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At a Glance:
Title:
453-02-2387-m5
Date:
January 16, 2003
Status:
Retrospective Medical Necessity

453-02-2387-m5

January 16, 2003

DECISION AND ORDER

I. Introduction

Continental Casualty Company (Carrier) and Waco Ortho Rehab (Provider) each requested a hearing before the State Office of Administrative Hearings (SOAH) (the appeal) regarding a Texas Workers’ Compensation Commission (TWCC) Medical Review Division (MRD) decision concerning treatments to an injured worker (the Claimant). The MRD concluded that the Provider’s claim for the first three dates of service (of a total of six dates) should be denied because the Provider did not obtain preauthorization for the treatments. MRD decided that the Provider’s claim for treatments on the latter three dates should be paid because they were shown to be medically necessary. At the hearing, the Carrier withdrew its contention that the first three dates of treatments required preauthorization, but contended the services were not medically necessary. This decision concludes the Carrier is precluded from asserting a lack of medical necessity for the first three dates of treatments and they should be paid. It also concludes the treatments on the latter three dates were not medically necessary and payment should be denied.

II. Procedural History

The hearing on this matter was held on November 14, 2002, before the undersigned Administrative Law Judge (ALJ) at the State Office of Administrative Hearings, Fourth Floor, William P. Clements Building, 300 West Fifteenth Street, Austin, Texas. Carrier appeared through its attorney James M. Loughlin. Provider appeared through its attorney Scott C. Hilliard. The hearing was left open for post-hearing submissions and finally closed on November 25, 2002. Because there were no contested issues of notice, jurisdiction, or venue, those matters are addressed in the fact findings and legal conclusions without further discussion here.

III. Background

A.Legal Standards

Under Tex. Lab. Code Ann. §408.021(a)(1-3) (the Act),

(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.

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

Under 28 Tex. Admin. Code (TAC) § 148.21(h) and (i), the Carrier has the burden of proof on the matters it appealed and the Provider has the burden of proof on the matters it appealed.

B.Factual Background

The Claimant sustained a compensable injury to his left wrist and thumb on or about____, ____, working at a_______ warehouse, when he was hit by a piece of moving equipment. He presented to the Scott & White medical facility in Temple with a chief complaint of wrist pain and received treatment from September 8, 2000, through September 22, 2000. He presented to Provider doctor Craig Cernosek, D.C., on November 17, 2000, and subsequently received extensive treatment. Dr. Cernosek diagnosed his condition as “842.00, Left wrist sprain/strain, grade II.”

On November 14, 2000, Brett Bolte, D.C., determined that the Claimant had reached maximum medical improvement (MMI) with a six percent impairment rating. A designated doctor, Stephen Armstrong, D.C., determined that the Claimant reached MMI as of December 28, 2000, with a four percent impairment rating.

C. Issues

The Carrier denied payment for the disputed treatments on January 8, 10, and 12, 2001, using code “A,” meaning “preauthorization required but not requested.” It did not say the treatments were medically unnecessary. At the hearing, it withdrew its argument that these treatments required preauthorization, but contended they were not medically necessary. It denied payment for the January 15, 16, and 17, 2001, treatments using code “V,” meaning “unnecessary treatment with peer review.” The following issues are to be decided:

  • For treatments on January 8, 10, and 12, may the Carrier assert medical necessity as a reason to deny payment or is it precluded from doing so because it did not assert it as a defense on its TWCC-62 or like form before MRD?
  • If the Carrier is permitted to assert lack of medical necessity as a defense for the January 8, 10, and 12 treatments, are the services medically necessary? Because MRD ruled against it, the Provider would have the burden of proof on this matter.
  • Are the January 15, 16, and 17 services medically necessary? Because MRD ruled against it, the Carrier has the burden of proof on this issue.

IV. Discussion of Issues

A.Whether the Carrier May Assert Medical Necessity for the January 8, 10, and 12 Treatments.

The ALJ concludes that the Carrier may not raise the issue of medical necessity for the first time at SOAH.

The Carrier argued it should be able to assert medical necessity because that is the fundamental basis for reimbursement under the Act-§ 408.021 says an injured worker is entitled to all health care reasonably required by the nature of the injury as and when needed.[1] This argument has some appeal. However, the majority of SOAH decisions hold otherwise.[2]

Moreover, the Commission has implicitly rejected the Carrier’s argument in 28 TAC ' 133.307.j)(2). That section provides, “any new denial reasons or defenses raised [after a request for medical dispute resolution] shall not be considered in the review.” Although the Commission did not make Rule 133.307(j)(2) applicable to this case (it applies to dispute resolution requests filed on or after January 1, 2002), the rule nonetheless reflects an implicit Commission interpretation of ' 408.021 of the Act that medical necessity is not so fundamental that a carrier cannot be precluded from raising it for the first time at MRD. An agency’s interpretation of its own regulations or statute entrusted to its administration is entitled to judicial respect regarding any uncertainty, is presumptively valid, and will be upheld as long as it is reasonable.[3] The Carrier’s interpretation is contrary to the Commission’s and impliedly asserts the rule’s invalidity.

The ALJ concludes he should follow the reasoning of the majority of SOAH decisions and the Commission’s implicit interpretation of the Labor Code.[4] The Carrier is precluded from raising the issue of medical necessity for the January 8, 10, and 12 medical services. The Carrier will be ordered to pay $1074.00 for those services.[5]

B.Whether the January 15, 16, and 17 Services were Medically Necessary.

This decision concludes the preponderant evidence establishes that the treatments were not medically necessary.

Medicine Ground Rule Part I.A.1. of the Commission adopted Medical Fee Guideline[6] provides that for physical medicine treatment to qualify for reimbursement, the patient’s condition “shall have the potential for restoration of function.” A peer review by W. Bryan Woods, D.C. said the Claimant’s care “had far exceeded the recommendations of the Treatment Guidelines . . . .” and that the “ongoing and chronic care does not appear to be producing measurable or objective improvement.”[7]

Dr. Woods’ opinion is supported by Dr. Armstrong, the designated doctor for MMI, who concluded that the injured worker reached MMI as of December 28, 2000.[8] Both parties agreed that an MMI determination had some relevance to the medical necessity issue.[9] In support of these conclusions, Dr Woods and Dr. Armstrong both cited negative results from a magnetic resonance imaging in their reports.[10]

The Provider’s part owner, David Bailey, D.C., testified for the Provider, but his testimony was not as persuasive. He testified in a general sense that the treatments were medically necessary. He was able to demonstrate improved range of motion (ROM) resulting from treatments before the dates of service at issue in this case[11] and testified that the treatments provided on the disputed dates of service were the same as the ones that had improved ROM on the earlier dates. However, he did not specifically point to any objective improvement in the Claimant’s condition for the services in question. The record did not contain that evidence.

The opinions of Dr. Bailey and Dr. Woods’ were based on a paper review of the medical documentation; Dr. Armstrong personally examined the Claimant.

Overall, the opinions of two doctors, including a doctor who personally examined the Claimant, were more persuasive. Although similar treatments had increased the Claimant’s ROM before, the Provider’s assertion that additional physical therapy was necessary to do so for the treatments in dispute was not as persuasive as evidence to the contrary.

The Provider argued that the Medicine Ground Rule Part I.A.1. requirement of a potential for restoration of function is contrary to § 408.021 because the section says an injured worker is entitled to health care that relievesthe effects of the compensable injury as well as health care that improves his or her condition. The argument is unpersuasive. First, Medicine Ground Rule I.A.1 is not inconsistent with the statute. The rule does not say that physical medicine may not be provided to relieve pain; it just says there must also be a potential for restoration of function. Moreover, the rule in no way states that other types of treatments providing pain relief only are impermissible. Second, the Provider’s argument that the rule is contrary to the statute is an implicit assertion that the rule is invalid and that SOAH should not follow it. Again, an agency’s interpretation of the regulations or statute entrusted to its administration is entitled to judicial respect regarding any uncertainty, is presumptively valid, and will be upheld as long as it is reasonable.[12] Authority to declare a rule invalid lies with the district courts of Travis County, not SOAH.[13]

In addition, the evidence cited by the Provider to show the Claimant’s pain was relieved[14] was not persuasive. The Claimant said his pain was six on a scale of 0 to 10 when he presented on January 8, 2001, and this reduced to five on a scale of 0 to 10 by January 17, 2001. However, he also said on the latter date that he could “hardly drive at all because of the severe pain.”[15]

Another matter should be addressed (although it is not determinative in view of the foregoing conclusion). The Carrier argued that the Provider’s treatment of the Claimant’s back, neck, and certain other body parts was not necessary for a wrist and thumb injury. However, none of the Carrier’s experts said that. This argument is unconvincing because it requires the ALJ to render his own “expert” opinion of whether treatments to the neck, shoulder, and back were necessary.

V. Findings of Fact

  1. On or about______, the injured worker (Claimant) sustained a compensable injury to his wrist and thumb while working at a warehouse in_______, when he was hit by a piece of moving equipment.
  2. On the date of injury, the Claimant’s employer was insured by Continental Casualty Company (Carrier).
  3. The disputed treatments were provided by Waco Ortho Rehab (Provider) and consisted of:
    1. therapeutic exercises (7), group therapeutic procedure, myofascial release, and joint mobilization on January 8, 2001;
    2. therapeutic exercises (7), group therapeutic procedure, myofascial release, and joint mobilization on January 10, 2001;
    3. therapeutic exercises (7), group therapeutic procedure, myofascial release, and joint mobilization on January 12, 2001;
    4. Delorme muscle testing on January 15, 2001;
    5. limited O.V./established patient, therapeutic exercises (7), group therapeutic procedure, myofascial release, and joint mobilization on January 16, 2001; and
    6. limited O.V./established patient, therapeutic exercises (7), group therapeutic procedure, myofascial release, and joint mobilization provided on January 16, 2001.
  4. The Carrier denied the Provider’s claim for reimbursement for treatments provided on January 8, 10, and 12, 2001, using code “A,” meaning “preauthorization required but not requested.”
  5. The Carrier denied the Provider’s claim for reimbursement for treatments provided on January 15, 16, and 17, 2001, using code “V,” meaning “unnecessary treatment with peer review.”
  6. At the hearing, the Carrier withdrew its argument that the January 8, 10, and 12, 2001, treatments required preauthorization, but asserted the claims should be denied because they were not medically necessary.
  7. The Carrier did not contend the January 8, 10, and 12 treatments were medically unnecessary prior to the hearing at the State Office of Administrative Hearings.
  8. The Provider’s charges for the January 8, 10, and 12, 2001, consistent with maximum allowable reimbursement, was $1,074.00.
  9. The Claimant received three weeks of active and passive physical therapy at Scott and White medical center in September 2001.
  10. The Claimant began treatment for a left wrist sprain/strain with the Provider on November 17, 2001, and received extensive treatment.
  11. The Claimant’s ongoing and chronic care on January 15, 16, and 17, 2001, did not produce measurable and objective improvement.
  12. The Claimant reached maximum medical improvement as of December 28, 2000.
  13. A magnetic resonance imaging performed on the Claimant’s wrist on November 27, 2000, showed unremarkable results.
  14. The treatment provided to the Claimant on January 15, 16, and 17, 2001, did not have the potential for restoration of function.
  15. The hearing convened on November 14, 2002, and closed on November 25, 200.
  16. Both parties received reasonable notice of the hearing of not less than 10 days and each party had an opportunity to respond and present evidence and argument on each issue involved in the case.
  17. The notice of hearing included 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.

VI. 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. Labor Code Ann. §§ 402.073(b) and 413.031(k).
  2. Adequate and timely notice of the hearing was provided in accordance with Tex. Gov’t Code Ann. §§ 2001.051 and 2001.052.
  3. The Provider had the burden of proof on the treatments provided on January 8, 10, and 12, 2001, and the Carrier had the burden of proof on the treatments provided on January 15, 16, and 17, 2001. 28 Tex. Admin. Code (TAC) §148.21(h).
  4. The Carrier is precluded from asserting lack of medical necessity as a reason for denying the claim for the treatments on January 8, 10, and 12, 2001. Tex. Labor Code Ann. § 408.027(d); 28 TAC § 134.304.
  5. The Carrier should pay the Provider $1,074.00 for the treatments provided on January 8, 10, and 12, 2001.
  6. The Provider’s claims for the treatments on January 15, 16, and 17, 2001, should be denied. Tex. Labor Code Ann. § 408.021(a); 28 TAC § 134.201.

ORDER

IT IS THEREFORE ORDERED that Continental Casualty Company pay Waco Ortho Rehab $1,074.00 for treatments provided to the Claimant on January 8, 10, and 12, 2001.

IT IS ORDERED FURTHER that Waco Ortho Rehab’s claim for payment of treatments provided to the Claimant on January 15, 16, and 17, 2001, be, and the same is hereby, denied.

Signed this 16th day of January, 2003.

JAMES W. NORMAN

ADMINSTRATIVE LAW JUDGE

STATE OFFICE OF ADMINISTRATIVE HEARINGS

  1. The Carrier cited SOAH decisions stating that medical necessity could always be reviewed even when not previously cited by an insurance carrier as a ground for denial. See Dockets 453-02-2320.M5 and 453-02-0996.M5.
  2. SOAH Dockets 453-02-1723.M5, 453-01-1958.M5, 453-01-0309.M5, 453-00-1570.M5, 453-99-3399, 453-99-2021.M5, Docket 453-97-0973.M4, and 453-96-0817.M4.
  3. Board of Trustees of Employees Retirement System of Texas v. Benge, 942 S.W. 2d 742, 744 (Tex. App.- Austin 1997, writ den.)
  4. The Carrier’s argument is similar to the commonly stated rationale for a jurisdictional plea raised for the first time after proceedings have progressed, that jurisdiction cannot be waived-as the fundamental basis of a tribunal’s authority to act, it can be raised at any time. However, Texas courts have ruled against a late-asserted jurisdictional challenge when the subject matter of the case was originally within the general or potential authority of the court to act. The court in Spence et ux. v. State National Bank of El Paso, 5 S.W. 2d 754, 756 (Tex. 1928) said:
  5. But this irregularity, even though it be jurisdictional, will not avail plaintiffs in error. . . To permit one to invoke the exercise of a jurisdiction within the general powers of the court and then to reverse its orders upon the ground that it had no jurisdiction would allow one to trifle with the courts. The principle is one of estoppel in the interest of a sound administration of the laws whereby the regularity or even validity of an act procured by one himself cannot be not be, and estoppel does not make valid the thing complained of, but merely closes the mouth of the complainant. (Emphasis added.)

    In Spence, the appellants had applied to the trial court for the appointment of a receiver of their non-exempt property. A receiver was appointed and subsequently sold portions of the property to one of the appellees. The court authorized and approved the sale. The appellants then brought a trespass to try title action to, among other matters, have the sale set aside because it was made by a receiver appointed by the court upon the petition of the appellant property-owners themselves. Statutory law said it was impermissible for the court to appoint a receiver of a corporation, partnership, or person if asked for by that corporation, partnership, or person. The Texas Commission of Appeals stressed that the trial court had generaljurisdiction over the appointments of receivers. Had the appointment of receivers not been within the court, the ruling would have been otherwise.

    Several cases have followed Spence or a similar rationale for late-filed jurisdictional pleas when the subject matter of the case was originally within the court’s general or potential jurisdiction (even in cases where the party raising the jurisdictional plea was not the plaintiff). Kirk v. Head, 152 S.W. 2d 726, 728-729 (Tex. 1941); Svoboda v. State, 612 S.W. 2d 229, 231 (Tex. App. B Tyler 1981, no writ); Strunk v. Peoples, 576 S.W. 2d 487, 490 (Tex. Civ. App.-- Waco 1979, no writ); Garza v. Perez, 403 S.W. 2d 849, 850 (Tex. Civ. App. B Corpus Christi 1966, no writ).

    It was certainly within MRD's and SOAH’s general jurisdiction to render a decision in this case-an MRD decision considering the issues of preauthorization and medical necessity and an appeal of the MRD decision. The reasoning in Spence is similar to this case. To permit a carrier to raise a medical-necessity defense to a claim for the first time at SOAH would be contrary to the sound administration of justice and would allow the carrier to “trifle” with the review process mandated by the legislature.

  6. This amount is based on the Provider’s chart of services and charges at Ex. 1 p. 9.
  7. 28 TAC § 134.201.
  8. Ex. 1 at 46.
  9. As previously indicated, Dr. Bolte opined that the injured worker reached MMI on November 14, 2000.
  10. MMI is defined in part at § 401.011(30) of the Act as “the earliest date after which, based on reasonable medical probability, further material recovery or lasting improvement to an injury can no longer reasonably be anticipated”
  11. Ex. 1 at 45; Ex. 6 at 2.
  12. Ex. 1 at 30-31; Ex. 6 at 4.
  13. Benge.
  14. Tex. Rev. Civ. Stat. Ann. ' 2001.038.
  15. Ex. 1 at 24-29.
  16. Dr. Bailey testified the Claimant’s statement that he could hardly drive from Temple to Waco appears to be inaccurate. However, if that is true, it calls into question the rest of his statements. The accuracy of all the daily records appears to be somewhat doubtful because they are generated by a computer based on the patient’s answers rather than being recorded by the physician. An example of an inaccuracy is contained in the medical notes for November 21, 2000, which state, “The wrist brace gives relief. [The Claimant] reports he finds no relief with the wrist brace.” Ex. 1 at 22.
End of Document
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