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At a Glance:
April 30, 2003
Medical Fees


April 30, 2003


Continental Casualty Company (Carrier) has appealed the Findings and Decision of the Texas Workers' Compensation Commission's (Commission) Medical Review Division (MRD) issued October 11, 2002. Therein, the MRD directed the Carrier to reimburse Janice Keeley, P.T. (Provider) $106 for services related to physical therapy provided to the injured worker (Claimant). The Administrative Law Judge (ALJ) finds that the Carrier did not meet its burden of proof to show that the Provider is not entitled to reimbursement as ordered by the MRD.

The hearing was convened on January 29, 2003, at the State Office of Administrative Hearings (SOAH) hearings facility in the William Clements Building, Fourth Floor, 300 West 15th Street, Austin, Texas. Patricia Estes appeared and participated by telephone on behalf of the Provider. The Carrier appeared through its attorney, Erin Shanley. The Commission did not participate in the hearing. The hearing adjourned and the record closed that same day.

I. Notice, Jurisdiction, and Venue

Because there were no contested issues regarding notice, jurisdiction, or venue, those matters are addressed in the Findings of Fact and Conclusions of Law without further discussion here.


The Claimant suffered a compensable injury to her left knee on_________. The record shows that attending physician, Dr. Chris Tucker, D.O., referred the Claimant to the Provider for a physical therapy initial evaluation. The office visit and evaluation services at issue here were provided on September 4, 2001, and were billed using Current Procedural Terminology (CPT) Code 99204.[1] The Carrier denied payment with the explanation that the Provider had not obtained the necessary preauthorization. Upon reconsideration, the Carrier's explanation of benefits (EOB) and the denial of reimbursement did not change, and the Provider requested medical dispute resolution through the MRD. On October 11, 2002, the MRD ordered reimbursement in the amount billed by the Provider using Code 99204 based on its determination that such initial office visits do not require preauthorization, and treatment can be performed on the same day as an initial evaluation. The Carrier filed a request for a hearing and appeal of the MRD's order on November 1, 2002.

III. ARGUMENT and Evidence

A. Carrier

Documentation shows that the Carrier based its denial of payment on its determination that the treatment or service provided by this Provider on September 4, 2001, required preauthorization.[2] At the hearing, it articulated three bases for denial of reimbursement: (1) lack of necessary preauthorization; (2) inadequate documentation to support charges under CPT Code 99204;[3] and (3) the Provider had also billed and collected for a September 4 office visit with the referring doctor, Chris Tucker, using CPT Code 99214. The Carrier admitted it had not raised the last two points prior to the hearing.

On the first point, the Carrier notes that before September 4, 2001, the Claimant already received an initial eight weeks of therapy, knee surgery, and an additional nine weeks of post-surgery therapy.[4] For this reason, it argues that preauthorization is required for the additional treatment rendered by the physical therapist on September 4, 2001,[5] and contends there is no evidence in the record that the Provider requested and received preauthorization for the September 4, 2001, treatment.[6] The Carrier disagrees with the MRD's determination that the service provided was an initial evaluation, and insists that the Provider’s physical therapy evaluation form[7] shows that "treatment" was performed that should have been billed under CPT Code 97530.[8] It further complains that the Provider has "lumped" physical therapy into an office visit to get the higher maximum allowable reimbursement (MAR) under Code 99204.

Regarding lack of documentation, the Carrier maintains there is no evidence the office visit lasted forty-five minutes or that the Provider prepared a comprehensive history and examination, or participated in medical decision-making of moderate complexity as is expected if billing under Code 99204. The Carrier is also critical of the treatment plan shown on the physical therapy evaluation form, which it describes as a generic "fill-in-the blank" plan that is not specifically detailed for this patient as contemplated under Code 99204.

Concerning its observation that charges were submitted for two office visits involving the Claimant on September 4, 2001, the Carrier argues that both the doctor and physical therapist show the same mailing address and telephone number[9] and are, thus, the same "provider." It contends there is no justification shown for this one "provider" having two office visits for evaluation purposes on the same day.

Finally, the Carrier asserts that regardless of whether certain issues were raised earlier, they should now be examined in the SOAH hearing because the Commission cannot pay for medical treatment or services in violation of its own rules, and the Commission has an affirmative responsibility to ensure compliance with its rules to promote the efficient utilization of care to the worker.[10]

B. Provider

Referring to documentation in the record, the Provider insists that the service provided on September 4, 2001, was only an initial evaluation performed by the physical therapist at the request of Dr. Tucker. It maintains that this evaluation was used by Dr. Tucker to formulate a treatment plan for the Claimant, and that the ensuing recommended chronic pain management program was accepted and preauthorized by the Carrier.[11] The Provider asserts further that the Carrier is simply wrong when it argues that the "Intervention/Education" section of the physical therapy evaluation form shows that physical therapy "modalities" were performed. Noting the subparts that generally begin with the phrase "Explanation of," the Provider explains that in this type of office visit/evaluation, the physical therapists work to educate or instruct the patient about how they might address the patient’s problems and evaluate them by seeing what the patient is physically capable of doing at that time. The Provider agrees that under Subpart E “Stretches Instructed/Performed," the therapist should have circled "Instructed" to be clear that the therapist was only providing instruction to the patient about how to properly do certain stretches, but it reiterates that no actual physical therapy treatment was provided.

Regarding the Carrier's new complaint about the adequacy of documentation, the Provider contends that: (1) its documentation is adequate; and (2) the Carrier should not be able to raise documentation as an issue without warning for the first time in the hearing when it did not deny payment on this basis and failed to present this issue to the MRD for consideration. Moreover, it argues that the Carrier cannot presume the MRD did not consider the adequacy of the Provider’s documentation in making the determination that reimbursement was proper. As to the Carrier’s third issue related to the Claimant’s seeing both the physical therapist and her doctor on the same day, the Provider observes there is nothing in the applicable rules or MFG that says it is wrong or inappropriate to have a patient see two different health-care providers on the same day that are rendering different medical services. The Provider asserts that it makes such arrangements as a convenience to the patient and not because it makes any difference in charges for the services of the two different providers.


In both its denials of payment to the Provider and its subsequent presentation to the MRD, the Carrier’s sole basis for denying reimbursement to the Provider was its insistence that the service provided on September 4, 2001, was additional physical therapy "treatment" beyond the eight-week limit that triggers the need for preauthorization. It is the Carrier's burden on appeal to show by a preponderance of the evidence that its premise is correct, i.e., the September 4, 2001; service was actually a physical therapy session. The substance of the Carrier's case on this point is merely its repeated insistence that "it was a treatment."

The record, however, affirmatively supports the MRD’s determination that a physical therapy evaluation was performed at the new patient office visit on September 4, 2001, B not a physical therapy treatment session. The physical therapist's initial evaluation form records what activities took place and provides information consistent with and relevant to assessing the patient’s physical capabilities for the purpose of deciding on a future treatment plan.

In addition, although the MGR exclude treatment from the physical therapist’s initial evaluation under CPT Code 99204, the MGR also state that "[t]reatment may be performed on the same day as an initial evaluation."[12] If the patient receives physical therapy treatment on the same day as an initial evaluation, such treatment is billed under a separate code from the initial evaluation. The record does not show that the Provider billed separately for physical therapy treatment in addition to the initial office visit/evaluation on September 4, 2001, and does not support the Carrier's allegations that the service on September 4, 2001, was physical therapy. The ALJ finds that the preponderance of the evidence shows that the service on September 4, 2001, was a new patient office visit and physical therapy initial evaluation. As such, the ALJ agrees with the MRD that no preauthorization was necessary for this initial new patient office visit.

The ALJ finds no merit in other complaints raised by the Carrier concerning adequate documentation and the fact that the Claimant saw two different health-care providers for different services on one day. The Carrier argues that regardless of whether it followed TWCC requirements, it should be allowed to raise such issues for the first time in this hearing because the Commission must ensure compliance with applicable rules "to promote the efficient utilization" of care to the worker. The ALJ cannot agree completely with this position.

First, all participants in the TWCC’s health-care process for injured workers bear the responsibility to comply with the Commission's applicable rules to promote the efficient utilization of care to the worker. This includes the Commission’s requirement that carriers properly apprise providers of the reason(s) payments are denied.[13] The system set up by TWCC intends that a provider have the opportunity to address and correct, if possible, the perceived deficiencies in the supporting documentation for its charges. This opportunity is lost if the carrier fails to give an adequate and timely explanation for why reimbursement was denied to the provider and then fails to set those reasons before the MRD for its consideration in the TWCC dispute resolution process. Raising issues for the first time in this hearing that could easily have been brought to the provider's attention and remedied without even proceeding to the MRD or that could have been brought to the MRD's attention for consideration does not promote an efficient process of providing care for injured workers. If the Carrier believed the documentation submitted was not adequate to support the code used for this billing, then it could have and should have made that known in a timely manner and well before this hearing. The Carrier’s documentation complaints are very basic and are not of the nature that could not be discovered without an audit or other more in-depth analysis of the provider's records.

Second, the evidence does not support a finding that the MRD did, in fact, fail to consider the adequacy of the Provider's documentation as part of its general review of the documentation it was sent in this case. If the MRD may be presumed to know what its responsibilities are, one might conclude that the MRD considers the sufficiency of documentation in every dispute as a matter of course, but does not specifically address it in an order unless the carrier has raised it as a basis for denial. Since the Carrier did not base its denial of payment on a lack of documentation or otherwise raise it in written comments to the MRD, the MRD would not have been on notice that it needed to specifically address documentation in its decision. As such, the MRD’s decision and order properly addressed the dispute that the parties brought before it, i.e., the question of whether preauthorization was required.[14]

Finally, the Carrier cited no statute or rule that prohibits a patient from receiving two different services from two different providers on the same day, i.e., the therapist conducting an evaluation of the Claimant are physical capabilities and the doctor deciding on a subsequent treatment plan based on the physical evaluation.


  1. On_______, the Claimant suffered a compensable injury at her place of employment.
  2. On September 4, 2001, the Provider conducted an office visit and initial physical therapy evaluation of the Claimant.
  3. The Provider charged for the services rendered on September 4, 2001, using Current Procedural Terminology (CPT) Code 99204, which has a maximum allowable reimbursement value of $106.
  4. In its explanation of benefits, the Carrier denied reimbursement using denial code "A," that stands for "preauthorization required but not requested." In additional written explanation, the Carrier stated: the office visit was for physical therapy; physical therapy beyond eight weeks requires preauthorization; and the Provider had not obtained preauthorization. The Carrier presented no additional reasons for denial of payment to the MRD.
  5. By letter dated March 13, 2002, the Provider filed a request for medical dispute resolution with the Texas Workers’ Compensation Commission’s (TWCC or Commission) Medical Review Division (MRD) concerning the Carrier’s denial of payment for the services rendered by the Provider on September 4, 2001.
  6. On October 11, 2002, the MRD issued a decision that ordered the Carrier to reimburse the Provider a total of $106 for the services in dispute.
  7. The Carrier filed a request for hearing and appeal of the MRD’s order on November 1, 2002.
  8. On November 27, 2002, the Commission issued a notice of hearing to be held at the State Office of Administrative Hearings (SOAH). The notice contained a statement of the time, place, and nature of the hearing, a statement of the legal authority and jurisdiction under which the hearing was to be held, and a statement of the matters asserted and reference to the relevant statutes and rules involved.
  9. The new patient office visit and physical therapy evaluation performed on September 4, 2001, does not require preauthorization and was properly coded as CPT Code 99204.
  10. Documentation is adequate to support reimbursement as billed under CPT Code 99204.


  1. TWCC has jurisdiction over this matter pursuant to Tex. Lab. Code Ann. § 413.031 (Vernon Supp. 2002).
  2. The State Office of Administrative Hearings has jurisdiction over this proceeding, including the authority to issue a decision and order, pursuant to Tex. Lab. Code Ann. §413.031 and Tex. Gov't Code Ann. ch. 2003.
  3. The hearing was conducted pursuant to the Administrative Procedure Act, Tex. Gov't CodeAnn., ch. 2001 and 1 Tex. Admin. Code (TAC) ch. 155.
  4. Timely appeal of the MRD’s order was filed by the Carrier. Tex. Admin. Code §§ 133.305(p) and 148.3.
  5. Adequate and timely notice of the hearing was provided in accordance with Tex. Gov’t Code Ann. § 2001.052.
  6. The party seeking relief bears the burden of proving by a preponderance of the evidence that it should prevail in hearings. 28 Tex. Admin. Code § 148.21(h).
  7. Based on the above Findings of Fact, the Carrier did not meet its burden of proof to show that reimbursement should be denied for the office visit and initial evaluation at issue.
  8. Based on the above Findings of Fact and Conclusions of Law, the Provider is entitled to reimbursement of $106 for the services provided on September 4, 2001.


It is hereby ORDERED that the Carrier shall reimburse the Provider for the services at issue in this hearing in the amount of $106 plus interest at the rate and for the time as provided by law.

Issued the 30th day of April 2003.

Leslie Craven
Administrative Law Judge

  1. CPT codes adopted for use by the TWCC come from Physicians’ Current Procedural Terminology, Fourth Edition, copyright 1994 by the American Medical Association. See preamble to rule adopting the Medical Fee Guideline, effective April 1, 1996. 21 Tex. Reg. 2361 (1996) and 28 Tex. Admin. Code Ann. § 134.201 (hereinafter referred to as the "MFG").
  2. TWCC Exhibit (Ex.) 1 at 26-27 and 46.
  3. CPT Code 99204 is located in the MFG Evaluation/Management Ground Rules (E/M-GR) at 19. Its MAR is $106.
  4. Carrier Exs. 1 and 2.
  5. Tex. Labor Code Ann. § 413.014(b), 28 Tex. Admin. Code § 134.600(h)(10).
  6. Carrier Ex. 6.
  7. TWCC Ex. 1 at 28.
  8. CPT Code 97530 is found in the MFG's Medicine Ground Rules (MGR) at 59. Its MAR is $35 for each fifteen-minute increment of time spent performing what is described as "[t]herapeutic activities, direct (one on one) patient contact by the provider (use of dynamic activities to improve functional performance) . . ."
  9. Compare TWCC Ex. 1 at 24 and Carrier Ex. 7.
  10. See also American Home Assurance Co. v. Tex. Workers’ Compensation Comm’n and First Rio Valley Medical, P.A., SOAH Dkt. No. 453-02-3878.M5, D&O issued Nov. 27, 2002.
  11. TWCC Ex. at 17-18.
  12. MGR: Part I (A)(7) at 31.
  13. 28 Tex. Admin. Code § 133.300.
  14. See n. 9. The First Rio case cited by the Carrier is not on point. In First Rio, reimbursement was denied alleging lack of medical necessity. Noting in particular the contradictory statements throughout the record about who did what and under what conditions the instruction was provided to the patient, the ALJ found "no credible evidence" to establish that the service at issue was medically necessary. Under these circumstances, the ALJ further observed that the MRD had an affirmative duty to review and, with appropriate notice, could exercise its right to audit a provider's records to ascertain the charges were billed at a fair and reasonable rate. The record in this case contains nothing resembling the First Rio record of substantive evidentiary contradictions or clear coding violations that might justifiably trigger a more in-depth audit of this Provider.
End of Document