DECISION AND ORDER

Main Rehab and Diagnostic (Petitioner), appeals from a decision by an Independent Review Organization that denied reimbursement for four office visits and two weeks of work-hardening services provided to Claimant ___ Texas Mutual Insurance Company (Carrier) contends that the IRO decision should be upheld because the work hardening services were not medically reasonable or necessary and the office visits were not properly documented. The amount in dispute is $6,336.00. This Decision and Order denies Petitioner’s appeal because it failed to prove that the disputed work-hardening services were medically reasonable and necessary for ___ or that the office visits were properly conducted and documented.

I. JURISDICTION, NOTICE, AND VENUE

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

II. STATEMENT OF THE CASE

Administrative Law Judge (ALJ) Thomas H. Walston convened a hearing in this case on December 8, 2003, at the State Office of Administrative Hearings, William Clements State Office Building, Austin, Texas. Petitioner and its attorney, Mr. Scott Hilliard, appeared by telephone, and Carrier appeared in person through its attorney, Ms. Patricia Eads. The record closed the same day.

III. Discussion

A. Introduction

___ is a 48-year-old female who suffered a compensable injury to her back on ___, when she tripped and fell while working as a security guard. ___ received a long, extensive course of treatment for her compensable back injury, including a diskectomy and surgical fusion at L5-S1 on April 28, 2001. She continued to have problems with her back after the surgery, and on September 13, 2002, Dr. Robert Bedford (a chiropractor employed by Petitioner) requested preauthorization for six weeks of work hardening. On September 18, 2002, Carrier granted preauthorization for four weeks of work hardening. The preauthorized four weeks of work hardening were provided by Petitioner and paid for by Carrier and are not in dispute here.

Upon completion of the initial four weeks of service, Petitioner provided an additional two weeks of work hardening to ___ between October 28, 2002, and November 13, 2002. These services have not been paid and are disputed in this case. Although the additional two weeks of work hardening were not preauthorized by Carrier, Petitioner received certification as a CARF^[1] facility on October 21, 2002, and under the rules of the Texas Workers’ Compensation Commission (TWCC), CARF facilities are not required to obtain preauthorization for work hardening services. Therefore, Petitioner was not required to obtain preauthorization for the additional two weeks of work hardening. Nevertheless, Carrier denied payment for the additional work hardening based on lack of medical reasonableness or necessity. In addition, Carrier denied payment for four office visits that occurred on October 17, 24, and 31 and November 7, 2002, based on inadequate documentation.

Petitioner appealed Carrier’s denial of payment, but on August 12, 2003, Envoy Medical Systems, an Independent Review Organization (IRO), upheld the Carrier’s position based on the following rationale:

The patient’s response to the work hardening program was negligible at best. Demonstrable functional gains were absent. Comparing the patient’s performance tests on 8/23/02 and 11/29/02, there was little, if any, improvement in performance tasks. Comparing static lifting (bench and knuckle height) there was no improvement. The patient’s performance of a carrying task actually decreased. There was minimal improvement in cart height and shoulder height static pushing and pulling. During the performance task testing the patient reported an increase in discomfort and fatigue, demonstrated facial grimacing and body mechanics breakdown, lost her balance and finally stopped the activity. The disputed treatment failed to be beneficial to the patient and improvement in function was not documented. The documentation presented for this review lacked subjective complaints and clinical objective findings to support a reasonable expectation that the disputed treatment would help relieve symptoms. The patient’s injury occurred some two years prior to the disputed treatment, and it appears from the records provided that the patient had plateaued in a diminished condition several months after her 4/28/01 surgical fusion.

This appeal followed.

B. Petitioner’s Evidence and Arguments

Petitioner offered voluminous records into evidence and called Dr. Osler Kamath (D.C.) as a witness. Dr. Kamath has practiced chiropractic for over three years. He testified that Main Rehab and Diagnostic became CARF certified effective October 21, 2002, during the course of ___’s treatment. Dr. Kamath stated that ___ injured herself on ___, when she fell while running to answer a telephone. The accident caused ___ to have a sudden onset of acute back pain, which eventually resulted in back surgery, including an L5-S1 fusion, on April 28, 2001.

Dr. Kamath first saw ___ on May 20, 2002. His report for that date states that ___ reported pain in her low back, radiating into her left buttocks and leg, and she had reduced range of motion in

her lumbar spine. ___ could not perform the straight leg raising test due to pain and other orthopedic tests were not performed well. She was also severely de-conditioned. Her gross neurological exam was normal, and X-rays of her lumbar spine were normal except for the surgical fusion hardware noted at L5-S1. Dr. Kamath diagnosed ___’s condition as “Lumbar Disc Disorder-unspecified, Lumbar Neuritis/Radiculitis, Lumbar Segmental Dysfunction, and Muscle Spasms.” He proposed a conservative treatment plan of physical therapy five times per week for two weeks and four times per week thereafter.

Dr. Kamath stated that on September 18, 2002, Carrier granted preauthorization for four weeks of work hardening. After this initial four weeks, Petitioner provided an additional two weeks of work hardening without obtaining preauthorization because Petitioner had become CARF certified on October 21, 2002. The disputed two weeks of services began on October 28, 2002, after the CARF certification became effective. Dr. Kamath testified that lapses had occurred in ___’s treatment during the two years after her injury and that he believed work hardening would help her achieve a level of functionality.

Based on subsequent progress notes of Dr. George Farhat, M.D. (05/06/03 and 06/03/03) and Dr. Philip Cantu, M.D. (08/12/03), Dr. Kamath testified that after the work hardening ___ continued to have unrelenting back pain, she did not achieve MMI, and she did not return to work, although he thought she did move towards return-to-work status. Despite this lack of progress, Dr. Kamath testified that, in his opinion, based on the facts known before the work hardening began, ___ was a suitable candidate for work hardening.

Concerning the disputed office visits, Dr. Kamath testified that he spoke to ___ once per week to discuss her condition, progress, and problems.

In argument, Petitioner’s counsel noted that Carrier preauthorized four weeks of work hardening, so there should be no dispute that ___ was a suitable work hardening candidate. Further, before the work hardening began, Dr. Crawford Sloan, M.D., stated that ___ would benefit from further care. Petitioner also argued that the IRO based its decision on the idea that work hardening two years after injury is too late, yet Carrier continued to preauthorize other procedures such as injections.

Petitioner also stated that Carrier denied reimbursement for the additional two weeks of work hardening by using code YA – “treatment exceeds preauthorized treatment.” Petitioner suggests that Carrier’s denial of payment was actually due to confusion over preauthorization because Carrier did not realize Petitioner had become CARF certified, and that use of the YA code now precludes Carrier from arguing lack of medical reasonableness or necessity.

Concerning the four disputed office visits, Petitioner argued that it is CARF certified and must maintain thorough records, and that the office visits in question were adequately documented.

C. Carrier’s Evidence and Arguments

Carrier also relied on ___’s records and called Dr. William Defoyd, D.C., as a witness. Dr. Defoyd is a board certified Chiropractic Orthopedist who practices with the Spine and Rehab Center in Austin, Texas. He reviewed ___’s records but has not actually examined her. Dr. Defoyd reviewed ___’s treatment history and pointed out that before the work hardening began, she had a diskectomy and fusion at L5-S1 in April 2001, physical therapy (including aquatic therapy) for a period immediately after the surgery, six weeks of additional physical therapy in February and March

2002, and approximately 50 visits to Dr. Kamath between May and August 2002. However, after all of this conservative treatment, ___ showed no significant improvement and her work status never changed. In particular, Dr. Defoyd noted that during this period, ___’s strength and range of motion were evaluated seven times but never showed any significant improvement. Likewise, a Functional Capacity Evaluation (FCE) was performed on ___ on August 23, 2002, before the work hardening began, and again on November 8, 2002, after the first four weeks of work hardening, but this also showed no significant improvement. Thus, Dr. Defoyd testified that there was no reason to believe that more of the same treatment would provide any improvement for ___

Dr. Defoyd also testified that the four disputed office visits to Dr. Kamath were not adequately documented because they do not include any interim history or results of a physical exam, such as range of motion, muscle testing, etc. He stated that an office visit is more than just a verbal visit with the patient and must include an evaluation of the patient that the doctor describes in the records.

In argument, Carrier’s counsel pointed out that its initial EOB’s dated December 11, 2002, denied payment based on lack of medical necessity. Only after Petitioner resubmitted its claim did the Carrier issue EOBs on February 10, 2003, with a denial code for lack of preauthorization. Carrier conceded that these later EOBs were in error, but argued that the initial EOBs were sufficient to inform Petitioner of the reason for denial of reimbursement. Carrier further argued that the work hardening was not medically reasonable or necessary as ___ had already undergone three rounds of physical therapy without any significant improvement, so there was no reason to believe that work hardening would provide any benefit. Finally, Carrier reiterates that Petitioner failed to adequately document the four disputed office visits.

D. ALJ’s Analysis and Decision

The ALJ finds that Petitioner did not establish that the additional two weeks of work hardening in dispute were medically reasonable and necessary treatment for the treatment of ___ Therefore, the ALJ denies Petitioner’s appeal and request for reimbursement. In particular, the ALJ was not persuaded that there was any reasonable basis to conclude that an additional two weeks of work hardening would improve ___’s condition or increase her ability to return to work. As Carrier and Dr. Defoyd pointed out, ___ had already undergone extensive physical therapy and other conservative treatments without any significant improvement. Likewise, the first four weeks of work hardening showed little, if any, improvement for ___, and it was not reasonable to believe that an additional two weeks of work hardening would improve her condition. In other words, even though ___ continued to have back pain and was unable to return to work, the work hardening services were not an appropriate treatment for ___. As noted by the IRO, the work hardening treatment failed to benefit ___ and improvement in function was not documented. Likewise, the IRO found that the documentation lacked subjective complaints and objective clinical findings to support a reasonable expectation that the disputed treatment would help relieve ___’s symptoms. The ALJ agrees with the IRO’s conclusions and denies Petitioner’s appeal.

The ALJ also rejects Petitioner’s contention that Carrier cannot argue that the services were not medially reasonable or necessary due to Carrier’s EOBs stating that reimbursement was denied due to lack of preauthorization. As pointed out by Carrier, the original EOB’s dated December 11, 2002, did deny reimbursement due to lack of medical reasonableness or necessity. Only after Petitioner requested reconsideration did Carrier erroneously state that reimbursement was denied based on lack of preauthorization. The original EOBs gave Petitioner adequate notice that Carrier

denied reimbursement because the services were not medically reasonable or necessary, and Petitioner offered no evidence that it was prejudiced by the later erroneous EOB. Indeed, in its request for Medical Dispute Resolution dated May 16, 2003, Petitioner stated that Carrier “has denied the work hardening as unnecessary treatment.” Therefore, Carrier is not precluded from raising the issue of medical necessity in this proceeding.

Concerning the disputed office visits on October 17, 24, and 31 and November 7, 2002, the report for each date is an identical word-for-word narrative, and appears simply to be a copied word processing entry. These records do not reflect any true examination, evaluation, or analysis of ___’s condition, and Dr. Kamath provided little testimony concerning these office visits. CPT Code 99213, under which Petitioner billed these office visits, requires at least two of the following three key components: an expanded problem focused history, an expanded problem focused examination, and medical decision making of low complexity. Based on the rote narratives for these visits, along with Dr. Kamath’s limited testimony about them, the ALJ concludes that Dr. Kamath has not met his burden of proof to establish that he conducted and documented these office visits in accordance with the requirements of CPT Code 99213. Therefore, the ALJ denies Petitioner’s appeal concerning these office visits.

In summary, the ALJ denies Petitioner’s appeal and upholds the IRO’s denial of reimbursement for two weeks of work hardening and four office visits in connection with the treatment of ___

IV. FINDINGS OF FACT

1. On ___, Claimant ___ sustained a compensable injury during the course and scope of her employment.
2. Texas Mutual Insurance Company (Carrier) is the workers’ compensation insurance carrier responsible for ___’s compensable injury.
3. ___ has received a long, extensive course of treatment for her compensable injury, including a diskectomy and surgical fusion at L5-S1 on April 28, 2001.
4. ___ continued to have problems after her surgery, and on September 13, 2002, Dr. Robert Bedford, a chiropractor employed by Petitioner Main Rehab and Diagnostic, requested preauthorization for six weeks of work hardening.
5. On September 18, 2002, Carrier granted preauthorization for four weeks of work hardening.
6. The preauthorized four weeks of work hardening were provided by Petitioner and paid for by Carrier.
7. Upon completion of the initial four weeks of work hardening services, Petitioner provided an additional two weeks of work hardening to ___ that have not been paid by Carrier and are disputed in this case. Petitioner provided these two weeks of work hardening services between October 28 and November 13, 2002.
8. The additional two weeks of work hardening were not preauthorized by Carrier.
9. On October 21, 2002, Petitioner received certification as a CARF facility. CARF facilities are not required to obtain preauthorization for up to six weeks of work hardening services.
10. Carrier denied payment for the additional two weeks of non-preauthorized work hardening services based on lack of medical reasonableness or necessity.
11. Carrier denied payment for four office visits that occurred during this period based on inadequate documentation. These four office visits occurred on October 17, 24, and 31 and November 7, 2002.
12. The total amount in dispute between Petitioner and Carrier is $6,336.00.
13. Petitioner appealed Carrier’s denials of payment.
14. On August 12, 2003, Envoy Medical Systems, an Independent Review Organization (IRO), denied Petitioner’s appeal and upheld the Carrier’s denials of payments.
15. Petitioner timely filed a request to appeal the decision of the IRO.
16. Prior to the work hardening services in dispute, ___ had undergone extensive physical therapy and other conservative treatments without any significant improvement. Likewise, the first four weeks of her work hardening showed little, if any, improvement in ___’s condition, and it was not reasonable to believe that an additional two weeks of work hardening would improve her condition.
17. ___ was not a suitable candidate for the work hardening services in dispute because the documentation lacked subjective complaints and objective clinical findings to support a reasonable expectation that the disputed treatment would help relieve ___’s symptoms.
18. The evidence did not establish that the two weeks of work hardening services in dispute were medically reasonable and necessary for ___ at the time the services were provided.
19. Concerning ___’s office visits on October 17, 24, and 31 and November 7, 2002, the narrative report for each date is identical, word-for-word, and appears simply to be a copied word processing entry. These records do not reflect any true examination, evaluation, or analysis of ___’s condition.
20. CPT Code 99213, under which these office visits were billed, requires at least two of the following three key components: an expanded problem focused history, an expanded problem focused examination, and medical decision making of low complexity. The evidence did not establish that Dr. Kamath conducted and documented these office visits in accordance with the requirements of CPT Code 99213.
21. A hearing was conducted in this case on December 8, 2003, and the record closed the same day.
22. Petitioner and Carrier attended the hearing.
23. All parties received not less than 10 days notice of the time, place, and nature of the hearing; the legal authority and justification under which the hearing would be held; a reference to the particular sections of the statutes and rules involved; and a short, plain statement of the matters asserted.
24. All parties were allowed to respond and present evidence and argument on each issue involved in the case.

V. CONCLUSIONS OF LAW

1. The Texas Workers’ Compensation Commission has jurisdiction to decide the issues presented pursuant to the Texas Workers’ Compensation Act, Tex. Lab. Code §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 §§402.073(b) and 413.031(d) and Tex. Gov’t Code, Ch. 2003.
3. Petitioner timely requested a hearing pursuant to 28 Tex. Admin. Code §§102.3, 102.5(h), 102.7 and 148.3.
4. The parties received adequate and timely notice of the hearing pursuant to Tex. Gov’t Code § 2001.051.
5. Venue was established pursuant to 28 Tex. Admin. Code §148.6.
6. Petitioner had the burden of proof in this matter to establish its claim by a preponderance of the evidence. 28 Tex. Admin. Code §148.21(h) and (i).
7. Based on Findings of Fact Nos. 16-18, Petitioner failed to establish by a preponderance of the evidence that an additional two weeks of work-hardening services were medically reasonable and necessary for ___
8. Based on Findings of Fact Nos. 19-20, Petitioner failed to establish by a preponderance of the evidence that it properly conducted and documented four office visits on October 17, 24, and 31 and November 7, 2002.
9. Based on Conclusions of Law Nos. 7 and 8, Petitioner’s claims are denied.

ORDER

THEREFORE, IT IS ORDERED that Petitioner’s appeal of the IRO decision in Medical Dispute Resolution Docket No. M5-02-2389-01 is Denied, and that Petitioner Main Rehab and Diagnostic shall have and recover nothing in this case from Respondent Texas Mutual Insurance Company for the claims made the subject of this proceeding.

Signed January 9, 2004.

THOMAS H. WALSTON
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1. CARF stands for Commission on Accreditation of Rehabilitation Facilities, which is a private, non-profit accrediting organization.↑