DECISION AND ORDER
Staff of the Texas Workers’ Compensation Commission (Department) seeks a $2,500 administrative penalty from State Farm Fire & Casualty Company (Respondent). Staff alleges Respondent violated the Department’s policy and rules relating to Respondent’s failure to comply with a contested case hearing (CCH) final Decision & Order. The Administrative Law Judge (ALJ) finds Staff’s recommendation should be granted, and that $2,500 in administrative penalties be assessed.
I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY
There were no contested issues of jurisdiction, notice or venue. 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 October 9, 2002, at the Hearings Facility of the State Office of Administrative Hearings, William P. Clements Building, 300 W. 15th Street, Fourth Floor, Austin, Texas, with ALJ Stephen J. Pacey presiding. Respondent appeared through its attorney, John Fowler, and Yvonne Williams represented Department. After the introduction of evidence and arguments, the hearing proceeded and concluded the same day. The record closed on October 16, 2002, after the parties were allowed one week to file additional evidence.
A contested case hearing order, which required Respondent to pay benefits to the Claimant, was issued on July 28, 1998, and received by Respondent on July 31, 1998. Respondent had fifteen days from the date of receipt of the order to file an appeal or the order would become final on the sixteenth day or August 13, 1998. Respondent did not appeal and should have complied with the order by September 2, 1998. Based upon the final order, Respondent was required to pay income medical benefits for Claimant relating to the ___________compensable injury. Respondent complied with the order on October 15, 1999, which was 408 days late.
Both parties acknowledged that there was no rule or statute that described exactly how and when Respondent must pay between the time the CCH Decision and Order issued on July 28,1998, and the ultimate payment by the Respondent on October 15, 1999. Staff introduced two Question Resolution Logs (QRL) that bracketed the dates in question: one issued in 1997 and the other issued in 1999. The QRLs indicated that Respondent must pay both income and medical benefits, once an order becomes final, regardless of whether an appeal was filed.
Respondent’s position was that it was under no obligation to pay until the Claimant resubmitted the bills for the dates of service, which were received by Respondent on September 30, 1999, and paid by Respondent on October 15, 1999. Since this is directly contrary to the opinions in the QLRs, the question becomes whether the QRLs are admissible in evidence as official written “policy” of Department. At the hearing, ALJ took the question of admissibility under advisement, and upon further research and reflection on the evidence concludes that the QRLs are admissible as written public policy of the agency.
According to Exhibit 4, an affidavit from Brent Hatch, Director of Customer Service for the Commission:
The question resolution log (QRL) is a tool used by the TWCC in an effort to keep updated on agency positions and policy. The answers published in the QRL are distributed to all agency field offices as an information sharing and training mechanism. The QRL is also routinely requested by insurance carriers and attorneys. The QRL represents commission policy. QRL 97-22 was effective March 27, 1997, and QRL 99-09 was effective April 13, 1999.
SOAH Rules allow the ALJ to consider agency policy not incorporated in a rule and suggest factors to guide the determination of whether to consider such policy. 1 Tex. Admin. Code § 155.53(b). These factors include the extent to which the parties were given notice of the alleged policy and the opportunity to address it; the stability and duration of the policy, as illustrated by the process that led to its adoption and the level of formality of the process required for the agency to amend it; the highest level within the agency at which the policy has been adopted; whether the policy is a substantive principle coming within the agency’s expertise or more of a procedural matter; and whether application of the policy would violate constitutional, statutory, or common law principles.
In this case, the parties were aware of the Staff’s desire to rely on the QRLs. Respondent submitted nothing except argument and a former SOAH opinion to rebut the Staff’s contention that the QRL represents Commission policy. The QRLs were properly authenticated under Tex. R. Evid. 902, and the stability and duration of the policy are reflected by the fact that the policy was in effect for more than one year. In addition, the resolutions contained in the QRL have been reviewed by, and apparently adopted by, a representative of the Commission’s General Counsel and members of its Policy and Issue Resolution Committee. Finally, the policy is directed at a substantive principle within the agency’s expertise and unrelated to matters of procedure, and does not appear to violate constitutional, statutory, or common law principles. Based on these factors, it is appropriate to consider the QRL in determining whether the Respondent should have paid for the services at the appropriate time.
Prior to a rule, and even without a QRL, it is simply logical that parties to contested case hearings comply with the resulting order. In the instant case, Respondent was ordered to pay income and medical benefits. The order is not confusing and is not subject to a condition precedent that Respondent only has to pay once the Claimant resubmits its bill. It was Respondent that requested the compensability hearing and if it is challenging a bill for service, Respondent certainly was aware of the amount of the bill. It is unreasonable for Respondent to delay payment for 408 days, and a fine of $2,500 is not only justified, it is reasonable
IV. FINDINGS OF FACT
- On ___________(Claimant) suffered an injury that she claimed to be a compensable under the Texas Workers’ Compensation Act (Act).
- State Farm Fire and Casualty Company (Respondent) challenged the compensability.
- On July 28, 1998, Texas Worker’s Compensation Commission (Department) issued an order requiring Respondent to pay the medical and income benefits to Claimant.
- Respondent did not appeal the order, and the order became final August 13, 1998.
- Respondent was required to pay Claimant by September 2, 1998.
- Respondent did not pay Claimant until October 15, 1999, which was 408 days late.
- In 1998, there was no rule or statute directing Respondent as to how and when to pay Claimant; however, in 1997 and 1999 Question Resolution Logs (QRL) were issued requiring the Respondent to pay when the order is final.
- The QRLs were written policy of the Department for the following reasons:
- They were properly authenticated.
- The Director of Customer Services attested to the fact that the QRLs represented commission policy.
- The QRLs are directed at a substantive principle within the agency’s expertise and unrelated to matters of procedure, and does not appear to violate constitutional, statutory, or common law principles.
V. CONCLUSIONS OF LAW
- 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.
- 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.
- The hearing was conducted pursuant to the Administrative Procedure Act, TEX. GOV’T CODE ANN. ch. 2001.
- Adequate and timely notice of the hearing was provided in accordance with TEX. GOV’T CODE ANN. §§2001.051 and 2001.052.
- QRLs are written policy of the Commission, which at the time of the nonpayment required Respondent to pay the Claimant the income and medical benefits when the contested case order became final.
- Respondent violated the written policy of Department because Respondent did not pay the Claimant for 408 days.
- At a hearing, the Texas Labor Code §414.021(b)(3) provides for a maximum penalty of $10,000 for a violation of a Commission Order.
- A penalty of $2,500 is appropriate because of the length of time that Respondent violated the Commission Order requiring that Respondent pay Claimant her income and medical benefits.
- Based on the foregoing, Department’s request for Respondent to pay a $2,500 penalty should be granted.
IT IS ORDERED that State Farm Fire and Casualty Company pay to Texas Workers’ Compensation Commission a penalty of $2,500 for violating Department’s order.
Signed this 13th day of December, 2002.
STEPHEN J. PACEY
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS
- The 1997 QRL said in pertinent part: “The H.O. [hearing officer] decision is binding during the pendency of an appeal. Therefore, the bills must be paid at that time.”
The 1999 QRL said in pertinent part: Orders to pay benefits include both income and medical benefits and by statute, such orders are binding during the pendency of an appeal.↑