DECISION AND ORDER
Back and Joint Clinic (the Provider) sought reimbursement of $6,639 for treatment rendered an injured worker (the Claimant), but Bryan Independent School District Risk Management (the Carrier) denied payment. The Medical Review Division (MRD) of the Texas Workers' Compensation Commission (the Commission) ordered the Carrier to pay $2,726. The Provider requested a hearing seeking full payment of its claims. Subsequently, the Carrier requested a hearing to challenge the order requiring it to pay $2,726. The Administrative Law Judge (ALJ) concludes the Carrier should reimburse the Provider $5,668 plus accrued interest.
II. PROCEDURAL HISTORY
On June 17, 2003, ALJ Georgie B. Cunningham convened the hearing at the William P. Clements Building, 300 West 15th Street, Austin, Texas. The Provider was represented by Attorney Scott C. Hilliard; the Carrier was represented by Attorney Nick R. Bray; and the Commission was not represented. The parties did not contest notice or jurisdiction. After evidence was presented, the ALJ left the hearing open for the parties to file additional documents and written closing arguments. The hearing closed on June 30, 2003.
The dispute involves whether the Carrier should be ordered to reimburse the Provider for the Claimants chiropractic treatments for a cervical strain between March 18 and June 5, 2001. After the Carrier denied reimbursement, the Provider requested dispute resolution from the Commission on December 31, 2001. The MRD staff reviewed the documents submitted and issued its decision on September 27, 2002. The decision enumerated the claims in chronological order specifying the billing code, the amount billed, the amount paid, the Carriers denial code, and the Maximum Allowable Rate (MAR) for reimbursement as set forth in the 1996 Medical Fee Guidelines applicable to this claim. Then the MRD decision provided the rationale for its conclusion regarding payment or denial of each claim. The MRD decision found the Provider was entitled to reimbursement of $2,726 of the $6,639 billed.
During the hearing, the Provider introduced copies of its treatment and billing records and the telephonic testimony of its managing general partner, David N. Bailey, D.C. The Carrier provided a copy of the MRD decision, the deposition testimony of the Claimant, an agreement between the Carrier and the Claimant, and copies of selected rules promulgated by the Commission. Both parties provided a copy of the Commissions form, TWCC Form 62, Explanation of Benefits (EOB) and propounded multiple arguments in support of their positions.
Section 408.027(d) of the Texas Labor Code (the Code) requires carriers to explain the reasons for reducing or denying reimbursement requests submitted by health care providers. The Commission enacted 28 Tex. Admin. Code (TAC) § 133.304(c) requiring carriers to send providers an explanation of benefits using payment exception codes with sufficient explanation. Through the adoption of its EOB form, the Commission has established codes the carriers may use to communicate their reasons for denying reimbursement. Here, the Carrier used three Commission-approved codes in denying payment of the claims: (1) “E - Entitlement to benefits;” (2) “U-Unnecessary treatment;” and (3) “L - Not treating doctor approved treatment”
The Carrier did not use an EOB in denying some of the claims and did not provide the missing EOBs to MRD as requested. In reviewing the claims in which no EOB was provided, the MRD decision ordered reimbursement. At the hearing, the Carrier did not challenge the MRD order that it pay these claims. Therefore, without further discussion, the ALJ will order reimbursement of $2,176 for the claims with no EOB, which the MRD staff calculated based on the MAR.
The Provider requested reimbursement of $6,519. To prevail in its appeal, the Provider had the burden of proving it was entitled to payment of the claims the MRD decision had not ordered paid. The Carrier appealed the MRD order that it reimburse the Provider $2,726. To prevail in its appeal, the Carrier had the burden of proving it should not have to pay the Provider the amount ordered by the MRD decision. The ALJ will discuss the evidence and legal arguments regarding the claims denied under each of the three codes.
B. “E” - Entitlement to Benefits
The Parties Positions
The code, ”E - Entitlement to benefits,” is used when an insurance carrier is disputing liability for the claim or compensability of the injury, and the issue has not been adjudicated. The Carrier used this code in denying claims for treatment from March 20 through March 30, 2001, and again from April 24 through May 16, 2001. According to its arguments, the Carrier initially disputed whether the Claimant had a compensable injury. Eventually, the Carrier and the Claimant, with the assistance of her attorney, entered into the agreement in which the Carrier acknowledged the compensability of the injury. As an alternative argument at the hearing, the Carrier asserted that it used this code to challenge the claims as treatment provided to body parts not involved in the initial injury.
In its written closing argument, the Carrier urged the ALJ to affirm the MRD decision. The Carrier pointed to the MRD rationale for denying reimbursement of certain services it had originally denied under the “E” code. According to the Carrier, the MRD decision was carefully documented. The MRD staff had examined the billing codes, the amounts billed, and the documentation submitted in support of the services provided. A large majority were approved when the documentation submitted substantiated delivery of the service to the compensable injury. Reimbursement of other services were denied for the following reasons: (1) documentation submitted did not support the number of units billed for the compensable injury or the medical necessity for individual therapy; (2) documentation did not support the medical necessity of an office visit in conjunction with physical therapy; (3) documentation did not support the medical necessity for repeat muscle testing to the compensable injury; (4) documentation did not support an office visit four days after the last visit with no change in symptoms and no change in treatment plan to support ongoing treatment and lack of improvement; (5) documentation did not support medical necessity for analgesic balm; and (6) documentation showed generalization of evaluations and did not indicate evaluation was specific to the compensable injury.
As the Carrier continued its argument, it asserted that the code it used in the initial denial was irrelevant. It was apparent to the Carrier that the MRD decision allowed reimbursement when the documented service satisfied the requirements of the applicable statute as well as the Medical Fee Guidelines.
The Provider contended that the use of the “E” code to deny reimbursement for treatment to non-compensable body parts was incorrect for four reasons. First, the Provider argued the Carrier failed to establish through the submission of a TWCC 21 Form that it had challenged the extent of injury. Second, the EOB form specifies that “R - Extent of Injury” is the acceptable code to use for denying reimbursement for non-compensable injury services. Third, the use of the “E” code without further explanation is so vague as to give the Provider no usable explanation for its denial. Fourth, the Carrier should be precluded after-the-fact from raising new arguments for the denial of the reimbursement. In support of its fourth argument, the Provider cited a long line of SOAH decisions issued between 1999 and 2002.
The Provider further asserted that the Carrier failed to use the correct code, “N - not appropriately documented” and cannot now make this argument. Moreover, the Provider argued the record is replete with examples of the continued improvement the Claimant made. In his testimony, Dr. Bailey addressed the issue of the Claimants improvement, increased strength, decreased reliance on medication, and pointed to documentation in support thereof. In her deposition testimony, the Claimant reported having decreased pain, increased strength, and increased range of motion. The Provider referred to numerous statutory provisions and rules in support of its position.
The ALJ agrees with the Providers contentions about the use of the correct code. As established through the above-referenced statutory provision, rule, and form, “E” is the code for use in challenging compensability; however, the Carrier conceded the compensability challenge in an agreement with the Claimant. If the Carrier had wanted to challenge the extent of the injury, it should have used the approved “R” code and presented evidence that it had in fact raised this issue with the Commission. Likewise, the Carrier should have used the “N” code to assert insufficient documentation as a basis for non-payment.
Section 413.015 of the Code requires carriers to make appropriate payments for charges for medical services provided. Section 413.016 provides that payments may not be made in violation of the Commissions medical policies and fee guidelines. The responsibility is placed on carriers, according to Section 408.027, to either pay the fee allowed or dispute the fee through the use of a report that sufficiently explains the reasons for the payment denial or reduction. Additionally, 28 TAC § 133.301(a)(6) places the responsibility on carriers to audit health care providers claims to make determinations about numerous factors, including documentation.
It is not the responsibility of either the MRD staff or the ALJ to make this assertion on behalf of a carrier. The Carrier did not use documentation as a basis for its denial. Under the Commissions rules, as interpreted by numerous SOAH decisions, a carrier cannot rely on a different reason for denying reimbursement after a request for dispute resolution has been filed. To hold otherwise would render the review process meaningless, increase costs, and guarantee uncertainty in a system that should be stable. The ALJ concludes that the Provider is entitled to reimbursement of $2,514 based on the MAR for the claims the Carrier denied using the “E” code.
C. “U” - Unnecessary Treatment
The Parties Positions
The code, U - Unnecessary treatment, is used when an insurance carrier is denying payment because the carrier deems the treatment or service to be medically unreasonable or unnecessary, and the carrier is not basing its judgment on a peer review. The Carrier used the “U” code in denying reimbursement for services provided from April 2 through April 20, 2001. Again, the Carrier argued that the ALJ should not order reimbursement for those services for which the MRD decision declined payment based on a lack of documentation to satisfy various provisions.
The Carrier pointed out that the MRD decision related to this denial code considered whether the treatment promoted recovery and whether it was actually necessary for the condition presented. In so doing, the focus shifted from examining whether the documentation met the minimal requirements of the statutes and Medical Fee Guidelines to a more intense focus on the actual medical necessity under the Medicine Ground Rules as outlined in the Medical Fee Guidelines. According to the Carrier, the Providers attempts to justify its right to reimbursement by comparing the Claimants condition from the beginning of treatment to the subjective assessment of her condition at the conclusion of treatment is not the method by which medical services are examined for reimbursement. Specifically, the Carrier stated in its written closing argument:
[T]he ALJ must examine each and every service to verify that (a) it meets at least the minimum requirements of the statute, (b) the general requirements of the Medical Fee Guidelines (1996), and (c) the requirements and standards set forth in the Medicine Ground Rules of the Medical Fee Guidelines (1996).
The Provider contended that Dr. Bailey, a Board-certified chiropractic orthopedist, adequately addressed the necessity of the Claimants treatment in his testimony. Moreover, the treatment records established medical necessity and an improved condition. Again, the Provider pointed to specific documentary evidence including various narrative reports, graphs, charts, questionnaires, post-treatment subjective pain scales, subjective pain assessment, and other tests showing the Claimants improvement, increased cervical muscle strength, and decreased pain. Moreover, the Claimants deposition testimony verified her improvement. The Provider further argued that the Carrier did not present evidence that its treatments were unreasonable or unnecessary nor did it establish these points through cross examination. Of even more importance, according to the Provider, the Carrier failed to put it on notice of the reason for its denial by failing to provide an adequate statement of its reasons for denial, as required by a Commission rule.
After Dr. Bailey testified about the necessity for the treatment and the documentation in support thereof, the burden shifted to the Carrier to refute that testimony. Without mentioning the appeal and without any further explanation of its changed position, the Carrier asked the ALJ to accept the MRD decision as correct. After the Carrier appealed the MRD decision asserting that it was wrong, relying on that same decision as evidence that its position is right is hardly convincing.
If the Carrier denied reimbursement based on a lack of documentation, it should have used the appropriate code and explanatory remarks. In the alternative, the Carrier could have presented testimony at the hearing to establish that a lack of documentation showed the treatments were unnecessary. An ALJ must decide a case based on the evidence admitted and on the statutory provisions and rules. The ALJ concludes that the Provider is entitled to reimbursement of $882, based on the MAR, for each of the claims the Carrier denied using the “U” code.
D. “L” - Not Treating Doctor Approved Treatment
The Parties Positions
The code, “L - Not treating doctor approved treatment,” is used when the insurance carrier is denying payment because a referral health care provider performed treatment or service without the treating doctors approval. The Carrier used this code in denying reimbursement for treatment provided on May 23 and June 5, 2001. The evidence shows that the Claimants initial treating doctor was Nalini Dave, M.D. On March 6, 2001, the Commission approved the Claimants request for a change in treating doctors to Sam Liscum, D.O., of the Providers office. The Commission approved the change on its Form 63 and ordered the Carrier to pay for reasonable and necessary treatment requested by the treating doctor.
At the hearing, the Carrier argued that the request and approval of the change contained irregularities and presented the written agreement between it and the Claimant that rejected the approved change. Based on the agreement, the Carrier asked the ALJ to find that the change in treating doctors was not effective. The agreement, dated June 22, 2001, stated, “The parties agree the Claimant is not entitled to change treating doctors to Dr. Liscum.” In its written closing argument, the Carrier changed its approach and stated, “Even if the issue of change of treating doctor is a moot point because it has not been resolved by the TWCC . . . .” Then it proceeded to assert the Provider had failed to meet its burden of proof on this issue.
The Provider contended it was not a party to this agreement between the Claimant and the Carrier. Furthermore, the Provider argued that the Commission has not approved a change that would remove Dr. Liscum as the treating doctor, as required by the Commissions rule, 28 TAC § 126.9(g).
The Carrier should have disputed the request for the change in treating doctors within ten days of the initial order, as provided in the Commissions rule cited above. Thus, the Carrier has failed to properly deny payment for services based on the use of the “L” code. Although the MRD decided the documentation was insufficient, the ALJ has determined that decision exceeded the MRDs scope of review, as discussed in more detail above. Therefore, the Provider is entitled to reimbursement of $96, based on the MAR, for the two claims the Carrier denied using the “L” code.
The Carrier had the burden of proving it should not have to pay the Provider the amount ordered in the MRD decision, and the Provider had the burden of proving it was entitled to reimbursement for the claims that were denied. Inexplicably, the Carrier not only did not address its appeal, but adopted the decision it had appealed as rebuttal evidence. In contrast, the Provider offered credible evidence in support of its position, which the Carrier failed to rebut. Therefore, based on the evidence presented, the ALJ concludes that the Carrier shall reimburse the Provider based on the MAR, as follows: $2,514 for the claims denied under the “E” code, $882 for the claims denied under the “U” code, $96 for the claims denied under the “L” code, and $2,176 for the claims with no EOB, plus accrued interest.
IV. FINDINGS OF FACT
- During_____, the Claimant was employed as a ___ for the Bryan Independent School District (the Carrier) transportation department.
- The Carrier is self-insured.
- On________, the Claimant sustained an injury when she reached for the loading light switch on a bus.
- The Claimants injury was diagnosed as a cervical strain.
- Nalini Dave, M.D. was the Claimants initial treating doctor.
- On March 9, 2001, Sam Liscum, D.C. of the Back and Joint Clinic (the Provider) became the Claimants treating doctor.
- The Provider submitted claims of $6,639 to the Carrier for reimbursement of chiropractic services provided to the Claimant between March 13 and June 5, 2001.
- The Carrier denied reimbursement of the claims.
- On December 31, 2001, the Provider requested dispute resolution services from the Medical Review Division (MRD) of the Texas Workers' Compensation Commission (the Commission).
- On September 27, 2002, MRD issued its decision ordering the Carrier to remit $2,726 plus accrued interest to the Provider, but denied reimbursement of the balance.
- On October 7, 2002, the Provider filed a request for a hearing regarding reimbursement of the balance of its unpaid claims.
- On October 11, 2002, the Carrier filed a request for a hearing to challenge the MRD order that it reimburse the Provider $2,726 plus accrued interest.
- The Commission sent notice of the hearing to the parties on December 9, 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.
- In denying payment for the claims the Provider submitted for services on March 20, 23, 26, 28, 29, 30, April 24, May 3, and May 16, 2001, the Carrier used the Commission-approved code, “E - Entitlement to benefits.”
- The code, “E - Entitlement to benefits,” is used when an insurance carrier is disputing liability for the claim or compensability of the injury, and the issue has not been adjudicated.
- The injury was a compensable cervical strain.
- In denying payment for the claims the Provider submitted for services on April 2, 4, 6, 9, and 11, 2001, the Carrier used the Commission-approved code, “U - Unnecessary treatment.”
- The code, “U - Unnecessary treatment,” is used when an insurance carrier is denying payment because the carrier deems the treatment or service to be medically unreasonable or unnecessary, and the carrier is not basing the judgment on a peer review.
- The Provider presented evidence that its treatments and services were necessary and medically reasonable.
- The Carrier did not present evidence that the Providers treatments were unreasonable or unnecessary.
- In denying payment for the claims the Provider submitted for services on May 23 and June 5, 2001, The Carrier used the Commission-approved code, “L - Not treating doctor approved treatment”
- The code, “L - Not treating doctor approved treatment,” is used when the insurance carrier is denying payment because a referral health care provider performed treatment or service without the treating doctors approval.
- A referral health care provider did not perform the treatment provided the Claimant on May 23 and June 5, 2001.
- The treating doctor provided the Claimant the treatment for which it submitted claims on May 23 and June 5, 2001.
- The Carrier denied reimbursement of benefits for the Providers services on March 13, 19, and 21, or April 16, 18, and 20, 2001.
- The Carrier did not give an explanation for denying reimbursement for the services provided on March 13, 19, and 21, or April 16, 18, and 20, 2001.
- The MRD decision ordered the Carrier to reimburse the Provider for the dates of service with no EOBs.
- The Carrier did not contest the order to pay the provider for the dates of service for which it provided no EOB.
- The code, “N - Not appropriately documented,” is used when an insurance carrier denies payment because a health care failed to submit required documentation with a bill.
- The Carrier did not use the code, “N,” in denying Providers claims.
- The Carrier did not include an explanation of any missing documentation to allow the Provider to correct its error when requesting reconsideration.
- The Claimant had decreased pain and decreased reliance on medication.
- The Claimant had increased strength generally, increased range of motion, and increased cervical muscle strength.
V. CONCLUSIONS OF LAW
- 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.
- 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(d) and Tex. Gov't Code Ann. ch. 2003.
- The notices of appeal were timely filed, as specified in 28 Tex. Admin. Code (TAC) § 148.3.
- 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).
- The Provider had the burden of proving by a preponderance of the evidence, pursuant to 28 TAC § 148.21(h) and (i), that it is entitled to reimbursement for all of its claims.
- The Carrier had the burden of proving by a preponderance of the evidence, pursuant to 28 TAC §148.21(h) and (i), that it should not have to pay the Provider $2,726 plus accrued interest, as ordered in the MRD decision.
- The Carrier was required pursuant to Tex. Lab. Code Ann. § 408.027(d) and 28 TAC §§133.301(a) and 133.304(c), to audit and explain the reasons for denying reimbursement requests to the Provider.
- The Carrier failed to comply with Tex. Lab. Code Ann. §408.027(d), 28 TAC §§133.301(a) and 133.304, and Form TWCC-62 in denying the Providers claims.
- The Carrier failed to meet its burden of proof, pursuant to 28 TAC § 148.21(h), that it should not have to pay the Provider $2,726 plus accrued interest.
- The Claimant was entitled to healthcare that cured or relieved the effects naturally resulting from her compensable injury, promoted her recovery, or enhanced her ability to return to work, as specified in Tex. Lab. Code Ann. § 408.021(a).
- The Providers treatment and services promoted the Claimants recovery.
- The Provider showed by a preponderance of the evidence, pursuant to 28 TAC § 148.21(h) and (i).
- Based on the foregoing findings of fact and conclusions of law, the Provider should be reimbursed for its claims.
It is hereby ordered that the Bryan Independent School District reimburse the Back and Joint Clinic $5,568 plus accrued interest for treatment provided the Claimant between March 18, 2001, and June 5, 2001.
Signed this 22nd day of August 2003.
GEORGIE B. CUNNINGHAM
Administrative Law Judge
State Office of Administrative Hearing
- The Provider did not explain why it requested reimbursement of $6,519 when the MRD decision indicated it had submitted claims for $6,639. Because neither party addressed the apparent discrepancy or challenged the MAR calculations based on a claims total of $6,639, the ALJ accepted the MAR as correct.↑
- The ALJ will not repeat the list of eleven cases cited by the Provider. Both parties have the list, and most ALJs at SOAH are well-aware of this line of cases. The Carrier did not address this issue.↑
- 28 TAC § 133.304(c).↑