DECISION AND ORDER

American Casualty Company of Reading, PA (Carrier), appealed an order of the Texas Workers’ Compensation Commission Medical Review Division (MRD) that it pay OxyMed, Inc. (Provider), for the purchase of certain durable medical equipment (DME) in the amount of $809.00. OxyMed also requests reimbursement for a bone growth stimulator in addition to the $3,400.00 already paid by the Carrier. The Administrative Law Judge (ALJ) finds that OxyMed is not entitled to any additional reimbursement because it failed to provide adequate documentation for the DME and failed to preserve its claim for additional reimbursement for the bone growth stimulator.

I.JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

On October 27, 2003, ALJ Nancy N. Lynch convened the hearing at the William P. Clements Building, 300 West 15^th Street, Austin, Texas. The Carrier was represented by Erin Shanley, attorney. OxyMed was represented by Peter Rogers, attorney. Jurisdiction and notice 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.

II.DISCUSSION

Issues

Were the components of the cryotherapy unit (a water circulating unit, wrap, and pad), and the suspenders for the bone growth stimulator documented as required by the Medical Fee Guidelines and, if so, were they medically necessary for Claimant’s treatment? May the Carrier challenge the amount of payment received for the bone growth stimulator, and, if so, what amount of payment was fair and reasonable for that equipment?

The Parties’ Evidence and Arguments

Carrier’s Arguments

1. Reimbursement for the cryotherapy equipment is not appropriate because it was not documented as required in the Medical Fee Guideline (MFG).
2. Provider failed to obtain preauthorization for the cryotherapy unit. The water circulating unit, the wrap, and the pad should have been treated as one piece of equipment. Viewed as one integrated piece of equipment, the cost of the unit is such that it requires preauthorization. OxyMed’s failure to obtain preauthorization, therefore, would be sufficient to deny reimbursement.
3. The cost of the suspenders should be bundled with the bone growth stimulator. Provider has already been paid for the suspenders as part of the amount paid for the bone growth stimulator.
4. Provider is not entitled to additional reimbursement for the bone growth stimulator, because Provider failed to raise that issue by cross-appeal and, therefore, it is inappropriate for consideration in this proceeding. If it is considered, Provider did not prove the fair and reasonable amount of reimbursement for this particular bone growth stimulator.

Provider’s Arguments

1. The documentation was sufficient for the durable medical equipment (the components of the cryotherapy unit and the suspenders).
2. Preauthorization of the cryotherapy equipment was not raised in Carrier’s explanation of benefits and, therefore, should not be considered in this appeal.
3. The appeal of the suspenders for the bone growth stimulator opens that entire date of service for reconsideration and that includes the amount paid for the bone growth stimulator. Reconsideration of the amount paid for the bone growth stimulator should be allowed. Provider seeks an additional $1,600.00 for the bone growth stimulator, as well as $40.00 for the suspenders.

1. ALJ’s Analysis and Conclusion

The ALJ finds that Provider did not provide adequate documentation of the procedure as required in the MFG for services and equipment that do not have a maximum allowable reimbursement (MAR). The Provider also failed to document the medical necessity of the DME as required in the DME ground rules. Finally, the Provider failed to preserve its cross-appeal regarding the cost of the bone growth stimulator and thus may not recover any additional amount for that equipment. Provider is entitled to no additional reimbursement.

Required Documentation for the DME

When services do not have an assigned MAR, the MFG requires that the value of the service be determined by written documentation attached to, or included with, the bill. The required documentation may vary, but the following is required: (1) exact description of procedure or service provided; (2) nature, extent, and need (diagnosis and rationale) for the service or procedure; (3) time

required to perform the service or procedure; (4) skill level necessary to perform the service or procedure; (5) equipment used; and (6) other information as necessary.^[1]

In addition, a statement of medical necessity must be submitted with initial claims for the purchase of DME.^[2] A verbal order for DME must be followed by a written prescription or order prior to billing. The statement of medical necessity must specify the claimant’s diagnosis, prognosis, and the expected length of time the equipment or supplies will be required.

This record does not include that required documentation. There is some printed information about the cryotherapy unit in general and its various attachments. There is also some information about the claimant and his multiple medical problems. However, it impossible to ascertain with certainty exactly what diagnosis requires this equipment, what claimant’s prognosis it, what the exact combination of component parts make up the equipment purchased, and how long the claimant will use the equipment.

There is a letter in the record prepared by John McConnell, M.D., dated December 24, 2002, that purports to address medical necessity. (R’s Ex. 1, p. 7) That letter, however, was prepared after the Carrier had already denied payment for the cryotherapy equipment charges. The charges for DME were submitted for payment on a claim form showing a date of service of September 18, 2002. Clearly, this letter was not submitted with the initial claim as required. Even if it had been submitted with the initial claim, the letter is not at all clear. It refers to both “rehabilitation of the knee” and “patient sustained left shoulder injury.” There is nothing else in the record related to claimant’s knee. There is very little else in the record related to claimant’s shoulder. There are also references in the file to low back pain and lumbar surgery. Dr. McConnell’s letter does not explain the claimant’s diagnosis, prognosis, or what the equipment will be used for or how long it will be used.

The only connection between the cryotherapy unit and a particular injury is the diagnostic code on the health insurance claim form (HCFA-1500). That diagnostic code is 719.41, the code for “pain in joint involving shoulder region” and is related to each component of the cryotherapy unit where it is listed on the HCFA-1600.^[3] There is also a mention on a chart note dated June 14, 2002, that claimant had a “left shoulder arthroscopy.”^[4] However, the documents do not explain the connection between the arthroscopy, the shoulder joint pain, and the cryrotherapy unit.

The bone growth stimulator was apparently used in some manner related to claimant’s low back pain.^[5] Presumably, the suspenders relate to the use of the bone growth stimulator. However, there is nothing in this record that explains how the bone growth stimulator and suspenders will be used to treat claimant, how long they will be used, the diagnosis and rationale for the equipment, or the prognosis for claimant’s lower back-or other-condition. Neither is there a statement of medical necessity regarding the suspenders. The bone growth stimulator itself was preauthorized.

Preauthorization for the Cryotherapy Unit and Bundling of Suspenders with Bone Growth Stimulator

The ALJ will not consider the Carrier’s argument regarding preauthorization of the cryotherapy unit or the argument that the payment for the suspenders should be considered a part of the payment already made for the bone growth stimulator. The negative determination based on inadequate documentation renders those issues moot.

Additional Reimbursement for the Bone Growth Stimulator

Provider did not preserve its right to seek additional reimbursement for the bone growth stimulator because it did not challenge the decision of the MRD by asking for a contested case hearing on that point. An appeal from the MRD findings and the request for an administrative hearing must be in writing and must be received by the Commission within twenty days of the date the decision is received. 28 Tex. Admin. Code ‘148.3. (See also ‘413.031(d) of the Act and 28 Tex. Admin. Code §133.307.p), which provide for an appeal to SOAH.) See, e.g., SOAH Docket No. 453-01-2370.M5 (ALJ Landeros); SOAH Docket No. 453-96-0469.M4 (ALJ Norman); SOAH Docket No. 453-96-2099.M4 (ALJ Ramos).

III. FINDINGS OF FACT

1. Claimant sustained a compensable on-the-job injury on or about ___.
2. Petitioner American Casualty Company of Reading, PA (Carrier), is the workers’ compensation insurance carrier for claimant’s employer.
3. Claimant complained of constant back pain radiating mostly into his left leg on an intermittent basis for at least a year after his injury.
4. A preoperative history and physical for disc disruption syndrome and anterior discectomy and interbody fusion was done by Sidney H. Bernstein, D.O., on June 14, 2002, in anticipation of surgery at Las Colinas Medical Center on July 19, 2002.
5. Claimant had a left shoulder arthroscopy at some time prior to June 14, 2002.
6. A cryotherapy unit, made up of four components was provided to claimant on or about September 18, 2002, by order of Robert Henderson, M.D.
7. A bone growth stimulator and suspenders for a bone growth stimulator was provided to claimant on or about September 27, 2002, by John McConnell, M.D., an orthopedic surgeon.
8. No statement of medical necessity and order or prescription was submitted to the Carrier for the initial claim for the purchase of the cryotherapy unit or the suspenders related to the bone growth stimulator.
9. The bone growth stimulator was preauthorized.
10. No documentation of procedure was submitted to the Carrier giving the exact description of the procedure or service provided to claimant; the nature, extent, and need (diagnosis and
11. rationale) for the service or procedure; the time required for use of the equipment; the necessary skill level to provide the service; or the equipment necessary to provide the service.
12. The Medical Review Decision (MRD) issued its Decision and Order on July 24, 2003, requiring Carrier to pay Provider $809.00 for the cryotherapy unit components and the suspenders for the bone growth stimulator.
13. On August 8, 2003, Carrier filed a request for a hearing at the State Office of Administrative Hearings to challenge the MRD order.
14. On September 9, 2003, the Commission issued a notice of hearing which included 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; a reference to the particular sections of the statutes and rules involved; and a short, plain statement of the matters asserted.

IV.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. Lab. Code Ann. §§402.073 and 413.031(k) and Tex. Gov’t Code Ann. ch. 2003.
2. Petitioner timely filed notice of appeal, as specified in 28 Tex. Admin. Code §148.3.
3. Proper and timely notice of the hearing was effected upon the parties according to Tex. Gov’t Code Ann. ch. 2001 and 28 Tex. Admin. Code § 148.4(b).
4. Carrier, who had the burden of proof, proved its case by a preponderance of the evidence, pursuant to 28 Tex. Admin. Code § 148.21(h) and (i), and 1 Tex. Admin. Code § 155.41.
5. When there is no pre-negotiated contract between the carrier and provider, the carrier is required to reimburse provider at the fair and reasonable rate for the item described. MedicalFee Guideline, p. 253.
6. Documentation of procedure (DOP) is required when there is no established maximum allowable reimbursement (MAR). Medical Fee Guideline, p. 1-2.
7. When DOP is required, the value of the service shall be determined by written documentation attached to or included with the bill. This must include the exact description of the procedure or service provided including the diagnosis and rationale for the service or procedure, the time required, the skill level necessary, and the equipment used. Medical Fee Guideline, p. 1-2.
8. Provider failed to submit required documentation to Carrier for the DME provided to claimant in this case. Medical Fee Guideline, pp. 1-2; Durable Medical Equipment Ground Rules in Medical Fee Guideline; pp. 253-254.
9. No further reimbursement is due to Provider from Carrier in this case.

ORDER

IT IS, THEREFORE, ORDERED that Carrier’s appeal is found to have merit, and its prayer for relief is hereby granted: Carrier is not required to pay OxyMed, Inc. for durable medical equipment in the amount of $809.00

Signed, December 19, 2003.

NANCY N. LYNCH
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1. Medical Fee Guideline, effective 04/01/96, Copyright 1996 Workers= Compensation Commission, p. 1-2.↑
2. Medical Fee Guideline, supra, Durable Medical Equipment (DME)Ground Rules, p. 254.↑
3. R’s Ex. 1, p. 81.↑
4. R’s Ex. 1, p. 22.↑
5. This is unclear, however, because again, the diagnostic code related to these items is the code for shoulder joint pain. R’s Ex. 1, pp. 18B20.↑