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Title: 

453-04-6622-m5

Date: 

June 10, 2005

Type: 

Retrospective Medical Necessity

453-04-6622-m5

DECISION AND ORDER

This is a dispute over reimbursement for services performed for an injury suffered by Claimant while in the course and scope of her employment. The Administrative Law Judge (ALJ) concludes that the therapeutic services should be reimbursed, as Texas Mutual Insurance Company, (Carrier and Petitioner) failed to state rationales on its EOBs that complied with the Texas Labor Code (Labor Code) the Texas Administrative Code.

I. FACTUAL AND PROCEDURAL HISTORY

Due to the procedural history of this case and a predicate issue raised by Main Rehab and Diagnostic (Provider and Respondent), the merits of the medical necessity dispute are not reached. The merits will only be briefly discussed herein.

Claimant suffered a work-related repetitive injury to her left hand and wrist on ___. On November 7, 2002, Osler Kamath, D.C., performed an initial evaluation and diagnosis of carpal tunnel, tenosynovitis, paresthesia and muscle spasms. Dr. Kamath prescribed physical therapy and treated Claimant intermittently November, 2002, through July, 2003. On March 11, 2003, Claimant underwent surgery by an orthopedic surgeon.

After surgery, Provider treated Claimant through July 14, 2003. The disputed services were rendered from May 29, 2003, through July 14, 2003. The CPT codes in issue are 97110 and 99213. The amount in dispute is $4,575.00.

Claiming lack of medical necessity, Carrier denied reimbursement of Provider’s treatment of Claimant. Provider filed a timely request for medical dispute resolution (MDR # M5-04-0488-1). The Independent Review Organization (IRO) determined that the disputed services were medically necessary.

Carrier filed a timely request for hearing before the State Office of Administrative Hearings (SOAH) on June 2, 2004. The Texas Worker’s Compensation Commission (TWCC) issued a notice of hearing in this matter on July 5, 2004. A hearing was held on March 9, 2005, before Administrative Law Judge (ALJ) Travis Vickery. Provider and Carrier participated in the hearing, which was adjourned the same day. The record originally closed on April 6, 2005. By motion of the parties, the record re-opened until April 13, 2005. As explained below, by the granting of Petitioner’s Motion to Re-open Evidence, the record is re-opened and closed on June 10, 2005, the date of issuance of this decision.

This case involves an unusual procedural history, which began at the hearing when Provider raised the issue of the Carrier’s failure to provide a sufficient rationale for its denial on the Explanation of Benefits (EOB) forms. The post-hearing procedural history follows:

March 24, 2005Respondent’s Brief;[1]

March 25, 2005Petitioner’s Amended Table of Disputed Services;

April 13, 2005 Petitioner’s Motion to Re-open Evidence;

April 13, 2005 Petitioner’s Reply Brief and Motion for Sanctions;

April 15, 2005 Respondent’s Response to Petitioner’s Reply Brief and Motion for Sanctions;

April 18, 2005 Petitioner’s Reply to Respondent’s Response to Petitioner’s Reply Brief and Motion for Sanctions;

April 22, 2005 Respondent’s Reply to Petitioner’s Motion to Re-open Evidence;

April 22, 2005 Respondent’s Response to Petitioner’s Reply to Respondent’s Response to Petitioner’s Reply Brief and Motion for Sanctions;

April 25, 2005 Petitioner’s Motion to Strike and Reply to Respondent’s Response to Petitioner’s Motion to Re-open Evidence; and

April 26, 2005 Petitioner’s Final Letter Brief Regarding Motion for Sanctions.

II. DISCUSSION

A. Adequacy of Carrier’s EOB Rationales

By stipulation of the Carrier, the only issue is whether the disputed services were medically necessary. On its EOBs forms, the Carrier used the payment exception code “U” in denying reimbursement for the disputed services as medically unnecessary. The Labor Code and the Texas Administrative Code require the Carrier to provide at least one rationale for each denial code like “U.”

Provider raised two issues with the mandatory denial rationales the Carrier used on the EOBs: (1) that the rationales were too generic to meet the requirements of Section 408.027(d) of the Labor Code and 28 Tex. Admin. Code (TAC) § 133.304(c); and (2) that the rationales were cryptic and referred back to Carrier’s internal, confidential and undisclosed treatment guidelines. The two rationales, which are the same throughout the record, are:

YUThis service has been deemed unnecessary medical treatment based on a review of the claim file, billing records and/or written review protocols established for appropriate healthcare treatment.

RGThe treatment/service provided exceeds medically accepted utilization review criteria and/or reimbursement guidelines established for severity of injury, intensity of service and appropriateness of care.

The law requires that when a carrier denies reimbursement to a Provider, it must explain why. Section 408.027(d) of the Labor Code requires that:

If an insurance carrier disputes the amount of payment or the health care provider’s entitlement to payment, the insurance carrier shall send to the commission, the health care provider, and the injured employee a report that sufficiently explains the reasons for the reduction or denial of payment for health care services provided to the employee . . . (Emphasis added).

28 TAC § 133.304(a) states the deadline for a carrier to submit the EOB:

. . . an insurance carrier shall take final action on a medical bill not later than the 45th day after the date the insurance carrier received a complete medical bill.

28 TAC § 133.304(c) requires that:

At the time an insurance carrier makes payment or denies payment on a medical bill, the insurance carrier shall send, in the form and manner prescribed by the Commission, the explanation of benefits to the appropriate parties. The explanation of benefits shall include the correct payment exception codes required by the Commission’s instructions, and shall provide sufficient explanation to allow the sender to understand the reason(s) for the insurance carrier’s action(s). A generic statement that simply states a conclusion such as not sufficiently documented or other similar phrases with no further description of the reason for the reduction or denial of payment does not satisfy the requirements of this section . . . (Emphasis added).

Carrier’s rationales fail to meet its burden under the rules. Both rationales are conclusory and generic. Neither rationale explains the Carrier’s reasons for the denials. The YU rationale basically says that the Carrier took a look at the file and denied it under undisclosed “review protocols.” Likewise, the RG rationale is a vague conclusion that the services somehow exceeded unstated criteria and guidelines. Not surprisingly, the Carrier’s witness, Dr. William DeFoyd, could not articulate the meaning of the rationales.

ALJ Egan recently issued a number of decisions on this matter involving Texas Mutual Insurance Company and the rationale code RG B one of the codes at issue here. In one of the decisions, ALJ Egan ruled:

Even after Provider requested clarification, Carrier did not provide a sufficient explanation for denying Provider’s claim other than to use the brief rationale codes listed above that failed to clarify what protocols, guidelines and criteria Carrier relied upon in denying these claims. The Commission’s rules required Carrier to provide on the EOB a sufficient explanation to allow Provider to understand the reason(s) for Carrier’s denial.

Carrier cannot substitute at a much later date a reason or an explanation for asserting the service or treatment was unnecessary treatment other than that provided by Carrier when it denied the claims. The physicians who testified at the hearing on behalf of Carrier were unable to testify regarding Carrier’s criteria and guidelines referenced in the EOBs. Under the Commission’s rules, Carrier’s explanation was insufficient. The ALJ will not permit Carrier to now substitute an explanation that was not furnished in compliance with 28 TAC ‘ 133.304(c). Therefore, when Carrier failed to timely submit a sufficient explanation of its denial, it is now barred from denying the claim based on lack of medical necessity.[2]

The ALJ agrees with ALJ Egan’s reasoning, which is squarely on point here. The law clearly requires that, within 45 days of its receipt of a provider’s bill, the carrier must issue an EOB with a proper denial code that is sufficiently explained. If the carrier’s rationales do not sufficiently explain why the carrier denied payment, the carrier cannot later, offer different reasons for denial.[3]

The Carrier, however, argues that there is no limit to the rationales a carrier may offer in a medical necessity hearing at SOAH:

The rules of the TWCC are clear. A medical necessity denial must contain a proper payment exception code and at least one rationale. The carrier is limited to its payment exception code, but not to the stated rationale, in an administrative review of medical necessity . . . [t]o state it specifically, in this case, TMI may initially rely

on internal guidelines to deny services on the basis of medical necessity. At hearing, it may introduce all competent evidence that shows the services were not medically necessary.[4]

So according to the Carrier, Labor Code§ 408.027(d), and 28 TAC § 133.304(a) and (c) clearly allow the Carrier to: (1) state a denial rationale that the Provider cannot possibly understand because its reasons are shrouded in confidential protocols or guidelines; and (2) having so stated this secret rationale, the Carrier may appear at the hearing and offer any evidence that may support any reason for denial. In essence, the Carrier may state a reason devoid of substance B or at least cloak the reason in confidentiality and at the SOAH hearing offer any denial reason it chooses. Since the carrier’s reason need not be substantive, it also need not be the result of a factual investigation.

If such were TWCC’s intended result, then the language of the statutes cited are without meaning. The carrier has 45 days after its receipt of a medical bill to respond and provide denial rationales on an EOB. 28 TAC§ 133.304(a). The explicit language of the rules require that the rationales be non-conclusory and non-generic B and the language is mandatory. The time limit and the mandatory language of 28 TAC § 133.304(c) and Labor Code § 408.027(d), makes clear the carrier has a duty to provide understandable reasons for denial within 45 days. It only makes sense that the carrier is then limited at hearing to those rationales for denial which were stated on the EOBs.

The requirement of a sufficient rationale serves a dual purpose: (1) that a carrier must conduct some form of investigation prior to denial of a claim B otherwise carriers could routinely deny claims without justification; and (2) to put the provider on notice of what was medically unnecessary about the services. The carrier’s rationale shapes the course of litigation and a clear rationale may lead to a speedier resolution of the claim. Furthermore, it is a fundamental concept that litigation is not instituted without some form of factual investigation. The rule stated in 28 TAC § 133.304(c) does not allow for a “general denial’ as it is known under the Texas Rules of Civil Procedure. Rather, it requires the opposite.

In response to the duty to provide “notice pleading,” the Carrier cited to ALJ Rogan’s decision in Docket No. 453-04-1978.M5, for the proposition that “. . . carriers should not be required to list speculative reasons for denying reimbursement on the mere chance that such a deficiency might later arise,” because “. . . medical necessity disputes often involve a deficiency that an insurer realistically may not be able to detect until a late stage in the dispute resolution process.’”[5] This proposition is not an accurate representation of ALJ Rogan’s reasoning.

Like the instant case, ALJ Rogan’s decision involved a dispute over the medical necessity of one-on-one services billed under CPT Code 97110. That case differed, however, because during the course of litigation the carrier (Texas Mutual Insurance Company) discovered that the services billed under 97110 were not properly coded. ALJ Rogan then determined that the basic premise upon which case rested, provider’s fulfilment of its duty to accurately code its services, did not exist:

The record presented to the ALJ does not support a basic premise under which the review of this dispute apparently has proceeded up to this point B i.e., it does not indicate that those disputed services recorded [u]nder CPT Code 97110 actually satisfied the definition for that category of services . . . Code 97110 treatment does not include Asimultaneous treatment to two or more patients who may or may not be doing the same activities . . .

The testimony of Ms. Smith showed, with reasonable clarity, that she sometimes monitored the therapeutic activities of both the claimant and one or more other patients at the same time. Such activity does not fit in CPT Code 97110, although Respondent reported it under that category. Ms. Smith apparently could not recall her work with the claimant in any detail and did not specify that any of it entailed true one-on-one supervision during the dates of service in dispute. Thus, the ALJ is not able to conclude that any portion of the disputed services billed under CPT Code 97110 was properly categorized.

The ALJ does not believe that disallowance of services for the provider’s failure to identify them properly is precluded by 28 TAC § 133.307(j)(2) or by SOAH’s well-established principle (in Commission cases) that only those reasons for denial that are set out prior to a request for dispute resolution may be considered in subsequent review. On the contrary, in an administrative contest of this type, when a provider

asserts that certain, specifically identified services were medically necessary, a later showing that the services actually delivered were of a significantly different nature must lead, normally, to a logical assumption that those different services were not medically necessary . . .

In addition, the failure to deliver the same services that a provider specifically bills is a deficiency that an insurer realistically may not be able to detect until a late stage in the dispute resolution process if even then. In this case, Petitioner may not have had any firm basis for questioning whether Respondent actually provided CPT Code 97110 services until Ms. Smith’s testimony showed a lack of substantiation for those services. Insurers certainly should not be required to list the provider’s inaccuracy of service identification as a speculative reason for denying reimbursement, on the mere chance that such inaccuracy might surface in the subsequent investigation of a dispute.[6]

ALJ Rogan’s decision stands for the basic propositions that a provider must first properly code its services, and that when a provider has failed to do so, it may go undiscovered until very late in the litigation. The Provider in this matter cited to that very principle in Respondent’s Brief at page 6. Nothing in 28 TAC § 133.304(c) or Labor Code § 408.027(d) has any impact on that very fundamental concept. ALJ Rogan’s decision has no bearing on the instant case. Nevertheless, should such a situation arise, ALJ Rogan stated a prudent principle which the undersigned ALJ will likely follow.

Provider also complained about the Carrier’s use of codes “YU” and “RG” for its rationales. These codes are allegedly proprietary and their associated meanings have not been disclosed to the Provider or the ALJ. But the mere use of the proprietary codes “YU” and “RG,” as cryptic as they may be, do not violate the Carrier’s obligations to explain why it denied reimbursement. The ALJ understands that TWCC cases are voluminous and that there are a finite number of reasons why reimbursement would be denied as medically unnecessary. The codes may simply be a way to plug-in rationales on the EOBs.

As stated above, the real issue is that the “written review protocols” in the description of “YU” and the “medically accepted utilization review criteria and/or reimbursement guidelines” in “RG,” form the undisclosed basis of the rationales. Unless the protocols and guidelines are disclosed

(or at least the relevant portion of them), it is impossible for a provider to understand, or receive notice of why the services were medically unnecessary, as required by the law. In any litigation, a party is entitled to understand the bases for a claim or defense and TWCC disputes are no different. Denial of reimbursement by reference to a proprietary and undisclosed protocol is the classic “sword and shield.” If the Carrier will not disclose the protocols, criteria or guidelines that have been violated, then it has failed to meet its burden to explain “the reasons for the reduction or denial of payment” or to “provide sufficient explanation to allow the [provider] to understand reason(s) for the insurance carrier’s action(s)” as required by Section 408.027(d) of the Labor Code and 28 TAC § 133.304(c).

The Carrier’s rationales do not meet the Carrier’s burden under the Labor Code or the Texas Administrative Code. The Carrier is barred from denying the Provider’s claims based on lack of medical necessity.

B. Carrier’s Motion for Sanctions

In Respondent’s Brief, the Provider cited the ALJ to 28 TAC § 133.307(j)(2) for the proposition that “TWCC is not even supposed to consider new reasons for denial not contained in the Carrier’s EOBs.”[7] The gist of the Carrier’s Motion for Sanctions is that 28 TAC § 133.307(j)(2) applies only to fee disputes B and the only issue in this proceeding is medical necessity. The Carrier points out that Chapter 133 observes a clear distinction between fee disputes and medical necessity disputes.

The ALJ agrees that the cite to 28 TAC § 133.307(j)(2) is either out of place, or is poorly explained in the Provider’s Brief. Absent some explanation, the Provider appears to argue the prohibition as a rule for TWCC in its review of a carrier’s denial rationales B obviously limited to fee disputes since medical necessity disputes take a different track to an IRO. This obvious distinction was not explained or applied as persuasive argument for the same result here. Most important, however, is that the Provider never argues that SOAH is bound by the provision in a case of medical necessity. Although the reference to 28 TAC § 133.307(j)(2) should have been better explained, it does not rise to the level of an outright misrepresentation of law to the ALJ.

In fact, the Provider explained the genesis of the citation prior to the filing of the Motion for Sanctions. In an April 4, 2005, letter to the Carrier, Provider explained that at the hearing the Carrier’s witness, Dr. William DeFoyd, and counsel for Carrier raised fee dispute arguments. In response, Provider cited 28 TAC § 133.307(j)(2) to exclude any reasons for denial unrelated to medical necessity.[8] The Provider’s April 15, 2005, Response to the Motion for Sanctions offered the same explanation.[9] Provider’s explanation is acceptable to the ALJ. The Carrier’s Motion for Sanctions is denied.

C. Provider’s Motion for Warning

Part of Provider’s response to the Motion for Sanctions was a cross-motion that a warning be issued to Carrier under SOAH Rule of Procedure § 155.49(b) for failing to treat Provider with courtesy and dignity.[10] The ALJ is aware of instances in the Carrier’s briefing which mischaracterizes the Provider’s arguments. One example is found in Petitioner’s Reply to Respondent’s Response to Petitioner’s Reply Brief and Motion for Sanctions:

In an attempt to ameliorate the level of its misrepresentation, Respondent now points to its citation of Labor Code § 408.027(d) and 28 TAC § 133.304. However, as the Respondent’s own brief indicates, these sections merely stand for the non-controversial proposition that the carrier must include an authorized Payment Exception Code on its EOBs. Petitioner agrees, and as pointed out repeatedly, the Code U was used and is the only live Payment Exception Code at issue.[11]

This passage states that the cited provisions of the Labor Code and the Texas Administrative Code are only relevant to the Carrier’s use of Payment Exception Code U and that was why Provider cited to them. To the contrary, the point of Respondent’s Brief has nothing to do with the Carrier’s use of the Payment Exception Code U.[12] Instead, Labor Code § 408.027(d) and 28 TAC § 133.304, were clearly cited for the rule that a carrier shall state non-conclusory and non-generic rationales for denial, in connection with a proper Payment Exception Code. The Carrier’s statement recasts those provisions as relevant to a non-issue, when they are directly relevant to the key issue raised by Provider’s brief.

More troubling is the Carrier’s positive statement that Labor Code § 408.027(d) and 28 TAC § 133.304 clearly allow the Carrier to state an unexplained rationale on its EOBs and later offer any reason for denial at the SOAH hearing. Although already cited, the passage bears citing again:

The rules of the TWCC are clear. A medical necessity denial must contain a proper payment exception code and at least one rationale. The carrier is limited to its payment exception code, but not to the stated rationale, in an administrative review of medical necessity . . . [t]o state it specifically, in this case, TMI may initially rely on internal guidelines to deny services on the basis of medical necessity. At hearing, it may introduce all competent evidence that shows the services were not medically necessary.[13]

As stated earlier, if the TWCC rules are clear that the Carrier can deny a claim and explain the denial with generic language that refers to its own internal and undisclosed protocols in essence, stating no reason at all, then the “shall” language of Labor Code§ 408.027(d) and 28 TAC§ 133.304(c) is without meaning. For all the Carrier’s references to code construction in its briefing, it never cited a rule that states clear language in two statutes should be disregarded. Likewise, the 45-day time limit for a carrier to transmit EOBs under 28 TAC § 133.304(a) and (c) is also meaningless if the Carrier has no limitation on the reasons it can offer at a SOAH hearing. It is one thing for the Carrier to argue against or around such mandatory language. It is quite another thing to represent to the ALJ that such an argument is a clear statement of the law.[14]

Other examples exist in the Carrier’s briefing. For instance, in Docket No. 453-04-1978.M5, ALJ Rogan never states that “. . . medical necessity disputes often involve a deficiency that an insurer realistically may not be able to detect until a late stage in the dispute resolution process.”[15] Instead, ALJ Rogan simply states:

In addition, the failure to deliver the same services that a provider specifically bills is a deficiency that an insurer realistically may not be able to detect until a late stage in the dispute resolution process B if even then.[16]

In other words, when a provider codes for services other than those rendered, it may not be discovered until late in the dispute process. The Carrier took this fundamental concept and changed it to state that medical necessity disputes often involve hidden issues. The point being that carriers should not be limited to the rationales stated on their EOBs.

Nevertheless, the ALJ denies the Provider’s motion for a formal warning under SOAH rules. Instead, the ALJ informally reminds both parties that the point of briefing and legal argument is to clarify the legal and factual issues for the Judge while advocating the best position for their clients.

It is unlikely that smoke and mirrors will do anything more that make unnecessary work for the parties and the ALJ B a waste of the client’s and the State’s resources.

D. Carrier’s Motion to Re-open Evidence and Motion to Strike

Carrier filed a Motion to Re-open Evidence and a separate Motion to Strike. While the Motion to Strike was filed long after the record closed, had it been timely filed the ALJ would have denied it as explained herein.

A basis for both motions is that the Provider failed to list the EOB defense in discovery responses. The Provider’s response to Petitioner’s Request for Disclosures was:

(c) The legal theories and, in general, the factual bases of the responding party’s claims or defenses:

Response: Texas Worker’s Compensation Commission Medical Fee Guidelines, Spinal Treatment Guidelines, Texas Labor Code.[17]

There is no evidence of the Carrier ever filing a motion to compel a more specific answer. Although the Provider’s response was very broad, it covers the legal framework upon which the Provider relies. To the extent that it is based on the Provider’s discovery responses, the Carrier’s Motion to Strike is denied.

To the extent that the Carrier wishes to respond to the factual background of Provider’s EOB defense, the Motion to Re-open Evidence is granted and the affidavit of Richard A. Ball is admitted in evidence.[18] The Provider filed a cross-motion seeking the deposition of Mr. Ball. That motion is denied. Mr. Ball’s testimony shed little, if any, new light on the issue of the rationales in the Carrier’s EOBs. Besides, the Carrier has the burden of proof in this matter and nothing Mr. Ball could say can change the rationales listed on the EOBs.

In its Motion to Strike, the Carrier also argues that Provider failed to preserve the EOB issue when it failed to appeal the MDR’s “rejection”of that claim. The Carrier’s assumption is that its failure to provide sufficient rationales on its EOBs is a fee dispute. The ALJ finds, however, that Labor Code § 408.027(d) and 28 TAC § 133.304(c) apply independent of whether the dispute involves medical necessity or documentation. In that respect, a carrier must always comply with the rules governing EOBs, just as a provider must properly code its services. In addition, it is the Carrier’s burden in this proceeding to show it complied with fundamental rules governing its denial of Provider’s claims for reimbursement. The Carrier’s Motion to Strike is denied.

In conclusion, the ALJ finds that Provider is entitled to additional reimbursement of $4,575.00, for services billed under CPT Code 97110. The Carrier is ordered to reimburse the Provider for this amount. In support of this determination, the ALJ makes the following findings of fact and conclusions of law.

III. FINDINGS OF FACT

  1. Claimant ___ suffered compensable, work-related injuries to her left hand and wrist on ___.
  2. Texas Mutual Insurance Company (Carrier) is the provider of workers’ compensation insurance covering Claimant for her compensable injury.
  3. On November 7, 2002, Claimant presented to Main Rehab (Provider) for evaluation and treatment.
  4. Osler Kamath, D.C., a clinician at Main Rehab, made an initial diagnosis of tenosynovitis, carpal tunnel syndrome, paresthesia and muscle spasms.
  5. Main Rehab began treatment of Claimant on November 8, 2002.
  6. On March 11, 2003, Claimant underwent surgery by an orthopedic surgeon.
  7. Provider treated Claimant from May 29, 2003, through July 14, 2003 (Disputed Services).
  8. Carrier declined to reimburse Provider for the Disputed Services, contending that they were not medically necessary.
  9. Based on the Consolidated Table of Disputed Services, the total amount in dispute is $4,575.00. The Disputed Services involve one-on-one therapy (CPT Code 97110).
  10. Carrier denied reimbursement for the Disputed Services on the explanation of benefits (EOB) utilizing the denial code U, which stands for unnecessary treatment (without peer review).
  11. On the EOBs for the Disputed Services, Carrier used the rationale codes YU” and RG and the definition for both as its explanation to Provider for denying the claims.
  12. The rationale code RG is defined as the treatment/ services provided exceeds medically accepted utilization review criteria and/or reimbursement guidelines for severity of injury, intensity of service, and appropriateness of care.
  13. The rationale code “YU” is defined as “this service has been deemed unnecessary medical treatment based on a review of the claim file, billing records and/or written review protocols established for appropriate healthcare treatment.”
  14. Carrier failed to disclose to Provider the relevant protocols, utilization review criteria and/or reimbursement guidelines, asserting they were proprietary and confidential.
  15. By failing to disclose to Provider the relevant protocols, utilization review criteria and/or reimbursement guidelines, Carrier’s explanation was insufficient for Provider to understand Carrier’s reason(s) for the denial of reimbursement of the disputed services.
  16. The Carrier’s explanation was conclusory and insufficient for Provider to understand Carrier’s reason(s) for the denial of reimbursement of the disputed services.
  17. Provider sought medical dispute resolution through the Texas Workers’ Compensation Commission (Commission).
  18. The matter was referred to an Independent Review Organization (IRO) designated by the Commission for the review process.
  19. The IRO determined that the disputed services were medically necessary.
  20. Carrier requested a hearing before the State Office of Administrative Hearings (SOAH).
  21. The Commission issued a notice of hearing in this matter on July 5, 2004.
  22. On December 15, 2004, SOAH continued the hearing which was reset to March 9, 2005, at 1:30 p.m.
  23. The hearing convened on March 9, 2005, with ALJ Travis Vickery presiding. Provider appeared telephonically through its attorney, Scott Hilliard. Carrier appeared through its attorney, Ryan Willett. The hearing concluded and the record closed on June 10, 2005.
  24. No parties objected to notice or jurisdiction.

IV. CONCLUSIONS OF LAW

  1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order, pursuant to the Texas Workers’ Compensation Act, specifically Labor Code Ann. § 413.031(k), and Tex. Gov’t Code Ann. ch. 2003.
  2. The hearing was conducted pursuant to the Administrative Procedure Act, Tex. Gov’t Code Ann. ch. 2001 and 28 Tex. Admin. Code (TAC) ch. 148.
  3. The request for a hearing was timely made pursuant to 28 TAC § 148.3.
  4. Adequate and timely notice of the hearing was provided according to Tex. Gov’t Code Ann. §§ 2001.051 and 2001.052.
  5. Carrier had the burden of proof in this matter under a preponderance of the evidence standard. 28 TAC §§ 148.21(h), (i) and 1 TAC § 155.41(b).
  6. When an insurance carrier makes or denies payment on a medical bill, the carrier must include on the EOB the correct payment exception code and a sufficient explanation to allow the sender (provider) to understand the reason for the carrier’s action. A general statement that simply states a conclusion in not sufficient. 28 TAC § 133.304(c).
  7. Carrier’s explanation for denying reimbursement for the disputed services was legally inadequate as it failed to deny reimbursement in compliance with the Commission’s rules.
  8. Because Carrier never denied reimbursement in compliance with the Commission’s rules for the disputed services, Carrier is required to provide reimbursement.
  9. Carrier is liable to Provider for a total reimbursement of $4,575.00 for services billed under CPT Code 97110.

ORDER

Texas Mutual Insurance Company shall reimburse Main Rehab & Diagnostic a total of $4,575.00 for the services in dispute in this proceeding.

Signed June 10, 2005

TRAVIS VICKERY
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

  1. Respondent inaccurately titled its brief Petitioner’s Brief.↑
  2. SOAH Docket No. 453-04-0360.M5↑
  3. While it does not form a basis for the decision in this case, it is possible that the IRO will develop reasons for denial beyond those rationales stated on the EOB. In that instance, the carrier may be permitted to rely on the IRO’s reasons in addition to those on the EOB.↑
  4. Petitioner’s Reply to Respondent’s Response to Petitioner’s Reply Brief and Motion for Sanctions at page 3. (Emphasis added).↑
  5. Petitioner’s Reply Brief and Motion for Sanctions at page 6.↑
  6. Docket No. 453-04-1978.M5 at pages 5-6.↑
  7. Respondent’s Brief at page 2. (Emphasis added).↑
  8. Exhibit A to Petitioner’s Final Letter Brief Regarding Motion for Sanctions.↑
  9. Respondent’s Response to Petitioner’s Reply Brief and Motion for Sanctions at page 2.↑
  10. Respondent’s Response to Petitioner’s Reply Brief and Motion for Sanctions at pages 5-6.↑
  11. Petitioner’s Reply to Respondent’s Response to Petitioner’s Reply Brief and Motion for Sanctions at pages 2-3.↑
  12. The Provider’s Brief does argue that RG is not an accepted Payment Exception Code, and that is correct. The real fight, however, is over whether the stated rationales are adequate under the rules.↑
  13. Petitioner’s Reply to Respondent’s Response to Petitioner’s Reply Brief and Motion for Sanctions at page 3. (Emphasis added).↑
  14. While the IRO decision may result in additional reasons that a carrier may offer at the SOAH hearing, that issue is not present here.↑
  15. Petitioner’s Reply Brief and Motion for Sanctions at page 6 B inner quotes are ALJ Rogan’s language from the decision in Docket No. 453-04-1978.M5. (Emphasis added).↑
  16. Docket No. 453-04-1978.M5 at page 6. (Emphasis added).↑
  17. Petitioner’s Motion to Re-open Evidence at page 1 and Exhibit B.↑
  18. Exhibit A to Petitioner’s Motion to Re-open Evidence.↑