgery required the skill of two different surgeons, and he performed the most difficult of the procedures.

B. ALJ’s Analysisof the Modifier -65 issue

The ALJ does not question Dr. Harph’s description of the procedure. Nevertheless, the MFG governs payment for the procedures in question.

Under the MFG, modifier -65 can be applied only to separate primary procedures performed through the same incision and also to arthrodesis and arthrodesis approach, if performed by separate surgeons. Instrumentation is explicitly defined as a secondary procedure. There is no specific provision allowing the instrumentation approach to be treated as if it were a separate procedure. Therefore, modifier -65 cannot be used for instrumentation.

The issue with respect to the -65 modifier’s use on a secondary procedure has been addressed in prior hearings before SOAH. In SOAH Docket No. 453-00-1381.M4, issued on November 9, 2001, ALJ Owens wrote:

Dr. Harph’s use of modifier -65 for instrumentation was also improper, because the MFG does not allow this modifier to be used for a secondary procedure such as instrumentation. This issue was addressed in a Decision and Order issued on June 1, 1999, by Henry D. Card in Texas Workers’ Compensation Insurance Fund v. Texas Workers’ Compensation Commission and Paul J. Harph, Docket No. 453-98-1398.M4. In that decision, ALJ Card held that modifier -65 cannot be used with the instrumentation procedure because instrumentation is explicitly defined by the MFG as a secondary procedure, while the MFG provides that modifier -65 can be applied only to separate primary procedures performed through the same incision and also to arthrodesis and arthrodesis approach, if performed by separate surgeons. The ALJ agrees with this holding in the earlier decision, and so holds here. Therefore, Dr. Harph failed to meet his burden of proving by a preponderance of the evidence that he is entitled to reimbursement for the instrumentation.

The facts and issues in the present case are the same as those discussed by ALJ Owens and addressed by ALJ Card. Dr. Harph is not entitled to reimbursement because the -65 modifier was not proper.

C. Modifier -22

Modifier -22 requires four types of documentation pursuant to Commission rules:

Dr. Harph argues that he is entitled to payment for CPT Codes with the additional modifier -22 representing unusual service based on information in his operative reports. The Fund presented expert testimony to contradict Dr. Harph’s assertion of unusual service, but that issue does not have to be decided as nothing presented by Dr. Harph establishes the value of the service performed as required by number 4 above. With no documentation provided, payment cannot be ordered.

III. Findings of Fact

  1. Respondent Paul J. Harph, M.D. is a vascular surgeon.
  2. Dr. Harph billed the Texas Workers’ Compensation Insurance Fund (the Fund) for surgical procedures using modifiers -65 and -22 in several cases.
  3. The cases described in Finding of Fact No. 2 were consolidated in Docket No. 453-99-1591.
  4. The Fund denied payment to Dr. Harph.
  5. Dr. Harph was the secondary surgeon for the cases described in Finding of Fact No. 2.
  6. Dr. Harph did not provide documentation of value of the services performed and billed with the -22 modifier.
  7. The Medical Review Division (MRD) of the Texas Workers’ Compensation Commission denied payment for the services billed by Dr. Harph.
  8. Dr. Harph appealed the decision of the MRD.
  9. The hearing was held December 21, 2001 at the offices of the State Office of Administrative Hearings in Austin, Texas with Administrative John H. Beeler presiding. Attorney Jeff Boggess represented the Fund. Timothy P. Riley represented the Commission. Dr. Harph participated by telephone and represented himself. After the presentation of evidence and arguments, the hearing was adjourned. The record was closed January 25, 2002, after the parties submitted written closing arguments.

V. Conclusions of Law

  1. The Texas Workers’ Compensation Commission (the Commission) has jurisdiction over this matter pursuant to Section 413.031 of the Texas Workers’ Compensation Act (the Act), TEX. LAB. CODE ANN. chapter 401 et seq.
  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. chapter 2003.
  3. Adequate and timely notice of the hearing was provided in accordance with TEX. GOV’T CODE ANN.§2001.052.
  4. Under the MFG, modifier 65 cannot be used for instrumentation.
  5. Reimbursement to Dr. Harph is not proper under MFG for modifiers -22 because no documentation of value of services was provided.

ORDER

IT IS, THEREFORE, ORDERED that Respondent, the Texas Workers’ Compensation Insurance Fund, shall not be required to reimburse Paul J. Harph, M.D.

Signed this 25th Day of March 2002.

JOHN H. BEELER

Administrative Law Judge
State Office of Administrative Hearings

DECISION AND ORDER

____ (Claimant) challenges the denial of reimbursement by ______ (______) for services provided to an injured worker. The Administrative Law Judge (ALJ) concludes that Claimant did not timely file a request for medical fee dispute resolution. Consequently, Claimant is not entitled to reimbursement.

I.JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no disputed issues of notice or jurisdiction. Therefore, those matters are set out in the Findings of Fact and Conclusions of Law without further discussion here.

Claimant filed a request for medical fee dispute resolution with the Texas Department of Insurance, Division of Workers’ Compensation (Division) on May 12, 2011, which concerned disputed dates of medical service from April 9, 2009, through December 21, 2010. On September 14, 2011, the Division issued its Medical Fee Dispute Resolution Findings and Decision. On October 5, 2011, Claimant requested a hearing at the State Office of Administrative Hearings (SOAH) to contest the Division’s determination. On October 31, 2011, the Division issued a Notice of Hearing. The hearing was held October 16, 2012, before ALJ Steven D. Arnold, at the SOAH offices located in Austin, Texas. Claimant was represented by Anthony Walker, Ombudsman. ______ was represented by attorney John V. Fundis. The record closed on January 11, 2013, following the submission of supplemental written briefs.

I.APPLICABLE LAW

Requests for medical fee dispute resolution, such as are involved in this case, are governed by 28 Tex. Admin. Code § 133.307. Because the medical fee dispute resolution in this case was filed before June 1, 2012, the current version of the rule does not apply; rather, the rule in effect at the time of the medical fee dispute resolution controls.[1]

Under the version of Rule 133.307 in effect at the time of the medical fee dispute resolution, an injured employee may be the requestor in a medical fee dispute when the injured employee seeks reimbursement of medical expenses paid by the injured employee.[2] The rule then requires that requests for medical fee dispute resolution shall be filed in the form and manner prescribed by the Division.[3] One of the mandatory requirements is that the request be filed in a timely manner.[4] Rule 133.307 provides the following regarding the timeliness requirement:

(A) A request for medical fee dispute resolution that does not involve issues identified in subparagraph (B) of this paragraph shall be filed no later than one year after the date(s) of service in dispute.

(B) A request may be filed later than one year after the date(s) of service if:

  1. a related compensability, extent of injury, or liability dispute under Labor Code Chapter 410 has been filed, the medical fee dispute shall be filed not later than 60 days after the date the requestor receives the final decision, inclusive of all appeals, on compensability, extent of injury, or liability;
  2. a medical fee dispute regarding medical necessity has been filed, the medical fee dispute must be filed not later than 60 days after the date the requestor received the final decision on medical necessity, inclusive of all appeals, related to the health care in dispute and for which the carrier previously denied payment based on medical necessity; or
  3. the dispute relates to a refund notice issued pursuant to a Division audit or review, the medical fee dispute must be filed not later than 60 days after the date of the receipt of a refund notice.[5]

The Claimant has the burden of proving by a preponderance of the evidence in the record that he satisfies these requirements and is entitled to payment.

I.EVIDENCE AND ANALYSIS

B.Evidence

Claimant testified on his own behalf and offered two exhibits into evidence, both of which were admitted. _____ offered two exhibits, both of which were admitted.

Claimant filed a Medical Fee Dispute Resolution Request (Form DWC 060) on May 12, 2012.[6] The Medical Fee Dispute Resolution Request concerned disputed dates of medical service from April 9, 2009, to December 21, 2010.[7] On September 14, 2011, the Division issued its Medical Fee Dispute Resolution Findings and Decision (Decision), ordering that Claimant be reimbursed for the following dates of service totaling $170.00: June 14, 2010; July 20, 2010; September 21, 2010; and December 21, 2010.[8]

The Decision also determined that Claimant was not entitled to reimbursement for dates of service from April 9, 2009, through April 12, 2010, because the Medical Fee Dispute Resolution Request was not timely filed for those dates of service as required by 28 Tex. Admin. Code § 133.307.[9]

Claimant presented evidence that he argues demonstrates that ___ claims management service, Sedgewick Claims Management Service, Inc. (Sedgewick), did not effectively or efficiently process his claims and that Sedgewick contributed to the delay in filing the Medical Fee Dispute Resolution Request.[10]

Claimant also argues that there was a “related” dispute between the parties (i.e., one that relates to the request for reimbursement) which could trigger the automatic extensions of time to file the Medical Fee Dispute Resolution Request. Claimant submitted a Final Decision, issued October 29, 2009, which dealt with a dispute regarding the extent of injury.[11] _____ argues that there was no dispute concerning the compensability (i.e., whether Claimant sustained a compensable injury), as that was agreed by the parties,[12] and that any extension received as a result of the Final Decision would not impact the timeliness of filing for the disputed dates of service.

Finally, Claimant argues that he was entitled to a 60‑day extension because he entered into a Benefit Dispute Agreement on March 11, 2011, concerning date of maximum medical improvement, impairment rating, and disability.[13] ______ responds that the disputes resolved by the agreement do not concern whether the Claimant sustained a compensable injury (i.e., was injured in the course and scope of employment), what is the proper extent of the compensable injury (i.e., does the compensable injury extend to include certain diagnosed conditions), or whether ______ is or is not liable for payment of the compensation.[14] Rather, the agreement concerns Claimant’s entitlement to income benefits. Thus, according to ______, because there is no related dispute regarding compensability, extent of injury, or liability, Claimant’s argument that the agreement grants him an additional 60 days is misplaced. Further, _____ argues, the matters involved in the agreement – disability, maximum medical improvement, and impairment rating – concern and impact only income benefits or the payment of temporary income benefits for the periods of disability and the payment of impairment income benefits for the impairment rating received by Claimant. According to ______, these are not matters at issue in this proceeding.

_____ also argues that Claimant is not entitled to reimbursement in this proceeding because Claimant failed to present evidence of preauthorization of treatment as required,[15] Claimant failed to establish that the health care was treatment for the compensable injury,[16] and Claimant engaged in fraudulent conduct by submitting claims for non‑medical expenses and attempting to receive double recovery for amounts spent. With respect to the first two grounds, Claimant responds that previous SOAH decisions prohibit a party, such as _____, from raising at SOAH grounds that were not raised before the Division. As to the third, Claimant testified that the non‑medical expenses were either included by mistake or were intentionally included to test whether the submitted bills were actually being reviewed.

A.Analysis

Claimant failed to submit the Medical Fee Dispute Resolution Request within one year of the dates of the medical services in dispute as required by 28 Tex. Admin. Code § 133.307(c)(1)(A). That requirement is mandatory and the attempts to resolve the matter with ____ and its claims management service do not constitute grounds for extension of that deadline. To the extent that Claimant’s October 29, 2009, Final Decision provides grounds for an extension does not provide Claimant solace – the extension would be 60 days and that period would have passed by the time Claimant filed his Medical Fee Dispute Resolution Request. Claimant’s March 11, 2011, Benefit Dispute Agreement does not aid Claimant’s cause. As _____ argued, that agreement concerned only income benefits and does not address matters related to compensability, extent of injury, or liability. Claimant is correct that ____ is barred from raising at hearing defenses that it failed to raise before the Division.[17]

Accordingly, the ALJ concludes that Claimant did not timely file a request for medical fee dispute resolution and is not, therefore, entitled to reimbursement.

I.FINDINGS OF FACT

  1. _____ (Claimant) challenges the denial of reimbursement by ______ (____) for services provided to him as an injured worker.
  2. Claimant filed a Medical Fee Dispute Resolution Request (Form DWC 060) on May 12, 2012.
  3. The Medical Fee Dispute Resolution Request concerned disputed dates of medical service from April 9, 2009, to December 21, 2010.
  4. On September 14, 2011, the Division issued its Medical Fee Dispute Resolution Findings and Decision (Decision), ordering that Claimant be reimbursed for the following dates of service totaling $170.00: June 14, 2010; July 20, 2010; September 21, 2010; and December 21, 2010.
  5. The Decision also determined that Claimant was not entitled to reimbursement for dates of service from April 9, 2009, through April 12, 2010, because the Medical Fee Dispute Resolution Request was not timely filed for those dates of service as required by 28 Tex. Admin. Code § 133.307.
  6. Claimant did not submit a Medical Fee Dispute Resolution Request for dates of service from April 9, 2009, through April 12, 2010, within one year after the date the medical services were provided.
  7. On October 5, 2011, Claimant requested a hearing at the State Office of Administrative Hearings (SOAH) to contest the Division’s determination.
  8. On October 31, 2011, 2012, the Division issued a Notice of Hearing. The notice informed the parties of the date, time, and location of the hearing; the matters to be considered; the legal authority under which the hearing would be held; and the statutory provisions applicable to the matters to be considered.
  9. The hearing was held October 16, 2012, before ALJ Steven D. Arnold, at the SOAH offices located in Austin, Texas. Claimant was represented by Anthony Walker, Ombudsman. ____ was represented by attorney John V. Fundis. The record closed on January 11, 2013, following the submission of supplemental written briefs.

XIX.CONCLUSIONS OF LAW

  1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031 and Tex. Gov’t Code ch. 2003.
  2. Adequate and timely notice of the hearing was provided. Tex. Gov’t Code §§ 2001.051 and 2001.052.
  3. Subject to certain exceptions, failure of a claimant to timely submit a Medical Fee Dispute Resolution Request constitutes a forfeiture of the claimant’s right to reimbursement for that claim for payment. 28 Tex. Admin. Code § 133.307(c)(1)(A).
  4. Claimant had the burden of proof in this proceeding by a preponderance of the evidence.
  5. Claimant did not prove he timely submitted a Medical Fee Dispute Resolution Request as required by 28 Tex. Admin. Code § 133.307(c)(1)(A).
  6. Claimant did not prove he was entitled to reimbursement for services performed on the Claimant.

XXXI.ORDER

_____ is not required to pay Claimant any reimbursement for services provided to the Claimant for dates of service from April 9, 2009, through April 12, 2010.

Issued March 11, 2013.

  1. 28 Tex. Admin. Code § 133.307(a)(1).
  2. 28 Tex. Admin. Code § 133.307(b)(3) (2007 version).
  3. 28 Tex. Admin. Code § 133.307(c) (2007 version).
  4. 28 Tex. Admin. Code § 133.307(c)(1) (2007 version).
  5. 28 Tex. Admin. Code § 133.307(c)(1)(A) and (B) (2007 version).
  6. Claimant Ex. 1 at 3.
  7. Claimant Ex. 1 at 4-5.
  8. Claimant Ex. 1 at 1-2.
  9. Claimant Ex. 1 at 2.
  10. See generally, Claimant Ex. 1.
  11. Claimant Ex. 1 at 12.
  12. Claimant Ex. 1 at 16.
  13. Claimant Ex. 2.
  14. 28 Tex. Admin. Code § 133.307(c)(1)(B)(1) (2007 version).
  15. 28 Tex. Admin. Code § 134.600.
  16. 28 Tex. Admin. Code § 180.22(a).
  17. Stacy J. Meeks, D.C. v. Texas Workers’ Compensation Commission, Medical Review Division, and American Casualty Company of Reading, PA, SOAH Docket No. 453-99-0410.M2 (June 11, 1999); Liberty Mutual Fire Insurance Company v. Texas Workers’ Compensation Commission and Joseph Oei, M.D., SOAH Docket No. 453‑96-0175.M2 (Aug. 5, 1996); Connie S. Nipp and O.D. Ralston, M.D. v. Texas Workers’ Compensation Commission, Medical Review Division, and Insurance Company of the State of Pennsylvania, SOAH Docket No. 453‑96‑1022.M2 (July 24, 1996); Stephen L. Wilson, M.D. v. Texas Workers’ Compensation Commission and Travelers Insurance Company, SOAH Docket No. 453‑97‑1189.M2 (Oct. 6, 1997); Sylvia Lamas v. Texas Workers’ Compensation Commission, Medical Review Division, and Security National Insurance Company, SOAH Docket No. 453‑97‑1606.M2 (Mar. 17, 1998); Texas Workers’ Compensation Insurance Fund v. Texas Workers’ Compensation Commission and Nervchek, SOAH Docket No. 453‑96‑0720.M4 (Nov. 26, 1996).

DECISION AND ORDER

Parker City Pharmacy (Provider) seeks reimbursement of $3,269.55 from Continental Casualty Insurance Company (Carrier) for prescription medications it dispensed to an injured worker (Claimant) on December 27, 2004, and January 24, 2005. The Administrative Law Judge (ALJ) finds the Provider is not entitled to reimbursement.

I.JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no issues of notice or jurisdiction. Therefore, these matters are addressed in the Findings of Fact and Conclusions of Law without discussion here.

On August 22, 2005, Provider filed a request for medical fee dispute resolution with the Medical Review Division (MRD) of the Texas Department of Insurance, Division of Workers’ Compensation (DWC, known in 2005 as the Texas Workers’ Compensation Commission). On December 28, 2012, the MRD issued its Medical Fee Dispute Resolution Findings and Decision (MRD Decision) ordering no reimbursement for the prescribed medications. On January 10, 2013, Provider timely requested a medical fee dispute hearing before the State Office of Administrative Hearings (SOAH) to contest MRD’s determination.

A hearing convened before ALJ Steven M. Rivas on March 18, 2013, at SOAH’s facilities in Austin, Texas. Provider’s president, Douglas Parker, appeared on behalf of Provider. Carrier was represented by attorney James Loughlin. The record closed the same date.

II.DISCUSSION

A.Applicable Law

This case is governed by Texas Labor Code (Labor Code) § 401.001et seq., also known as the Texas Workers’ Compensation Act (Act). The workers’ compensation insurance program created by the Act covers all medically necessary health care.[1] A health care provider is entitled to review of a medical service provided if it is denied payment for the service.[2]

A provider that is dissatisfied with a carrier’s denial of reimbursement of a medical bill shall send a copy of the medical bill to the carrier clearly marked “REQUEST FOR RECONSIDERATION” for further consideration.[3] All provider requests for medical dispute resolution (MDR) shall include a copy of each explanation of benefits (EOB) or, if no EOB was received, convincing evidence that the carrier received the provider’s request for an EOB.[4]

B.Evidence

Background Facts

Claimant sustained a work-related injury on ____, and at some point sought treatment with ___ Marmel, M.D., in San Antonio, Texas. Dr. Marmel prescribed medication to treat Claimant’s pain. Provider, a pharmacy, began filling the prescriptions in October 2002 on a regular basis. Mr. Parker testified that, from October 2002 to November 2004, Carrier reimbursed Provider $72,712.49 for prescribed medications that were dispensed to Claimant. However, Carrier denied a $1,670.35 reimbursement claim for a prescription that was filled on December 27, 2004, for oxycodone and hydrocodone/APAP (commonly referred to as Vicodin). Carrier also denied a $1,599.30 reimbursement claim for a prescription of oxycodone that Provider filled on January 24, 2005. Provider stopped filling prescriptions for Claimant following these denials. The total disputed amount is $3,269.65.

Provider received Carrier’s TWCC-62 Explanation of Benefits (EOB) form, which reflected “extent of injury” as the reason for the denial.[5] On May 23, 2005, Provider’s bookkeeper, D, submitted Provider’s initial request for MDR with the MRD. On June 14, 2005, the MRD advised Provider that the MDR request was incomplete because Provider had not resubmitted the denied claims to Carrier for reconsideration.[6]

On June 16, 2005, Ms. D resubmitted the request for MDR with the MRD,[7] and was notified on June 27, 2005, that the request was again incomplete because it failed to provide proof that Provider resubmitted the claims to Carrier for reconsideration.[8] In response, Ms. D wrote a letter to the MRD on July 22, 2005, indicating she had been assured by Carrier representative Theresa Borzik that the claims would be paid.[9]

On August 12, 2005, the MRD again notified Provider that its request for MDR remained incomplete and could not be processed because Provider had not submitted two copies of the MDR request to the MRD and still had not forwarded a request for reconsideration to Carrier for the denied claims. In response, on August 19, 2005, Ms. D submitted two copies of the request for MDR to the MRD as well as another copy of form TWCC-66a with the words “request for reconsideration” handwritten on the form in red ink.

The MRD received and accepted Provider’s request for MDR on August 22, 2005. Provider’s request for MDR indicated the matter was a fee dispute.[10] On September 6, 2005, the MRD informed Provider that it had evaluated Provider’s request for MDR and determined that, despite the Carrier’s “extent of injury” challenge on its EOB, the issues in dispute were related to reimbursement based on fee issues only.

The MRD Decision was issued several years later, on December 12, 2012.[11] The MRD found that Provider failed to file its request for MDR in accordance with applicable rules. Specifically, the MRD found Provider failed to resubmit the denied claims to the Carrier for reconsideration pursuant to Texas Administrative Code title 28, § 133.304. Additionally, the MRD found that Provider failed to include a copy of the EOBs to the MRD with its request for MDR as required by Texas Administrative Code title 28, § 133.307. For these reasons, the MRD concluded Provider was not entitled to reimbursement.

Provider

Mr. Parker testified that, in 2005, he contacted Ms. Borzik in an effort to determine why Carrier denied reimbursement for the prescriptions in question. She offered no explanation, and merely informed Mr. Parker that treatment rendered (medications dispensed) did not guarantee reimbursement. Next, Mr. Parker discussed the matter with Claimant’s treating physician, Dr. Marmel, who contended that the medications were medically necessary to manage Claimant’s pain. But having no understanding of why the claims were denied, Provider’s former bookkeeper, Ms. D, initiated a request for MDR.

Provider’s current bookkeeper, S. E., testified that, although she did not work on this claim, she is familiar with the file. Ms. E believes Provider submitted all documents that were requested by the MRD, including all documents in Provider’s possession regarding this claim. However, Ms. E could not specifically identify which documents were submitted to the MRD as part of Provider’s request for MDR.

Carrier

Carrier did not present any witness testimony but instead pointed out, as did the MRD Decision, Provider failed to submit any EOBs to the MRD with its request for MDR. Carrier asserted that, although Provider offered an EOB (Page 17 of Provider’s Exhibit No. 2) to the ALJ, the EOB should have been previously provided to the MRD. Carrier also noted that no EOBs were included in Provider’s Exhibit No. 1 identified as “document submitted to MDR.” Carrier argued that, because Provider did not submit the required EOBs with its request for MDR, it did not comply with MRD’s § 133.307 of DWC’s rules. As such, it should not be reimbursed for its claims.

C.Analysis and Conclusion

The Carrier’s EOB clearly indicates payment was denied based on “extent of injury.” Yet, despite Carrier’s initial “extent of injury” challenge, this matter progressed through MRD as a fee dispute even though Carrier’s extent of injury challenge should have been resolved before the MRD considered any fee dispute. Under Texas Administrative Code title 28, § 133.305(b), if a dispute regarding extent of injury exists for the same service for which there is a medical fee dispute, the dispute regarding extent of injury shall be resolved prior to the submission of a medical fee dispute for the same services. Because neither party raised this issue with the MRD, it progressed as a fee dispute. Likewise, the ALJ considered this matter on the basis of a fee dispute. Hence, the issue for the ALJ to determine is whether Provider complied with applicable fee dispute rules in its request for MDR with the MRD. Although Provider offered a copy of one EOB to the ALJ at the hearing, it failed to comply with § 133.307 by failing to submit any EOBs to the MRD with its request for MDR.

Provider also failed to submit its medical bills to the Carrier for reconsideration, which is a requirement under § 133.304(k)(1)(A) as noted in the MRD Decision. The applicable form TWCC-66a was submitted to the MRD marked “request for reconsideration” in red ink, but it was not submitted to the Carrier prior to Ms. D initial request for MDR. Ms. E candidly admitted that, although she is familiar with Claimant’s file, she was not Provider’s bookkeeper in 2005 and does not know precisely how Ms. D processed this claim.

The evidence sufficiently supports the MRD Decision that no EOBs were submitted and that Provider failed to request reconsideration. Provider has the burden to prove it is entitled to reimbursement, but it failed to demonstrate that it properly sought reimbursement under the MRD’s rules in effect at the time. Hence, the ALJ finds Provider is not entitled to the reimbursement it seeks.

III. FINDINGS OF FACT

  1. On ___, a workers’ compensation claimant suffered a work-related injury and, at some point, sought treatment with R M, M.D.
  2. Dr. M prescribed pain medications for the claimant.
  3. Parker City Pharmacy (Provider) filled the claimant’s prescriptions for several years.
  4. Continental Casualty Insurance Company (Carrier) was the responsible workers’ compensation insurer for the claimant.
  5. Carrier denied Provider reimbursement of $1,670.35 and $1,599.30 for prescriptions filled on December 27, 2004, and January 24, 2007.
  6. Following Carrier’s denials of reimbursement, Provider filed a request for medical dispute resolution (MDR) with the Texas Department of Insurance, Division of Workers’ Compensation (DWC), known in 2005 as the Texas Workers’ Compensation Commission.
  7. After several incomplete requests for MDR, the DWC’s Medical Review Division (MRD) accepted Provider’s request for MDR on August 22, 2005.
  8. On December 28, 2012, the MRD issued its Medical Fee Dispute Resolution Findings and Decision (MRD Decision), finding that no reimbursement was owed to Provider.
  9. Provider timely requested a hearing before the State Office of Administrative Hearings (SOAH) to contest the MRD Decision.
  10. A Notice of Hearing informed the parties of the date, time, and location of the hearing; the matters to be considered; the legal authority under which the hearing would be held; and the statutory provisions applicable to the matters to be considered.
  11. A hearing convened before Administrative Law Judge Steven M. Rivas on March 18, 2013, at SOAH in Austin, Texas. Provider was represented by its president, Douglas Parker. Carrier was represented by attorney James Loughlin. The record closed the same date.
  12. Provider did not submit its denied medical bills to the Carrier for reconsideration.
  13. Provider did not submit any EOBs to the MRD as part of its request for MDR.

IV. CONCLUSIONS OF LAW

  1. The State Office of Administrative Hearings has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031 and Tex. Gov’t Code ch. 2003.
  2. Adequate and timely notice of the hearing was provided. Tex. Gov’t Code §§ 2001.051, and 2001.052.
  3. Provider failed to comply with the Division’s rule at Texas Administrative Code title 28, § 133.304(k)(1)(A) by not submitting its denied medical bills to the Carrier for reconsideration.
  4. Provider failed to comply with the Division’s rule at Texas Administrative Code title 28, § 133.307(e)(2)(A) by not submitting any EOBs to the MRD as part of its request for MDR.
  5. Provider is not entitled to reimbursement from Carrier for the prescriptions that were filled for the Claimant on December 27, 2004, and January 24, 2005.

ORDER

IT IS ORDERED thatParker City Pharmacy’s request for additional reimbursement from Continental Casualty Company is denied.

Signed May 17, 2013.

  1. Tex. Lab. Code (Labor Code) § 401.011.
  2. Labor Code § 413.031(a)(1) and 28 Tex. Admin. Code § 133.307.
  3. When Provider’s reimbursement claim was denied, the Division rule in effect was found at Texas Administrative Code title 28, § 133.304(k)(1)(A). The current rule regarding requests for reconsideration, § 133.250, no longer requires a provider to mark “REQUEST FOR RECONSIDERATION” on its medical bills.
  4. The Division rule in effect at the time the services were provided was found at Texas Administrative Code title 28, § 133.307(e)(2)(B). The current rule requiring a provider to submit explanation of benefits (EOB) with its request for medical dispute resolution (MDR) is found at § 133.307(c)(2)(K).
  5. Provider’s Exhibit No. 2, page 17. The undated EOB refers only to the prescription filled on January 24, 2005.
  6. Id. at page 22. The letter stated no “Request for Reconsideration” was stamped on the TWCC-66a, Statement for Pharmacy Services.
  7. Id. at page 26. Ms. D submitted Form TWCC-66a with the words “Request for Reconsideration” handwritten in red ink to the MRD but apparently did not submit this form to Carrier for reconsideration.
  8. Id. at page 30.
  9. Id. at page 33. The letter was mostly illegible but the ALJ was able to discern some of its contents.
  10. Provider’s Exhibit No. 2 at page 27. The box labeled “Fee Reimbursement” was checked on the MDR request form.
  11. Carrier’s Exhibit No. 1.

DECISION AND ORDER

Zurich American Insurance Co. (Carrier) appeals the approval of full reimbursement to Texas Health Fort Worth (Provider) for services provided to an injured worker because the Provider released the injured worker to a rehabilitation facility rather than home. The Administrative Law Judge (ALJ) concludes that under the Inpatient Hospital Fee Guideline (Guideline), the Provider was not entitled to additional reimbursement and is entitled to only $30,914.83.

I.I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no issues of notice or jurisdiction in this proceeding. Therefore, these matters are addressed in the Findings of Fact and Conclusions of Law without further discussion here.

On May 22, 2014, Provider filed a request for medical fee dispute resolution with the Texas Department of Insurance, Division of Workers’ Compensation (Division). On November 6, 2014, the Division issued its Medical Fee Dispute Resolution Findings and Decision finding that Provider was entitled to additional reimbursement of $10,762.60. On December 31, 2015, Carrier requested a hearing at the State Office of Administrative Hearings (SOAH) to contest the Division’s determination. On January 9, 2015, the Division issued a Notice of Hearing. A hearing convened before ALJ Steven D. Arnold on May 4, 2015, at SOAH’s facilities in Austin, Texas. Provider was represented by Workers’ Compensation Claims Auditor Karen Lynch. Carrier was represented by its attorney, James Loughlin. Carrier filed it brief on May 22, 2015, the Division filed an amicus curiae brief that same day, and Provider filed a brief on June 1, 2015, at which point the record closed.

I.II. APPLICABLE LAW

The Texas Labor Code provision relating to reimbursement policies and guidelines states:

The commissioner shall adopt health care reimbursement policies and guidelines that reflect the standardized reimbursement structures found in other health care delivery systems with minimal modifications to those reimbursement methodologies as necessary to meet occupational injury requirements. To achieve standardization, the commissioner shall adopt the most current reimbursement methodologies, models, and values or weights used by the federal Centers for Medicare and Medicaid Services, including applicable payment policies relating to coding, billing, and reporting, and may modify documentation requirements as necessary to meet the requirements of Section 413.053.[1]

I.III. EVIDENCE AND ANALYSIS

B.Agreed Facts

The facts of this case are not in dispute. The parties agreed that the Claimant was admitted to Provider’s facility on September 5, 2013. The Claimant was discharged five days later on September 10, 2013, to Pate Rehabilitation (a Commission on Accreditation of Rehabilitation Facilities accredited post-acute residential treatment program).

Carrier contends that the release of the Claimant to the rehabilitation facility triggers application of the Medicare transfer policy and results in a lower level of reimbursement ($30,914.83).

Provider contends that the Division has never differentiated reimbursement based on whether a claimant was released to home or a rehab facility and that the reimbursement should be $41,677.44 under the Guideline. Therefore, Provider seeks additional reimbursement of $10,762.60.

The Medical Fee Dispute Resolution sided with Provider and found that additional reimbursement of $10,762.60 was appropriate.

A.Parties’ Positions on Applicable Law

Provider argued that since the inception of the new fee schedule in 2008 all of the Department’s decisions on inpatient claims (with or without transfers at the time of discharge) have been at the higher rate unless the provider requested separate reimbursement. This is consistent with the Medical Fee Dispute resolution Findings and Decision, although the Provider alluded to many decisions that supported this position both at hearing and in its brief, none were specifically cited and the only references were anecdotal.

The Carrier argued that the Texas Workers’ Compensation Act, the Guideline, and the preamble to the Guideline establish that the Guideline incorporates the Medicare Acute Care Hospital Inpatient Prospective Payment System (IPPS) Transfer Policy, which limits the amount payable to the Provider in this situation.

Carrier argued that the legislative intent, as expressed in the plain language of this statute, is to adopt the Medicare reimbursement methodologies with only minimal modifications, and only as necessary to meet occupational injury requirements, to achieve standardization. Carrier noted that the emphasis on minimal modifications is repeatedly employed in the 2002 preamble to Rule 134.202, which was the first medical fee guideline adopted pursuant to the legislative directive.[2] Carrier argued that modifications are to be specified in the text of the rule.[3] Carrier contends that this means that the Division does not have to reprint the Medicare policies in its own fee guidelines because it has adopted everything it has not specifically excluded.[4]

Carrier noted that the Division adopted the current Guideline effective March 1, 2008. The Guideline requires workers’ compensation participants to apply Medicare payment policies in effect on the date of service with only those additions or exceptions specifically stated in a rule.[5] According to Carrier, modifications to Medicare payment policies cannot be implied or inferred; they must be specified by rule, and there is no exception for Medicare’s transfer policy specified in the Guideline.

Finally, Carrier pointed to the Division’s response to a commenter who proposed that the Division create an exception to the Medicare payment policies for the Medicare transfer policy when the Division adopted the Guideline:

In regard to inpatient services, the commenter also recommends that the PAF be increased to account for the application of the Medicare transfer rules or that both hospitals be paid the full [Diagnosis Related Group (DRG)] amount.

In regard to the comment concerning Medicare transfer rules, the Division notes that paying both facilities the full DRG in transfer situations would result in significant overpayment for a stay and is contrary to the effective medical cost control provisions of the Labor Code.[6]

The Division noted this provision in its brief, as well, and argued that if the Medicare transfer policy was applicable to the facts of the case, the Medicare transfer policy must be applied.

A.Analysis and Discussion

The Act provides that the Division must adopt guidelines that incorporate the Medicare transfer policy. As discussed in the preamble, the Guideline limits the amount payable to Provider in this situation. The Labor Code makes clear that Medicare’s reimbursement policies are adopted and only limited exceptions are permitted. The Guideline (and, in particular, the preamble to the Guideline) make clear that the transfer policy is not excepted. Accordingly, the Provider is not entitled to additional reimbursement of $10.762.60, and is limited to reimbursement of $30,914.83.

I.IV. FINDINGS OF FACT

  1. Claimant, an injured worker, suffered a compensable injury.
  2. Claimant was admitted to Texas Health Fort Worth (Provider) on September 5, 2013. The principal procedure code listed was for brain meninge repair (other repair of cerebral meninges).
  3. Claimant was discharged five days later on September 10, 2013, to Pate Rehabilitation (a Commission on Accreditation of Rehabilitation Facilities accredited post‑acute residential treatment program).
  4. If the Medicare transfer policy applies to Claimant’s release, Zurich American Insurance Co. (Carrier) would be required to reimburse Provider $30,914.83. If the transfer policy does not apply, Carrier would be required to reimburse Provider an additional $10,762.60.
  5. Provider filed a request for medical fee dispute resolution with the Texas Department of Insurance, Division of Workers’ Compensation (Division).
  6. On November 6, 2014, the Division issued its Medical Fee Dispute Resolution Findings and Decision finding that the Medicare transfer policy did not apply and finding that Carrier must reimburse Provider the additional $10,762.60.
  7. Carrier timely requested a hearing at the State Office of Administrative Hearings (SOAH) to contest the Division’s determination.
  8. On January 9, 2015, the Division issued a Notice of Hearing. The notice informed the parties of the date, time, and location of the hearing; the matters to be considered; the legal authority under which the hearing would be held; and the statutory provisions applicable to the matters to be considered.
  9. The hearing was held May 4, 2015, before Administrative Law Judge Steven D. Arnold, at the SOAH offices located in Austin, Texas. Provider was represented by Workers’ Compensation Claims Auditor Karen Lynch. Carrier was represented by its attorney, James Loughlin. Carrier filed it brief on May 22, 2015, the Division filed an amicus curiae brief that same day, and Provider filed a brief on June 1, 2015, at which point the record closed.

XI.V. CONCLUSIONS OF LAW

  1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order, pursuant to Texas Labor Code § 413.031 and Texas Government Code ch. 2003.
  2. Adequate and timely notice of the hearing was provided in accordance with Texas Government Code§§ 2001.051 and 2001.052.
  3. Carrier had the burden of proof in this proceeding.
  4. The Medicare transfer policy applied to the release of the Claimant to a rehabilitation facility. Tex. Labor Code § 413.011(a); 28 Tex. Admin. Code 134.404(d).
  5. Provider is entitled to reimbursement by Carrier of $30,914.83.

XVII.ORDER

THEREFORE, IT IS ORDERED THAT Zurich American Insurance Co. is required to pay the sum of $30,914.83 to Texas Health Fort Worth as compensation for the services at issue in this case.

I.NON-PREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 Texas Administrative Code § 133.307.h) require the non-prevailing party to reimburse the Division for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires SOAH to identify the non-prevailing party and any costs for services provided by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, Texas Health Fort Worth is the non-prevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

Issued July 29, 2015.

  1. Tex. Labor Code § 413.011(a).
  2. See, 27 Tex. Reg. 4058‑4059, 4066, 4091 (2002).
  3. 27 Tex. Reg. 4068 (2002).
  4. Carrier notes that, for example, the Division’s medical fee guideline creates a specific exception to Medicare’s payments policies for chiropractors so they can participate in the workers’ compensation system citing to 28 Texas Administrative Code § 134.203(a)(6) (“Notwithstanding Medicare payment policies, chiropractors may be reimbursed for services provided within the scope of their practice act.”).
  5. 28 Tex. Admin. Code § 134.404(d).
  6. 33 Tex. Reg. 418 (2008).

DECISION AND ORDER

This case is a dispute over whether National Union Fire Insurance Company of Pittsburgh Pa. (Carrier) should pay a claim filed by Back & Joint Clinic (Clinic) for services performed on an injured worker (Claimant) from June 19, 1999, through February 2, 2000. The Texas Workers’ Compensation Commission (Commission) Medical Review Division (MRD) ordered the Carrier to pay $7,896.00. This decision concludes that the Carrier should pay for the majority of the disputed services because it pre-authorized the services and is precluded from denying the Clinic’s claim on the ground of medical necessity. Overall, the Carrier should pay $7,280.50.

I. PROCEDURAL HISTORY

Hearings were held in this case on June 18, 2002, August 28, 2002, and March 17, 2003, before James W. Norman, Administrative Law Judge (ALJ), at the State Office of Administrative Hearings (SOAH), 4th Floor, William P. Clements Building, 300 West 15th Street, Austin, Texas. The Carrier was represented by Attorney Steven M. Tipton. Attorney Scott Hilliard represented the Clinic.

After the June 18, 2002, hearing convened, the parties and the ALJ agreed it would be more efficient to try first the threshold issue of whether the Carrier pre-authorized treatment to the Carrier’s lumbar spine. A Commission hearing officer had ruled on January 26, 1999, that the Claimant’s compensable injury was limited to his lumbar spine. The Carrier contended its review agent’s pre-authorization was to the cervical spine only. Both parties said this decision would largely control the case. The Clinic asked to recess the hearing for time to research and prepare testimony specifically on this issue. The Carrier did not object, and the motion was granted.

The hearing reconvened on August 28, 2002. After the presentation of evidence, the Carrier conceded that the evidence did not support its position that its pre-authorization approvals were limited to the cervical spine and agreed that a lack of pre-authorization is not an issue in this case. However, the Carrier still asserted that SOAH has no jurisdiction to order medical benefit payments in cases where it has yet to be determined that the medical treatment was for the compensable injury. The Carrier contended compensability issues are exclusively within the Commission’s jurisdiction to determine.[1] The parties submitted extensive briefing on this issue. In an order dated December 6, 2002, the ALJ ruled that SOAH does have jurisdiction to consider the matters appealed given the facts that: the Carrier invoked SOAH’s jurisdiction by appealing the MRD decision; the matters appealed (such as whether the services are medically necessary) are within the general jurisdiction of SOAH/MRD to decide; and there is no evidence that the Commission Hearing Division has pending compensability issues applicable to the services in dispute in this case.

The hearing reconvened on March 17, 2003, and concluded on that date.

There were no additional challenges to notice or jurisdiction, and those matters are set forth in the findings of fact and conclusions of law.

II.DISCUSSION

The parties said at the March 17, 2003, hearing that the remaining issues were: whether the Carrier could contest the medical necessity of certain treatments and services it had previously pre-authorized; if it could, whether those services were medically necessary; and whether certain other services, consisting of office visits on October 26, 1999, and January 7, 2000, a functional capacity evaluation (FCE) on January 3, 2000, range of motion (ROM) testing on August 17, 1999, and muscle testing and ROM testing on October 26, 1999, were medically necessary.

A. Background

An employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury, as and when needed. The employee is specifically entitled to health care that: (1) cures or relieves the effects naturally resulting from the injury; (2) promotes recovery; or (3) enhances the ability to return to or retain employment. Tex. Labor Code Ann. § 408.021. "Health care" includes "all reasonable and necessary medical . . . services." Tex. Labor Code § 401.011(19).

On_________, the Claimant, a _____ man, suffered low back pain while helping a co-worker push a dolly. He had a previous low-back injury in_____. He first presented to the Clinic on June 19, 1998.

B. Whether the Carrier May Contest the Medical Necessity of Pre-authorized Treatments

The Carrier pre-authorized several physical medicine sessions.[2] As previously indicated, the Carrier conceded that its pre-authorized approval included the lumbar spine.

Parties

The Carrier argued that it could contest the medical necessity of the treatments despite the its pre-authorization because the Clinic either misrepresented or fraudulently stated the facts in its pre-authorization request. It cited language from TWCC rule-adoption preambles saying a pre-authorization can be challenged if it was obtained by fraud or misrepresentation.

The Carrier argued it was not precluded from asserting that the pre-authorization was obtained by misrepresentation/fraud by failing to expressly assert that matter in its TWCC 62/EOBs denying payment for the service.[3] It pointed out there was no specific denial code for that assertion. It contended the denial code “U” (unnecessary treatment without peer review)[4] that it used was adequate because the treatments were in fact unnecessary and its pre-authorizations of medical necessity were invalidly obtained. It asserted that at the time it denied the Clinic’s claim, insurers were simply required to use denial codes they thought were appropriate with no requirement for any additional explanation. It maintained if a party is going to be put in jeopardy of waiving a defense by failing to assert it, the duty to assert it should be unambiguously clear.

The Carrier stressed its position that the only real chance it has had to review the medical necessity of the treatments was through a retrospective review, given the fact that the pre-authorizations were obtained by fraud/misrepresentation. The Carrier also arguedit is only necessary to raise the misrepresentation/fraud issue at the time the provider raises the defense of pre-authorization to the Carrier’s assertion that the services were medically unnecessary. It reasoned that because the provider’s assertion that the services were pre-authorized is essentially an affirmative defense, it is only necessary to counter it when it is asserted.

The Clinic contended as follows:

Analysis

This decision concludes the Carrier is precluded from now asserting that the pre-authorizations were procured through fraud/misrepresentation because it did not assert that matter when it denied the claim or in its response to the Clinic’s request for medical dispute resolution. The following matters are significant to this conclusion:

The ALJ agrees with the majority view in previous SOAH dockets which hold that an insurer may not assert a reason for denying a claim that was not stated prior to the filing of a request for medical dispute resolution.[9] These decisions were based largely on § 408.027(d) of the Labor Code, which states that if an insurer disputes the amount of payment or the health care provider’s entitlement to payment, it must send to the Commission, the provider, and the injured employee a report that “sufficiently explains the reasons for the reduction or denial of payment. . . .” The Carrier did not raise the fraud/misrepresentation issue until the SOAH hearing.

C. Medical Necessity of Additional Services

The remaining disputed services are office visits on October 26, 1999, and January 7, 2000, an FCE on January 3, 2000, ROM testing on August 17, 1999, and muscle testing and ROM testing on October 26, 1999. The issue is whether the services were medically necessary.[10]

Carrier

The Carrier argued that two peer reviews-one dated April 18, 2000, from Dorothy Leong, M.D., a specialist in physical medicine and rehabilitation,[11] and the other dated May 10, 1999, from Patti Cates, D.C.[12]-showed the services were not medically necessary. It asserted that both doctors said the Claimant’s back problems had resolved. It contended that the Claimant’s _____, injury was merely a back strain superimposed on an existing injury that by any measure had independently resolved before the services were provided.

Dr. Leong’s letter said “. . . there is no objective indication to support the necessity of continued treatment as it relates to the injury date of 06/11/98. The MRI study of the lumbar spine was reviewed and there is no indication from the MRI to support the allegations of continued low back pain with radiation to bilaterally lower extremities as [unintelligible] as of 2/10/00.”

After reviewing relevant records, Dr. Cates said

In my opinion, the injury on _____ by the claimant was documented on June 19, 1998, by Dr. Opersteny as an acute exacerbation of low back pain at work, due to pushing and prolonged standing. . . On September 16, 1998, an examination from the Back and Joint Clinic reportedly revealed the claimant to have good range of motions documented. While overlooking the examinations performed by Back and Joint Clinic on August 21, September 16, November 9, 1998, and February 16, 1999,[13] I have noted that on September 16, 1998, no pain was noted in lumbar range of motion. Sitting and supine straight leg raising was noted at 90 degrees bilateral. Seated Kemps’ test and medical hip rotation noted painful bilaterally on all examination visits. Heel walk and toe walk was noted on Sept. 16, 1998, as within normal limits. Lumbar postural evaluation and weight bearing were noted as within normal limits. In comparison of all examination visits, on November 9, 1998, and on February 16, 1999; these examinations found more positive findings in the lumbar spine and in the wrist area than ever noted before in any prior examinations performed by Back and Joint Clinic. Per the DeLorme muscle testing performed on September 21, 1998 and October 16, 1998, the claimant had overall increased muscle strength noted on October 16, 1998.

Necessity of treatment of active and passive modalities past the October 16, 1998, DeLorme’s muscle test, I feel has not been beneficial to the claimant. MRI of the lumbar spine revealed some mild generalized disc desiccation changes with some ligament and facet hypertrophic changes. With the comprehensive testing and examination on September 16, 1998, showing results that are revealing SLR at 90 degrees, no pain in the lumbar range of motion, I feel the claimant has reached a static end point to his chiropractic care on or about October 16, 1998, and that a home exercise program could be implemented. (Emphasis in original.)

Clinic

The Clinic contended the burden of proof was on the Carrier because MRD ruled against it. It pointed out that the Carrier’s peer reviews opine that treatments are unnecessary rather than addressing office visits and diagnostic procedures.

The Clinic addressed each disputed service as follows:

a. January 7, 2000, Office Visit

The Clinic cited pages 296 and 297 of the certified record relating to the office visit, where

the Claimant reported pain in numerous areas, including his lumbar spine. The Claimant was approved to return to work with restrictions. The Clinic contended the office visit was justified because the doctor met with the Claimant to say he could return to work under restricted conditions.

b. October 26, 1999, Office Visit, Muscle Testing, and ROM Testing

The Clinic indicated CPT code 99215 for this office visit is probably the highest level of office visit. It occurred at the same time as muscle and ROM testing and included a discussion of the tests.

At pages 274 and 275 of the certified record, the testing is described in detail; the Claimant’s level of pain, including lumbar pain, and progress are also described. The Claimant reported decreased pain levels since his last visit. The Claimant’s test results are discussed beginning at page 151 and the rationale for the testing is stated as periodic monitoring of the rehabilitation process to prevent over utilization, assessment of patient progress and compliance, and setting future workout limits. The Clinic also said the test values determine the extent of the disability, quantify performance deficiencies, help detect and prove malingering, evaluate rehabilitation goals and progress, and help determine the type of rehabilitation program to be followed. The Clinic reported that the Claimant did not meet minimum acceptable performance levels, although there had been improvement since his last visit. A treatment plan is stated beginning at page 159.[14]

c. January 3, 2000, FCE

The Clinic argued the FCE was necessary because it gave a thorough breakdown of the Claimant’s physical abilities and lead to his being released to return to work. The FCE report also recounted the Claimant’s medical history since his________, injury. The examining doctor said he could return to work with restrictions.[15]

d. August 17, 1999, ROM Testing

The Clinic’s records show the results of lumbar ROM testing on August 17, 1999.[16]

Analysis

The preponderant evidence shows the services were not medically necessary. The first basis of this conclusion is the opinions of the peer review doctors. Dr. Cates based her opinion largely on a September 16, 1998, examination showing good ROM with no pain in the lumbar region. She compared these results with later tests showing more positive findings in the lumbar and wrist areas than in previous tests. She pointed out that an MRI of the lumbar spine revealed some mild generalized disc desiccation changes with some ligament and facet hypertrophic changes. This evidence appears to show the Claimant’s back problems from his________, injury had resolved within approximately three months of the injury.

Although Dr. Leong’s April 18, 2000, opinion focused primarily on the necessity of ongoing rather than previous treatments, she also said the MRI of the lumbar spine did not support continued low back pain complaints.

In addition, the evidence cited by the Clinic does not specifically and expressly state the services/treatments were necessary for treating the_______, injury. The records talk about the Claimant’s pain levels, his test results, the rationale for the testing, the FCE results, and his being approved to return to work. However, to some degree at least, the ALJ is called on to serve as his own expert in concluding that the services were necessary to treat the ____, injury. Although there might be sufficient grounds to do find the services were necessary if there were little or no evidence to the contrary, the peer review opinions against medical necessity carried more weight.

The ALJ was not persuaded by the Clinic’s argument that the peer review doctors addressed only treatments and not office visits and diagnostic procedures. Obviously, if treatments were not necessary at the time of those services, the services themselves would likely be unnecessary as well.

III.FINDINGS OF FACT

  1. On________, the Claimant suffered a compensable injury to his lumbar spine.
  2. The Claimant presented to Back and Joint Clinic (Clinic) on June 18, 1999, after which he received extensive treatment through February 2, 2000.
  3. The treatments and services at issue in this case are certain physical medicine services to the Claimant’s lumbar spine pre-authorized by National Union Fire Insurance Company of Pittsburgh Pa. (the Carrier) as medically necessary and other services, consisting of office visits on October 26, 1999, and January 7, 2000, a functional capacity evaluation (FCE) on January 3, 2000, range of motion (ROM) testing on August 19, 1999, and muscle and ROM testing on October 26, 1999.

Pre-authorized Services

  1. The Carrier claimed the physical medicine services it had pre-authorized were not medically necessary and denied the claim.
  2. The Clinic requested medical dispute resolution before the Texas Workers’ Compensation Commission medical review division (MRD).
  3. In its request for medical dispute resolution, the Clinic pointed out that the services were pre-authorized.
  4. In its response to the Clinic’s request for medical dispute resolution, the Carrier maintained its position that the physical medicine services were medically unnecessary.
  5. At the hearing, the Carrier contended for the first time that the physical medicine service pre-authorizations were obtained by fraud or misrepresentation.

October 26, 1999, and January 7, 2000, Office Visits; January 3, 2000, FCE; August 19, 1999, ROM; and October 26, 1999, Rom and Muscle Testing

  1. The Carrier’s position that the October 26, 1999, and January 7, 2000, Office Visits; January 3, 2000, FCE; August 19, 1999, ROM; and October 26, 1999, Rom and Muscle Testing were medically unnecessary was supported by peer review opinions from medical experts.
  2. A September 16, 1998, examination, approximately three months after the Claimant’s injury, showed he had good ROM with no pain in the lumbar region.
  3. Later tests showed more positive findings in the lumbar and wrist areas than in previous tests.
  4. An MRI of the lumbar spine revealed some mild generalized disc desiccation changes with some ligament and facet hypertrophic changes.
  5. Evidence cited by the Clinic to support the medical necessity of the treatments did not expressly and specifically state the services were necessary to treat the______, injury.

Costs

  1. The MRD ordered the Carrier to pay $7,896.00 to the Clinic.
  2. The amount stated in Finding of Fact No. 14 included $615.50 for the services described in Finding of Fact No. 9.

Notice

  1. 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 the matters asserted.
  2. All parties had an opportunity to respond and present evidence and argument on each issue involved in the case.

IV. CONCLUSIONS OF LAW

  1. The State Office of Administrative Hearings has jurisdiction over matters related to the hearing, including the authority to issue a decision and order. Tex. Labor Code Ann. §413.031(k).
  2. All parties received proper and timely notice of the hearing. Tex. Gov’t Code Ann. §§ 2001.051 and 2001.052.
  3. The Carrier is precluded from asserting that the physical medicine services were obtained by fraud or misrepresentation. Tex. Labor Code Ann. § 408.027(d).
  4. The Carrier may not raise a lack of medical necessity as a reason for denying payment for the pre-authorized physical medicine services. Tex. Labor Code Ann. § 413.014; 28 Tex. Admin. Code § 134.600(a) (effective at the time the services were pre-authorized).
  5. The services described in Finding of Fact No. 9 were not medically necessary. Tex. Labor Code Ann. § 408.021.
  6. The Carrier should pay the Clinic $7,280.50 plus interest.

ORDER

IT IS, THEREFORE, ORDERED that National Union Fire Insurance Company of Pittsburgh Pa. pay Back and Joint Clinic $7,280.50 plus interest.

Signed this 7th day of March, 2020.

JAMES W. NORMAN
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

  1. Compensability issues are determined by the Commission Hearing Division. Tex. Labor Code Ann. ch. 410.
  2. Ex. 1 at 39-52.
  3. Although TWCC Rule 28 TAC§ 133.301(a) now says a Carrier may not retrospectively review the medical necessity of a treatment for which the provider obtained pre-authorization, it was silent on that issue at the time this matter was submitted for medical dispute resolution in June 2000. However, both parties agreed there was a general understanding that a Carrier could not revisit the issue of medical necessity once a treatment was pre-authorized. The ALJ believes this is a correct understanding. Commission Rule 134.600(a), effective at the time the services were pre-authorized, provided that a Carrier is liable for the reasonable and necessary medical costs of health care services it pre-authorized.
  4. Contrary to this description, the Carrier did obtain peer reviews.
  5. Ex. 1 at 412-420.
  6. 28 TAC §133.304(g) (in effect at the time the Clinic filed the dispute with the Commission).
  7. Ex. 1 at 18.
  8. Ex. 1 at 410.
  9. See SOAH Docket No. 453-01-1958.M5 (ALJ Corbitt); SOAH Docket No. 453-01-0309.M5 (ALJ Doherty); SOAH Docket No. 453-00-1570.M5 (ALJ Smith); SOAH Docket No. 453-99-3399 (ALJ Pacey); SOAH Docket No. 453-99-2021.M5 (ALJ Rusch); SOAH Docket No. 453-97-0973.M4 (ALJ Card); and SOAH Docket No. 453-96-0817.M4 (ALJ Corbitt).
  10. The parties cited specific pages of the 486-page certified record as supporting their contentions. The ALJ reviewed the pages cited in determining medical necessity.
  11. Ex. 1 at 412-416.
  12. Ex. 1 at 417-420.
  13. Although a period is inserted here in Dr. Cates’ narrative, the text indicates she intended a comma.
  14. Ex. 1 at 151-161.
  15. Ex. 1 at 165-172.
  16. Ex. 1 at 337. The Clinic cited the certified record at page 165 as evidence of this testing, but that page and the following pages related to the January 3, 2000, FCE. The Clinic did not specifically contend that the August 17, 1999, ROM testing was necessary apart from general arguments applicable to all services.
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