DECISION AND ORDER

Connecticut Indemnity Company (Carrier) appealed the Findings and Decision issued by the Medical Review Division (MRD) of the Texas Workers’ Compensation Commission (the Commission) which ordered it to pay the Clinic for Special Surgery (the Clinic or Respondent) the amount of $5,717.50 as additional reimbursement for services performed at the Clinic. The Clinic is an ambulatory surgical center in Fort Worth, Texas. The MRD found that the Carrier did not submit adequate documentation explaining its reimbursement methodology, as required by 28 Tex. Admin. Code ‘ 133.304(I). The issue in this case is whether the Carrier met its burden in proving that its methodology to determine the reimbursement amount for services provided at an ambulatory service center resulted in a fair and reasonable rate.

This decision finds that Petitioner failed to prove that it should not have to pay additional reimbursement to the Clinic.

I.PROCEDURAL HISTORY, JURISDICTION, AND NOTICE

On April 15, 2002, ALJ Suzanne Marshall convened the hearing at the William C. Clements Building in Austin, Texas. Attorney Janice Menzies represented Connecticut Indemnity Company. Attorney Norman Darwin appeared on behalf of the Clinic. Counsel for the Commission had previously notified the parties that it would not participate in the hearing. Notice and jurisdiction were not contested and will be addressed in the findings of fact and conclusions of law. The MRD official record was admitted into evidence. Dr. Linden Dillin testified as a witness on behalf of the Clinic.

II. DISCUSSION

Factual

On (date of injury) Claimant sustained a compensable workers’ compensation injury. On June 6, 2000, Dr. Linden Dillin performed a right shoulder arthroscopic acromioplasty and A-C resection at the Clinic for Special Surgery. The Clinic for Special Surgery is an ambulatory surgical center. The Clinic submitted a claim for reimbursement in the amount of $7,953.50 for services provided on June 6, 2000. Carrier reimbursed $2,236.00 and denied additional reimbursement on the grounds that it was not fair and reasonable. The Clinic requested medical dispute resolution through a desk audit. The MRD issued its decision on May 31, 2000, ordering Carrier to remit an additional $5,717.50, to the provider. Carrier filed an appeal of the MRD decision on June 19, 2001.

Legal

n 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. Labor Code Ann. ‘ 408.021. AHealth care includes Aall reasonable and necessary medical . . . services. Tex. Labor Code Ann. ‘ 401.011(19). The Commission has established fee guidelines for medical services and treatment which are intended to be fair and reasonable, thereby ensuring the quality of medical care while achieving effective medical cost control. Tex. Labor Code Ann. ‘ 413.011.

The guidelines establish maximum allowable reimbursements (MAR) for various services. If the Commission has adopted an MAR for a particular surgical or treatment, the Carrier must reimburse that amount to the provider. In other instances, such as for services that are provided through an ambulatory surgical center, the Commission has not established an MAR. When no MAR is available, the Carrier must reimburse services at a fair and reasonable rate, until specific fee guidelines are established by the Commission. 28 Tex. Admin. Code (TAC) ‘ 134.1(f).

In 28 TAC ‘133.304(I), the Commission addresses the situation where no MAR exists for a service or treatment. The insurance carrier shall:

1. develop and consistently apply a methodology to determine fair and reasonable reimbursement amounts to ensure that similar procedures provided in similar circumstances receive similar reimbursement;
2. explain and document the method it used to calculate the rate of pay, and apply this method consistently;
3. reference its method in the claim file; and
4. explain and document in the claim file any deviation for an individual medical bill from its usual method in determining the rate of reimbursement.

Carrier reimbursed Provider $2,236.00, on the basis that this was a fair and reasonable rate for the geographical area. During the MRD process, Carrier explained that this amount was calculated to be the fair and reasonable rate as it is two times the per diem rate for an in-hospital procedure under the Medical Fee Guidelines ($1,118.00). Exhibit 1, p. 96. Since the amount reimbursed was twice the amount Provider would have received if the procedure had been done on an in-hospital basis, Carrier claimed the reimbursement was more than fair and reasonable. At hearing, Carrier again claimed its methodology of paying twice the in-hospital rate was fair and reasonable but Carrier offered no evidence as to why this was so. Carrier failed to meet its burden of proof that the amount of $2,236.00 which it paid Clinic was fair and reasonable.

Carrier also claimed that the decision in consolidated SOAH Docket Nos. 453-01-1179.M4, 453-01-1262.M4, and 453-01-1263.M4 should control, and that the ALJ should find that the Medicare reimbursement rate should be applied in this case.^[1] Carrier did not offer any evidence that it relied upon the Medicare reimbursement rate at the time its decision was made to only partially reimburse the Clinic, nor was any evidence offered that the Carrier has adopted the Medicare reimbursement rate. Consequently, Carrier is prohibited from relying upon a methodology which it did not take into account when making its decision on reimbursement. 28 TAC ‘ 133.304(c).

Additionally, Carrier also did not offer any evidence as to what the reimbursement rate would be if the Medicare rate was applied. Carrier relied upon material within the MRD file which showed that the Provider had received payment of 33% from Medicare cases. Exhibit 1, p. 49. As Dr. Dillin testified, however, this percentage applied only in cases in which Medicare was the primary insurance carrier; most of the Clinic’s patients also had secondary insurance which paid additional amounts. This exhibit also showed that Provider was reimbursed from a low of 33% to 104% from various types of insurance carriers for surgeries performed at the Clinic from 1998-1999. Therefore, using the 33% Medicare rate as a fair and reasonable rate is not reliably supported by the evidence in this case. Carrier failed to meet its burden of proof in this case that the Medicare rate is a fair and reasonable rate.

III. FINDINGS OF FACT

1. On (date of injury) Claimant sustained a compensable workers’ compensation injury.
2. On June 6, 2000, Dr. Linden Dillin performed a right shoulder arthroscopic acromioplasty and A-C resection at the Clinic for Special Surgery.
3. The Clinic for Special Surgery (Provider) is an ambulatory surgical center.
4. The Clinic requested reimbursement of $7,953.50 from Connecticut Indemnity Company (Carrier) for its services and treatment.
5. Carrier paid $2,236.00 for the services and treatment.
6. Provider sought additional reimbursement of $5,717.50 and submitted a request for dispute resolution on April 20, 2001.
7. Provider requested that the Commission’s Medical Review Division (MRD) perform a desk audit of the dispute.
8. The MRD issued its Findings and Decision on May 31, 2001, which recommended additional reimbursement on the grounds that the Carrier had not complied with the Commission’s documentation rule relating to the denial of payment.
9. On June 20, 2001, Carrier filed a request for a hearing on the MRD decision.
10. The Commission sent notice of the hearing to the parties on July 16, 2001, and a statement of matters asserted on April 5, 2002. The hearing notice and the statement of matters asserted informed the parties of the matter to be determined, the right to appear and be represented by counsel, the time and place of the hearing, and the statutes and rules involved.
11. The Commission has not established a maximum allowable reimbursement (MAR) for services and treatment at an ambulatory surgical center.
12. Carrier reimburses ambulatory surgical centers at a rate of two times the per diem rate established by the Medical Fee Guidelines for one day of in-hospital treatment.
13. There was no evidence from Carrier to explain how it developed its reimbursement methodology for treatment provided by ambulatory surgical centers.
14. Carrier did not rely upon the Medicare rate as a basis for determining its reimbursement methodology for treatment provided at an ambulatory surgical center at the time it made its partial payment to Provider.

IV. CONCLUSIONS OF LAW

1. The Texas Workers’ Compensation Commission has jurisdiction to decide the issue presented, pursuant to the Texas Workers’ Compensation Act (the Act), Tex. Lab. Code Ann. ‘ 413.031 (Vernon Supp. 2000).
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 ” 402.073 and 413.031(d) of the Act and Tex. Gov’t Code Ann. ch. 2003 (Vernon 2000).
3. Carrier timely filed a request for hearing, as specified in 28 Tex. Admin. Code

(TAC)’ 148.3.

1. Proper and timely notice of the hearing was effected upon the parties according to Tex. Gov’t Code Ann. ch. 2001 (Vernon 2000) and 28 TAC ‘ 148.4(b).
2. Carrier had the burden of proof by a preponderance of the evidence, pursuant to

28 TAC ‘ 148.21(h) and (I).

1. Carrier did not comply with 28 TAC ‘ 133.304(I).
2. Based on the foregoing findings of fact and conclusions of law, Carrier did not meet its burden of proof to show it should not be required to reimburse Provider for the billed amount.

ORDER

It is hereby ordered that the appeal of Connecticut Indemnity Company is denied and it is ordered to reimburse the Clinic for Special Surgery the amount of $5,717.50.

Signed this 4^th day of June, 2002.

SUZANNE FORMBY MARSHALL
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1. These cases involved consideration of the fair and reasonable rate for surgicals provided at the same ambulatory surgicals center as this case, the Clinic for Special Surgery. Administrative Law Judge Katherine Smith concluded that, based upon the evidence presented at hearing, the Medicare reimbursement rate amounted to a fair and reasonable rate. In this case, the Carrier did not rely upon the Medicare rate as its methodology in determining a fair and reasonable rate at the time it made its decision not to reimburse Provider’s requested amount. Whether or not the Medicare rate is a fair and reasonable one is not the issue in this case.↑