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October 16, 2002


October 16, 2002


Insurance Company of the State of Pennsylvania (Petitioner) is appealing the decision of Envoy Medical Systems, LLC, an independent review organization (IRO) certified by the Texas Department of Insurance, in Texas Workers’ Compensation Commission (Commission) Medical Review Division tracking number M2-02-0770-01 granting preauthorization for the requested revision fusion procedure[1] and cardiac stress test. The IRO determined from the medical documentation submitted for review that the requested medical procedure was medically necessary to treat the Claimant’s condition. The Administrative Law Judge (ALJ) finds the request for preauthorization should be granted because the requested treatment is medically necessary.


On September 24, ALJ Michael J. Borkland convened the hearing at the William P. Clements Building, 300 West 15th Street, Austin, Texas. Petitioner was represented by Dan C. Kelley, attorney. Dr. John A. Sazy (Respondent) appeared pro se via telephone. Notice and jurisdiction were not contested and will be addressed in the findings of fact and conclusions of law. Following the presentation of evidence, the hearing was closed on the same day.



Claimant, who is a 61-year old female, suffered a lower back injury on________, while working as a cashier at______. She was injured when she leaned over to place a case of soft drinks into a shopping cart. Treatment for the injury included chiropractic manipulation, epidural steroid injections, facet joint injections, and a fusion at the L3-L4 and L4-L5 levels on January 8, 1998. During the 1998 surgery, spine fixation devices were placed at the fusion levels. The Claimant has continued to experience low back pain and states that it is worse than before fusion surgery. The Respondent diagnosed the Claimant with continued pain due to a failed fusion, and recommends surgery to repair the fusion. Additionally, the Respondent recommends a cardiac stress test prior to surgery due to the Claimant’s age.

B. Medical Records

The documentary evidence presented consisted of three exhibits. Petitioner’s Exhibit 2 contains the 145 pages of medical records reviewed by the IRO. The records contain a peer review performed by Professor Stanley J. Bigos, M.D., who stated that “without evidence of either neurologic compromise or structural instability, it is difficult to opine in favor of a surgical procedure according to any reliable literature criteria . . . that would expect a reasonable outcome relative to the potential risks.” Dr. Bigos concluded that he could not “opine in favor of further fusion.” (Pet. Exh. 2, p. 9)

Dr. Phillip Osborne, M.D., completed a functional capacity examination on the Claimant. He stated that the Claimant has failed back syndrome, degenerative disc disease, and osteoarthritis, all of which have contributed to her pain. Dr. Osborne believed that the Claimant could return to work, but would be limited to the sedentary to light duty range of activity. He did not believe that the Claimant’s ongoing complaints are solely related to her injury, and that surgical intervention would be beneficial. (Pet. Exh. 2, p. 23 and 24)

A CT lumbar myelogram was performed on February 12, 2002. The study revealed a broad-based disc bulge at the L2-L3 level without canal stenosis, but hardware complications were not seen. The study also revealed that nerve roots were clumped at the L3-L4 level. (Pet. Exh. 2, p. 44 and 53)

Petitioner’s Exhibit 1 contains discovery documents which were not answered by the Respondent. These documents were the subject of Order No. 2 and were not considered in the preparation of this Decision and Order.[2] Respondent’s Exhibit No. 1 contains medical records which were sent to the IRO by Dr. Sazy.

C.Testimony of Dr. Sazy

Dr. Sazy is the Claimant’s current treating physician. He went to medical school at Wayne State University, and later studied orthopedic surgery in New York. Dr. Sazy then moved to Galveston, Texas, to study burn treatment at the University of Texas Medical Branch. He resumed his orthopedic training at the Chicago Spine Fellowship, and became a specialist in reconstructive and revision spine surgery. He moved to Texas seven years ago because there were no other surgeons in the state with his speciality.

Dr. Sazy testified that 60% of two level spine fusions fail. He believes that the Claimant’s fusion has failed because there is no hard bone at the L3-L4 fusion site, and movement at the site indicates that the fusion never healed. The Claimant is diagnosed with failed back syndrome, which is responsible for her continuing low back pain. Dr. Sazy recommends revision surgery to repair the failed fusion.

On cross-examination, Dr. Sazy stated that continuing motion at the fusion site is the definition of a non-healed fusion. He testified that fusion site motion was not seen in the February 12, 2002, study because it was not performed by neuroradiologist. Dr. Sazy pointed out that a study performed on March 17, 1999, by a neuroradiologist revealed motion at the L3-L4 level. (Pet. Exh. 2, p. 47) In conclusion, Dr. Sazy stressed that Dr. Osborne is not either an orthopedist or a surgeon, but is a biased intervenor retained by carriers.


The burden is on the Petitioner to show that the decision of the IRO finding medical necessity for the requested procedures was incorrect. At the hearing on the merits, the Petitioner did not submit medical evidence that had not been reviewed by the IRO. On the other hand, Dr. Sazy was an impressive witness who provided valuable testimony about the requested procedures, and refuted the evidence in the record relied on by the Petitioner in presenting its case. There was no argument presented at the hearing by the Petitioner concerning medical necessity of the cardiac stress test.

The evidence is quite clear that, while risky, the requested medical procedures are necessary for the treatment of the Claimant’s back injury. Accordingly, the request for preauthorization of a cardiac nuclear stress test and TLIF spinal surgery at the L2-L3, L3-L4, L4-L5, L5-S1 levels should be granted.[3]


  1. On________, the Claimant sustained an on-the-job injury to her lower back when she leaned over to place a case of soft drinks into a shopping cart.
  2. At the time of the Petitioner’s injury, the Insurance Company of the State of Pennsylvania (Petitioner) provided workers’ compensation insurance to the Claimant’s employer.
  3. On January 8, 1998, Claimant had a multi-level fusion performed at the L3-L4 and L4-L5 levels.
  4. Claimant continued to experience low back pain following the multi-level fusion referred to in Finding of Fact No. 3.
  5. Dr. John A. Sazy, M.D. (Respondent), Claimant’s current treating physician, diagnosed Claimant with failed back syndrome.
  6. Claimant’s fusion referred to in Finding of Fact No. 3 did not heal and there is movement at the L3-L4 level.
  7. The requested spinal surgery is a lengthy, very invasive, and dangerous procedure.
  8. A cardiac stress test determines whether a patient is physically able to undergo a lengthy, very invasive, and dangerous surgical procedure.
  9. The Respondent requested preauthorization for a cardiac nuclear stress test, and TLIF spinal surgery at the L2-L3, L3-L4, L4-L5, and L5-S1 levels to treat the Claimant’s condition referred to in Findings of Fact Nos. 5 and 6.
  10. On April 11, 2002, and April 24, 2002, Petitioner denied the Respondent’s request for the services referred to in Finding of Fact No. 9.
  11. The Respondent requested dispute resolution services from the Texas Workers’ Compensation Commission’s Medical Review Division.
  12. On June 20, 2002, Envoy Medical Systems, LLC, an independent review organization certified by the Texas Department of Insurance, issued its decision granting preauthorization because the medical records provided showed that the requested care was medically necessary.
  13. On July 8, 2002, Petitioner filed a request for hearing to contest preauthorization of the requested services.
  14. The Commission sent notice of the hearing to the parties on July 30, 2002. The hearing notice informed the parties of the matter to be determined, the right to appear and be represented by counsel, the time and place of the hearing, and the statutes and rules involved.
  15. The hearing on the merits convened on September 24, 2002, before Michael J. Borkland, Administrative Law Judge. Petitioner was represented by Dan C. Kelley, attorney. Respondent appeared pro se via telephone.


  1. The Texas Workers’ Compensation Commission has jurisdiction to decide the issue presented, pursuant to the Texas Workers’ Compensation Act, Tex. Lab. Code Ann. § 413.031.
  2. 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. Lab. Code Ann. § 402.073 and 413.031(k) and Tex. Gov’t Code Ann. ch. 2003.
  3. Petitioner timely filed notice of appeal, as specified in 28 Tex. Admin. Code (TAC) § 148.3.
  4. Proper and timely notice of the hearing was effected upon the parties according to Tex. Gov’t Code Ann. ch. 2001 and 28 TAC § 148.4(b).
  5. Petitioner had the burden of proving the case by a preponderance of the evidence, pursuant to 28 TAC § 148.21(h) and (i), and 1 TAC 155.41..
  6. As provided by Tex. Lab. Code Ann. §413.014 and 28 TAC § 134.600(h)(1), preauthorization is required for all non-emergency hospitalizations.
  7. Based on Findings of Fact Nos. 3 - 8, the requested medical procedures are medically necessary.
  8. Based on Findings of Fact Nos. 3 - 8, and Conclusions of Law Nos. 5 and 7, Claimant is entitled to preauthorization for the medically necessary treatment.


IT IS, THEREFORE, ORDERED that Petitioner, the Insurance Company of the State of Pennsylvania, pay the reasonable and necessary cost of providing the Claimant the requested cardiac nuclear stress test and TLIF spinal surgery at the L2-L3, L3-L4, L4-L5, and L5-S1 levels.

Signed this 16th day of October 2002.

Administrative Law Judge

  1. The purpose of the procedure is to repair a failed fusion.
  2. Order No. 2 allowed the withdrawal of Request for Admission No. 3, which concerned the issue of medical necessity of the requested spinal surgery.
  3. TLIF is an acronym and the parties did not provide the words from which it was created.
End of Document