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At a Glance:
Title:
453-02-3525-m5
Date:
October 15, 2002
Status:
Retrospective Medical Necessity

453-02-3525-m5

October 15, 2002

DECISION AND ORDER

I. Introduction

The University of Texas System (Carrier) has appealed a decision of an independent review organization (IRO) and an order of the Texas Workers’ Compensation Commission (TWCC) Medical Review Division (MRD) directing the Carrier to reimburse Impairment and Pain Center (Provider) $400 for two functional capacity evaluations (FCEs) that it performed on E.R.H. (Claimant). The only disputed issues are:

  • Whether the FCEs were reasonably medically necessary to treat the Claimant’s compensable injury;
  • Whether the Administrative Law Judge (ALJ) has jurisdiction to determine which party should pay the IRO’s fee; and
  • If the ALJ has that jurisdiction, who should pay the $650 IRO fee.

As set out below, the Administrative Law Judge (ALJ) finds that the FCEs were not reasonably medically necessary. Accordingly, he concludes that the Provider’s request for reimbursement for the FCEs should be denied. The ALJ also finds that State Office of Administrative Hearings (SOAH) ALJs have no jurisdiction to rule on the IRO fee dispute.

II. Medical Necessity of the FCEs

There is no significant evidence that the FCEs were medically necessary. To the contrary, the great weight of the evidence shows that they were unnecessary. An FCE includes a physical examination, neurological evaluation, a physical capacity evaluation of the injured area and functional abilities tests.[1]

The Claimant’s treating physician, Eric H. Scheffey, M.D., (Treating Physician) prescribed the FCEs by jotting on a prescription pad, “FCE Dr. Oneal,” and adding no explanation.[2] The Carrier’s claims representative, Susan Theis, testified that the Claimant has been terribly disabled by the Injury for eleven years and has had more than ten surgeries to treat his Injury, and that the Carrier has paid the maximum benefits to the Claimant since his Injury. She also stated that the purpose of an FCE is to determine a claimant’s ability to work.[3]

Before the FCEs were performed, the Treating Physician stated in writing that:

  • The Claimant could not stand, sit or walk without being medicated for leg and back pain, which medications then required the Claimant to go to bed;
  • The Claimant was not a candidate for gainful employment;
  • The Claimant was a candidate for further surgery only one month before the first FCE and three months before the second; and
  • Any type of activity aggravated the Claimant’s back and leg condition.[4]

When the Claimant participated in the FCEs, he was unable to sit unsupported, stand, walk, crouch, reach, or lift the minimal times required to complete the FCEs.[5] Thus, the FCEs confirmed what the Treating Physician and the Carrier knew and admitted beforehand: there was no possibility that the Claimant would be able to return to work in the near future, if ever.

In all appeals from reviews of retrospective necessity disputes, the IRO decision has presumptive weight.[6] In this case, the IRO found that the first FCE was necessary, but the basis of that determination is unclear. The IRO noted that the Claimant had complained in April 2001 of increased falling and weakness and that the Claimant had surgery in April 2001. The IRO discussed recently performed nerve-conduction, motor and sensory studies and a myelogram. He stated that they were insufficient to determine the source of the Claimant’s injury and that an FCE, was needed to determine the Claimant’s ability to work. There is no evidence that the IRO found that a second FCE was necessary.

Even prior to the first FCE, it was clear to the Treating Physician and the Carrier that the Claimant had no ability to work. Why then was an FCE needed? The ALJ concludes that it was not, and, despite his decision’s presumptive weight, the IRO was incorrect.

The ALJ concludes that the FCEs were not reasonably medically necessary. He further concludes that the Provider’s request for reimbursement for the FCEs should be denied.

III. The ALJ Lacks Jurisdiction to Hear or Rule on IRO Fee Disputes

The Carrier believes it should not have been required to pay the IRO’s fee for reviewing its medical dispute with the Provider. Under TWCC’s rules, the non-prevailing party in a retrospective necessity dispute must pay the IRO’s fee.[7] In this case, MRD determined that the Carrier was the non-prevailing party before the IRO.[8] The Carrier contends that the MRD decision was incorrect and that the ALJ has jurisdiction to review MRD’s prevailing-party, IRO-reimbursement decision. The Provider, not represented by an attorney, takes no specific position on this jurisdictional issue.

The ALJ concludes that he has no jurisdiction to hear or rule on an IRO fee dispute. SOAH has only the specific powers conferred on it by statute in clear and express language.[9] The Government Code[10] authorizes SOAH to conduct administrative hearings: (1) for agencies that do not have an employee whose sole duty is to conduct such hearings and (2) in matters as required by other law.[11]

It is true that SOAH’s enabling act requires SOAH to conduct certain workers’ compensation hearings as provided under Labor Code Title 5.[12] However, that title does not authorize SOAH to conduct all workers’ compensation hearings. TWCC has specialized hearings officers. TWCC’s Division of Hearings conducts certain contested case hearings related to workers’ compensation claims.[13]

Labor Code §413.031(k), which lies within Title 5, does authorize SOAH to hear cases involving a “medical dispute that remains unresolved after review” by TWCC. It is tempting to say that such a “medical dispute” includes any ancillary dispute concerning IRO reimbursement. Within the context of Section 413.031, however, it is clear that the “medical dispute”concerns only the “review of a medical service provided or for which authorization of payment is sought . . ..”[14] Thus the main dispute in this case, concerning the medical necessity of and reimbursement for the FCEs, is a “medial dispute,” while the IRO-reimbursement dispute is not.

Other provisions in Title 5 authorize SOAH to hear cases involving other types of workers’ compensation disputes,[15] but IRO-reimbursement disputes are not mentioned. Notably, the provisions of Title 5 that provide for IRO review of medical disputes and specify who shall pay for the cost of that review[16] do not authorize SOAH to hear related disputes concerning IRO reimbursement.

The Carrier argues that Labor Code § 401.021(1) grants SOAH jurisdiction to hear the IRO-reimbursement dispute. That statute provides that a proceeding, hearing, judicial review, or enforcement of a commission order, decision, or rule is governed by certain provisions of the Administrative Procedure Act (APA).[17] While those APA provisions appear to govern how a hearing on an IRO-reimbursement dispute would be conducted, they say nothing about SOAH conducting such a hearing. One of those APA provisions[18] governs the relationship between SOAH and the agencies for which SOAH conducts hearings, but it does not authorize SOAH to conduct any hearing.

Nor does TWCC’s IRO rule support the Carrier’s notion that SOAH is to hear disputes concerning the IRO’s reimbursement. That rules require the party requesting review of a retrospective medical-necessity dispute, in this case the Provider, to remit payment to the assigned IRO at the same time the requestor files the documentation requested by the IRO.[19] The rule provides that “the commission” shall review the IRO decision to determine the prevailing party and, if applicable, will order the non-prevailing party to refund the IRO fee to the party who prevailed by contested case hearing or SOAH decision.[20] If the IRO decision is subsequently reversed or differently decided by SOAH, the rule states that “the commission” shall order a refund of the IRO fee to be paid the party who prevailed by the SOAH decision.[21] Thus, TWCC’s rules do not contemplate or even arguably delegate to SOAH the authority to hear an IRO-reimbursement dispute.

The ALJ concludes that he has no jurisdiction to rule on this prevailing-party, IRO-reimbursement dispute.

IV. Findings of Fact

  1. ______. (Claimant) sustained a work-related injury (Injury) to his back on_____________, while the University of Texas System (Carrier) was his employer and its own workers’ compensation insurer.
  2. The Claimant has been terribly disabled by the Injury for eleven years.
  3. The Claimant has had more than ten surgeries to treat his Injury and was a candidate for another surgery in March 2001.
  4. The Claimant could not stand, sit or walk without being medicated for leg and back pain, which medications then required the Claimant to go to bed.
  5. Any type of activity aggravated the Claimant’s back and leg condition.
  6. The Claimant complained in April 2001 of increased falling and weakness.
  7. The Claimant was not a reasonable candidate for gainful employment in 2001.
  8. On April 22, 2001, and June 17, 2001, Eric H. Scheffey, M.D., (Treating Physician) prescribed two functional capacity evaluations (FCEs) for the Claimant by jotting on a prescription pad, “FCE Dr. Oneal,” and adding no explanation.
  9. An FCE includes a physical examination, neurological evaluation, a physical capacity evaluation of the injured area and functional abilities tests.
  10. The purpose of an FCE is to determine a Claimant’s ability to work.
  11. On April 26, 2001, and June 21, 2001, Impairment and Pain Center (Provider) performed both FCEs on the Claimant.
  12. When the Claimant participated in the FCEs, he was unable to sit unsupported, stand, walk, crouch, reach, or lift the minimal times required to complete the FCEs.
  13. The Provider sought reimbursement of $400 from the Carrier for the two FCEs
  14. The Carrier denied the requested reimbursement, maintaining the FCEs were not shown to be reasonably medically necessary.
  15. The Provider filed a request for medical dispute resolution with TWCC seeking reimbursement for the FCEs.
  16. An independent review organization (IRO) reviewed the medical dispute and found that the first FCE, on April 26, 2001, was reasonably medically necessary.
  17. Based on the IRO’s findings, TWCC’s Medical Review Division (MRD) ordered the Carrier to reimburse the Provider $400 for the two FCEs and $650 for the cost of the IRO review.
  18. The Carrier appealed the MRD’s decision to the State Office of Administrative Hearings (SOAH).
  19. Notice of a September 24, 2002 hearing in this case was mailed to the Carrier and the Provider on July 10, 2002.
  20. On September 24, 2002, William G. Newchurch, an Administrative Law Judge (ALJ) with SOAH held a hearing on the Carrier’s appeal at the William P. Clements Office Building, Fourth Floor, 300 West 15th Street, Austin, Texas. The hearing concluded and the record closed on that same day.
  21. The Carrier appeared through its attorneys, Paige Duncan and Bradley D. McClellan.
  22. The Provider appeared by telephone through its accounts representative, Deborah Cooks.

V. 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) (West 2002) and Tex. Gov’t Code Ann. ch. 2003 (West 2001).
  2. SOAH has no jurisdiction to rule on an IRO-reimbursement dispute.
  3. Adequate and timely notice of the hearing was provided in accordance with Tex Gov’t. Code Ann. §§ 2001.051 and 2001.052.
  4. Under Tex. Labor Code § 408.021 (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.
  5. As the party appealing the IRO’s decision, the Carrier has the burden of proof in this matter. 28 Tex. Admin. Code §148.21(h)(2002).
  6. In all appeals from reviews of retrospective medical necessity disputes, the IRO decision has presumptive weight. 28 TAC §133.308(v).
  7. Based on the above Findings of Fact, the FCEs were not reasonably medically necessary.
  8. Based on the above Findings of Fact and Conclusions of Law, the Provider’s request for reimbursement of $400 for the FCEs should be denied.

ORDER

IT IS ORDERED THAT the Provider’s request for reimbursement of $400 for the FCEs is denied.

Signed October 15, 2002.

STATE OFFICE OF ADMINISTRATIVE HEARINGS

WILLIAM G. NEWCHURCH
Administrative Law Judge

  1. 28 TAC § 134.202(e)(4) (2002).
  2. Exs. 17 and 18.
  3. Tape of 9/24/02.
  4. Exs. 2, 6, 7, 12, 13, and 14.
  5. Exs. 15 and 16.
  6. 28 TAC §' 133.308(v).
  7. 28 TAC § 133.308(q)(2).
  8. Ex. 3, p. 2.
  9. Sexton v. Mount Olivet Cementary Ass’n, 720 S.W.2d 129, 137-38 (Tex. App. B Austin 1986, writ ref’d n.r.e.)
  10. Tex. Gov’t Code Ann. (West 2001).
  11. Gov’t Code§ 2003.021(b)(1) and (2).
  12. Gov’t Code §2003.021(c).
  13. Labor Code §410.004.
  14. Labor Code§413.031 (a) and (b).
  15. E.g. Labor Code §§ 407.046, 411.049(b), 413.055, and 415.034.
  16. Labor Code § 413.031(c) through (j).
  17. Government Code Chapter 2001.
  18. Gov’t Code § 2001.058.
  19. 28 TAC §133.308(q)(1)(B).
  20. 28 TAC § 133.308(q)(2).
  21. 28 TAC§ 133.308(q)(10).
End of Document
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