DECISION AND ORDER

Texas Mutual Insurance Company (TMI) appeals a decision by the Texas Workers’ Compensation Commission’s (TWCC)^[1] Medical Review Division (MRD) regarding the medical necessity for a portion of work-hardening services provided to a workers’ compensation claimant (Claimant) during April 2003 by Edward Wolski, M.D. TMI denied payment for the services, and MRD referred the dispute to an independent review organization (IRO), which found the services were medically necessary. The total amount in dispute is 3147.30. This decision finds that the disputed services were not medically necessary; therefore, it orders that TMI is not required to reimburse Dr. Wolski for those services.

I. JURISDICTION AND PROCEDURAL HISTORY

The Commission has jurisdiction over this matter pursuant to Tex. Lab. Code § 413.031. The State Office of Administrative Hearings (SOAH) has jurisdiction over matters related to the hearing in this proceeding pursuant to Tex. Lab. Code § 413.031(k) and Tex. Gov’t Code Ch. 2003. No party challenged jurisdiction or notice.

Administrative Law Judge (ALJ) Thomas H. Walston convened a hearing in this matter on August 18, 2005, at the SOAH hearing facilities in Austin, Texas. Attorney Ryan Willett represented TMI; attorney William Maxwell represented Dr. Wolski. The hearing concluded and the record closed the same day.

II. DISCUSSION

A. Introduction

Claimant is a 30-year-old male who injured his low back on___The injury occurred while Claimant worked with his supervisor to lift a 60-gallon barrel of flour. The supervisor lost his grip and Claimant twisted his back while trying to stabilize the load. Claimant underwent a course of conservative treatment, including a work-hardening program provided by Dr. Wolski from February 18 through April 10, 2003. TMI paid Dr. Wolski for the work-hardening services until April 1, 2003, when Dr. Paul Vaughan recommended a discogram and back surgery for Claimant. TMI terminated reimbursement for the remaining work-hardening services provided April 2-10, 2003, because, in TMI’s view, Claimant ceased to be a suitable candidate for work hardening once he was referred to surgery.

Dr. Wolski appealed the denial of payment to the TWCC MRD, which referred the case to an IRO. The IRO issued a decision on June 2, 2004, disagreeing with TMI and finding that the disputed work-hardening services were medically reasonable and necessary. The IRO reviewer stated the rationale as follows: “The records provided for review indicate that at the time the patient was undergoing a work-hardening/work conditioning program from 4/2/03 through 4/10/03, he was medically appropriate for this program and had significant goals toward attainment for re-entry into the work force.” In a decision issued June 17, 2004, the MRD concurred with the IRO decision and ordered TMI to reimburse Dr. Wolski for the disputed services. TMI timely requested a contested case hearing at SOAH to challenge the MRD and IRO decisions.

B. Parties’ Evidence and Arguments

Evidence

The parties offered into evidence various records and the depositions of Dr. Wolski and Dr. Robert Joyner. The records describe Claimant’s injury and course of treatment as noted in the introduction above. Most of the records concern the work-hardening services that are not in dispute. Dr. Vaughan’s April 1, 2003 report recounted Claimant’s injury and treatment and noted that he had restricted range of motion in his lumbar spine and pain with flexion. Claimant had positive straight-leg raising on the right at 60 degrees, decreased sensation on the right L5 distribution, but no motor weakness. Dr. Vaughan also noted that an MRI showed Claimant had bulging at L2-3 and L4-5, and x-rays showed spondylolysis at L5-S1. Based on his examination, Dr. Vaughan concluded that Claimant’s pain was probably coming from L5-S1 and he recommended a fusion, along with a three-level discogram to assess the L4-5 level.

In his deposition, Dr. Wolski testified that he is an M.D. who owns and operates a pain management facility known as WOL+MED. He received his education and training in Canada but has lived and practiced medicine in Texas since 1980. Dr. Wolski stated that Claimant was first seen at WOL+MED on December 27, 2002, by Cheryl Henderson, a nurse practitioner. Ms. Henderson prescribed a physical medicine treatment plan that included ultrasound, hydrocortisone, diathermy, aquatic therapy, electrical stimulation, and training on activities of daily living. Dr. Wolski did not personally supervise this physical medicine rehabilitation although he did meet with Claimant on five visits. That course of treatment continued until February 12, 2003, when Claimant began a work-hardening program at WOL+MED. Claimant was placed in the work-hardening program based on the recommendation of aWOL+MED occupational therapist, Grace Eubanks. Again, Dr. Wolski did not personally supervise the work-hardening program for Claimant, but he did attend weekly conferences to discuss Claimant’s progress.

Dr. Wolski testified that the work hardening program was medically reasonable and necessary through April 10, 2004, because Claimant showed improved strength, endurance, and functioning but had not yet reached the functional capacity required by his job. Dr. Wolski stated that his office referred Claimant to Dr. Paul Vaughan to evaluate Claimant’s protruding disc. Dr. Vaughan reported that Claimant’s pain came from L5-S1 and herecommended a discogram and

fusion at that level. Dr. Wolski testified that recovery from fusion surgery would last several months, and the recommended surgery was the primary reason for terminating Claimant’s work-hardening program on April 10, 2003. However, Dr. Wolski did not think the work-hardening ceased to be medically necessary as of April 1, 2003, the date of Dr. Vaughan’s recommendation.

First, he said, additional work hardening would make Claimant stronger for surgery; and second, Dr. Wolski thought his office probably did not receive Dr. Vaughan’s letter until several days later. However, he acknowledged that Dr. Vaughan’s letter recommending surgery was the main reason that his office terminated the work-hardeningprogram.

Dr. Wolski also testified that on April 2, 2003, Claimant refused to perform work-simulation exercises, even after repeated explanation of the requirements and benefits. Claimant continued to

refuse the work-simulation exercises for the remainder of the program. On April 8, Claimant also began to tell other patients that they did not have to do work simulation exercises. Dr. Wolski agreed that the Medical Fee Guidelines discharge/exit criteria for work-hardening include “non-compliance with program policies” and that Claimant was showing non-compliance as early as April 2.

Dr. Robert Joyner testified by deposition on behalf of TMI. He is a medical doctor who practices anesthesia and pain management in San Antonio. He received his medical degree from Wayne State University. Dr. Joyner testified from the available medical records; he did not see or treat Claimant. He noted that Dr. Wolski referred Claimant to Dr. Vaughan on March 26, and that Dr. Vaughan examined Claimant on April 1, 2003. Dr. Vaughan recommended Claimant for a discogram and fusion surgery, which Dr. Joyner testified made further work-hardening services medically unnecessary. Dr. Joyner did not know when Dr. Wolski received Dr. Vaughan’s surgery recommendation. However, he stated that Dr. Wolski referred Claimant on March 26, and Claimant returned to WOL+MED on April 2. Under these circumstances, Dr. Joyner though that Dr. Wolski’s staff should have asked Claimant about Dr. Vaughan’s recommendation or should have contacted Dr. Vaughan to determine whether work hardening should continue. In Dr. Joyner’s opinion, Dr. Wolski should have terminated Claimant’s work-hardening program onApril 2, 2003.

Dr. Joyner also stated that Dr. Wolski should have terminated Claimant’s work-hardening program on April 2 because Claimant refused to perform work simulation exercisesthat day and

continued to refuse for the remainder of the program (through April 10). However, on cross-examination, Dr. Joyner agreed that he would not necessarily have terminated the program merely for the failure of a patient to perform exercises on one day. Rather, he would take all of the circumstances into account.

Finally, Dr. Joyner testified that the Functional Capacity Examination (FCE) on April 10, 2003, was not medically necessary because the work-hardening program was terminated at that time based on the surgery referral, not because of Claimant’s progress in the program. He stated that under those circumstances an FCE was not necessary to discharge Claimant from the work-hardening program.

TMI’s Arguments

TMI relied on the records admitted into evidence and Dr. Joyner and Dr. Wolski’s depositions. TMI does not dispute any of the work-hardening services provided to Claimant before April 2, 2003. But, beginning with that date of service, TMI argues that work hardening was no longer medically reasonable or necessary because on April 1, 2003, Dr. Paul Vaughan recommended a discogram and L5-S1 fusion for Claimant. TMI states that Dr. Wolski terminated the work-hardening program on April 10 due to the recommended surgery, so it argues that there is no dispute that the proposed surgery eliminated the medical necessity for work hardening. In TMI’s view, medical necessity ended on April 1, when Dr. Vaughan issued his letter recommending surgery; therefore, it contends that it owes no reimbursement after that date. If Dr. Wolski had not received Dr. Vaughan’s letter by April 2, then TMIcontends that his staff should have either askedClaimant or called Dr. Vaughan’s office about the outcome.

As an additional reason for denying reimbursement, TMI points out that Claimant refused to perform work simulation exercises from April 2-9. The Medical Fee Guidelines list “non-compliance with program policies” as a termination/exit criterion and TMI argues that Dr. Wolski should have terminated the work-hardening program on April 2, when Claimant refused to perform the required exercises.

Finally, TMI argues that the IRO decision gave only a vague, generic explanation of its rationale and should not be given any weight.

Dr. Wolski’s Arguments

Dr. Wolski argues that TMI’s appeal must fail because TMI provided no evidence of when Dr. Wolski received Dr. Vaughan’s letter recommending surgery. He suggests that medical necessity continued until he received notice of the recommended surgery. Dr. Wolski also points out that TMI paid for the work-hardening services through April 1, 2003, so there is no dispute that Claimant met the entrance criteria for the program and that work hardening was beneficial for Claimant.

Dr. Wolski further argues that it would not be reasonable to terminate a work-hardening program the first day a patient failed to perform a specific set of exercises. Dr. Wolski states that it is not unusual for patients occasionally not to perform certain exercises for a variety of reasons. He suggests that it is not realistic to terminate a program every time a patient failed to do one set of exercises. Further, Dr. Wolski contends that he acted reasonably by terminating this work-hardening program at the next team meeting after Dr. Vaughan’s surgical recommendation and after Claimant refused to perform the work simulation exercises for several days. Therefore, he argues that the work-hardening services in dispute were medically reasonable and necessary and should be reimbursed.

C. ALJ’s Analysis and Decision

The ALJ finds that the work-hardening services provided to Claimant after April 1, 2003, were not medically reasonable or necessary. Therefore, the ALJ sets aside the IRO decision and orders that TMI is not required to reimburse Dr. Wolski for the disputed services.

It is undisputed that Dr. Wolski referred Claimant to Dr. Vaughan, and that on April 1, 2003, Dr. Vaughan recommended that Claimant undergo surgery for a multi-level discogram and a fusion at L5-S1. It is also essentially undisputed that once Dr. Vaughan recommended Claimant for back surgery, the work-hardening serviced provided by Dr. Wolski were no longer medically reasonable or necessary. In his deposition, Dr. Wolski acknowledged that the primary reason he terminated Claimant’s work hardening program was because Dr. Vaughanrecommended surgery. Inaddition,

Dr. Wolski’s written form for terminating the program stated the reason for termination as “The patient required further health care intervention -Surgery consult” and “Patient was referred to Dr. Vaughan for possible surgery.” Dr. Wolski’s suggestion in his deposition that work hardening could help condition the patient for surgery appears to be little more than an afterthought. Therefore, the ALJ finds that once Dr. Vaughan recommended Claimant for back surgery, the work hardening program at Dr. Wolski’s office ceased to be medically reasonable and necessary.

Dr. Wolski argues that even if work hardening was no longer reasonable or necessary after April 1, 2003, TMI’s appeal must be denied because there is no evidence in the record to establish

when Dr. Wolski received Dr. Vaughan’s letter. It is not clear to the ALJ that lack of notice of Dr. Vaughan’s letter is necessarily a defense for Dr. Wolski. But even if it were a defense, the ALJ finds that Dr. Wolski had the burden of proof to establish the date he received Dr. Vaughan’s letter. In other words, Dr. Wolski’s argument concerning lack of notice is a matter of an avoidance or affirmative defense on which Dr. Wolski had the burden of proof.This is also supported by thefact that the date Dr. Wolski received the letter or other information from Dr. Vaughan is a matter on which Dr. Wolski had peculiar knowledge not available to TMI.^[2] However, Dr. Wolski offered no such evidence on when he received Dr. Vaughan’s letter, so even if lack of notice were a defense (which is not decided), Dr. Wolski failed to establish when he first learned that Dr. Vaughan had recommended surgery. Further, as pointed out by Dr. Joyner, Dr. Wolskireferred Claimant to Dr. Vaughan even earlier, on March 26, and Dr. Wolski’s office should have asked Claimant or called Dr. Vaughan’s office about the outcome of the April 1 examination.

The ALJ does agree with Dr. Wolski that he was not required to terminate the work hardening program when Claimant first failed to perform work simulation exercises on April 2, 2003. Dr. Wolski testified that it is not unusual for a patient not to perform a specific set of exercises from time to time. The ALJ agrees with Dr. Wolski that it would not be reasonable to require a doctor to terminate a work-hardening program the first time a patient failed to perform a specific set of exercises. Therefore, this argument by TMI does not support denial of payment to Dr. Wolski.

Concerning the FCE on April 10, 2003, Dr. Joyner testified that it was not medically necessary since Claimant was terminated from the work-hardening program due to a surgery referral

rather than for his progress in the program. Dr. Wolski offered no evidence or argument to rebut this assertion. The ALJ agrees with Dr. Joyner that, under the circumstances of this case, an FCE was not medically necessary when Claimant’s work-hardening program was terminated due to a surgery referral.

In summary, the ALJ does not find that Dr. Wolski was required to terminate work hardening on April 2, 2003, based on Claimant’s failure to perform work simulation exercises on April 1. However, the ALJ does find that work hardening ceased to be medically reasonable and necessary after April 1, 2003, when Dr. Vaughan recommended back surgery for Claimant. In addition, the

FCE performed on April 10, 2003, was likewise not medically necessary. Therefore, the ALJ concludes that TMI is not liable to reimburse Dr. Wolski for work-hardening services or the FCE provided between April 2-10, 2003.

III. FINDINGS OF FACT

1. Claimant is a 30-year-old male who injured his low back on____, when he twisted his back while trying to stabilize a 60-gallon barrel of flour.
2. Texas Mutual Insurance Company is the workers’ compensation carrier for Claimant’s injury.
3. Between February 18 and April 10, 2003, Dr. Edward Wolski provided work-hardening services for Claimant.
4. Dr. Wolski performed a Functional Capacity Evaluation (FCE) on Claimant on April 10, 2003.
5. TMI reimbursed Dr. Wolski for the work-hardening services provided between February 18 and April 1, 2003.
6. Dr. Wolski referred Claimant to Dr. Paul Vaughan for a surgery consultation, and on April 1, 2003, Dr. Vaughan recommended Claimant for a multi-level discogram and a fusion at L5-S1.
7. Dr. Wolski terminated Claimant’s work hardening program on April 11, 2003, based on Dr. Vaughan’s surgery recommendation.
8. TMI denied payment to Dr. Wolski for the work-hardening services and FCE provided to Claimant between April 2-10, 2003, on the grounds that these services ceased to be medically reasonable and necessary after Dr. Vaughan recommended back surgery for Claimant.
9. Dr. Wolski appealed the denial of payment to the TWCC MRD, which referred the dispute to an IRO. The IRO issued a decision on June 2, 2004, that disagreed with TMI and found that the disputed work hardening-services were medically reasonable and necessary.
10. In a decision issued October 22, 2004, the MRD concurred with the IRO decision and ordered TMI to reimburse Dr. Wolski for the disputed work-hardening services.
11. TMI timely requested a contested case hearing at the State Office of Administrative Hearings to challenge the MRD decision.
12. A contested case hearing was held at SOAH on August 18, 2005, and the record closed the same day.
13. All parties received not less than ten days notice of the time, place, and nature of the hearing; 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.
14. TMI and Dr. Wolski were represented by counsel at the hearing. All parties were allowed to respond and present evidence and argument on each issue involved in the case.
15. The disputed work-hardening services and FCE provided by Dr. Wolski to Claimant between April 2-10, 2003, were not medically reasonable and necessary for the treatment of Claimant’s compensable injury based on Dr. Vaughan’s April 1, 2003 recommendation that Claimant undergo a discogram and fusion surgery at L5-S1.

IV. CONCLUSIONS OF LAW

1. SOAH 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§ 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 the Commission’s rules, 28 Tex. Admin. Code (TAC) § 133.305(g) and §§ 148.001-148.028.
3. Adequate and timely notice of the hearing was provided in accordance with Tex. Gov’t Code Ann. §§ 2001.051 and 2001.052.
4. TMI as the party seeking relief, bore the burden of proof in this case pursuant to 28 TAC § 148.14(a) to establish that the services in question were not medically reasonable and necessary.
5. TMI established by a preponderance of the evidence that the work-hardening services Dr. Wolski provided to Claimant between April 2-10, 2003, were not medically reasonable and necessary to treat Claimant’s compensable injury.
6. Based on the above Findings of Facts and Conclusions of Law, TMI should not be required to reimburse Dr. Wolski for the work-hardening services or FCE that Dr. Wolski provided to Claimant between April 2-10, 2003.

ORDER

IT IS THEREFORE, ORDERED that Texas Mutual Insurance Company is not liable to reimburse Dr. Wolski for the disputed services provided to Claimant between April 2-10, 2003.

Signed October 6, 2005.

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

1. Effective September 1, 2005, the functions of TWCC were transferred to the newly created Division of Workers Compensation of the Texas Department of Insurance.↑
2. Jackson v. Green, 700 S.W.2d 620, 621 (Tex. App. B Corpus Christi 1985, writ ref’ n.r.e.).↑