DECISION AND ORDER

Petitioner, Edward Wolski, M.D.,^[1] appeals a Texas Workers’ Compensation Commission Medical Review Division (MRD) decision denying additional reimbursement for pain management services. The Carrier, ______________, argued and MRD found, that Petitioner did not sufficiently substantiate the fairness and reasonableness of his $185 per hour charges. The Carrier paid $100 per hour for the services. In this appeal, Petitioner asserted that the Carrier’s explanation for the reduction was inadequate, and this decision agrees with Petitioner.

I. Jurisdiction and Hearing

As there were no challenges to notice or jurisdiction, those matters are stated in the findings of fact and conclusions of law without further discussion here.

The hearing was held on June 19, 2002, before Sarah G. Ramos, Administrative Law Judge (ALJ), at the State Office of Administrative Hearings facility, 300 West Fifteenth Street, Austin, Texas. Attorney Douglas Pruett represented Petitioner, and attorney Mark Sickles represented the Carrier. MRD did not participate. The record closed on July 10, 2002, after the parties filed proposed findings of fact and conclusions of law.

II. Discussion

A.Background

At the hearing, Petitioner withdrew payment requests for service dates August 31, September 5, and September 13, 2001, and the parties did not disagree about compensability of the injury or the fact that Petitioner provided chronic pain management services (billed as CPT Code 97799-CP) on specified dates of service. The amount remaining in dispute, $8,095, is for services provided July 10, 2001, through August 22, 2001. Petitioner bore the burden of proof.

In paying $100 for Petitioner’s service instead of the billed amount of $185, the Carrier typed on the explanation of benefits forms (EOBs) the letter “M”. At the bottom of the EOB form, this brief explanation is given for the letter: “No MAR^[2]/Reduced to Fair and Reasonable.” The Carrier attached no other explanation or peer review to support its reduction.

Petitioner requested reconsideration and resubmitted his billing forms stamped with the words, “Request for Reconsideration.” He attached a treatment summary for each date of service. The summaries included the number of treatment hours and the types of treatment, e.g., range of motion, cardio exercise, LPC^[3] group, test questions, etc. (Ex. 1, pp. 18-106.) The Carrier did not respond to the reconsideration requests (Ex. 1, pp. 14 and 164.)

B.Petitioner’s Arguments

Citing 28 Tex. Admin. Code (TAC) §133.304(c), Petitioner asserted that the EOBs were inadequate because they provided no further reasons than the cryptic explanation and were not accompanied by peer review support. Rule 133.304(c) states, in pertinent part:

At the time an insurance carrier makes payment or denies payment on a medical bill, the insurance carrier shall send, in the form and manner prescribed by the Commission, the explanation of benefits to the appropriate parties. The explanation of benefits shall include the correct payment codes required by the Commission’s instructions, and shall provide sufficient explanation to allow the sender to understand the reason(s) for the insurance carrier’s action(s). A generic statement that simply states a conclusion such as “not sufficiently documented” or other similar phrases with no further description of the reason for the reduction or denial of payment does not satisfy the requirements of this section. . . . (Emphasis added.)

Petitioner relied on ALJ James W. Norman’s decision in Docket No. 453-02-0731.M5 as support for his argument that the EOBs were inadequate. Judge Norman found a similar brief explanation inadequate. However, the facts in Judge Norman’s case were somewhat different in that the carrier relied on a peer review report, but it failed to give the report to the medical care provider, even after repeated requests.

To further support his request for additional reimbursement, Petitioner provided EOBs from other carriers that paid him $180 or $185 an hour for pain management services: AIG Claims Services (service date 7/19/01), National Union Fire Insurance of Pittsburgh, PA (service date 8/7/01); Wal-Mart, Texas (service date 3/7/01); GAB Business Services, Inc. (service date 1/13/00); State Office of Risk Management (service dates 11/13/00, 1/11/01, 1/16/01); and the U.S. Department of Labor (service date 1/15/01).

The EOBs submitted do not show diagnosis codes for pain management in those cases. Nevertheless, Petitioner asserted that pain management is not a diagnosis-based code. Instead, it is a service-based code; i.e., he should not be paid different amounts for pain management for treating different injuries. Pain management treatment for carpal tunnel syndrome, for example, should be reimbursed at the same rate as treatment for back injuries, he argued.

C.Carrier’s Arguments

The Carrier cited another decision in which ALJ Katherine L. Smith considered the issue of fair and reasonable reimbursement for ambulatory surgical center care. Those services also do not have a MAR. Reviewing several Commission rules, and relying particularly on 28 TAC §134.1(f) and Tex. Lab. Code Ann. §413.011(b), Judge Smith concluded that a carrier must pay a usual and customary charge only if there is evidence that it achieves effective medical cost control, takes into account payments made to others with an equivalent standard of living, and considers the increased security of payment.

The Carrier argued that the EOBs from other carriers only proved that Petitioner “cherry picked” certain claims. Also, the other claims, though the services were for the same CPT code, did not show that the same injuries as the Claimant suffered in this case were being treated. Finally, the Carrier noted that Petitioner’s clinic is not CARF-certified; thus, the Medical Fee Guideline requires an automatic twenty percent reduction in reimbursement.

D.Analysis

The ALJ finds that the Carrier’s response was inadequate under 28 TAC §133.304 (c) because it used only a generic statement to explain its reduction. The Carrier’s failure to adequately explain its reasons for denying the claim may have deprived Petitioner of the opportunity to submit a meaningful response to the Carrier’s denial when he asked for reconsideration under 28 TAC ‘133.304(k) or when he requested reconsideration. Although the rule does not require a peer review, it does require an explanation that helps the provider understand the reason for reduction.

The Carrier’s brief explanation and its payment of $100 per hour would inform a reasonable person of the Carrier’s conclusion as to what was fair reasonable, but it would not be instructive as to why $100 an hour was considered more reasonable than $185 an hour. And, while it would be impractical for every claim to be peer reviewed, it would not be unreasonable to expect a carrier to refer to some study about similar payments, particularly in this case where there was a request for reconsideration.

If the Carrier had appropriately denied the claim, its arguments about the inadequacy of Petitioner’s case would merit further consideration, particularly in light of requirements Judge Smith outlined in her decision. Nevertheless, a valid denial or at least a clear response to a reconsideration request are necessary before the provider is required to respond.

For these reasons, the ALJ finds that Petitioner met his burden of proof. As the Carrier noted, Petitioner was not CARF-certified when the services were provided. Therefore, the amount billed should be reduced by twenty percent.

III. Findings of Fact

1. All parties received at least ten days notice of the hearing, which 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.
2. An employee of ______________ (the Carrier) sustained a compensable injury on___________.
3. At the time of the employee’s injury and continuing to the present, the Carrier has been a certified self-insurer.
4. Edward Wolski, M.D., (Petitioner) treated the injured employee with chronic pain management services, CPT Code 97799-CP, and billed $185 per hour for various service dates from July 10, 2001, through September 13, 2001.
5. The Carrier reimbursed Petitioner for services dates from July 10, 2001, through August 22, 2001, at the rate of $100 per hour.
6. Petitioner withdrew payment requests for service dates August 31, September 5, and September 13, 2001.
7. The total amount remaining in dispute is $8,095.
8. In paying the reduced amount, the Carrier supplied explanations of benefits (EOBs) with the letter “M” typed on it. The letter corresponds to this statement at the bottom of the forms: “No MAR [maximum allowable reimbursement]/Reduced to Fair and Reasonable.”
9. No other explanation was attached to the EOBs.
10. The Carrier’s explanation was a generic statement that simply stated a conclusion. It did not include sufficient explanation to allow Petitioner to understand the reason the billed amount was reduced.
11. Petitioner requested reconsideration and resubmitted his billing forms stamped with the words, “Request for Reconsideration.” He attached a treatment summary for each date of service. The summaries included the number of treatment hours and the types of treatment, e.g., range of motion, cardio exercise, LPC group, test questions, etc.
12. The Carrier did not respond to the reconsideration requests.
13. Petitioner was not CARF-certified when it provided services to the employee.

IV. Conclusions of Law

1. The State Office of Administrative Hearings has jurisdiction over matters related to the hearing, 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.
2. The parties received proper and timely notice of the hearing. Tex. Gov’t Code Ann §§ 2001.051 and 2001.052; 1 Tex. Admin. Code §155.27.
3. The Texas Worker’s Compensation Commission’s rule at 28 Tex. Admin. Code §133.304(c) requires EOBs to include not only the correct payment codes but also sufficient explanation to allow the sender to understand the reasons for the insurance carrier’s actions.
4. A generic statement that simply states a conclusion such as “not sufficiently documented” or other similar phrases with no further description of the reason for the reduction or denial of payment does not satisfy the requirements of the rule.
5. Because the EOB was inadequate, there was no legal denial of the reimbursement claim, and the time for filing denial has passed. Tex. Lab. Code Ann.§408.027.
6. The Carrier should reimburse Petitioner $185 per hour for services provided between July 10, 2001 and August 22, 2001, less a twenty percent reduction because the Petitioner was not CARF-certified.
7. Pursuant to Tex. Lab. Code Ann. §413.019, the Carrier should pay interest on the amount that was unpaid.

ORDER

THEREFORE, _________ is ORDERED to reimburse Petitioner the $185 per hour for service dates between July 10, 2001, and August 22, 2001, less a twenty percent reduction because the Petitioner was not CARF-certified. The Carrier should receive a credit for the amounts already paid. Further, pursuant to Tex. Lab. Code Ann. ‘413.019, the Carrier should pay interest on the amount that was unpaid.

Signed this 4^th day of September 2002.

SARAH G. RAMOS
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1. The MRD decision used an incorrect spelling of the doctor’s surname (Wolanski), but Wolski is the correct spelling.↑
2. Maximum allowable reimbursement. There is no MAR for chronic pain management.↑
3. Licensed Professional Counselor.↑