DECISION AND ORDER

I. INTRODUCTION

Liberty Insurance Corporation (Carrier) has appealed a decision of the Texas Workers= Compensation Commission’s (TWCC or Commission) Medical Review Division (MRD) regarding a fee dispute between Carrier and R S Medical (Provider) for medical services furnished to ___ (Claimant). MRD found that Provider’s monthly rental rate for the RS-4i Sequential Stimulator (RS4i) is fair and reasonable and ordered Carrier to reimburse Provider $276.22 plus all accrued interest.

The disputed issue is whether Carrier has assigned the proper relative value–in effect, the maximum allowable reimbursement amount–for the monthly rental of the RS4i.

As set out below, the Administrative Law Judge (ALJ) finds that reimbursement should be at Provider’s list price of $250.00 per month for rental of the RS4i.

II. APPLICABLE LAW

Lbor Code ‘ 413.011(a),^[1] entitled AReimbursement Policies and Guidelines; Treatment Guidelines and Protocols, reads in pertinent part as follows:

The commission shall use health care reimbursement policies and guidelines that reflect the standardized reimbursement structures found in other health care delivery systems with minimal modifications to those reimbursement methodologies as necessary to meet occupational injury requirements. To achieve standardization, the commission shall adopt the most current reimbursement methodologies, models, and values or weights used by the federal Health Care Financing Administration, including applicable payment policies relating to coding, billing, and reporting. . . .

In response to the Legislature’s directive, TWCC promulgated a new Medical Fee Guideline (MFG), effective January 5, 2003. The MFG is set forth in Section 134.202 of Commission Rules^[2] and applies to professional medical services provided on or after August 1, 2003. In pertinent part, Sections 134.202(c)(6) and 134.202(d) state the following:

(c)To determine the maximum allowable reimbursements (MARs) for professional services system participants shall apply the Medicare payment policies with the following minimal modifications.

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(6)for products and services for which CMS [the Center for Medicare and Medicaid Services] or the commission does not establish a relative value unit and/or a payment amount the carrier shall assign a relative value, which may be based on nationally recognized published relative value studies, published commission medical dispute decisions, and values assigned for services involving similar work and resource commitments.

(d)In all cases, reimbursement shall be the least of the:

1. MAR amount as established by this rule;
2. health care provider’s usual and customary charge; or,
3. health care provider’s workers= compensation negotiated and/or contracted amount that applies to the billed service(s).

III. DISCUSSION

Both Crrier and Provider agree there is no MAR for Durable Medical Equipment (DME) billed under the Healthcare Common Procedural Coding System (HCPCS) code E1399. That is, DME billed under E1399 are products for which neither CMS nor the Commission has established Aa relative value unit and/or a payment amount. Therefore, according to the procedure set forth in Section 134.202(c)(6) of the MFG, Carrier is instructed to, in effect, create the MAR by assigning a relative value based on (1) nationally recognized published relative value studies, (2) published Commission medical dispute decisions, and (3) values assigned for services involving similar work and resource commitments.

ccording to the United States Food and Drug Administration, the RS4i Sequential Stimulator is a Class II medical device that is safe and effective for muscle stimulation and pain relief. Yet, Carrier argues that the RS4i does not provide pain relief; instead, it is nothing more than a ACadillac muscle stimulator that just treats more muscle groups. Relying solely on a May 4, 2004, MRD decision that states that reimbursement is $150.00 for HCPCS code E0745, a neuromuscular stimulator with a AD code in the 1991 MFG, Carrier contends that the maximum allowable reimbursement for the RS4i should be at the same $150.00 monthly rental rate as a neuromuscular stimulator.

Carrier asserts that there are no studies proving that the RS4i provides pain relief. However, the record shows that the RS4i is indicated for use not only as muscle stimulator but also to relieve acute and chronic pain. Carrier had the burden of proof, and it failed to demonstrate that the RS4i is only a muscle stimulator. Because Carrier did not assign a relative value for the RS4i, a DME that the evidence shows is intended for both muscle stimulation and pain relief, there is, in effect, no maximum allowable reimbursement amount – no MAR – for this product.

Pursunt to Section 134.202(d), if there is no MAR amount, the health provider’s usual and customary charge or its workers= compensation negotiated and/or contracted amount determines reimbursement. In this case, Provider has no workers= compensation negotiated or contracted amount. Therefore, reimbursement shall be at Provider’s Ausual and customary charge, which is Provider’s list price of $250.00 for the monthly rental of the RS4i.

Because the evidence establishes that reimbursement should be at Provider’s list price of $250.00 per month for rental of the RS4i, Provider is entitled to be further reimbursed by Carrier in the amount of $276.22 plus all accrued interest.

IV. FINDINGS OF FACT

1. On ___, ___. (Claimant) sustained a work-related injury as a result of her work activities (compensable injury).
2. On the date of injury, Claimant’s employer was ___., and its workers= compensation insurance carrier was Liberty Insurance Corporation (Carrier).
3. R S Medical (Provider) is the manufacturer and distributor of the RS-4i Sequential Stimulator device.
4. The RS-4i Sequential Stimulator is a Class II medical device that the United States Food and Drug Administration has determined is safe and effective for the following specified indicated uses:
5. Muscle stimulation:
   1. Relax muscle spasms
   2. Prevent or retard disuse atrophy
   3. Maintain or increase range of motion
   4. Increase local blood circulation
   5. Re-educate muscle
   6. Immediate post-surgical stimulation of calf muscles to prevent venous thrombosis
6. Pain relief:
   1. Relieve acute pain
   2. Relieve and manage chronic pain
7. On August 20, 2003, Claimant’s treating physician, Ritesh Prassad, M.D., (Dr. Prassad) diagnosed Claimant with lumbar pain. Dr. Prassad prescribed the RS-4i Sequential Stimulator to relieve and manage Claimant’s chronic pain, relieve her muscle spasms, and re-educate her muscles.
8. In response to Dr. Prassad’s prescription, Provider furnished the RS-4i Sequential Stimulator to Claimant, using the Healthcare Common Procedural Coding System (HCPCS) code shown below, on the dates and at the monthly rental rate shown below:

DATES	HCPCS CODE	SERVICE DESCRIPTION AND RENTAL RATE
8/20 – 9/19/2003	E1399	Rental of RS-4i Four Channel Muscle/Interferential Stimulator at the monthly rental rate of $250.00
9/20 -10/19/ 2003	E1399	Rental of RS-4i Four Channel Muscle/Interferential Stimulator at the monthly rental rate of $250.00

9. Provider sought reimbursement in the amount of $500.00 from Carrier for the supplied medical services.
10. There is no maximum allowable reimbursement (MAR) for Durable Medical Equipment (DME) billed under HCPCS code E1399.
11. Carrier reimbursed Provider at the monthly rate of $111.89, for a total amount of $223.78.
12. Carrier denied Provider’s remaining requested reimbursement amount of $276.22 and sent Provider an explanation of benefit setting forth the following reasons for the denial:

DATE	CODES	DENIAL REASONS
10/20/03	F Z560	Fee guideline MAR reduction. Charge for this procedure exceeds the fee schedule or usual and customary values as established by Ingenix.

13. On March 29, 2004, Provider filed a request for medical dispute resolution with TWCC.
14. TWCC’s Medical Review Division (MRD) determined that Provider’s monthly rental rate of $250.00 was fair and reasonable and ordered Carrier to reimburse Provider in the amount of $276.22.
15. After the MRD decision was issued, Carrier asked for a contested-case hearing by a State Office of Administrative Hearings (SOAH) Administrative Law Judge (ALJ).
16. Notice of a contested-case hearing concerning the dispute was mailed on August 19, 2004, to Carrier and Provider. The notice informed the parties of the time, place, and nature of the hearing; the legal authority and jurisdiction under which the hearing was to be held; the particular sections of the statutes and rules involved; and the matters to be considered.
17. On February 17, 2005, Carol Wood, a SOAH ALJ, held a contested-case hearing concerning the dispute at the William P. Clements Office Building, Fourth Floor, 300 West 15^th Street, Austin, Texas. The hearing concluded, and the record closed that same day.
18. Carrier appeared at the hearing through its attorney, Kevin J. Franta.
19. Provider appeared at the hearing through its representative, Patrick K. Cougill.

V. 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. Labor Code Ann. (Labor Code) ” 402.073(b) and 413.031(k) (Vernon Supp 2004-2005) and Tex. Gov=t Code Ann. (Gov=t Code) ch. 2003 (Vernon 2000).
2. Adequate and timely notice of the hearing was provided in accordance with Gov=t Code ” 2001.051 and 2001.052.
3. Based on the above Findings of Fact and Gov’t Code ‘ 2003.050 (a) and (b), 1 Tex. Admin. Code (TAC) ‘ 155.41(b) (2005), and 28 TAC ” 133.308(v) and 148.21(h) (2005), Carrier has the burden of proof in this case.
4. An employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed that cures or relieves the effects naturally resulting from the compensable injury, promotes recovery, or enhances the ability of the employee to return to or retain employment. Labor Code ‘ 408.021(a) (Vernon 1996).
5. For coding, billing, reporting, and reimbursement of professional medical services, Texas Workers’ Compensation system participants shall apply the Medicare program reimbursement methodologies, models, and values or weights including its coding, billing, and reporting payment policies in effect on the date a service is provided with any additions or exceptions in this section. 28 TAC ‘ 134.202(b) (2005).
6. For products and services for which CMS [the Center for Medicare and Medicaid Services] or the Commission does not establish a relative value unit and/or a payment amount, the carrier shall assign a relative value, which may be based on nationally recognized published relative value studies, published Commission medical dispute decisions, and values assigned for services involving similar work and resource commitments. 28 TAC ‘ 134.202(c)(6).
7. Because Carrier has not assigned a relative value for the RS-4i, a DME that is intended for both muscle stimulation and pain relief, no MAR has been established by Commission Rule for the RS-4i product.
8. Provider has no workers= compensation negotiated or contracted amount that applies to the monthly rental of the RS-4i.
9. If there is no MAR amount as established by Commission Rule or a health care provider’s workers= compensation negotiated and/or contracted amount that applies to the billed service, the health care provider’s usual and customary charge shall be the reimbursement amount. 28 TAC ‘ 134.202(d).
10. Based on the above Findings of Fact and Conclusions of Law, Provider is entitled to further reimbursement from Carrier in the amount of $276.22.

ORDER

THEREFORE, IT IS ORDERED that Liberty Mutual Corporation reimburse R S Medical in the amount of $276.22 plus all accrued interest.

Signed April 18, 2005.

CAROL WOOD
Administrative Law Judge
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1. TEX. LAB. CODE ANN. (Labor Code) ‘ 413.011(a) (Vernon Supp. 2004-2005).↑
2. 28 TEX. ADMIN. CODE (TAC) ‘ 134.202 (West 2005).↑