All Things Texas Workers' Compensation

Facebook Linkedin

Title: 

453-05-8921-m4

Date: 

May 12, 2009

Type: 

Medical Fees

453-05-8921-m4

DECISION AND ORDER

Insurance Company of the State of Pennsylvania (Carrier) requested a hearing on a decision by the Medical Review Division (MRD) of the Texas Department of Insurance, Division of Workers’ Compensation (Division)[2] ordering additional reimbursement to Spring Branch Medical Center (Provider) for a hospital stay provided to Claimant, an injured worker. Provider argued that reimbursement for this admission should be based on the Stop‑Loss Exception to the per diem reimbursement methodology contained in the 1997 Acute Care Inpatient Hospital Fee Guideline (1997 ACIHFG).[3] The Administrative Law Judge (ALJ) finds the Stop-Loss Exception should be followed in this proceeding. Accordingly, Carrier is ordered to pay additional reimbursement in the amount of $25,428.39, plus any applicable interest.

I. PROCEDURAL HISTORY, NOTICE AND JURISDICTION

The MRD issued its decision on June 9, 2005. Carrier filed a timely and sufficient request for hearing.[4] Notice of the hearing was appropriately issued to the parties. The hearing convened and concluded on March 24, 2009.[5] The record closed the same day.

II. DISCUSSION

A. Factual Overview

The basic facts were uncontested. Claimant sustained a compensable injury and was admitted to Provider, where Claimant underwent treatment. After Claimant was discharged from the hospital, Provider submitted a bill to Carrier in the amount of $42,975.75 based on Provider’s usual and customary charges for the inpatient stay and surgical procedure. To date, Carrier has paid $6,803.42.

B.Summary of Positions and ALJ’s Decision

In summary, the parties’ positions and ALJ’s findings are as follows:

MRD

Provider

Carrier

ALJs

Charges

$42,975.75

$42,975.75

$42,975.75

$42,975.75

Reimbursement Methodology

Stop-Loss[6]

Stop-Loss

per diem[7]

Stop-Loss[8]

Reimbursement Amount

$32,231.81

$32,231.81

$6,803.42

$32,231.81

Less Payment

$6,803.42

$6,803.42

$6,803.42

$6,803.42

Balance Due Provider

$25,428.39

$25,428.39

$0.00

$25,428.39

Provider charged its usual and customary charges for the items and services provided. The hospital’s total audited bill is greater than $40,000 and the admission involved “unusually extensive services.” The Stop-Loss Exception applies and the hospital is reimbursed at 75% of its total audited bill. The purpose of the Stop-Loss Methodology is “to ensure fair and reasonable compensation to the hospital for unusually costly services rendered during treatment to an injured worker.”[9] The ALJ concludes that the Stop-Loss Threshold was met in this case and that the amounts in dispute should be calculated accordingly.

III.FINDINGS OF FACT

  1. Claimant sustained a compensable injury in the course and scope of his employment; the employer had coverage with Insurance Company of the State of Pennsylvania (Carrier).
  2. Spring Branch Medical Center (Provider) provided medical treatment to Claimant for the compensable injury.
  3. Provider submitted itemized billing totaling $42,975.75 for services provided to Claimant.
  4. The $42,975.75 billed was Provider’s usual and customary charges for these items and treatments.
  5. Carrier issued payments of $6,803.42 to Provider for the services in question.
  6. Carrier denied further reimbursement to Provider.
  7. Provider requested Dispute Resolution Services from the Medical Review Division (MRD) of the Texas Workers’ Compensation Commission (Commission).
  8. Effective September 1, 2005, the legislature dissolved the Commission and created the Division of Workers’ Compensation within the Texas Department of Insurance. The Commission and its successor are collectively referred to as the Division.
  9. MRD issued its Findings and Decision holding that additional reimbursement was owed Provider.
  10. Carrier timely filed a request for a contested case hearing on the MRD’s decision.
  11. All parties were provided not less than 10-days notice of hearing and of their rights under the applicable rules and statutes.
  12. On March 24, 2009, Administrative Law Judge Howard S. Seitzman convened a hearing on the merits at the hearing facilities of the State Office of Administrative Hearings (SOAH) in Austin, Texas. Carrier and Provider were present and represented by counsel. The Division did not participate in the hearing. The hearing concluded and the record closed that day.
  13. Provider’s total audited charges are $42,975.75.
  14. The admission involved unusually extensive services.
  15. Under the Stop-Loss Methodology, Provider is entitled to total reimbursement of $32,231.81. After deduction of Carrier’s prior payment of $6,803.42, Provider is entitled to additional reimbursement of $25,428.39, plus any applicable interest.

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. Carrier timely requested a hearing, as specified in 28 Tex. Admin. Code (TAC) § 148.3.
  3. Proper and timely notice of the hearing was provided to the parties in accordance with Tex. Gov’t Code Ann. §§ 2001.051 and 2001.052.
  4. Carrier had the burden of proof in this proceeding pursuant to 28 TAC § 148.21(h) and (i).
  5. All eligible items, including the items listed in 28 TAC § 131.401(c)(4), are included in the calculation of the $40,000 Stop-Loss Threshold.
  6. In calculating whether the Stop-Loss Threshold has been met, all eligible items are included at the hospital’s usual and customary charges in the absence of an applicable MARS or a specific contract.
  7. When the Stop-Loss Methodology applies to a workers’ compensation admission, all eligible items, including items listed in 28 TAC § 134.401(c)(4), are reimbursed at 75% of their post-audit amount.
  8. The Stop-Loss Methodology applies to this case.
  9. Applying the Stop-Loss Methodology in this case, Provider is entitled to total reimbursement of $32,231.81.
  10. As specified in the above Findings of Fact, Carrier has already reimbursed Provider $6,803.42of this amount.
  11. Based on the foregoing findings of fact and conclusions of law, Carrier owes Provider an additional reimbursement of $25,428.39, plus any applicable interest.

ORDER

It is hereby ORDERED that Insurance Company of the State of Pennsylvania reimburse Spring Branch Medical Center the additional sum of $25,428.39, plus any applicable interest, for services provided to Claimant. Any relief not expressly granted herein is DENIED.

Signed May 12, 2009.

HOWARD S. SEITZMAN

JAMES W. NORMAN -30-

ADMINISTRATIVE LAW JUDGES

STATE OFFICE OF ADMINISTRATIVE HEARINGS

  1. Effective September 1, 2005, the legislature dissolved the Texas Workers’ Compensation Commission (Commission) and created the Division of Workers’ Compensation within the Texas Department of Insurance. Act of June 1, 2005, 79th Leg., R.S., ch. 265, § 8.001, 2005 Tex. Gen. Laws 469, 607. This Decision and Order refers to the Commission and its successor collectively as the Division.↑
  2. The 1997 ACIHFG established a general reimbursement scheme for all inpatient services provided by an acute care hospital for medical and/or surgical admissions using a service-related standard per diem amount. Independent reimbursement is allowed on a case‑by‑case basis if the particular case exceeds the Stop‑Loss Threshold as described in paragraph (6) of 28 Tex. Admin. Code (TAC) § 134.401(c). This independent reimbursement mechanism, the Stop-Loss Method or Stop-Loss Methodology, is sometimes referred to as the Stop-Loss Exception or the Stop-Loss Rule.↑
  3. DWC referred the case to the State Office of Administrative Hearings (SOAH) on two separate occasions. The first referral occurred on August 11, 2005, and was docketed as SOAH Docket No. 453-05-8850.M4. The second referral occurred on August 16, 2005, and was docketed as SOAH Docket No. 453-05-8921.M4. On January 7, 2008, the cases were consolidated under lead docket 453-05-8921.M4.↑
  4. Beginning in 2003, the Division began referring a significant number of ACIHFG cases to SOAH. Between 2003 and August 31, 2005, approximately 885 ACIHFG cases were referred to SOAH for contested case hearings on issues including the Stop-Loss Exception, audits, and the reimbursement of implantables. In order to efficiently and economically manage this growing number of cases, SOAH in late 2004 and early 2005 began to join the cases into a Stop-Loss Docket, and the cases were abated. By the close of the 2005 regular legislative session, SOAH realized a finite, but still unknown, number of Stop-Loss cases would be referred to SOAH by the Division through August 31, 2005.↑
  5. MRD determined that the Stop-Loss Exception applied because audited charges exceeded $40,000.00 and the admission involved unusually extensive services. MRD determined Provider billed its usual and customary charges.↑
  6. Carrier’s Explanation of Benefits (EOB) used an “F” denial code. According to the EOB, Carrier paid $2,260.00 ($1,180.00 per day) for the 2-day hospital stay, and $4,459.62 for drugs and pharmaceuticals.↑
  7. The Stop-Loss Threshold was met in this case and the reimbursement should be calculated in accordance with the Stop-Loss Exception.↑
  8. 28 TAC § 134.401(c)(6).↑