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At a Glance:
Title:
453-01-1604-m4-etal
Date:
May 24, 2002
Status:
Medical Fees

453-01-1604-m4-etal

May 24, 2002

DECISION AND ORDER

This consolidated proceeding (453-01-1601.M4 and 453-01-2211.M4) involves a dispute over whether additional reimbursement is appropriate for durable medical equipment and one service provided by Oxymed, Inc., (Provider) to two different claimants. ____. and __. (Claimants) sustained compensable injuries and underwent spinal surgeries as a result of their compensable injuries. Both Claimants were provided various durable medical equipment and one service as part of their respective treatment. Provider billed Texas Workers’ Compensation Insurance Fund (Carrier) for the equipment and service. Carrier paid what it deemed a fair and reasonable rate. Provider asserts it is entitled to additional reimbursement for the equipment and service rendered to Claimants. The amount in controversy is $930.32.

The Administrative Law Judge (ALJ) concludes the Provider is entitled to additional reimbursement in the amount of $209.04 for the durable medical equipment in dispute.

I.

DISCUSSION

  1. Background Facts
  2. Claimant ____.

There is no dispute that Claimant ____ sustained a compensable injury on_______. Although the record is silent as to the cause of the injury, there is testimony that Claimant ___. underwent lumbar spine surgery following the compensable injury. The medical necessity of the surgery is not in dispute either. As part of the treatment for the compensable injury and surgery, Provider prescribed, among other things, a pillow, shower head, and training for a bone growth stimulator. Provider billed Carrier a total amount of $456.00 for the above mentioned equipment and service. Carrier reimbursed Provider $76.09. Provider filed a request for Medical Dispute Resolution (MDR) with the Medical Review Division (MRD). The MDR, found the equipment and service in this matter were not related to the compensable injury and therefore ordered no further reimbursement for Provider. At the hearing before this ALJ, both parties agreed the MRD misidentified the issue. The parties further agreed the issue is whether or not Carrier paid a fair and reasonable reimbursement for the items and services in question. Provider filed a request for hearing before the State Office of Administrative Hearings (SOAH). Therefore, Provider has the burden of proof in determining whether or not it was reimbursed a fair and reasonable amount for the items prescribed to Claimant ____.

Claimant ____.

Claimant ___. sustained a compensable injury on__________. Although the record is silent as to the cause of the injury, there is testimony that __. underwent cervical spine surgery following the compensable injury. The medical necessity of the surgery is not in dispute either. As part of the treatment for the compensable injury and surgery, Provider prescribed, among other things, a pillow, walker, and three collars. Provider billed Carrier a total amount of $925.55 for the above mentioned equipment. Carrier reimbursed Provider a total of $375.14. Provider filed a request for Medical Dispute Resolution (MDR) with the Medical Review Division (MRD) in this matter. The MRD found Carrier had not reimbursed Provider a fair and reasonable amount for the equipment provided to Claimant ___. The MRD held Provider was entitled to additional reimbursement in the amount of $1,657.45. Carrier filed a request for hearing before SOAH. Carrier has the burden of proof in determining whether or not it issued a fair and reasonable reimbursement amount for the items prescribed to Claimant ___. At the hearing before SOAH, the parties agreed the amount in controversy for Clamant Carlisle is $550.41 because other reimbursement issues had been previously settled.

B. Applicable Law

The Texas Labor Code contains the Texas Workers’ Compensation Act (the “Act”) and provides the relevant statutory requirements regarding compensable treatment for workers’ compensation claims. In particular, Tex. Lab. Code Ann. §408.021 provides in pertinent part:

(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.

Under Tex. Lab. Code Ann. §401.011(19) health care “includes all reasonable and necessary medical aid, medical examinations, medical treatment, medical diagnoses, medical evaluations, and medical services.”

Tex. Lab. Code Ann. §413.011 provides:

  1. The commission by rule shall establish medical policies and guidelines relating to:
    1. fees charged or paid for medical services for employees who suffer compensable injuries, including guidelines relating to payment of fees for specific medical treatments or services;
    2. use of medical services by employees who suffer compensable injuries; and
    3. fees charged or paid for providing expert testimony relating to an issue arising under this subtitle.
  2. 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.
  3. Medical policies adopted by the commission must be consistent with Sections 413.013, 413.020, 413.052, and 413.053.
  4. The commission by rule shall establish medical policies relating to necessary treatments for injuries. Medical policies shall be designed to ensure the quality of medical care and to achieve effective medical cost control.

Analysis

L0172 Philadelphia Collar

Provider furnished a L0172 Philadelphia Collar to Claimant ___. This item was not included in the MRD Findings and Decision. Therefore, Provider has the burden of proving it was denied a fair and reasonable reimbursement for this item.

Carrier relies on various sources when determining reimbursement amounts paid to providers and claimants. For instance, Carrier consults fee guidelines and studies published by the Texas Workers’ Compensation Commission (TWCC) under Tex. Lab. Code Ann. § 413.011. One source Carrier relies on for determining reimbursement rates is the Durable Medical Equipment (DME) Ground Rules of the Commission’s Medical Fee Guideline effective April 1, 1996. Pursuant to the Ground Rules, “reimbursement shall be...the fair and reasonable rate. A fair and reasonable reimbursement shall be the same as the fees for the ‘D’ codes in the 1996 Medical Fee Guideline.”

The L0172 Philadelphia Collar has a corresponding “D” code in the 1996 Medical Fee Guideline. The reimbursement rate for the Philadelphia Collar is $43.85. Since Carrier is instructed to consult the “D” codes in the 1996 Medical Fee Guideline, the amount paid by Carrier was proper. Provider did not establish it was denied a fair and reasonable reimbursement for this item. No additional reimbursement is warranted for the Philadelphia Collar provided to Claimant ____.

E1399 Pillows, L0180 Collar, L0120 Collar

Carrier additionally relies on the DME Fee Schedule for Medicare patients. Under Tex. Lab. Code Ann. § 413.011(b), fee guidelines relied upon by Carriers, “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.” Carrier asserts all workers’ compensation claimants have an equivalent standard of living to Medicare patients. Therefore, Carrier contends it may consult the fee guidelines for Medicare patients when determining reimbursement rates for workers’ compensation claimants and providers. In support of this assertion, Carrier points to the language of the Texas Register at 22 TexReg 6270, 6271. In its repeal of 28 TAC § 134.400 and adoption of § 134.401, the Commission, “compared the per diem rates derived from the 1994-1995 hospital contracts to Medicare rates.” The Texas Register further reveals, “Studies show that Medicare patients are of an equivalent standard of living to workers’ compensation patients.”

One study initiated by the Commission and cited by the Carrier in this case is titled, “A Standard of Living Comparison between the Working Population, the Medicare Population, and the Managed Care Population.” This study found the standard of living of Medicare patients actually exceeds that of the workers’ compensation population. Since this study concludes that Medicare patients have a higher standard of living than that of the workers’ compensation population, it clearly is not equivalent. That being said, however, because the Medicare population has a higher standard of living than the population of workers’ compensation participants, it stands to reason that consulting the Medicare fee guidelines will, at the minimum, render a fair and reasonable reimbursement rate. Furthermore, the study concludes, “the fees and reimbursement amounts to medical providers paid under the Medicare program and under commercial managed care plans must be considered by the TWCC in establishing medical fee guidelines.”

The Carrier presented sufficient evidence that it may rely on Medicare fee guidelines when determining reimbursement rates. This is mainly because the workers’ compensation population has been deemed to have a standard of living similar to, if not exceeded by, the population of Medicare patients.

The Provider argues that if a workers’ compensation claimant and a Medicare patient have a similar standard of living, then certainly two workers’ compensation claimants have similar standards of living. Provider asserts this argument because it introduced evidence that other carriers have reimbursed Provider on prior occasions for equipment similar to that in dispute here. Although this point maybe true, it does not prove that carriers paid a fair and reasonable rate of reimbursement in every instance. Even by looking most favorably on the documents presented, it does not prove Carrier erred in consulting the Medicare fee guidelines.

In determining the reimbursement rate for the pillow and two collars provided to Claimants, Carrier consulted Medicare fee guidelines, specifically the Durable Medical Equipment Prosthetic Orthotic Supply (DMEPOS), published by the Durable Medical Equipment Regional Carrier. Carrier paid $26.39 for the E1399 Pillow provided to Claimant ____. as directed by the Medicare fee guidelines. Because it followed the Medicare guideline, Carrier is not required to reimburse Provider any further for this pillow. Carrier paid $286.85 for the L0180 Collar and $18.49 for the L0120 Collar given to Claimant ____. in accordance with Medicare fee guidelines.

Carrier provided sufficient evidence it paid a fair and reasonable reimbursement rate for the collars given to Claimant ____ and therefore is not required to additionally reimburse Provider for these collars.

Another E1399 Pillow was given to Claimant ____. Carrier admits it should have consulted the Medicare fee guidelines when it reimbursed Provider for this pillow. Carrier reimbursed Provider $25.95 for the pillow. Carrier should have paid $26.39. Under the Medicare fee guidelines, Provider is entitled to .44 cent additional reimbursement.

E1399 Showerhead

Provider supplied Claimant ____ with an E1399 Showerhead and billed Carrier $112.00 for this item. Carrier consulted the Alimed catalog to determine a reasonable reimbursement for this item. The Alimed catalog is published for the general population to review and order items as needed. Carrier found a showerhead similar to the one provided to Claimant ____ in the Alimed catalog listed at $24.95. Based on this finding, Carrier reimbursed Provider $24.95, rather than the billed amount of $112.00. Carrier asserts it should not reimburse Provider for more than the amount the general public would pay for any particular item. Carrier did not provide a copy of the Alimed catalog or the statute that supports this contention. Carrier additionally admits it did not consider shipping and handling charges or overhead fees of the Provider when it determined its reimbursement. Provider points out that if Provider purchased this item from the Alimed catalog at $24.95 and then passed it on to a patient at $24.95, it would make no profit. This argument is compelling because reimbursement rates are directed by statute to be fair and reasonable. A reimbursement that does not allow a Provider to make any profit will compromise a Provider’s duty to furnish claimants with adequate treatment. A reimbursement of the exact same purchase price of an item without taking into consideration shipping, handling, and overhead would not be fair and reasonable. For the E1399 Showerhead, Provider offered sufficient evidence that $112.00 is a fair and reasonable amount of reimbursement. Provider is entitled to additional reimbursement for this item.

Medical Necessity of the E0143 Walker

Claimant ___was provided an E0143 Walker. Provider billed Carrier $121.55 for the walker. Carrier denied this bill claiming the walker was not medically necessary. This item is also not included in the MRD Findings and Decision. Here again Provider has the burden of proving it did not receive a fair and reasonable reimbursement for this item.

Carrier declined any reimbursement citing this item was not medically necessary. Carrier asserts walkers are not normally a piece of durable medical equipment prescribed to patients who undergo cervical spine surgery like Claimant ____. The single most compelling evidentiary item is the prescription written by Dr. Paul A. Vaughn. Dr. Vaughn provided treatment and personally examined Claimant ___ in April 2000. On July 13, 2000, the record indicates Dr. Vaughn wrote a prescription for Claimant ___ that included, among other things, a walker with wheels. Having treated Claimant ___ and personally examined her, the Court finds that Dr. Vaughn was in a position to determine medical necessity better than that of Carrier. Despite Carrier’s credible opinion that a walker is not normally prescribed to a claimant such as ____, the evidence of Dr. Vaughn’s prescription is more convincing that the walker was medically necessary in this case. Provider offered sufficient evidence that it was not paid a fair and reasonable reimbursement for the walker. Provider is entitled to a full reimbursement of $121.55.

97139-TN, Training/Fitting Fees

Carrier reimbursed Provider $24.75 for 97139-TN, training/fitting fees for a bone growth stimulator provided to Claimant ____, but asserts it should have paid nothing to Provider for this service. Carrier contends under the Medicine Ground Rules of the Medical Fee Guideline, a medical procedure such as this must be performed under the supervision of a doctor or health care professional. Carrier asserts Provider is neither a doctor nor health care professional based on the absence of a professional license number included on its bills to Carrier. Provider made no significant argument to the contrary nor did it offer any evidence to rebut Carrier’s claim that any reimbursement, much less additional reimbursement, was necessary. Carrier is not liable to Provider for any additional reimbursement of this item.

II. FINDINGS OF FACT

  1. Claimant, ____, sustained a compensable injury on__________.
  2. Claimant, ____ sustained a compensable injury on___________.
  3. Oxymed (Provider) furnished seven items known as durable medical equipment and one service to both Claimants.
  4. On December 1, 2000, the Commission’s Medical Review Division found that all durable medical equipment provided to Claimant F. M. was not medically necessary.
  5. On January 24, 2001, the Commission’s Medical Review Division found that Provider was entitled to additional reimbursement for the durable medical equipment provided to Claimant ____.
  6. In regard to Claimant ____, Provider filed a request for hearing before the State Office of Administrative Hearings (SOAH).
  7. Prior to the hearing, both parties agreed the Commission misidentified the issue. The issue before SOAH was whether or not Provider was given a fair and reasonable reimbursement for the equipment and service provided to Claimant ____.
  8. In regard to Claimant ____, Texas Workers Compensation Insurance Fund (Carrier) filed a request for hearing before SOAH.
  9. The matters of Claimant ___ and Claimant ___ were consolidated under one cause number.
  10. Prior to the hearing before SOAH, the parties settled some disputes that were argued before the Medical Review Division.
  11. Of the remaining disputes, Provider billed a total amount of $1,381.55.
  12. Of the remaining disputes, Carrier reimbursed Provider a total of did $451.23.
  13. Notice of the hearing for this consolidated hearing was sent January 4, 2002.
  14. 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.
  15. The hearing was held March 28, 2002, with Administrative Law Judge Steven M. Rivas presiding and representatives of the Carrier and Provider participating. The hearing was adjourned the same day.
  16. Provider furnished a E1399 Pillow to Claimant ____. Provider billed Carrier $159.00 for the pillow. Carrier reimbursed Provider $26.39. Carrier properly consulted the Medicare fee guideline in determining the reimbursement rate. Carrier is not liable to Provider for any additional reimbursement.
  17. Provider furnished a E1399 Showerhead and hose to Claimant ____. Provider billed Carrier $112.00 for the showerhead. Carrier reimbursed Provider $24.95. Carrier did not render a fair and reasonable reimbursement to Provider. Carrier is liable to Provider for $87.05 of additional reimbursement.
  18. Provider charged carrier for 97139-TN training and fitting fees of a bone growth stimulator given to Claimant _____. Provider billed Carrier $185.00 for the training. Carrier reimbursed Provider $24.75. Carrier rendered a fair and reasonable reimbursement to Provider. Carrier is not liable to Provider for any additional reimbursement.
  19. Provider furnished a L0180 Collar to Claimant ___. Provider billed Carrier $400.00 for the collar. Carrier reimbursed Provider $286.95. Carrier properly consulted the Medicare fee guideline in determining the reimbursement rate. Carrier is not liable to Provider for any additional reimbursement.
  20. Provider furnished a L0172 Philadelphia Collar to Claimant ____. Provider billed Carrier $195.00 for the collar. Carrier reimbursed Provider $43.85. Carrier properly consulted the “D”codes in the 1996 Medical Fee Guideline in determining the reimbursement rate. Carrier is not liable to Provider for any additional reimbursement.
  21. Provider furnished a L0120 Collar to Claimant _____. Provider billed Carrier $50.00 for the collar. Carrier reimbursed Provider $18.49. Carrier properly consulted the Medicare fee guideline in determining the reimbursement rate. Carrier is not liable to Provider for any additional reimbursement.
  22. Provider furnished a E0143 Walker to Claimant ___. Provider billed Carrier $121.55 for the walker. Carrier reimbursed Provider $0. Carrier did not render a fair and reasonable reimbursement to Provider. Carrier is liable to Provider for $121.55 of additional reimbursement.
  23. Provider furnished a E1399 Pillow to Claimant _____. Provider billed Carrier $159.00 for the pillow. Carrier reimbursed Provider $25.95. Carrier did not render a fair and reasonable reimbursement to Provider. Carrier is liable to Provider for $.44 cent of additional reimbursement.
  24. Provider is entitled to $209.04 of additional reimbursement.

III.CONCLUSIONS OF LAW

  1. The Commission has jurisdiction over this matter pursuant to Section 413.031 of the Texas Workers' Compensation Act (the Act), Tex. Lab. Code Ann. ch. 401 et seq.
  2. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order, pursuant to Tex. Lab. Code Ann. §413.031(d) and Tex. Gov’t Code Ann. ch. 2003.
  3. Adequate and timely notice of the hearing was provided in accordance with Tex. Gov’t Code Ann. § 2001.052.
  4. The Carrier and Provider had different burdens of proof on certain items in consolidated case under 28 Tex. Admin. Code §148.21(h).
  5. 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 in accordance with TEX. Lab. Code Ann. §' 408.021.
  6. Health care includes all reasonable and necessary medical aid, medical examinations, medical treatment, medical diagnoses, medical evaluations, and medical services, under Tex. Lab. Code Ann. §401.011(19).
  7. The commission by rule shall establish medical policies and guidelines relating to fees charged or paid for medical services for employees who suffer compensable injuries, including guidelines relating to payment of fees for specific medical treatments or services, under Tex. Lab. Code Ann. §413.011.
  8. Pursuant to Findings of Facts numbers 14 though 21, Provider is entitled to a total of $209.04 additional reimbursement.

ORDER

IT IS, THEREFORE, ORDERED that Provider Oxymed is entitled to additional reimbursement of $209.04 from the Carrier, Texas Workers Compensation Insurance Fund, for the durable medical equipment provided to Claimants __ and ____.

Signed May 24, 2002.

Steven M. RivasAdministrative Law Judge

State office of administrative hearings

End of Document
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