Your FREE and easy resource for all things Texas workers' compensation
At a Glance:
September 26, 2002


September 26, 2002


VONO challenges a decision of the Texas Workers’ Compensation Commission’s Medical Review Division (MRD) denying requested reimbursement of $1,521.48 for prescription drugs provided to an injured worker (Claimant). Continental Insurance Company (Continental) denied reimbursement based on its conclusion that there was neither a showing of objective medical necessity for the drugs nor any demonstrated functional gains from their use. This decision agrees with Continental and the MRD that the prescribed drugs were not shown to be medically necessary. Consequently, reimbursement is not warranted under the Commission’s Medical Fee Guideline generally or its Spine Treatment Guideline specifically.

I. Jurisdiction and Notice

Neither jurisdiction nor notice were contested; they are addressed only in the Findings of Fact and Conclusions of Law.

The hearing convened and closed on August 1, 2002, at the Hearings Facility of the State Office of Administrative Hearings (SOAH) before SOAH Administrative Law Judge (ALJ) Gary Elkins. Nicky Otts appeared on behalf of VONO. Continental was represented by its attorney, Shannon Pounds.

II. Discussion

A. Background

The determinative issue in this case is straightforward: Were various prescription drugs provided to Claimant between August 17, 2001, and September 26, 2001, medically necessary to treat work-related slip-and-fall back injuries she suffered in 1991 and 1993?

After her injury in 1991, Claimant began seeing Fernando Avila, M.D., a pain specialist, who continues to treat her for chronic pain. During the more than ten years following Claimant’s first injury, Dr. Avila administered a pain treatment regimen that included the several prescription medications for which VONO, as the pharmaceutical provider, requests reimbursement.[1] While Continental consistently reimbursed VONO for the medications over several years, the carrier apparently decided, during the summer of 2001, to re-confirm the continuing need for such treatment. By letter of August 31, 2001, a claims representative of Continental requested both documentation demonstrating improvement in the claimant’s condition and a treatment plan describing the duration of the drug therapy. When Continental was not persuaded that an October 2001 “Letter of Medical Necessity” provided by Dr. Avila demonstrated the need for continued drug therapy, it denied reimbursement for the medications provided from August 17, 2001, to September 26, 2001.

Summary of Parties’ Positions

VONO’s request for reimbursement focuses on the following arguments:

  • The medical documentation demonstrates medical necessity.
  • VONO acted in good faith in filling the prescriptions, but by the nature of its role in filling prescriptions it was “caught in the middle” between a doctor’s medical judgment and a carrier’s determination that the prescribed medication was not medically necessary.
  • The peer reviewers who reviewed Dr. Avila’s treatment, an orthopedist and chiropractor, were not of the same or similar medical expertise as required by the Commission’s rules.
  • The peer review reports were not provided to VONO, thereby hindering its efforts to prosecute its claim.

Continental simply focused on its conclusion that there was no objective evidence to support a finding of medical necessity for a pain management program employing prescription drug therapy.

C. Analysis

Medical Documentation

The evidence presented failed to establish any medical necessity for the prescription drugs provided to the claimant in August and September of 2001. Absent were any objective signs of a medical abnormality supporting the prescription drug therapy or objective findings reflecting improvement in the patient. Furthermore, the record reflected no formal, detailed plan of treatment that might have proven useful in tracking the need for and effectiveness of Dr. Avila’s therapy. In fact, the medical documentation strongly suggests any medical problems that might have arisen from Claimant’s compensable injuries had long ago resolved themselves and, thus, did not merit the medication prescribed by Dr. Avila.

The ALJ was not persuaded by VONO’s assertion that an August 7, 2000, letter by Dr. Avila to a utilization review company supports a finding of medical necessity. The letter refers to an eight-year-old diagnosis (at the time of the disputed services) of L5-S1 nerve root compromise and a subsequent diagnosis by Dr. Avila of L5-S1 radiculopathy. More importantly, the letter appears, at least in part, to legitimize Continental’s suspicions regarding the need for continued drug therapy, where Dr. Avila states:

After reviewing Dr. Lee’s report I plan to wean [Claimant] off medication in the coming months. I have done so in the past. However, [Claimant] does have an exacerbation of the L5-S1 nerve root periodically that will require some pain medication.

(Ex. 1, at 50.)[2]

Peer Reviews

VONO questioned the validity of the peer reviews conducted by Rod Lee, M.D., an orthopaedic surgeon, and Lloyd Payne, D.C., a chiropractor. VONO asserted that the two reviews should be disregarded based on their failure to comply with the requirement of 28 Tex. Admin. Code §134.304(g). The rule requires that peer reviews be conducted by doctors with the same or similar expertise as the treating doctor. VONO argued that the expertise of the two reviewers was not similar to that of Dr. Avila, who is an anesthesiologist and pain management specialist.

The ALJ agrees that the experience of the two reviewers is substantially different than that of Dr. Avila in regard to anesthesiology and pain management. Nevertheless, the ALJ finds their opinions more persuasive than Dr. Avila’s on the more fundamental issue in this case: whether there existed an injury in August and September of 2001 for which Dr. Avila’s pain management techniques might be appropriate. The evidence indicates no such injury existed.

As Dr. Avila did in his letter, the peer reviewers referred in their 2000 reports to examinations conducted by other doctors. The most serious diagnosis, according to Dr. Lee, was a lumbar strain reported by two neurologists in the early 1990's. Two other doctors found either no orthopaedic injury or no objective clinical abnormality of significance. Further, according to Dr. Lee, MRIs conducted in 1992 and 1993 were reported to be normal. (Ex. 1, pp. 71-72.)

VONO was persuasive in its assertion that pharmaceutical providers inherently are disadvantaged in proceedings such as this, where they find themselves are stuck between the primary care physician, who has concluded the subject services are medically necessary, and the carrier, who has concluded no such necessity exists. In its ancillary role as a mechanism through which the doctor’s decisions are fulfilled, VONO simply follows the doctor’s instructions when it appears they are prudent and reasonable; the pharmacy argues that it can not and does not make medical necessity decisions. Consequently, and unfortunately, under the medical dispute resolution scheme the pharmacy is placed in a distinctly disadvantageous position when attempting to collect for its services via the medical dispute resolution process-the position of vicariously having to defend a treating doctor’s decisions on medical necessity.

Notwithstanding the obvious disadvantage created by this aberration in the medical dispute resolution process, the administrative law judge still is left with the responsibility of deliberating and rendering a decision based on the evidence presented. As for VONO’s complaint that it was not provided with copies of the peer reviews, thus preventing it from better preparing its claim, the ALJ concludes that under the circumstances of this case any such failure did not prejudice VONO’s ability to present its position before SOAH.

D. Conclusion

The evidence strongly favors Continental’s position that Dr. Avila’s chronic pain management efforts via the drug therapy in August and September of 2001 were not shown to be medically necessary. Consequently, as set out in the Findings of Fact and Conclusions of Law, VONO’s claim should be denied.

III. Findings of Fact

  1. A worker (Claimant) suffered compensable injuries to her spine in ________and _______when, in each instance, she slipped and fell.
  2. At the time of Claimant’s injuries, Continental Casualty Company (Continental) was the workers’ compensation insurance carrier for her employer.
  3. Claimant has been provided chronic pain treatment by Fernando Avila, M.D., since her first injury.
  4. From August 17, 2001, through September 26, 2001, Dr. Avila prescribed several drugs associated with pain treatment for the claimant, including MS Contin (morphine), 60 mgs; Zonegran, 100 mgs; Senokot-S; MSIR, 15 mgs; Effexor-XR, 75 mgs; and Remeron, 15 mgs.
  5. The drugs were dispensed by the provider, VONO, who billed Continental $1,521.48 for them.
  6. Continental refused to reimburse VONO for the drugs.
  7. On December 26, 2001, VONO filed a request for medical dispute resolution with the Medical Review Division (MRD) of the Texas Workers’ Compensation Commission.
  8. Upon consideration of the request for medical dispute resolution, the MRD denied reimbursement to VONO.
  9. Based on the MRD decision, VONO timely filed a request for hearing before the State Office of Administrative Hearings.
  10. Two peer reviews concluded there was no medical necessity for the prescribed drugs.
  11. In August 2000, Dr. Avila concluded Claimant should be weaned from the drug therapy.
  12. MRIs conducted on Claimant in 1992 and 1993 were reported to be normal.
  13. During the pertinent dates of service, Claimant did not suffer from a clinical abnormality of any significance.

IV. Conclusions of Law

  1. The Texas Workers' Compensation Commission has jurisdiction to decide the issue presented pursuant to the Texas Workers' Compensation Act (the Act), Tex. Labor Code Ann. §413.031 (Vernon Supp. 2002).
  2. SOAH 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. Code Ann. ch. 2003 (Vernon 2002).
  3. The hearing was conducted pursuant to the Administrative Procedure Act, Tex. Gov’t Code Ann. ch. 2001 (Vernon 2002) and 28 Tex. Admin. Code (TAC) §§133.305.
  4. Petitioner has the burden of proof in this matter. 28 TAC §148.21(h).
  5. Petitioner failed to prove that the dispensed drugs were medically necessary for the treatment of Claimant.
  6. Petitioner’s request for reimbursement should be denied.


IT IS ORDERED that VONO is not entitled to reimbursement from Continental Insurance Company for drugs dispensed to Claimant from August 17, 2001, through September 26, 2001.

Signed this 26th day of September, 2002.

Administrative Law Judge

  1. The drugs included MS Contin (morphine), 60 mgs; Zonegran, 100 mgs; Senokot-S; MSIR, 15 mgs; Effexor-XR, 75 mgs; and Remeron, 15 mgs.
  2. Rod Lee, M. D. was the chiropractor who performed one of the peer reviews.
End of Document