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At a Glance:
Title:
453-01-3776-m4
Date:
July 10, 2002
Status:
Medical Fees

453-01-3776-m4

July 10, 2002

DECISION AND ORDER

Liberty Mutual Fire Insurance Company (Petitioner) appealed the findings and decision of the Texas Workers’ Compensation Commission’s (Commission) Medical Review Division (MRD) in MDR Docket No. M5-01-1609-01, which granted reimbursement to Ultra Medical Inc. (Provider) for rental of a neuromuscular stimulator device (Alpha Stimulator) to E.W. (Claimant). The MRD decision, issued June 29, 2001, ordered Carrier to pay Provider an additional $400.00 for the device rental and accompanying supplies. Carrier asserted that additional reimbursement would be in excess of a fair and reasonable amount, which it had already paid. This decision finds the additional reimbursement should be paid.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There were no contested issues of jurisdiction or notice. 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 May 14, 2002, at the Hearings Facility of the State Office of Administrative Hearings, 300 West 15th Street, Fourth Floor, Austin, Texas, with Administrative Law Judge (ALJ) Ann Landeros presiding. Petitioner appeared through its attorney, Shannon Butterworth. Provider’s employee, Jon Famestad, appeared telephonically and represented the company. Respondent Commission did not participate. The record closed that same day after receipt of evidence and argument.

II. DISCUSSION

A. Background Facts

In_______, Claimant suffered an injury to his right foot compensable under the Texas Workers' Compensation Act. At the time of his compensable injury, Carrier was the worker’s compensation insurer for Claimant’s employer. Claimant was under the care of Dr. Linda Roos, M.D., for continuing pain. In early 2001, Dr. Roos prescribed Provider’s Alpha Stimulator device for Claimant to relieve pain, to increase his range of motion, and to increase local circulation. (Exh. 1, p. 25).

Because the Alpha Stimulator was durable medical equipment and the two months prescribed rental at $350 a month would cost over $500, Carrier’s representative told Provider it must obtain preauthorization prior to the rental. Provider requested and obtained from Carrier preauthorization for two months rental at $350 a month. Provider subsequently billed Carrier on January 29 and February 17, 2001, at the $350 a month rate under CPT code E1399, which does not have a maximum allowable reimbursement rate set by the Commission and so must be reimbursed at the fair and reasonable rate. Carrier paid the two months rental but reduced the reimbursement to $150 per month, claiming that was the fair and reasonable rate. Provider appealed to the MRD which awarded it the additional $400 in reimbursement. Carrier appealed this award.

B. Legal Standards

Petitioner has the burden of proof in this proceeding. 28 TAC §§ 148.21(h) and (I). Pursuant to the Act, an employee who has sustained 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 cures or relieves the effects naturally resulting from the compensable injury, promotes recovery, or enhances the ability of the employee to return to or retain employment. TEX. LAB. CODE ANN. § 408.021(a). Health care includes all reasonable and necessary medical services including a medical appliance or supply. TEX. LAB. CODE ANN. §401.011(19)(A). A medical benefit is a payment for health care reasonably required by the nature of the compensable injury. TEX. LAB. CODE ANN. § 401.011(31).

Pursuant to its mandate to implement policies that establish fair and reasonable reimbursement for medical services, the Commission adopted the 1996 Medical Fee Guideline (Guideline), found at 28 TAC § 134.201. The Guideline contains policies designed to ensure the quality of medical care and to achieve effective medical cost control. The Guideline lists maximum allowable reimbursements (MAR) for most services. To be entitled to a MAR, the provider must show the services were performed within the provider’s scope of practice or under the direct supervision of that provider. Guideline General Instructions (General Instructions).

Reimbursement for services not identified in an established fee guideline (as a MAR), or requiring documentation of procedure (DOP) shall be at a fair and reasonable rate. 28 TAC § 134.1(f); 28 TAC § 134.201, General Instructions Rule VI. To be fair and reasonable, the fee must be set at a level which will: ensure quality medical care; achieve effective cost control; not exceed the fee charged for similar treatment of an injured individual of an equivalent standard of living and paid by the individual or by someone acting on the individual's behalf; and take into consideration the increased security of payment under the Act. TEX. LAB. CODE ANN. § 413.011.

Pursuant to TEX. LAB. CODE § 413.014 and the Commission rule at 28 TAC § 134.600, for a carrier to be liable for certain services and supplies, it must preauthorize them. Among the supplies which must be preauthorized are durable medical equipment costing over $500.00. 28 TAC § 134.600(h).

C. Discussion

Petitioner argued that the $350 per month rental charged by Provider for the Alpha Stimulator was too high and that it paid at the fair and reasonable rate of $150 per month. Provider argued that Petitioner’s preauthorization recognized not only that the service was medically necessary but also that it was reimbursable at Provider’s stated rate of $350 per month. Provider asserted it was inconsistent for Petitioner to require preauthorization on the basis that the Alpha Stimulator rental constituted durable medical equipment over $500, then refuse to pay the $350 rental rate. Petitioner responded that preauthorization does not bind the carrier to pay more than a fair and reasonable rate.

The Alpha Stimulator was durable medical equipment that was billed under a CPT code without a MAR. Therefore, its rental was to be reimbursed at the fair and reasonable rate. Petitioner had the burden of proof in this matter, which meant it had to prove its claim that $150 per month was a fair and reasonable rate of reimbursement for the Alpha Stimulator under the criteria set out in TEX. LAB. CODE ANN. § 413.011.

Other than a conclusory statement in its denial letters to Provider, Petitioner did not provide any evidence to prove that $150 per month was the fair and reasonable rental rate. Petitioner failed to meet its burden to prove that $150 per month was a reasonable reimbursement rate for the Alpha Stimulator. The findings and decision of the MRD in this matter should not be changed.

III. FINDINGS OF FACT

  1. In _____ (Claimant) suffered an injury compensable under the Texas Workers’ Compensation Act (Act).
  2. At the time of Claimant’s compensable injury, Liberty Mutual Fire Insurance Company (Carrier) was the workers’ compensation insurer for Claimant’s employer.
  3. In early 2001, his treating doctor, Linda Roos, M.D., prescribed Ultra Medical Inc.’s (Provider) Alpha Stimulator device for Claimant to relieve pain, to increase his range of motion, and to increase local circulation.
  4. Because the Alpha Stimulator was durable medical equipment and the two months prescribed rental at $350 a month would cost over $500, Carrier’s representative told Provider it must obtain preauthorization prior to the rental.
  5. Provider requested and obtained from Carrier preauthorization for two months rental at $350 a month and subsequently billed Carrier on January 29 and February 17, 2001, at the $350 a month rate under CPT code E1399.
  6. CPT code E1399 does not have a maximum allowable reimbursement (MAR) rate set by the Texas Worker’s Compensation Commission (Commission).
  7. Carrier paid the two months rental but reduced the reimbursement to $150 per month, claiming that was the fair and reasonable rate.
  8. Provider appealed the reduction in reimbursement to the Commission’s Medical Review Division (MRD), which awarded it the additional $400 in reimbursement. Carrier appealed the MRD decision.
  9. Petitioner and Provider appeared or were represented at the hearing held in this matter.
  10. Petitioner’s evidence that $150 a month was a fair and reasonable rate for rental of an Alpha Stimulator consisted of a conclusory statement in its denial letter to Provider that reimbursement had been paid at the fair and reasonable rate.
  11. There was insufficient evidence to establish that $150 a month was a fair and reasonable rate for rental of an Alpha Stimulator from Provider.

IV. CONCLUSIONS OF LAW

  1. The Texas Workers’ Compensation Commission (Commission) has jurisdiction related to this matter pursuant to the Texas Workers' Compensation Act (the Act), TEX. LABOR 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 § 413.031(d) of the Act and TEX. GOV'T CODE ANN. ch. 2003.
  3. The hearing was conducted pursuant to the Administrative Procedure Act, TEX. GOV'T CODE ANN. ch. 2001.
  4. Adequate and timely notice of the hearing was provided in accordance with TEX. GOV’T CODE ANN. §§ 2001.051 and 2001.052.
  5. Petitioner had the burden of proof in this case. 28 TAC § 148.21(h) and (i).
  6. An employee who has sustained 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 cures or relieves the effects naturally resulting from the compensable injury, promotes recovery, or enhances the ability of the employee to return to or retain employment. TEX. LAB. CODE ANN. § 408.021(a).
  7. Health care includes all reasonable and necessary medical services including a medical appliance or supply. TEX. LAB. CODE ANN. §401.011(19)(A).
  8. Reimbursement for services not identified in an established fee guideline (as a MAR), or requiring documentation of procedure (DOP) shall be at a fair and reasonable rate. 28 TAC § 134.1(f); 28 TAC § 134.201, General Instructions Rule VI.
  9. To be fair and reasonable, the fee must be set at a level which will: ensure quality medical care; achieve effective cost control; not exceed the fee charged for similar treatment of the injured individual of an equivalent standard of living and paid by the individual or by someone acting on the individual's behalf; and take into consideration the increased security of payment under the Act. TEX. LAB. CODE ANN. § 413.011.
  10. Petitioner failed to establish by a preponderance of the evidence that $150 per month was a fair and reasonable rate of reimbursement for the Alpha Stimulator.
  11. Petitioner failed to show that the MRD decision awarding an additional $400 in reimbursement to Provider should be overturned.

ORDER

IT IS ORDERED that Petitioner, Liberty Mutual Fire Insurance Company, shall pay Provider, Ultra Medical, Inc., $400 in reimbursement for two months’ rental of the Alpha Stimulator for Claimant E.W.

Signed this 10th day of July 2002.

ANN LANDEROS
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

End of Document
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