DECISION AND ORDER
Continental Casualty Company (Petitioner) appealed the Findings and Decision of the Texas Workers’ Compensation Commission’s (the Commission) Medical Review Division (MRD) in a medical fee dispute, MDR Docket No. M5-00-0521-01. The MRD recommended John P. Hodges, D.C. (Provider) be reimbursed $1,260 for the work-conditioning services provided to the worker’s compensation claimant ____ (Claimant) from February 23, 1999 to March 26, 1999. Continental Casualty Company (Carrier) argues that the services were not medically necessary and that Provider failed to provide sufficient documentation to support a finding of medical necessity.
The Administrative Law Judge (ALJ) concludes that Carrier failed to meet its burden of proving that the work-conditioning was not medically necessary. Therefore, Carrier owes Provider $1,152.
Claimant sustained a compensable back injury on______. His treating physician, Judy Mackey-Hargadine, M.D., prescribed four weeks of work-conditioning and referred Claimant to Provider’s facility. From February 23 through March 26, 1999, Provider treated Claimant with work conditioning. Provider sent the bills to Carrier for payment within days of the service. Carrier initially sent Provider an explanation of reviews (commonly called explanation of benefits or EOBs) stating that the services were approved for payment. On April 19, 1999, before Carrier paid Provider for the work-conditioning services, the Carrier’s physician advisor reported to Carrier that work conditioning was not medically necessary. Nonetheless, Carrier still issued EOBs approving payment of the services provided on March 22 and 26, 1999. On May 6 through June 16, 1999, Carrier reissued the EOBs denying payment disputing that the services were medically necessary (45 days after receipt of Provider’s claims). Carrier did pay Provider $144 for the work conditioning performed on March 1, 1999.
A. The Position of Provider and MRD
Provider maintains that because Carrier issued an EOB stating it approved payment of Provider’s claims for work conditioning, and paid Provider for a day of work conditioning, Carrier has admitted that the services were medically necessary. In addition, Providers asserts that Carrier did not timely notify Provider that it was disputing the services and may not do so now. Dr. Hodges agreed that if the ALJ found Provider is entitled to reimbursement, it should be at the rate of $28.80 per hour because Provider is not accredited by the Commission of Accreditation of Rehabilitation (CARF). At this rate, Provider is due $1,152.
Dr. Hodges candidly admitted that, except for what was filed with MRD, he is unfamiliar with Claimant’s medical file. Dr. Durkop took Claimant’s file when he left Provider’s employment. However, from the record in evidence he noted that when Claimant began the work conditioning program he was below average in his tolerance to stand, walk, and balance. At the conclusion of the program, Claimant passed all standards for baseline tolerances.
MRD issued a decision on April 26, 2001, holding that Carrier’s decision not to reimburse Provider according to the “original audit summaries dated 3/17/99 through 5/7/99 is based on a peer review report date 4/19/99 which is 25 days after the carrier’s original audit summaries. Consequently, the respondent [Carrier] generated a second set of audit summaries dated 5/8/99 through 6/16/99 (52 days after the first original audit summary) alerting the requestor of the change in reimbursement. The Commission Rule 133.300, Carrier Payment of Bills of Health Care Providers, states, . . . the carrier shall process for payment all properly completed bills . . . and payment of all allowable charges shall be remitted to the health care providers no later than 45 days after receipt of the completed bill . . .’.”
Carrier argues that when Claimant began work conditioning, Claimant had already returned to work and had reached maximum medical improvement on December 7, 1998 three months before the beginning work conditioning. Because Dr. Hodges was not Claimant’s treating physician and did not have Claimant’s medical records, Dr. Hodges did not know the number of hours Claimant could work when he began work conditioning, and he did not know the number of hours Claimant could work when he completed work-conditioning. Likewise, he did not know the work restrictions Claimant had before or after the program. Therefore, Carrier opines, Provider did not prove that Claimant needed work conditioning to return to employment, or attain employment, to work longer hours, or to work with fewer restrictions.
Carrier further argues that Claimant did not meet the entrance criteria set out in the Medical Fee Guideline. Claimant needed to have some level of function that interfered with some identifiable work-related tasks that he could not perform. Because Dr. Hodges did not treat the patient and does not have the Claimant’s medical record, Dr. Hodges does not know what Claimant’s job duties were and whether Claimant was unable to perform specific tasks that interfered with his job duties. Therefore, asserts Carrier, it is not evident that the services were medically necessary.
Claimant was in the tertiary level of care before he began these services. Work conditioning is usually provided during the secondary level of care. Carrier argues work conditioning was not an appropriate treatment because Claimant had already achieved the goals for work conditioning he had returned to work, and/or reached maximum medical improvement. If Claimant’s condition did require additional care, one of his doctors had to document the reason for the departure from the spine treatment guidelines. No such documentation is contained in the evidence, contends Carrier.
As for the originally issued EOBs approving payment, Carrier called Evelyn Corley, Carrier’s adjuster, to explain how Carrier could have mistakenly issued the first EOBs approving payment. Ms. Corley, however, testified that she began working with Carrier July 17, 2000, and was told by someone how Carrier processed the bills in 1999. Sheila Rumsey, who still works for Carrier, was the adjuster when these claims were processed, but Carrier did not call Ms. Rumsey to testify.
Ms. Corley admitted that the Carrier issued the original EOBs stating that it would pay Provider for the work conditioning program provided to Claimant, but she contended this was done in error. Ms. Corley believed Carrier sent the bills to its auditing company, CCN, to determine the appropriate fee schedule. CCN, Ms. Corley stated, was not to decide what was medically necessary. CCN returned the bills with the fee schedule, and the Carrier’s adjuster would review the EOB and decide if the services were medically necessary. If not, the adjuster marked “denied”on the form and returned to CCN to issue the EOB with the appropriate denial code.
Ms. Corley theorized that the original EOB sent to the Provider approving payment for the work hardening program, was “inadvertently” sent out by the Carrier. Alternatively, Ms. Corley suggested, “possibly, it had been sent to the doctor at the doctor’s request by CCN because sometimes if the doctor’s office calls to check on a bill we will refer them to CCN to see if there was an audit done on it and CCN may have pulled up the original audit and forwarded that to him. That is possible, I don’t know that happened, but that is one way it could have happened.”
At some point the Carrier requested a peer review. Two weeks after the Carrier received the peer review report that work conditioning was not medically necessary (April 19, 1999) the Carrier began reissuing EOB to the Provider denying payment for the work conditioning.
Under cross-examination, Ms. Corley admitted that Carrier issued an EOB on May 7, 1999, for the services delivered on March 22, 1999, recommending payment. This was after Carrier received the peer review report. Ms. Corley speculated that because the bills went directly to CCN, CCN might have mistakenly processed the claim as allowable. Yet, the day before, on May 6, 1999, CCN issued an EOB denying payment for the services of February 24, 1999, per the claims administrator, as unnecessary medical treatment or services. Ms. Corley could not provide an adequate explanation for Carrier’s inconsistent issuance of EOBs. She testified that "the only possibility is that CCN got them and reviewed them and then they got another batch in afterwards and that is the day they got to them . . . I wasn’t there, so I can’t say . . . Ms. Corley could only guess why Carrier issued these two EOBs after the claims adjuster determined that the services were not medically necessary.
Ms. Corley explained that the way she does a peer review is to provide to the physician advisor with all the medical records and a time line. Ms. Corley did not know why Charles Xeller, M.D. received the medical records for only three dates of service to review: February 23, 25, and March 1, 1999.
Carrier had the burden of proving that the work conditioning provided to Claimant was not medically necessary. Ms. Corley appropriately admitted that she could only guess why certain things happened in 1999 before she took over the file. Ms. Humley, who still works for Carrier, could have explained what happened but was not called to testify. Dr. Xeller’s report indicated that he did not have a complete medical file to review. Ms. Corley could not verify that all the medical records were provided to him for consideration. The ALJ is not persuaded that Ms. Corley had adequate knowledge of the events in 1999 to prove that Carrier’s original decisions to pay for work conditioning as medically necessary services were done in error. Consequently, Carrier failed to show by a preponderance of the evidence that the work conditioning services provided to Claimant were not medically necessary.
In addition, the Carrier was required under Section 408.027(b) of the Tex.Lab. Code Ann. to pay the health provider 50 percent of the bill not later that the 45th day after the date the insurance carrier received the bill. Otherwise, the insurance carrier is to pay for the services. The time for Carrier to dispute Provider’s charges was before the date it issued its first EOBs. The 45th day had passed by the time Carrier issued its second round of EOBs denying payment.
Additionally, Section 413.017 of the Act provides that “(2) medical services that are provided subject to prospective, concurrent, or retrospective review as required by the medical policies of the commission and that are authorized by an insurance carrier” are presumed reasonable. Carrier paid Provider for the work conditioning services provided Claimant on March 11, 1999. Carrier did not present sufficient evidence to rebut this presumption that the medical services were reasonably necessary.
Therefore, the ALJ finds that Carrier agreed the work-conditioning services provided to Claimant were medically necessary and should be paid. Carrier’s subsequent denial of payment was both untimely and unpersuasive. Because Provider agreed that the payment due was at the rate of $28.80 per hour, the ALJ finds that Carrier owes the Provider $1,152.
III. Findings of Fact
- Claimant, ____., suffered a compensable lower back injury on or about_____________.
- At the time of Claimant’s compensable injury, Continental Casualty Company (Carrier) was the workers’ compensation insurer for Claimant’s employer.
- Judy Mackey-Hargadine, M.D., Claimant’s primary treating physician, prescribed four weeks of work conditioning for the Claimant on February 18, 1999, and referred him to David Durkop, D.C., employed by HealthNet Rehabilitation and Work Hardening Center. John P. Hodges, Jr., D.C., own this facility (collectively referred to as Provider).
- Claimant went to Provider’s facility for work-conditioning on between February 23 and March 26, 1999.
- The dates of service in issue are February 23, 24, 26; March 1, 3, 5, 10, 12, 22, and 26, 1999.
- Provider sent Carrier the completed claim forms requesting payment within days of each service.
- Between March 18 and May 7, 1999, Carrier sent Provider notice in the Explanation of (commonly referred to as Explanation of Benefits or EOBs) that it had approved the claims for work-conditioning services listed in Findings of Fact No. 5, except for part of the services delivered on March 5, 1999.
- Carrier approved the work conditioning services provided by Provider to the Claimant on March 1, 1999, and paid Provider $144, the amount billed.
- At Carrier’s request, on April 19, 1999, Carrier received the Physician Advisor Review report (peer review report) from Charles Xeller, M.D., stating that work condition was not medically necessary for Claimant.
- Dr. Xeller’s review of the medical records was incomplete because Carrier failed to provide Dr. Xeller with all the medical records generated by Provider.
- Despite receiving this peer review report on April 19, 1999, Carrier issued an EOB on April 21 and May 7, 1999, approving payment for the work conditioning services provided by Provider to Claimant on March 22 and 26, 1999.
- From May 6 to June 16, 1999, Carrier reissued a second set of EOB’s this time denying the claims. The second EOBs were issued later than 45 days after Carrier received the corresponding claim forms requesting payment from Provider.
- The Provider filed a Request for Medical Dispute Resolution with the Texas Workers’ Compensation Commission (the Commission), seeking reimbursement for the work-conditioning services provided from February 23 through March 26, 1999.
- On April 26, 2001, the Commission’s Medical Review Division (MRD) determined that $1,260 was due the Provider.
- Carrier filed a timely request for a hearing before the State Office of Administrative Hearings (SOAH).
- Notice of the hearing was sent June 8, 2001.
- 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.
- The hearing was held February 13, 2002, with SOAH Administrative Law Judge Catherine C. Egan presiding and representatives of the Carrier and Petitioner participating. The hearing was adjourned the same day.
- The evidence did not show that the work-conditioning treatment provided to Claimant was not medically necessary.
- Provider is not accredited by the Commission of Accreditation of Rehabilitation (CARF).
IV. Conclusions of Law
- 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.
- 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.
- Adequate and timely notice of the hearing was provided in accordance with Tex. Gov’t Code Ann. § 2001.052.
- Carrier has the burden of proof in this matter. 28 Tex. Admin. Code (TAC) §148.21(h).
- Carrier did not meet its burden of proving the work-conditioning services provided to Claimant by Provider were not medically necessary.
- Carrier did not properly or timely dispute Provider’s claims as required by Section 408.027(b) of the Tex.Lab. Code Ann.
- Provider is entitled to the reimbursement for the work conditioning services provided Claimant from February 23 through March 26, 2002
- Provider is not accredited by CARF and therefore the maximum reimbursement Provider is entitled to for work conditioning services is $28.80 per hour for a total of $1,152.
IT IS, THEREFORE, ORDERED that the request by Continental Casualty Company to deny reimbursement to for work conditioning services provided from February 23 through March 26, 1999, is denied. Continental Casualty Company is ORDERED to reimburse HealthNet Rehabilitation and Work Hardening Center and its owner John P. Hodges for the work conditioning services provided to Claimant by Provider in the amount of $1,152.
Signed April 22, 2002.
STATE OFFICE OF ADMINISTRATIVE HEARINGS
CATHERINE C. EGAN
Administrative Law Judge
- David Durkop, D.C. while working at HealthNet Rehabilitation and Work Hardening Center (the facility), treated Claimant. Dr. Hodges owns the facility and this claim. Dr. Durkop no longer works at the facility or with Dr. Hodges. When he left, Dr. Durkop took Claimant’s medical records.↑
- Ex. 1 at 3.↑
- Ex. 3, Attachments A and C.↑
- Section 408.027(b) of the Tex.Lab. Code Ann. provides: (a) An insurance carrier shall pay the fee allowed under Section 413.011 for a service rendered by a health care provider not later than the 45th day after the date the insurance carrier receives the charge unless the amount of the payment or the entitlement to payment is disputed. (b) If an insurance carrier disputes the amount charged by a health care provider and requests an audit of the services rendered, the insurance carrier shall pay 50 percent of the amount charged by the health care provider not later than the 45th day after the date the insurance carrier receives the statement of charge.↑