DECISION AND ORDER
Texas Mutual Insurance Company (Petitioner) appealed the decision of the Texas Workers’ Compensation Commission’s (Commission) Medical Review Division (MRD) in MDR Docket No. M5-02-0420-01 which granted reimbursement for a cryotherapy unit provided by Houston Premier DME (Provider) to a workers’ compensation claimant (Claimant). Petitioner had denied reimbursement to Provider claiming the cryotherapy unit was not medically necessary healthcare. This decision finds Petitioner is not liable to reimburse Provider for the DME.
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 convened and the record closed on August 29, 2002, at the State Office of Administrative Hearings, 300 W. 15th Street, Austin, Texas, with Administrative Law Judge (ALJ) Ann Landeros presiding. Petitioner was represented by its attorney, Patricia Eads. Respondent was represented by its designated representative, Alex Cuevas. The Commission did not participate in the hearing.
A. Background Facts
On______, Claimant injured his knee, an injury compensable under the Texas Workers’ Compensation Act (Act). At the time of the compensable injury, Petitioner was the workers’ compensation insurer for Claimant’s employer.
In August 2000, Claimant had knee surgery. His doctor prescribed a cryotherapy unit to decrease post-operative pain and swelling. Provider subsequently billed Petitioner $620 for the cryotherapy unit, which consisted of a water circulating pump and a pad. Provider billed separately for the circulating pump and the pad. Because each of the two components cost under $500, Provider did not seek preauthorization for the rental. Petitioner denied reimbursement on the basis that the durable medical equipment (DME) was not medically necessary healthcare, being a more expensive way to provide the same relief that could be obtained with an ice or gel pack. The MRD ordered reimbursement of the full $620, finding medical necessity was established under the Commission’s Lower Extremity Treatment Guideline (LETG), formerly found at 28 TAC §134.1003 (repealed effective January 1, 2002).
B. Legal Standards
Entitlement To Health Care
Petitioner has the burden of proof in this proceeding. 28 TAC §§148.21(h) and (i); 1 TAC ' 155.41. 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)
Lower Extremity Treatment Guidelines
Among other considerations, the LETG required treatment of a work related injury be adequately documented, evaluated for effectiveness, provided in the least intensive setting, and be cost-effective. 34 TAC § 134.1003(e)(2). Although the LETG contained a discussion of surgical indicators, it did not specifically discuss or recommend the post-surgical use of cryotherapy. 34 TAC § 134.1003(g).
Because the MRD did not specifically cite to the LETG, it is difficult to know to what the MRD referred in its decision when it wrote: “The Health Care Provider (HCP) has submitted a letter of medical necessity addressing all the documentation requirement of the LETG for reimbursement. By satisfying the requirements set forth in the LETG, the HCP has established medical necessity and effective utilization of this medical service. (Exh. 1, p.3)
Provider argued that it adequately documented the medical necessity of the cryotherapy unit. Provider’s representative, Alex Cuevas, referred to the letter of medical necessity written by Claimant’s surgeon, Dr. Lubor Jarolimek, which stated:
. . . Post-operatively a cryotherapy unit was ordered to decrease post-operative pain and swelling and to prevent the occurrence of edema, effusion, and hematoma formation, both intra-articularly and in soft tissue by vasoconstriction of the capillaries to the injured/operative area. Although ice bags could be used for post-operative cooling, they carry the risk of frostbite and they do not maintain constant temperature. A cryotherapy unit is superior to ice bags just as automobiles are superior to bicycles for one’s daily commute. The treatments are medically necessary, reasonable, and were made medically necessary by the patient’s covered surgery. (Exh. 1, p. 19).
Petitioner’s expert witness, orthopedic surgeon John Pearce, testified that cryotherapy units have a higher incidence of complications, such as frostbite, than ice or gel packs. With the constant temperature of the cryotherapy unit, the patient’s skin may be exposed to extreme cold over too long a period. Because the ice and gel packs warm over time, they are less likely to expose the skin to extended periods of excessive cold, thus being less likely to cause frostbite. (Exh. 2, pp. 7-8).
For a carrier to be liable for reimbursement, the provider must obtain preauthorization for all durable medical equipment (DME) in excess of $500 per item (either purchase or expected cumulative rental). 28 TAC § 134.600(h)(11). Provider did not obtain preauthorization for the cryotherapy unit, claiming that it was not required because neither of the two components billed (the water circulating pump or the pad) individually cost over $500.
Petitioner argued that preauthorization was required because the cryotherapy unit could not operate without both components, so it was the cost of the total functional unit, not its individual components, that determined whether the $500 per item preauthorization threshold had been reached. Petitioner likened Provider’s approach to billing separately for a needle and a syringe. Because the needle is useless without the syringe and vice versa, the items are really components of one piece of medical equipment and should be billed as a unit. Likewise, the water circulating pump and the pad must be used together to have a functional piece of medical equipment, and they should be billed as one unit.
Durable Medical Equipment Ground Rules
The DME Ground Rule IX, formerly found in the Commissions Medical Fee Guideline at 28 TAC § 134.1000, required that Provider submit a letter of medical necessity (containing the diagnosis, the prognosis, and the expected duration of use) along with the DME prescription. Provider admitted that it did not submit the letter of medical necessity until some weeks after the cryotherapy unit was provided Claimant. Provider claimed that because the letter of medical necessity was provided during the reconsideration period, the tardiness of its submission was irrelevant.
C. Medically Necessary Healthcare Arguments
Petitioner’s witnesses, Rick Ball, an registered nurse, and Dr. Pearce, admitted that cold therapy was probably appropriate post-surgical therapy for Claimant. But Petitioner’s witnesses argued that Provider’s cryotherapy unit was as unnecessary as a gold-plated wheelchair to deliver the needed cold therapy. According to Petitioner, Claimant could have gotten the same effect with an ice or gel pack with less danger of frostbite and at far less expense.
Provider argued that the cryotherapy unit was superior to an ice or gel pack because it maintained a constant temperature and did not require changes of ice or refrigeration as packs do. Because a person would be expected to have limited mobility after knee surgery, having a machine that can work for hours or days without needing attention from the patient is valuable improvement in technology. Provider pointed to the prescription for the cryotherapy unit and to Dr. Jarolimek’s letter of medical necessity as establishing the unit was medically necessary healthcare.
Petitioner met its burden to show that the cryotherapy unit was not medically necessary healthcare because it was not cost-effective and that it was an item of DME that required preauthorization for Petitioner to be liable for reimbursement.
The cryotherapy unit consisted of two components, neither of which could independently provide cold therapy. Whether or not the unit’s components were properly billed using two CPT separate codes, for purposes of determining whether the $500 threshold for preauthorization of DME was met, the cost of all components necessary to make the cryotherapy unit a functional piece of medical equipment (e.g., one capable of delivering a health care service) should have been included. In this case the water circulating unit was billed at $495 and the pad at $125, meaning the a functional cryotherapy unit cost $620, well over the $500 threshold requiring preauthorization. Because Provider did not obtain the required preauthorization, Petitioner is not liable to reimburse for the cryotherapy unit.
In addition to the lack of preauthorization, Petitioner established that the cryotherapy unit did not meet the LETG requirement that the healthcare be cost-effective. Dr. Jarolimek recommended the cryotherapy unit because it was a “car as opposed to the ice pack, which is a mere “bicycle. Based on the LETG’s cost-effectiveness mandate, when a “bicycle level of technology will provide a service adequately, the “car level of technology is not preferred over the “bicycle level if the “bicycle is more cost-effective. For Claimant’s post-surgical needs, an ice or gel pack could have provided the cold therapy as well as the cryotherapy unit but at a fraction of the cost. The major difference between the cryotherapy unit and an ice or gel pack is that the former maintains a constant temperature over a longer term. However, this difference may actually be a detriment, as prolonged use of cold temperatures increases the risk of frostbite to the patient. In that regard, the cryotherapy unit is actually less beneficial healthcare than an ice or gel pack.
Petitioner should not have to reimburse Provider for the cryotherapy unit provided Claimant in August 2002 because the unit was not cost-effective and was not preauthorized as required for DME over $500.
III. FINDINGS OF FACT
- In_____, Claimant suffered a knee injury compensable under the Texas Workers’ Compensation Act and for which Texas Mutual Insurance Company (Petitioner) was the responsible insurer.
- In 2000, after Claimant had surgery on his knee, his doctor prescribed the post-surgical use of a cryotherapy unit to provide cold therapy for the knee.
- Houston Premier DME (Provider) provided a cryotherapy unit, consisting of a water circulating pump and a pad, to Claimant.
- Provider billed Petitioner $495 for the water circulating pump and $125 for the pad.
- To provide cold therapy, the cryotherapy unit must have both the pump and the pad.
- At the prices Provider billed, a cryotherapy unit capable of providing cold therapy cost $620.
- Provider did not request preauthorization of the cryotherapy unit rental.
- Provider requested medical dispute resolution after Petitioner denied its request for reimbursement for the cryotherapy unit.
- Petitioner appealed the decision of the Texas Workers’ Compensation Commission’s (Commission) Medical Review Division, which ordered Petitioner to reimburse Provider $620 for the cryotherapy unit.
- Pursuant to the notice of hearing sent by the Commission’s Staff, all parties appeared and were represented at the hearing held in this matter on August 29, 2002.
- A cryotherapy unit provides longer exposure to constant cold temperatures than does an ice or gel pack. This prolonged exposure to constant cold temperatures increases the risk of frostbite to a patient.
- An ice or gel pack could have provided adequate cold therapy to Claimant at a fraction of the cost of a cryotherapy unit.
IV. CONCLUSIONS OF LAW
- The Texas Workers’ Compensation Commission (Commission) has jurisdiction related to this matter pursuant to the Texas Workers' Compensation Act (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 and the Commission’s rules, 28 TEX. ADMIN. CODE (TAC) §133.305(g).
- Adequate and timely notice of the hearing was provided in accordance with TEX. GOV’T CODE ANN. §§ 2001.051 and 2001.052.
- Petitioner has the burden of proof in this proceeding. 28 TAC §§ 148.21(h) and (i); 1 TAC § 155.41.
- 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).
- Among other considerations, the Commission’s Lower Extremity Treatment Guideline required treatment of a work related injury be adequately documented, evaluated for effectiveness, provided in the least intensive setting, and be cost-effective. 34 TAC § 134.1003(e)(2) (repealed January 1, 2002).
- For a carrier to be liable for reimbursement, the provider must obtain preauthorization for all durable medical equipment (DME) in excess of $500 per item (either purchase or expected cumulative rental). 28 TAC § 134.600(h)(11).
- As an item of DME costing over $500, the cryotherapy unit needed to be preauthorized if Petitioner was to be held liable to reimburse Provider for its cost.
- Without preauthorization, Petitioner is not liable for reimbursement of the cryotherapy unit.
- The cryotherapy unit rental for Claimant was not medically necessary because it was not cost-effective.
- Petitioner is not obligated to reimburse Provider for the cryotherapy unit.
IT IS ORDERED that Texas Mutual Insurance Company is not liable for reimbursement of the cost of the cryotherapy unit provided by Houston Premier DME to Claimant
Signed this 10th day of October, 2002.
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS