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DECISION AND ORDER

North Texas Rehabilitation Center (Provider) challenges decisions of the Texas Department of Insurance, Division of Workers’ Compensation, Medical Review Division (MRD or Division) that denied Provider additional reimbursement from Great American Alliance Insurance Company (Carrier) for a program of interdisciplinary traumatic brain injury rehabilitation provided by Provider to (Claimant). In Docket No. 454-21-3451.M4-NP, Carrier argues that Provider failed to timely file its request for Medical Fee Dispute Resolution (MFDR) for claims with dates of service September 5-6, 2018. For the remaining claims in both dockets, Carrier argues that Provider is not entitled to additional reimbursement because the payments already made are consistent with fair and reasonable reimbursement, while Provider’s reimbursement requests are not. The Administrative Law Judge (ALJ) agrees with both of Carrier’s arguments and concludes that Provider is not entitled to additional reimbursement.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no contested issues of notice or jurisdiction; therefore, these matters are addressed in the Findings of Fact and Conclusions of Law without further discussion.

Provider timely requested hearings before the State Office of Administrative Hearings (SOAH). SOAH Joint Order No. 2, issued October 11, 2021, consolidated the dockets and set them for hearing. The hearing on the merits was held via Zoom videoconference on January 20, 2022, before ALJ Heather D. Hunziker. Provider appeared and was represented by Insurance Manager Catherine Zacharias. Carrier appeared and was represented by attorney Steven Tipton. The record closed on February 18, 2022, after the filing of written closing arguments.1

II. APPLICABLE LAW

The resolution of a fee dispute is regulated by the Division’s billing, audit, and payment rules.2 In an appropriate case, a health care provider, such as Provider, may dispute the amount paid by an insurance carrier.3 In those cases, the Division’s authority is limited to resolving “the amount of payment due for services determined to be medically necessary and appropriate.”4 The Division’s rules reflect the statutory guidance and specify that:

In resolving disputes regarding the amount of payment for health care determined to be medically necessary and appropriate for treatment of a compensable injury, the role of the division is to adjudicate the payment, given the relevant statutory provisions and division rules.5

A requestor, such as Provider, must timely file the request for MFDR with the Division’s MFDR section or waive the right to MFDR.6 Such a request must be “filed no later than one year after the date(s) of service in dispute.”7 Additionally, the requestor must provide documentation that discusses, demonstrates, and justifies that the payment amount being sought is a fair and reasonable rate of reimbursement in accordance with 28 Texas Administrative Code (TAC) § 134.1 when the dispute involves health care for which the division has not established a maximum allowable reimbursement or reimbursement rate, as applicable.8

Texas Labor Code § 413.011 sets forth reimbursement policies and guidelines and includes the following:

(d) Fee guidelines must be fair and reasonable and designed to ensure the quality of medical care and to achieve effective medical cost control. The guidelines may not provide for payment of a fee in excess of the fee charged for similar treatment of an injured individual of an equivalent standard of living and paid by that individual or by someone acting on that individual’s behalf.

The Division rule that effects the above-referenced reimbursement guidelines is 28 TAC § 134.1 (Medical Reimbursement), which includes the following:

(e) Medical reimbursement for health care not provided through a workers’ compensation health care network shall be made in accordance with:

(1) the Division's fee guidelines;

(2) a negotiated contract; or

(3) in the absence of an applicable fee guideline or a negotiated contract, a fair and reasonable reimbursement amount as specified in subsection (f) of this section.

(f) Fair and reasonable reimbursement shall:

(1) be consistent with the criteria of Labor Code § 413.011;

(2) ensure that similar procedures provided in similar circumstances receive similar reimbursement; and

(3) be based on nationally recognized published studies, published Division medical dispute decisions, and/or values assigned for services involving similar work and resource commitments, if available.

The party seeking relief has the burden of proof by the preponderance of the evidence.9

III. BACKGROUND, MFDR DECISIONS, EVIDENCE, ARGUMENT, AND ANALYSIS

A. Background

Claimant suffered a compensable injury on (Date of Injury).10 On 38 days between May 7, 2018, and September 12, 2018, Claimant received interdisciplinary traumatic brain injury rehabilitation services from Provider, an outpatient rehabilitation facility, for the treatment of injuries sustained while on the job. The Division has not established a medical fee guideline for such services. For its services, Provider cited treatment code 97799 and billed Carrier $2,800 per service day, totaling $106,400.11 Provider’s documentation of services identified the varying types of, and amounts of time spent on, multidisciplinary therapies provided on each service date.12 Carrier issued explanations of benefits (EOB) for the claims, approving a total of $35,859.38.13 Carrier’s EOBs explained that the workers’ compensation jurisdictional fee schedule base rate was $720/day, and payment rates were calculated using allowances based upon whether the services rendered were cognitive rehabilitation, therapeutic exercises, biofeedback, group therapy, speech therapy, or individual counseling.14 Carrier’s EOBs explained the methodology as follows:

Billed charges are for a brain injury program approved under non-specific code 97799. Texas currently has 4 program [sic] that are identified within the guidelines where this code is used. One of those programs is an Outpatient Medical Rehabilitation Program where Modifier Code MR is used and the rate for this program for a CARF15 accredited facility is $90/hr. The head injury program being billed by [Provider] includes therapy/rehab hours that are reasonably the same as would be involved in this type of program. For the hours for rehab/therapy the Carrier … is using the same hourly rate for this CARF accredited facility. For more specific services that would not necessarily be included in such a program, and are more specific to this brain injury program the Carrier in an effort to find a Fair & Reasonable rate for these services has chosen to break these down by type of service performed as follows: Therapeutic Exercise: 97799 CARF Rehab Program x $90.00 per hour; Cognitive Rehab: G0515 $141.16 per hour; Biofeedback: 90902 $160.22 per hour; Group Therapy: 90853 $42.44 per hour; Speech Therapy: 92507 $125.71 per hour; Individual Counseling: 90837 $211.76 per hour.16

Provider requested reconsideration, in response to which Carrier denied additional payment.

B. MFDR Decisions

Provider filed two requests for MFDR, with different dates of service, for Claimant’s outpatient rehabilitation. On April 19, 2019, Provider requested MFDR in Division File No. (DWC Number) (SOAH Docket No. 454-21-3304.M4-NP; MRD No. M4-19-3844-01) for 35 dates of service from May 7, 2018, to September 4, 2018.17 On September 9, 2019, Provider filed for MFDR in Division File No. (DWC Number) (SOAH Docket No. 454-21-3451.M4-NP; MRD No. M4-20-0042-01) for three further dates of service: September 5, 2018; September 6, 2018; and September 12, 2018.18 For each service date in its MFDR requests, Provider requested 100% of its billed charges of $2,800.19

MFDR Decisions issued June 14, 2019, and October 4, 2019, found that Provider had failed to support its position that additional reimbursement was due.20 Each MFDR Decision set forth certain statements of the Division regarding reimbursements based on hospital charges, as follows:

The Division previously found, as stated in the adoption preamble to the former Acute Care Inpatient Hospital Fee Guideline, that “hospital charges are not a valid indicator of a hospital’s costs of providing services nor of what is being paid by other payors” (22 Texas Register 6271). In formulating the fee guidelines, the division further considered and rejected alternative payment methods that used hospital charges as their basis because they “allow the hospitals to affect their reimbursement by inflating their charges” (22 Texas Register 6268-6269).21

C. Evidence

Before the beginning of the hearing, the parties agreed that the operative facts in both cases were the same and the cases could be heard together. At the hearing, Provider offered no exhibits, but presented the testimony of its Insurance Manager, Catherine Zacharias. Carrier offered twelve exhibits, which were admitted, and presented the testimony of Senior Field Specialist and Adjuster, Spencer Spofford.

1. Testimony of Catherine Zacharias

Ms. Zacharias testified for Provider about its services and billing. She said Provider is a rehabilitation facility. Provider’s brain injury program differs from other types of rehabilitation, in that it requires a minimum of five different disciplines of providers, which Ms. Zacharias said Provider can customize because Provider has twelve different types of providers. According to Ms. Zacharias, Provider customizes individual treatment for its patients and did so for Claimant.

Ms. Zacharias testified that Claimant received hand and shoulder exercises, bicycle therapy for his back injuries, and other therapy. She explained that sometimes chronic pain patients and brain injury patients are in the same therapy group, but not “work hardening” patients. She stated that, although the exercises would typically be done by the entire group at once in this type of group program, Claimant’s issues required personal one-on-one exercises.

Ms. Zacharias testified that Claimant was able to get back to a partial workday as a result of Provider’s services, before he hit his head again, resulting in more significant brain injury. She said that Provider’s health care providers were the ones to determine the best treatment for Claimant; and Provider met all the guidelines for these determinations.

On cross examination, Ms. Zacharias admitted that Provider is only CARF accredited in pain management and outpatient rehabilitation—not brain injury. She explained that “CARF” stands for Certified Accredited Rehabilitation Facility and requires recertification every three years through surveying of every policy and procedure.

Ms. Zacharias testified that Provider uses “cost plus cogs” pricing, which combines all of Provider’s cost factors together. She said Carrier is the only insurance company that has not been able to agree with Provider on pricing—most other carriers are paying Provider 75 percent of what it is asking, not just 50 percent. She said Carrier wanted Provider to break down which treatments were given each day, but Provider was not prepared to separate the services provided because it is multidisciplinary.

2. Testimony of Spencer Spofford

Mr. Spofford is Carrier’s handling adjuster for the underlying workers’ compensation claim. He testified that Provider billed $2,800 per day on billing code 97799, which is a generic code for work hardening, chronic pain, and other types of treatment. He explained that $720 per day is the normal daily price for outpatient rehabilitation—not $2,800—although he acknowledged that another brain injury patient in the Dallas area had negotiated a rate of $765 per day for outpatient services.

Mr. Spofford said Provider had not accepted Carrier’s fee schedule payment of $720 per day, so Carrier tried to break the payments down by which type of multidisciplinary therapies were actually provided and use each of those individual modalities’ fee schedules. To do so, Carrier had to match CPT22 codes with the therapies given, then multiply those therapies’ fee schedules by the number of hours. According to Mr. Spofford, Carrier did not question the number of hours Provider billed for; and Carrier paid the same amount per hour as it would have for CARF-certified multidisciplinary rehabilitation therapy, even though Provider is not CARF certified for brain injury.

Mr. Spofford listed Carrier’s hourly reimbursement rates as follows: $141.16 for cognitive rehabilitation services, $90.00 for therapeutic exercises, $160.22 for biofeedback, $42.44 for group therapy, $211.76 for individual counseling, and $125.71 for speech therapy. According to Mr. Spofford, Carrier’s methodology resulted in a different amount paid for each day, between $830 and the “mid-one-thousands,” all of which were above the standard $720 per day (and the $765 per day agreed with the other Dallas provider referred to earlier). Mr. Spofford said the multidisciplinary fee schedule pays at $1000 per day, so some of Carrier’s payments are even above that.

Mr. Spofford observed that there were no separate bills for room and board, which he attributed to Provider’s services being on an outpatient basis; but he noted that Claimant was put up in a hotel near Provider’s facility. Mr. Spofford said no claim was filed for room and board, as would be required for those items to be covered. However, on cross examination, he noted that Carrier is required to reimburse for lodging when a claimant must travel a certain distance or remain at the facility for a certain number of hours; and he conceded he was not aware that room and board was included in Provider’s cost factor and considered in their $2,800 per day.

Mr. Spofford testified that Carrier’s reimbursement rates are correct and reflective of the actual services provided on each specific date; whereas Provider’s request for reimbursement of $2,800 per day was not based upon the specific services provided, which varied day to day. He said the reimbursements using Carrier’s methodology are more than fair and reasonable.

D. Argument

In its Closing Argument, Carrier cited SOAH dockets that have rejected evidence of other payments to the Provider, alone, as satisfying the fairness and reasonableness factor of effective medical cost control.23 Similarly, Carrier cited numerous SOAH dockets that have rejected using other carriers’ payments to other providers, as evidence of the fairness and reasonableness factor of consistency with other reimbursement schemes.24

E. ALJ’s Analysis

1. Claims with dates of service September 5-6, 2018

Provider failed to timely file for MFDR for claims on two service dates. Provider filed its request for MFDR on September 9, 2019, for its claims with service dates including September 5-6, 2018. Provider did not claim any exception applied to the one-year deadline to file a request for MFDR. Therefore, pursuant to 28 TAC § 133.307(c)(1), Provider waived its right to MFDR for these claims. Because Provider did not timely file a request for MFDR for the services provided September 5-6, 2018, Provider is not entitled to any additional reimbursement from Carrier for those claims.

2. All other claims

Claimant received interdisciplinary traumatic brain injury rehabilitation services from Provider on 36 dates between May 7, 2018, and September 12, 2018, exclusive of the two dates for which Provider waived its right to MFDR as discussed above. Payment is subject to the general medical reimbursement provisions of 28 TAC § 134.1(e) because the services were not provided through a workers’ compensation health care network.25 The Division has not established a medical fee guideline for the type of services Provider provided Claimant and there was no negotiated contract for the services; therefore, reimbursement must be made in accordance with a fair and reasonable amount as specified in 28 TAC § 134.1(f).26

With its MFDR request, Provider was required to provide documentation to discuss, demonstrate, and justify that the payment amounts being sought were fair and reasonable rates of reimbursement in accordance with 28 TAC § 134.1.27 Provider’s documentation in evidence shows that the Claimant’s treatments varied from day to day by type of therapy and time spent, and that Provider seeks payment of 100% of its billed charges of $2,800 per treatment day.28

It is Provider’s burden to show that the reimbursement amount sought satisfies the Texas Labor Code’s factors describing what is “fair and reasonable”; additionally, it is Provider’s burden to show that the reimbursement amount paid by Carrier does not satisfy the statutory “fair and reasonable” factors. As explained below, Provider has failed to meet its burden on both accounts.

a. The preponderant evidence does not support a finding that the daily reimbursement amount Provider seeks is fair and reasonable.

Provider admitted no exhibits and made no argument; so, its position is supported only by Carrier’s exhibits and the testimony of Ms. Zacharias. The record evidence is sparse as to Provider’s billing methodology, citing only the generic billing code for work hardening, chronic pain, and other types of treatment; and including Claimant’s treatment records. Provider’s bills fail to explain why $2,800 per day was a fair and reasonable amount even though the amounts and types of treatment differed by the specific date of service.29 Ms. Zacharias explained that Provider’s pricing combines all the cost factors of its multidisciplinary treatment, so Provider could not separate the services provided. Ms. Zacharias also testified that other insurance companies have paid Provider 75 percent of what it billed.

As noted in the MFRD Decisions, the Division has stated that reimbursement methodologies that use billed hospital charges, or a percentage thereof, as their basis do not provide acceptable fair and reasonable reimbursement amounts. While traumatic brain injury rehabilitation services are not the same as hospital care, this principle is of similar concern in this dispute. A health care provider’s charges are not evidence of a fair and reasonable rate or of what insurance companies are paying for the same or similar services. Unquestioning payment of a health care provider’s billed charge would leave the determination of the payment amount in the provider’s own hands, contrary to the objective of effective cost control and the standard not to pay more than for similar treatment of an injured individual of equivalent standard of living, both in Texas Labor Code § 413.011(d). In accordance with the Division’s policy, neither the billed charges nor an amount based on a percentage of billed hospital charges can be considered to be a fair and reasonable reimbursement amount without further evidence. In the SOAH dockets cited by Carrier, discussed above, SOAH similarly rejected evidence of other payments to the provider, alone, as satisfying the fairness and reasonableness factor of effective medical cost control.

Neither Provider’s evidence of its billed charges, nor Provider’s evidence of other carriers’ payments to it (which were, at most, 75 percent of its billing, not 100 percent) suffices to find Provider’s requested reimbursement at 100 percent of Provider’s $2,800 daily rate to be fair and reasonable. Therefore, Provider failed to show by a preponderance of the evidence that the daily reimbursement amount it seeks is fair and reasonable.

b. The preponderant evidence does not support a finding that the amount paid by Carrier is not fair and reasonable.

Provider failed to provide compelling evidence that the amount paid by Carrier was not fair and reasonable. On the contrary, the fairness and reasonableness of Carrier’s payments were supported through numerous exhibits, testimony, and argument. The record evidence explains Carrier’s reimbursement methodology in detail,30 in which, as Mr. Spofford explained, Carrier used Provider’s documentation of services to identify the types of multidisciplinary therapies actually provided on each service date and, using each of those individual modalities’ fee schedules, multiplied the hourly fee by the number of hours to arrive at daily total amounts paid.

The daily amounts paid by Carrier, as listed in Provider’s Request for MFDR and detailed in Carrier’s EOBs,31 exceed the workers’ compensation jurisdictional fee schedule base rate of $720 per day for outpatient rehabilitation, and also exceed the $765 per day rate that Mr. Spofford testified was negotiated by another brain injury treatment provider in the area for outpatient services. Moreover, Carrier’s payments to Provider for CARF-certified treatment, even though Provider lacks CARF certification for multidisciplinary brain injury treatment, are eminently fair and reasonable.

The methodology used by Carrier is consistent with the criteria of Texas Labor Code§ 413.011; ensures that similar procedures provided in similar circumstances receive similar reimbursement; and is based on values assigned for services involving similar work and resource commitments.

Provider failed to meet its burden, because it Provided no compelling evidence that Carrier’s methodology resulted in an unfair or unreasonable reimbursement.

3. Conclusion

In conclusion, the ALJ finds that Provider waived MFDR for the services provided September 5-6, 2018, by its failure to timely file its request; therefore, Provider is not entitled to any additional reimbursement from Carrier for those services. Additionally, as to Provider’s remaining claims for 36 further dates of service, the ALJ finds that Provider is not entitled to additional reimbursement because Provider failed to show, by the preponderance of the evidence, that: (1) the daily amount Provider seeks is fair and reasonable; and (2) the reimbursements already made by Carrier were not fair and reasonable.

IV. FINDINGS OF FACT

1. (Claimant) suffered a compensable injury on (Date of Injury).

2. On the date of injury, Great American Alliance Insurance Company (Carrier) was the workers’ compensation insurance carrier for Claimant’s employer.

3. On 38 days between May 7 and September 12, 2018, Claimant received outpatient interdisciplinary traumatic brain injury rehabilitation services from North Texas Rehabilitation Center (Provider), an outpatient rehabilitation facility, for the treatment of his injuries.

4. Provider billed Carrier $2,800 per service day, totaling $106,400, citing treatment code 97799, although the actual treatments varied from day to day.

5. Carrier issued explanations of benefits (EOB) for the claims approving a total amount of $35,859.38. The EOBs explained that payment rates were calculated above the workers’ compensation jurisdictional fee schedule base rate of $720/day, using allowances based upon whether the services rendered were cognitive rehabilitation, therapeutic exercises, biofeedback, group therapy, speech therapy, or individual counseling.

6. Provider requested reconsideration; and Carrier denied additional payment.

7. On April 19, 2019, Provider filed a request for medical fee dispute resolution (MFDR) with the Texas Department of Insurance, Division of Workers’ Compensation, Medical Review Division (MRD or Division), for Claimant’s outpatient rehabilitation in Division File No. (DWC Number) (MRD No. M4-19-3844-01) for 35 dates of service from May 7, 2018, to September 4, 2018.

8. On September 9, 2019, Provider filed a request for MFDR with the Division, for Claimant’s outpatient rehabilitation in Division File No. (DWC Number) (MRD No. M4-20-0042-01) for service dates of September 5, 2018; September 6, 2018; and September 12, 2018.

9. Provider failed to timely request MFDR within one year, for its services provided on September 5-6, 2018.

10. Provider timely requested MFDR of Carrier’s denial with the Division, with respect to the 35 dates of service from May 7, 2018, to September 4, 2018, and September 12, 2018.

11. On June 14, 2019, and October 4, 2019, MFDR decisions were issued by the Division, finding that Provider had failed to support its position that additional reimbursement was due in MRD Nos. M4-19-3844-01 and M4-20-0042-01.

12. Provider timely requested hearings before the State Office of Administrative Hearings (SOAH) to contest the MFDR Decisions in favor of Carrier.

13. On August 19, 2021, the Division provided timely notice of hearing to Carrier and Provider in SOAH Docket No. 454-21-3304.M4-NP, concerning MRD No. M4-19-3844-01.

14. On August 31, 2021, the Division provided timely notice of hearing to Carrier and Provider in SOAH Docket Nos. 454-21-3451.M4-NP, concerning MRD No. M4-20-0042-01.

15. In SOAH Joint Order No. 2, issued October 11, 2021, the Administrative Law Judge (ALJ) consolidated SOAH Docket 454-21-3304.M4-NP with SOAH Docket 454-21-3451.M4- NP for docketing and procedural purposes, and set them to be heard and decided together.

16. The notices of hearing, together with Joint Order No. 2, included a statement of the time, place, and nature of the hearing; statements of the legal authority and jurisdiction under which the hearing was to be held; references to the particular sections of the statutes and rules involved; and attachments that incorporated, by reference, the factual matters asserted in the complaints or petitions filed with the state agency.

17. The hearing on the merits was held via Zoom videoconference on January 20, 2022, before SOAH ALJ Heather D. Hunziker. Provider appeared and was represented by Insurance Manager Catherine Zacharias. Carrier appeared and was represented by attorney Steven Tipton. Post-hearing briefing was submitted; and the record closed February 18, 2022.

18. At the beginning of the hearing the parties agreed that the operative facts were the same in both dockets, and that they could be heard and decided together.

19. Provider’s services were not provided through a workers’ compensation health care network.

20. The Division has not established a medical fee guideline for the type of services Provider provided Claimant and there was no negotiated contract for the services.

21. Provider seeks payment of 100% of its billed charges of $2,800 per treatment day.

22. The Division has stated that reimbursement methodologies that use billed hospital charges as their basis or that use a percentage of hospital billed charges as their basis do not provide acceptable fair and reasonable reimbursement amounts; and this principle applies equally to traumatic brain injury rehabilitation services.

23. Carrier’s method of reimbursement: (1) identified the types of multidisciplinary therapy provided on each service date, as noted in Provider’s documentation of services; (2) referred to each individual therapy modality’s fee schedule; and (3) multiplied each therapy’s hourly fee by the number of hours to arrive at daily total amounts paid.

24. The daily amounts paid by Carrier exceed the workers’ compensation jurisdictional fee schedule daily base rate for outpatient rehabilitation and exceed the daily rate negotiated by another provider for similar services.

25. Carrier’s reimbursement methodology would ensure that similar procedures provided in similar circumstances receive similar reimbursement and is based on values assigned for services involving similar work and resource commitments.

V. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over these proceedings, including the authority to issue a decision and order, pursuant to Texas Labor Code § 413.0312(e) and Texas Government Code ch. 2003.

2. Adequate and timely notice of the hearing was provided in accordance with Texas Government Code §§ 2001.051-.052.

3. As the party seeking relief from the MFDR decisions, Provider had the burden of proving by a preponderance of the evidence that it had not been reimbursed a fair and reasonable amount by Carrier for the services provided and was entitled to additional reimbursement. 28 Tex. Admin. Code § 148.14(b); 1 Tex. Admin. Code § 155.427.

4. A requestor shall timely file the request with the Division’s MFDR section or waive the right to MFDR. The request for MFDR must be filed no later than one year after the date(s) of service in dispute. 28 Tex. Admin. Code § 133.307(c)(1)(A).

5. The exceptions to the one-year filing deadlines set out in 28 Texas Administrative Code § 133.307(c)(1)(B) do not apply to Provider’s claims for services provided Claimant on September 5-6, 2018.

6. Provider waived the right to MFDR as to dates of service September 5-6, 2018; therefore, Provider is not entitled to any additional reimbursement for medical services provided to Claimant on these dates. 28 Tex. Admin. Code § 133.307(c)(1)(A).

7. Because Provider’s services were not provided through a workers’ compensation health care network, payment is subject to the Division’s general medical reimbursement provisions. 28 Tex. Admin. Code § 134.1(e).

8. Due to the absence of an applicable fee guideline or a negotiated contract, Provider’s reimbursement must be made at fair and reasonable rates as specified in the Department’s rules. 28 Tex. Admin. Code § 134.1(e)(3) (emphasis added).

9. Carrier’s reimbursement methodology was consistent with the criteria of Texas Labor Code § 413.011; would ensure that similar procedures provided in similar circumstances receive similar reimbursement; and was based on values assigned for services involving similar work and resource commitments. Therefore, the methodology used by Carrier resulted in a fair and reasonable amount. 28 Tex. Admin. Code § 134.1.

10. Provider failed to show by a preponderance of the evidence that the daily reimbursement amount it seeks is fair and reasonable, and that Carrier’s reimbursements were not fair and reasonable. Tex. Lab. Code § 413.011(d); 28 Tex. Admin. Code § 134.1.

11. Provider failed to show by a preponderance of the evidence that it is entitled to additional reimbursement for the services at issue in this proceeding.

ORDER

Provider is not entitled to additional reimbursement for services provided September 5-6, 2018, because Provider waived its claims for such services; and, as to its claims for all other service dates, Provider is not entitled to additional reimbursement because it was reimbursed fairly and reasonably.

NON-PREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 TAC § 133.307(h) require the non-prevailing party to reimburse the Division of Workers’ Compensation for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires that SOAH identify the non-prevailing party and any costs for services provided by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, North Texas Rehabilitation Center is the non-prevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED April 11, 2022.

Heather Hunziker
Administrative Law Judge
State Office of Administrative Hearings

1 SOAH Joint Order No. 3, issued January 27, 2022, held the record open for replies to closing arguments until February 18, 2022. Carrier filed its closing brief on February 4, 2022 (Closing Argument), and its reply brief on February 18, 2022; however, Provider filed no closing brief or response. Therefore, Carrier’s reply brief was not considered by the ALJ. Similarly, Carrier’s “Objections to Admission of [exhibits in Provider’s response], and Motion to Disregard and Strike” filed February 24, 2022, is denied for mootness.

2 See 28 Tex. Admin. Code (TAC) ch. 133. All citations in this Decision reflect the law applicable on the date of service for each claim.

3 28 TAC § 133.307.

4 Tex. Labor Code § 413.031(c); 28 TAC § 133.307(a)(2).

5 28 TAC § 133.307(a)(2) (emphasis added).

6 28 TAC § 133.307(c)(1).

7 28 TAC § 133.307(c)(1)(A). Provider did not assert an exception under 28 TAC § 133.307(c)(1)(B).

8 28 TAC § 133.307(c)(2)(O).

9 28 TAC § 148.14(b); 1 TAC § 155.427. Burden of proof in worker’s compensation insurance reimbursement cases determining fair and reasonable reimbursement was previously analyzed in great depth, in SOAH Docket No. 454-11-2417.M4 (consolidating 113 cases with the same basic legal issues and evidence) (affirmed as to burden of proof, reversed and rendered by the trial court in Zurich American Ins. Co. v. Houston Community Hospital, Cause No. D-1-GN-14-001325 in the 201st Judicial District Court of Travis County).

10 Carrier Exs. A-1 at 1, B-1 at 1.

11 Carrier Exs. A-3 at 7-41, B-3 at 9-11.

12 Carrier Exs. A-5, B-5.

13 Carrier Exs. A-4, B-4.

14 Carrier Exs. A-4, B-4.

15 CARF means Certified Accredited Rehabilitation Facility.

16 Carrier Exs. A-4, B-4.

17 Carrier Ex. A-1 at 1-2.

18 Carrier Ex. B-1 at 1.

19 Carrier Exs. A-1 at 1-2, B-1 at 1.

20 Carrier Exs. A-6, B-6.

21 Carrier Exs. A-6 at 295, B-6 at 35.

22 This acronym was not defined.

23 Carrier cites SOAH Consolidated Dockets No. 453-03-0143.M4, 453-03-3098.M4, 453-05-1535.M4 and 453-05-1536.M4, Vista Healthcare, Inc. v. Twin City Fire Insurance Co., Decision and Order (June 12, 2007). Closing Argument at 7-8.

24 Carrier cites SOAH Docket No. 453-01-179.M4, Decision and Order (January 23, 2002); Consolidated Dockets No. 453-03-0143.M4, 453-03-3098.M4, 453-05-1535.M4 and 453-05-1536.M4, Vista Healthcare, Inc. v. Twin City Fire Insurance Co., Decision and Order (June 12, 2007); and SOAH Consolidated Dockets No. 453-03-0515.M4, 453-03-0516.M4, and 453-03-2818.M4, Decision and Order (June 27, 2007). Closing Argument at 8-9.

25 28 TAC § 134.1(e).

26 28 TAC § 134.1(e)(3).

27 28 TAC § 133.307(c)(2)(O).

28 Carrier Exs. A-1, A-5, B-1, B-5.

29 Compare Carrier Exs. A-3 with A-5; B-3 with B-5.

30 See Carrier Exs. A-2, B-2 (Carrier’s Responses to Requests for Dispute Resolution, explaining in detail how Carrier applied its methodology in its EOBs); Carrier Exs. A-4, B-4 (Carrier’s EOBs).

31 Carrier Exs. A-1, B-1, A-4, B-4.

DECISION AND ORDER

North Texas Rehabilitation Center (Provider) challenges decisions of the Texas Department of Insurance, Division of Workers’ Compensation, Medical Review Division (MRD or Division) that denied Provider additional reimbursement from Great American Alliance Insurance Company (Carrier) for a program of interdisciplinary traumatic brain injury rehabilitation provided by Provider to (Claimant). In Docket No. 454-21-3451.M4-NP, Carrier argues that Provider failed to timely file its request for Medical Fee Dispute Resolution (MFDR) for claims with dates of service September 5-6, 2018. For the remaining claims in both dockets, Carrier argues that Provider is not entitled to additional reimbursement because the payments already made are consistent with fair and reasonable reimbursement, while Provider’s reimbursement requests are not. The Administrative Law Judge (ALJ) agrees with both of Carrier’s arguments and concludes that Provider is not entitled to additional reimbursement.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no contested issues of notice or jurisdiction; therefore, these matters are addressed in the Findings of Fact and Conclusions of Law without further discussion.

Provider timely requested hearings before the State Office of Administrative Hearings (SOAH). SOAH Joint Order No. 2, issued October 11, 2021, consolidated the dockets and set them for hearing. The hearing on the merits was held via Zoom videoconference on January 20, 2022, before ALJ Heather D. Hunziker. Provider appeared and was represented by Insurance Manager Catherine Zacharias. Carrier appeared and was represented by attorney Steven Tipton. The record closed on February 18, 2022, after the filing of written closing arguments.1

II. APPLICABLE LAW

The resolution of a fee dispute is regulated by the Division’s billing, audit, and payment rules.2 In an appropriate case, a health care provider, such as Provider, may dispute the amount paid by an insurance carrier.3 In those cases, the Division’s authority is limited to resolving “the amount of payment due for services determined to be medically necessary and appropriate.”4 The Division’s rules reflect the statutory guidance and specify that:

In resolving disputes regarding the amount of payment for health care determined to be medically necessary and appropriate for treatment of a compensable injury, the role of the division is to adjudicate the payment, given the relevant statutory provisions and division rules.5

A requestor, such as Provider, must timely file the request for MFDR with the Division’s MFDR section or waive the right to MFDR.6 Such a request must be “filed no later than one year after the date(s) of service in dispute.”7 Additionally, the requestor must provide documentation that discusses, demonstrates, and justifies that the payment amount being sought is a fair and reasonable rate of reimbursement in accordance with 28 Texas Administrative Code (TAC) § 134.1 when the dispute involves health care for which the division has not established a maximum allowable reimbursement or reimbursement rate, as applicable.8

Texas Labor Code § 413.011 sets forth reimbursement policies and guidelines and includes the following:

(d) Fee guidelines must be fair and reasonable and designed to ensure the quality of medical care and to achieve effective medical cost control. The guidelines may not provide for payment of a fee in excess of the fee charged for similar treatment of an injured individual of an equivalent standard of living and paid by that individual or by someone acting on that individual’s behalf.

The Division rule that effects the above-referenced reimbursement guidelines is 28 TAC § 134.1 (Medical Reimbursement), which includes the following:

(e) Medical reimbursement for health care not provided through a workers’ compensation health care network shall be made in accordance with:

(1) the Division's fee guidelines;

(2) a negotiated contract; or

(3) in the absence of an applicable fee guideline or a negotiated contract, a fair and reasonable reimbursement amount as specified in subsection (f) of this section.

(f) Fair and reasonable reimbursement shall:

(1) be consistent with the criteria of Labor Code § 413.011;

(2) ensure that similar procedures provided in similar circumstances receive similar reimbursement; and

(3) be based on nationally recognized published studies, published Division medical dispute decisions, and/or values assigned for services involving similar work and resource commitments, if available.

The party seeking relief has the burden of proof by the preponderance of the evidence.9

III. BACKGROUND, MFDR DECISIONS, EVIDENCE, ARGUMENT, AND ANALYSIS

A. Background

Claimant suffered a compensable injury on (Date of Injury).10 On 38 days between May 7, 2018, and September 12, 2018, Claimant received interdisciplinary traumatic brain injury rehabilitation services from Provider, an outpatient rehabilitation facility, for the treatment of injuries sustained while on the job. The Division has not established a medical fee guideline for such services. For its services, Provider cited treatment code 97799 and billed Carrier $2,800 per service day, totaling $106,400.11 Provider’s documentation of services identified the varying types of, and amounts of time spent on, multidisciplinary therapies provided on each service date.12 Carrier issued explanations of benefits (EOB) for the claims, approving a total of $35,859.38.13 Carrier’s EOBs explained that the workers’ compensation jurisdictional fee schedule base rate was $720/day, and payment rates were calculated using allowances based upon whether the services rendered were cognitive rehabilitation, therapeutic exercises, biofeedback, group therapy, speech therapy, or individual counseling.14 Carrier’s EOBs explained the methodology as follows:

Billed charges are for a brain injury program approved under non-specific code 97799. Texas currently has 4 program [sic] that are identified within the guidelines where this code is used. One of those programs is an Outpatient Medical Rehabilitation Program where Modifier Code MR is used and the rate for this program for a CARF15 accredited facility is $90/hr. The head injury program being billed by [Provider] includes therapy/rehab hours that are reasonably the same as would be involved in this type of program. For the hours for rehab/therapy the Carrier … is using the same hourly rate for this CARF accredited facility. For more specific services that would not necessarily be included in such a program, and are more specific to this brain injury program the Carrier in an effort to find a Fair & Reasonable rate for these services has chosen to break these down by type of service performed as follows: Therapeutic Exercise: 97799 CARF Rehab Program x $90.00 per hour; Cognitive Rehab: G0515 $141.16 per hour; Biofeedback: 90902 $160.22 per hour; Group Therapy: 90853 $42.44 per hour; Speech Therapy: 92507 $125.71 per hour; Individual Counseling: 90837 $211.76 per hour.16

Provider requested reconsideration, in response to which Carrier denied additional payment.

B. MFDR Decisions

Provider filed two requests for MFDR, with different dates of service, for Claimant’s outpatient rehabilitation. On April 19, 2019, Provider requested MFDR in Division File No. (DWC Number) (SOAH Docket No. 454-21-3304.M4-NP; MRD No. M4-19-3844-01) for 35 dates of service from May 7, 2018, to September 4, 2018.17 On September 9, 2019, Provider filed for MFDR in Division File No. (DWC Number) (SOAH Docket No. 454-21-3451.M4-NP; MRD No. M4-20-0042-01) for three further dates of service: September 5, 2018; September 6, 2018; and September 12, 2018.18 For each service date in its MFDR requests, Provider requested 100% of its billed charges of $2,800.19

MFDR Decisions issued June 14, 2019, and October 4, 2019, found that Provider had failed to support its position that additional reimbursement was due.20 Each MFDR Decision set forth certain statements of the Division regarding reimbursements based on hospital charges, as follows:

The Division previously found, as stated in the adoption preamble to the former Acute Care Inpatient Hospital Fee Guideline, that “hospital charges are not a valid indicator of a hospital’s costs of providing services nor of what is being paid by other payors” (22 Texas Register 6271). In formulating the fee guidelines, the division further considered and rejected alternative payment methods that used hospital charges as their basis because they “allow the hospitals to affect their reimbursement by inflating their charges” (22 Texas Register 6268-6269).21

C. Evidence

Before the beginning of the hearing, the parties agreed that the operative facts in both cases were the same and the cases could be heard together. At the hearing, Provider offered no exhibits, but presented the testimony of its Insurance Manager, Catherine Zacharias. Carrier offered twelve exhibits, which were admitted, and presented the testimony of Senior Field Specialist and Adjuster, Spencer Spofford.

1. Testimony of Catherine Zacharias

Ms. Zacharias testified for Provider about its services and billing. She said Provider is a rehabilitation facility. Provider’s brain injury program differs from other types of rehabilitation, in that it requires a minimum of five different disciplines of providers, which Ms. Zacharias said Provider can customize because Provider has twelve different types of providers. According to Ms. Zacharias, Provider customizes individual treatment for its patients and did so for Claimant.

Ms. Zacharias testified that Claimant received hand and shoulder exercises, bicycle therapy for his back injuries, and other therapy. She explained that sometimes chronic pain patients and brain injury patients are in the same therapy group, but not “work hardening” patients. She stated that, although the exercises would typically be done by the entire group at once in this type of group program, Claimant’s issues required personal one-on-one exercises.

Ms. Zacharias testified that Claimant was able to get back to a partial workday as a result of Provider’s services, before he hit his head again, resulting in more significant brain injury. She said that Provider’s health care providers were the ones to determine the best treatment for Claimant; and Provider met all the guidelines for these determinations.

On cross examination, Ms. Zacharias admitted that Provider is only CARF accredited in pain management and outpatient rehabilitation—not brain injury. She explained that “CARF” stands for Certified Accredited Rehabilitation Facility and requires recertification every three years through surveying of every policy and procedure.

Ms. Zacharias testified that Provider uses “cost plus cogs” pricing, which combines all of Provider’s cost factors together. She said Carrier is the only insurance company that has not been able to agree with Provider on pricing—most other carriers are paying Provider 75 percent of what it is asking, not just 50 percent. She said Carrier wanted Provider to break down which treatments were given each day, but Provider was not prepared to separate the services provided because it is multidisciplinary.

2. Testimony of Spencer Spofford

Mr. Spofford is Carrier’s handling adjuster for the underlying workers’ compensation claim. He testified that Provider billed $2,800 per day on billing code 97799, which is a generic code for work hardening, chronic pain, and other types of treatment. He explained that $720 per day is the normal daily price for outpatient rehabilitation—not $2,800—although he acknowledged that another brain injury patient in the Dallas area had negotiated a rate of $765 per day for outpatient services.

Mr. Spofford said Provider had not accepted Carrier’s fee schedule payment of $720 per day, so Carrier tried to break the payments down by which type of multidisciplinary therapies were actually provided and use each of those individual modalities’ fee schedules. To do so, Carrier had to match CPT22 codes with the therapies given, then multiply those therapies’ fee schedules by the number of hours. According to Mr. Spofford, Carrier did not question the number of hours Provider billed for; and Carrier paid the same amount per hour as it would have for CARF-certified multidisciplinary rehabilitation therapy, even though Provider is not CARF certified for brain injury.

Mr. Spofford listed Carrier’s hourly reimbursement rates as follows: $141.16 for cognitive rehabilitation services, $90.00 for therapeutic exercises, $160.22 for biofeedback, $42.44 for group therapy, $211.76 for individual counseling, and $125.71 for speech therapy. According to Mr. Spofford, Carrier’s methodology resulted in a different amount paid for each day, between $830 and the “mid-one-thousands,” all of which were above the standard $720 per day (and the $765 per day agreed with the other Dallas provider referred to earlier). Mr. Spofford said the multidisciplinary fee schedule pays at $1000 per day, so some of Carrier’s payments are even above that.

Mr. Spofford observed that there were no separate bills for room and board, which he attributed to Provider’s services being on an outpatient basis; but he noted that Claimant was put up in a hotel near Provider’s facility. Mr. Spofford said no claim was filed for room and board, as would be required for those items to be covered. However, on cross examination, he noted that Carrier is required to reimburse for lodging when a claimant must travel a certain distance or remain at the facility for a certain number of hours; and he conceded he was not aware that room and board was included in Provider’s cost factor and considered in their $2,800 per day.

Mr. Spofford testified that Carrier’s reimbursement rates are correct and reflective of the actual services provided on each specific date; whereas Provider’s request for reimbursement of $2,800 per day was not based upon the specific services provided, which varied day to day. He said the reimbursements using Carrier’s methodology are more than fair and reasonable.

D. Argument

In its Closing Argument, Carrier cited SOAH dockets that have rejected evidence of other payments to the Provider, alone, as satisfying the fairness and reasonableness factor of effective medical cost control.23 Similarly, Carrier cited numerous SOAH dockets that have rejected using other carriers’ payments to other providers, as evidence of the fairness and reasonableness factor of consistency with other reimbursement schemes.24

E. ALJ’s Analysis

1. Claims with dates of service September 5-6, 2018

Provider failed to timely file for MFDR for claims on two service dates. Provider filed its request for MFDR on September 9, 2019, for its claims with service dates including September 5-6, 2018. Provider did not claim any exception applied to the one-year deadline to file a request for MFDR. Therefore, pursuant to 28 TAC § 133.307(c)(1), Provider waived its right to MFDR for these claims. Because Provider did not timely file a request for MFDR for the services provided September 5-6, 2018, Provider is not entitled to any additional reimbursement from Carrier for those claims.

2. All other claims

Claimant received interdisciplinary traumatic brain injury rehabilitation services from Provider on 36 dates between May 7, 2018, and September 12, 2018, exclusive of the two dates for which Provider waived its right to MFDR as discussed above. Payment is subject to the general medical reimbursement provisions of 28 TAC § 134.1(e) because the services were not provided through a workers’ compensation health care network.25 The Division has not established a medical fee guideline for the type of services Provider provided Claimant and there was no negotiated contract for the services; therefore, reimbursement must be made in accordance with a fair and reasonable amount as specified in 28 TAC § 134.1(f).26

With its MFDR request, Provider was required to provide documentation to discuss, demonstrate, and justify that the payment amounts being sought were fair and reasonable rates of reimbursement in accordance with 28 TAC § 134.1.27 Provider’s documentation in evidence shows that the Claimant’s treatments varied from day to day by type of therapy and time spent, and that Provider seeks payment of 100% of its billed charges of $2,800 per treatment day.28

It is Provider’s burden to show that the reimbursement amount sought satisfies the Texas Labor Code’s factors describing what is “fair and reasonable”; additionally, it is Provider’s burden to show that the reimbursement amount paid by Carrier does not satisfy the statutory “fair and reasonable” factors. As explained below, Provider has failed to meet its burden on both accounts.

a. The preponderant evidence does not support a finding that the daily reimbursement amount Provider seeks is fair and reasonable.

Provider admitted no exhibits and made no argument; so, its position is supported only by Carrier’s exhibits and the testimony of Ms. Zacharias. The record evidence is sparse as to Provider’s billing methodology, citing only the generic billing code for work hardening, chronic pain, and other types of treatment; and including Claimant’s treatment records. Provider’s bills fail to explain why $2,800 per day was a fair and reasonable amount even though the amounts and types of treatment differed by the specific date of service.29 Ms. Zacharias explained that Provider’s pricing combines all the cost factors of its multidisciplinary treatment, so Provider could not separate the services provided. Ms. Zacharias also testified that other insurance companies have paid Provider 75 percent of what it billed.

As noted in the MFRD Decisions, the Division has stated that reimbursement methodologies that use billed hospital charges, or a percentage thereof, as their basis do not provide acceptable fair and reasonable reimbursement amounts. While traumatic brain injury rehabilitation services are not the same as hospital care, this principle is of similar concern in this dispute. A health care provider’s charges are not evidence of a fair and reasonable rate or of what insurance companies are paying for the same or similar services. Unquestioning payment of a health care provider’s billed charge would leave the determination of the payment amount in the provider’s own hands, contrary to the objective of effective cost control and the standard not to pay more than for similar treatment of an injured individual of equivalent standard of living, both in Texas Labor Code § 413.011(d). In accordance with the Division’s policy, neither the billed charges nor an amount based on a percentage of billed hospital charges can be considered to be a fair and reasonable reimbursement amount without further evidence. In the SOAH dockets cited by Carrier, discussed above, SOAH similarly rejected evidence of other payments to the provider, alone, as satisfying the fairness and reasonableness factor of effective medical cost control.

Neither Provider’s evidence of its billed charges, nor Provider’s evidence of other carriers’ payments to it (which were, at most, 75 percent of its billing, not 100 percent) suffices to find Provider’s requested reimbursement at 100 percent of Provider’s $2,800 daily rate to be fair and reasonable. Therefore, Provider failed to show by a preponderance of the evidence that the daily reimbursement amount it seeks is fair and reasonable.

b. The preponderant evidence does not support a finding that the amount paid by Carrier is not fair and reasonable.

Provider failed to provide compelling evidence that the amount paid by Carrier was not fair and reasonable. On the contrary, the fairness and reasonableness of Carrier’s payments were supported through numerous exhibits, testimony, and argument. The record evidence explains Carrier’s reimbursement methodology in detail,30 in which, as Mr. Spofford explained, Carrier used Provider’s documentation of services to identify the types of multidisciplinary therapies actually provided on each service date and, using each of those individual modalities’ fee schedules, multiplied the hourly fee by the number of hours to arrive at daily total amounts paid.

The daily amounts paid by Carrier, as listed in Provider’s Request for MFDR and detailed in Carrier’s EOBs,31 exceed the workers’ compensation jurisdictional fee schedule base rate of $720 per day for outpatient rehabilitation, and also exceed the $765 per day rate that Mr. Spofford testified was negotiated by another brain injury treatment provider in the area for outpatient services. Moreover, Carrier’s payments to Provider for CARF-certified treatment, even though Provider lacks CARF certification for multidisciplinary brain injury treatment, are eminently fair and reasonable.

The methodology used by Carrier is consistent with the criteria of Texas Labor Code§ 413.011; ensures that similar procedures provided in similar circumstances receive similar reimbursement; and is based on values assigned for services involving similar work and resource commitments.

Provider failed to meet its burden, because it Provided no compelling evidence that Carrier’s methodology resulted in an unfair or unreasonable reimbursement.

3. Conclusion

In conclusion, the ALJ finds that Provider waived MFDR for the services provided September 5-6, 2018, by its failure to timely file its request; therefore, Provider is not entitled to any additional reimbursement from Carrier for those services. Additionally, as to Provider’s remaining claims for 36 further dates of service, the ALJ finds that Provider is not entitled to additional reimbursement because Provider failed to show, by the preponderance of the evidence, that: (1) the daily amount Provider seeks is fair and reasonable; and (2) the reimbursements already made by Carrier were not fair and reasonable.

IV. FINDINGS OF FACT

1. (Claimant) suffered a compensable injury on (Date of Injury).

2. On the date of injury, Great American Alliance Insurance Company (Carrier) was the workers’ compensation insurance carrier for Claimant’s employer.

3. On 38 days between May 7 and September 12, 2018, Claimant received outpatient interdisciplinary traumatic brain injury rehabilitation services from North Texas Rehabilitation Center (Provider), an outpatient rehabilitation facility, for the treatment of his injuries.

4. Provider billed Carrier $2,800 per service day, totaling $106,400, citing treatment code 97799, although the actual treatments varied from day to day.

5. Carrier issued explanations of benefits (EOB) for the claims approving a total amount of $35,859.38. The EOBs explained that payment rates were calculated above the workers’ compensation jurisdictional fee schedule base rate of $720/day, using allowances based upon whether the services rendered were cognitive rehabilitation, therapeutic exercises, biofeedback, group therapy, speech therapy, or individual counseling.

6. Provider requested reconsideration; and Carrier denied additional payment.

7. On April 19, 2019, Provider filed a request for medical fee dispute resolution (MFDR) with the Texas Department of Insurance, Division of Workers’ Compensation, Medical Review Division (MRD or Division), for Claimant’s outpatient rehabilitation in Division File No. (DWC Number) (MRD No. M4-19-3844-01) for 35 dates of service from May 7, 2018, to September 4, 2018.

8. On September 9, 2019, Provider filed a request for MFDR with the Division, for Claimant’s outpatient rehabilitation in Division File No. (DWC Number) (MRD No. M4-20-0042-01) for service dates of September 5, 2018; September 6, 2018; and September 12, 2018.

9. Provider failed to timely request MFDR within one year, for its services provided on September 5-6, 2018.

10. Provider timely requested MFDR of Carrier’s denial with the Division, with respect to the 35 dates of service from May 7, 2018, to September 4, 2018, and September 12, 2018.

11. On June 14, 2019, and October 4, 2019, MFDR decisions were issued by the Division, finding that Provider had failed to support its position that additional reimbursement was due in MRD Nos. M4-19-3844-01 and M4-20-0042-01.

12. Provider timely requested hearings before the State Office of Administrative Hearings (SOAH) to contest the MFDR Decisions in favor of Carrier.

13. On August 19, 2021, the Division provided timely notice of hearing to Carrier and Provider in SOAH Docket No. 454-21-3304.M4-NP, concerning MRD No. M4-19-3844-01.

14. On August 31, 2021, the Division provided timely notice of hearing to Carrier and Provider in SOAH Docket Nos. 454-21-3451.M4-NP, concerning MRD No. M4-20-0042-01.

15. In SOAH Joint Order No. 2, issued October 11, 2021, the Administrative Law Judge (ALJ) consolidated SOAH Docket 454-21-3304.M4-NP with SOAH Docket 454-21-3451.M4- NP for docketing and procedural purposes, and set them to be heard and decided together.

16. The notices of hearing, together with Joint Order No. 2, included a statement of the time, place, and nature of the hearing; statements of the legal authority and jurisdiction under which the hearing was to be held; references to the particular sections of the statutes and rules involved; and attachments that incorporated, by reference, the factual matters asserted in the complaints or petitions filed with the state agency.

17. The hearing on the merits was held via Zoom videoconference on January 20, 2022, before SOAH ALJ Heather D. Hunziker. Provider appeared and was represented by Insurance Manager Catherine Zacharias. Carrier appeared and was represented by attorney Steven Tipton. Post-hearing briefing was submitted; and the record closed February 18, 2022.

18. At the beginning of the hearing the parties agreed that the operative facts were the same in both dockets, and that they could be heard and decided together.

19. Provider’s services were not provided through a workers’ compensation health care network.

20. The Division has not established a medical fee guideline for the type of services Provider provided Claimant and there was no negotiated contract for the services.

21. Provider seeks payment of 100% of its billed charges of $2,800 per treatment day.

22. The Division has stated that reimbursement methodologies that use billed hospital charges as their basis or that use a percentage of hospital billed charges as their basis do not provide acceptable fair and reasonable reimbursement amounts; and this principle applies equally to traumatic brain injury rehabilitation services.

23. Carrier’s method of reimbursement: (1) identified the types of multidisciplinary therapy provided on each service date, as noted in Provider’s documentation of services; (2) referred to each individual therapy modality’s fee schedule; and (3) multiplied each therapy’s hourly fee by the number of hours to arrive at daily total amounts paid.

24. The daily amounts paid by Carrier exceed the workers’ compensation jurisdictional fee schedule daily base rate for outpatient rehabilitation and exceed the daily rate negotiated by another provider for similar services.

25. Carrier’s reimbursement methodology would ensure that similar procedures provided in similar circumstances receive similar reimbursement and is based on values assigned for services involving similar work and resource commitments.

V. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over these proceedings, including the authority to issue a decision and order, pursuant to Texas Labor Code § 413.0312(e) and Texas Government Code ch. 2003.

2. Adequate and timely notice of the hearing was provided in accordance with Texas Government Code §§ 2001.051-.052.

3. As the party seeking relief from the MFDR decisions, Provider had the burden of proving by a preponderance of the evidence that it had not been reimbursed a fair and reasonable amount by Carrier for the services provided and was entitled to additional reimbursement. 28 Tex. Admin. Code § 148.14(b); 1 Tex. Admin. Code § 155.427.

4. A requestor shall timely file the request with the Division’s MFDR section or waive the right to MFDR. The request for MFDR must be filed no later than one year after the date(s) of service in dispute. 28 Tex. Admin. Code § 133.307(c)(1)(A).

5. The exceptions to the one-year filing deadlines set out in 28 Texas Administrative Code § 133.307(c)(1)(B) do not apply to Provider’s claims for services provided Claimant on September 5-6, 2018.

6. Provider waived the right to MFDR as to dates of service September 5-6, 2018; therefore, Provider is not entitled to any additional reimbursement for medical services provided to Claimant on these dates. 28 Tex. Admin. Code § 133.307(c)(1)(A).

7. Because Provider’s services were not provided through a workers’ compensation health care network, payment is subject to the Division’s general medical reimbursement provisions. 28 Tex. Admin. Code § 134.1(e).

8. Due to the absence of an applicable fee guideline or a negotiated contract, Provider’s reimbursement must be made at fair and reasonable rates as specified in the Department’s rules. 28 Tex. Admin. Code § 134.1(e)(3) (emphasis added).

9. Carrier’s reimbursement methodology was consistent with the criteria of Texas Labor Code § 413.011; would ensure that similar procedures provided in similar circumstances receive similar reimbursement; and was based on values assigned for services involving similar work and resource commitments. Therefore, the methodology used by Carrier resulted in a fair and reasonable amount. 28 Tex. Admin. Code § 134.1.

10. Provider failed to show by a preponderance of the evidence that the daily reimbursement amount it seeks is fair and reasonable, and that Carrier’s reimbursements were not fair and reasonable. Tex. Lab. Code § 413.011(d); 28 Tex. Admin. Code § 134.1.

11. Provider failed to show by a preponderance of the evidence that it is entitled to additional reimbursement for the services at issue in this proceeding.

ORDER

Provider is not entitled to additional reimbursement for services provided September 5-6, 2018, because Provider waived its claims for such services; and, as to its claims for all other service dates, Provider is not entitled to additional reimbursement because it was reimbursed fairly and reasonably.

NON-PREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 TAC § 133.307(h) require the non-prevailing party to reimburse the Division of Workers’ Compensation for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires that SOAH identify the non-prevailing party and any costs for services provided by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, North Texas Rehabilitation Center is the non-prevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED April 11, 2022.

Heather Hunziker
Administrative Law Judge
State Office of Administrative Hearings

1 SOAH Joint Order No. 3, issued January 27, 2022, held the record open for replies to closing arguments until February 18, 2022. Carrier filed its closing brief on February 4, 2022 (Closing Argument), and its reply brief on February 18, 2022; however, Provider filed no closing brief or response. Therefore, Carrier’s reply brief was not considered by the ALJ. Similarly, Carrier’s “Objections to Admission of [exhibits in Provider’s response], and Motion to Disregard and Strike” filed February 24, 2022, is denied for mootness.

2 See 28 Tex. Admin. Code (TAC) ch. 133. All citations in this Decision reflect the law applicable on the date of service for each claim.

3 28 TAC § 133.307.

4 Tex. Labor Code § 413.031(c); 28 TAC § 133.307(a)(2).

5 28 TAC § 133.307(a)(2) (emphasis added).

6 28 TAC § 133.307(c)(1).

7 28 TAC § 133.307(c)(1)(A). Provider did not assert an exception under 28 TAC § 133.307(c)(1)(B).

8 28 TAC § 133.307(c)(2)(O).

9 28 TAC § 148.14(b); 1 TAC § 155.427. Burden of proof in worker’s compensation insurance reimbursement cases determining fair and reasonable reimbursement was previously analyzed in great depth, in SOAH Docket No. 454-11-2417.M4 (consolidating 113 cases with the same basic legal issues and evidence) (affirmed as to burden of proof, reversed and rendered by the trial court in Zurich American Ins. Co. v. Houston Community Hospital, Cause No. D-1-GN-14-001325 in the 201st Judicial District Court of Travis County).

10 Carrier Exs. A-1 at 1, B-1 at 1.

11 Carrier Exs. A-3 at 7-41, B-3 at 9-11.

12 Carrier Exs. A-5, B-5.

13 Carrier Exs. A-4, B-4.

14 Carrier Exs. A-4, B-4.

15 CARF means Certified Accredited Rehabilitation Facility.

16 Carrier Exs. A-4, B-4.

17 Carrier Ex. A-1 at 1-2.

18 Carrier Ex. B-1 at 1.

19 Carrier Exs. A-1 at 1-2, B-1 at 1.

20 Carrier Exs. A-6, B-6.

21 Carrier Exs. A-6 at 295, B-6 at 35.

22 This acronym was not defined.

23 Carrier cites SOAH Consolidated Dockets No. 453-03-0143.M4, 453-03-3098.M4, 453-05-1535.M4 and 453-05-1536.M4, Vista Healthcare, Inc. v. Twin City Fire Insurance Co., Decision and Order (June 12, 2007). Closing Argument at 7-8.

24 Carrier cites SOAH Docket No. 453-01-179.M4, Decision and Order (January 23, 2002); Consolidated Dockets No. 453-03-0143.M4, 453-03-3098.M4, 453-05-1535.M4 and 453-05-1536.M4, Vista Healthcare, Inc. v. Twin City Fire Insurance Co., Decision and Order (June 12, 2007); and SOAH Consolidated Dockets No. 453-03-0515.M4, 453-03-0516.M4, and 453-03-2818.M4, Decision and Order (June 27, 2007). Closing Argument at 8-9.

25 28 TAC § 134.1(e).

26 28 TAC § 134.1(e)(3).

27 28 TAC § 133.307(c)(2)(O).

28 Carrier Exs. A-1, A-5, B-1, B-5.

29 Compare Carrier Exs. A-3 with A-5; B-3 with B-5.

30 See Carrier Exs. A-2, B-2 (Carrier’s Responses to Requests for Dispute Resolution, explaining in detail how Carrier applied its methodology in its EOBs); Carrier Exs. A-4, B-4 (Carrier’s EOBs).

31 Carrier Exs. A-1, B-1, A-4, B-4.

DECISION AND ORDER

Columbia Mutual Insurance Co. (Columbia) challenges the Medical Fee Dispute Findings and Decision (MFD Decision) issued by the Texas Department of Insurance, Division of Workers’ Compensation (Division). The MFD Decision ordered Columbia to reimburse the Texas Institute for Surgery (Provider) the additional sum of $1,804.48 for implantables used during outpatient surgery provided to an injured worker. After reviewing the evidence presented and the applicable law, the Administrative Law Judge (ALJ) concludes that Columbia met its burden of proof to show that the MFD Decision incorrectly calculated the reimbursement amount. Accordingly, Columbia owes no additional reimbursement.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no disputed issues of notice or jurisdiction. Therefore, those matters are set out in the Findings of Fact and Conclusions of Law without further discussion here.

A Zoom videoconference hearing was held on February 8, 2022, before ALJ Srinivas Behara of the State Office of Administrative Hearings (SOAH). Columbia was represented by attorney Dan C. Kelley. Provider did not appear. Columbia presented the testimony of one witness, Anne M. Geanes. The hearing and record closed the same day.

II. APPLICABLE LAW

The Division’s rule at 28 Texas Administrative Code § 134.403 (Division Rule 134.403) applies to medical services provided in an outpatient acute care hospital. Absent a contracted fee schedule, reimbursement to a provider shall be the maximum allowable reimbursement (MAR) amount, including any applicable outlier payment amounts and reimbursement for implantables.1 An “implantable” is an object or device that is surgically implanted, embedded, inserted, or otherwise applied, and related equipment necessary to operate, program, and recharge the implantable.2 MAR for implantables is calculated as follows:

(f) The reimbursement calculation used for establishing the MAR shall be the Medicare facility specific amount, including outlier payment amounts, determined by applying the most recently adopted and effective Medicare Outpatient Prospective Payment System (OPPS) reimbursement formula and factors as published annually in the Federal Register. The following minimal modifications shall be applied.

(1) The sum of the Medicare facility specific reimbursement amount and any applicable outlier payment amount shall be multiplied by:

(A) 200 percent; unless

(B) a facility or surgical implant provider requests separate reimbursement in accordance with subsection (g) of this section, in which case the facility specific reimbursement amount and any applicable outlier payment amount shall be multiplied by 130 percent.

(2) When calculating outlier payment amounts, the facility’s total billed charges shall be reduced by the facility’s billed charges for any item reimbursed separately under subsection (g) of this section.

(g) Implantables, when billed separately by the facility or a surgical implant provider in accordance with subsection (f)(1)(B) of this section, shall be reimbursed at the lesser of the manufacturer’s invoice amount or the net amount (exclusive of rebates and discounts) plus 10 percent or $1,000 per billed item add-on, whichever is less, but not to exceed $2,000 in add-on’s per admission.3

Unresolved disputes “over the amount of payment due for services determined to be medically necessary and appropriate for treatment of a compensable injury” may be resolved by a contested case hearing at SOAH.4 As the party seeking relief from the MFD Decision, Columbia has the burden of proof.5

III. EVIDENCE AND ANALYSIS

On June 4, 2019, Provider performed surgery on an injured worker to repair a tendon in the left middle finger.6 The surgery used two implantables—an anchor and k-wire—to fixate bone and soft tissue.7 After the procedure, Provider timely submitted a bill to Columbia, itemizing charges in a document titled “Patient Account Detail.” Provider highlighted a portion of the Patient Account Detail to show Columbia the specific implantables charges in the amount of $2,202.00.8 In addition, Provider’s request for reimbursement to Columbia contained copies of the “implant log” and manufacturer invoices, demonstrating the specific implantables used and their costs from the manufacturer in the amount of $450.00.9

Based on the erroneous determination that Provider did not submit separate reimbursement request for implantables, the MFD Decision applied Division Rule 134.403(f)(1)(A), which mandates that “the sum of the Medicare facility specific reimbursement amount and any applicable outlier payment amount shall be multiplied by 200%.” However, there is no evidentiary support that the 200% multiplier should have applied under the circumstances. The undisputed evidence demonstrates that Provider made a separate request for reimbursement implantables. The charges for the implantables were separately billed, and thus, under Division Rule 134.403(f)(1)(B), that reimbursement should have been calculated at 130% of the facility- specific reimbursement amount plus any applicable outlier payment. Because Columbia has met its burden of proof that the correct reimbursement at 130% was made, no additional reimbursement of $1,804.48 remains due.

IV. FINDINGS OF FACT

1. On June 4, 2019, Texas Institute for Surgery (Provider) performed outpatient acute care services on an injured worker (Claimant) to repair a tendon in the worker’s finger.

2. The services involved use of an anchor and k-wire, which are “implantables” used to fixate bone and soft tissue.

3. Provider timely submitted a bill to Claimant’s insurance carrier, Columbia Mutual Insurance Co. (Columbia), itemizing charges in a document titled Patient Account Detail. Provider highlighted a portion of the Patient Account Detail to show Columbia the specific implantables charges. The total charge for implantables was $2,202.00.

4. Provider’s request for reimbursement to Columbia contained copies of the implant log and manufacturer invoices, demonstrating the specific implantables used and the implantables’ costs. The total invoice cost of implantables from the manufacturer was $450.00.

5. The total billed charges were $21,218.38. Provider’s total billed charges less Provider’s billed charges for items reimbursed separately totaled $19,016.38. Provider’s cost-to- charge ratio is 0.281.

6. Provider sought separate reimbursement for implantables when Respondent submitted its bill for payment to Columbia, and therefore reimbursement should have been calculated at 130% of the facility specific amount as set forth in 28 Texas Administrative Code Section 134.403(f)(1)(B).

7. Carrier reimbursed $21,693.42 to Provider for services to Claimant. This amount was based on a rate of 130% of the facility specific reimbursement amount.

8. Accordingly, for the date of service, the correct total reimbursement to Provider was $3,851.32, calculated as follows: $2,581.79 (Ambulatory Payment Classification payment for the appropriate Current Procedural Terminology (CPT) code 26356) multiplied by 130%, plus $495.00 (which is the implant cost of $450.00 plus 10% of the implant cost).

9. Provider filed a request for medical fee dispute resolution with the Texas Department of Insurance, Division of Workers’ Compensation (Division) on December 17, 2019, requesting additional reimbursement.

10. On January 10, 2020, the Division issued its Medical Fee Dispute Resolution Findings and Decision, finding that Provider was entitled to an additional $1,804.48 in reimbursement.

11. On September 2, 2021, Columbia requested a hearing at the State Office of Administrative Hearings (SOAH) to contest the Division’s determination.

12. On September 2, 2021, the Division issued a Notice of Hearing. The notice, along with SOAH Order No. 2, informed the parties of the date, time, and location of the hearing; the factual matters to be considered; the legal authority under which the hearing would be held; and the statutory provisions applicable to the matters to be considered.

13. A Zoom videoconference hearing was held on February 8, 2022, before ALJ Srinivas Behara of SOAH. Columbia was represented by attorney Dan C. Kelley. Provider did not appear. The hearing and record closed the same day.

14. Columbia adequately reimbursed Provider for services provided to Claimant.

V. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031 and Tex. Gov’t Code ch. 2003.

2. Adequate and timely notice of the hearing was provided. Tex. Gov’t Code §§ 2001.051-.052.

3. Columbia had the burden of proof in this proceeding by a preponderance of the evidence.

4. When implantables are separately invoiced, the Maximum Allowable Reimbursement is calculated by multiplying the sum of the Medicare facility-specific reimbursement amount and any applicable outlier payment amount by 130%. 28 Tex. Admin. Code § 134.403(f)(1)(B).

5. The Medical Fee Dispute Resolution Findings and Decision concluding that City owes an additional $8,282.08 is not consistent with 28 Texas Administrative Code § 134.403(f).

ORDER

Columbia Mutual Insurance Co. is not required to pay Texas Institute for Surgery (Provider) the additional reimbursement of $1,804.48 for services provided to Claimant.

NONPREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 Texas Administrative Code § 133.307(h) require the nonprevailing party to reimburse the Division for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires SOAH to identify the nonprevailing party and any costs for services provide by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, Texas Institute for Surgery is the nonprevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED March 21, 2022

Srinivas Behara
Administrative Law Judge
State Office of Administrative

1 28 Tex. Admin. Code § 134.403(e)(2).

2 28 Tex. Admin. Code § 134.403(b)(2).

3 28 Tex. Admin. Code § 134.403(f),(g).

4 Tex. Labor Code §§ 413.031(c), .0312(a), (e).

5 28 Tex. Admin. Code § 148.14(b).

6 Pet. Ex. 4 at 42.

7 Pet. Ex. 4 at 43.

8 Pet. Ex. 1.

9 Pet. Ex. 2 at 3-8.

DECISION AND ORDER

Texas Public School Workers’ Compensation Project (Carrier) challenges the Texas Department of Insurance, Division of Workers’ Compensation (the Division or DWC) Medical Fee Dispute Resolution (MFDR) Findings and Decision of July 3, 2020 (Decision) granting reimbursement to Baylor Scott & White Marble Falls (Hospital). The Administrative Law Judge (ALJ) finds that Hospital is entitled to reimbursement. Therefore, the ALJ upholds the determination by DWC and orders that Carrier reimburse Hospital $27,148.52.1

I. PROCEDURAL HISTORY, NOTICE, AND JURISDICTION

There are no issues of notice or jurisdiction in this proceeding. Therefore, these matters are addressed in the Findings of Fact and Conclusions of Law without further discussion here.

.On May 27, 2020, Hospital filed a request for medical fee dispute resolution with the DWC. On July 3, 2020, the DWC issued a decision granting Hospital’s request for additional reimbursement. On September 11, 2020, Carrier timely requested a hearing before the State Office of Administrative Hearings (SOAH) to contest the decision. A hearing was convened before ALJ Meitra Farhadi on January 20, 2022, by Zoom videoconferencing. Carrier appeared and was represented by attorney John Molinar. Hospital appeared and was represented by attorney Alan Barker. The record closed upon conclusion of the hearing on January 20, 2022.

II. APPLICABLE LAW

“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.”2 Specifically, the employee is entitled to health care that: “(1) cures or relieves the effects naturally resulting from the compensable injury; (2) promotes recovery; or (3) enhances the ability of the employee to return to or retain employment.”3

Texas Labor Code § 413.014 authorizes the Division to adopt rules regarding preauthorization. An insurance carrier is liable for all reasonable and necessary medical costs of both inpatient hospital admissions and outpatient surgical or ambulatory surgical services when those services have been preauthorized.4 If the inpatient hospital admission or outpatient surgical or ambulatory services are the result of an emergency, however, preauthorization is not required.5 A medical emergency is “the sudden onset of a medical condition manifested by acute symptoms of sufficient severity, including severe pain, that the absence of immediate medical attention could reasonably be expected to result in: (i) placing the patient’s health or bodily functions in serious jeopardy, or (ii) serious dysfunction of any body organ or part.”6

A preauthorization request can be sent by telephone, facsimile, or electronic transmission and must include, among other things, the estimated date of the proposed health care.7 The insurance carrier must contact the requestor by telephone, facsimile, or electronic transmission within three working days of receipt of a request for preauthorization to approve or deny the request, and must also send written notification of the decision to the injured employee and requestor.8 An approval must include, among other things, the specific health care and the specific period of time to complete the treatments.9 The insurance carrier cannot condition an approval or change any elements of the request unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.10

If a health care provider is denied or paid a reduced amount for the medical service rendered, the provider is entitled to review by the Division.11 If a dispute remains after that review, a party may request a contested case hearing at SOAH.12 As the party requesting a hearing at SOAH to challenge an adverse MFDR decision, Carrier has the burden of proof to show by a preponderance of the evidence that Hospital is not entitled to reimbursement.13 The hearing before SOAH is a de novo review of the issues involved.14

III. EVIDENCE AND ANALYSIS

At the hearing, Carrier had eight exhibits admitted into evidence, and Hospital admitted ten exhibits into evidence. Neither party presented any witnesses.

A. Evidence

This case arises out of the hospital admission on June 11, 2019, of an injured worker (Claimant) whose workers’ compensation insurance was provided by Carrier. Due to a fall on (Date of Injury), Claimant’s orthopedic doctor recommended that Claimant undergo surgery for a compensable injury sustained to Claimant’s left shoulder. On June 7, 2019, after a peer-to-peer discussion between Claimant’s doctor and a physician advisor working for Carrier’s Injury Management Organization (IMO), a preauthorization determination letter was issued. The preauthorization covered Open Reduction Internal Fixation (ORIF) of the left shoulder with possible Reverse Shoulder Arthroplasty (RSA) to be done on an outpatient basis.15 If an RSA was done, an inpatient stay would be necessary. Hospital had requested both inpatient and outpatient authorization; however, the IMO utilization review (UR) nurse advised Hospital not to request authorization for an inpatient stay until it was certain that Claimant would be admitted. The UR nurse advised Hospital that if RSA was performed, Hospital should fax the authorization request for an inpatient stay and then call to notify IMO as well.16

On Tuesday, June 11, 2019, Claimant underwent surgery from 10:15 a.m. to 12:50 p.m. After commencing the operation, Claimant’s doctor decided to proceed with the RSA procedure in lieu of the ORIF procedure.17 At 2:06 p.m. Hospital left a voicemail for the adjuster with IMO regarding the need for inpatient admission following the surgery.18 On the same date, Hospital also submitted an online request to IMO seeking preauthorization for an inpatient hospital stay.19 In response, IMO issued an amended preauthorization determination letter authorizing medical necessity for an inpatient stay for three days for an RSA on an inpatient basis.20 The amended preauthorization was effective for dates of service from June 12, 2019 through August 12, 2019.21

Hospital billed Carrier for the treatment.22 Carrier, through its administrator Creative Risk Funding (CRF), denied reimbursement on the basis that the services were not preauthorized.23

Carrier contends it is not liable for services provide prior to the June 12, 2019, effective date of the amended preauthorization for inpatient hospital services. Carrier further asserts that the medical evidence demonstrates that Claimant’s surgery was not an emergency. Specifically, the IMO preauthorization letter mentions a peer-to-peer discussion with Claimant’s surgeon, in which he explained his surgical plan to perform the ORIF procedure to repair Claimant’s left shoulder fracture, with the possibility that he would need to convert to the RSA procedure if the fracture was irreparable.24 Carrier argues that Hospital knew that if the RSA was done, it would need authorization for the inpatient stay. Further, Carrier stated that such a contingency could have been addressed from a preauthorization standpoint had Hospital included a hospital stay for the RSA procedure in its initial request.

Hospital contends that the RSA was a medically necessary procedure, and that the Hospital took the conservative route to only obtain the outpatient authorization. However, Hospital argued that it would have been inappropriate to stop the surgery and wait for the inpatient authorization before performing the approved RSA procedure. Hospital contends that IMO erred by dating the inpatient authorization to commence on June 12, 2019, instead of June 11, 2019.

B. Analysis and Decision

Carrier is liable for treatments and services requiring preauthorization if preauthorization is sought by the claimant or health care provider and either obtained from the insurance carrier or ordered by the commissioner. As applicable to this case, preauthorization must be obtained from the insurance carrier prior to receiving health care listed in 28 Texas Administrative Code § 134.600(p). Among the health care listed in 28 Texas Administrative Code § 134.600(p) is non-emergency healthcare including both inpatient hospital admissions and outpatient surgical services.

The preponderance of the evidence demonstrates that Hospital sought preauthorization for ORIF of the left shoulder with possible RSA to be done on an outpatient basis as well as approval for inpatient admission. Carrier approved the ORIF of the left shoulder with possible RSA to be done on an outpatient basis, but the IMO UR nurse advised Hospital not to request inpatient until they were certain it would be required. The evidence further demonstrated that it was not until the operation had begun that Claimant’s doctor decided it would be necessary to proceed with the RSA procedure in lieu of the ORIF procedure. As requested by the IMO UR nurse, once the RSA surgery was done and it was confirmed that Claimant would need inpatient admission, Hospital both called and faxed the inpatient request to IMO. IMO approved the request but failed to date it correctly—dating the amended preauthorization to be effective June 12, 2019.

Hospital obtained preauthorization which included the possibility of RSA. RSA necessitates an inpatient hospital admission. Although the preauthorization was not amended to specify the inpatient admission until the need for RSA was confirmed during surgery; the preponderance of the evidence established that the RSA was approved, and that if the RSA was performed an inpatient stay would be required. Carrier cannot now change an element of the request.25

In addition, although the RSA surgery itself was not a medical emergency; upon performing it, the inpatient admission of Claimant could arguably be considered a medical emergency. Carrier did not present any evidence that an RSA surgery does not present an emergency medical situation requiring inpatient hospital admission.

For these reasons, the ALJ concludes that Carrier has not met its burden of showing that Hospital did not receive preauthorization for the June 11, 2019, RSA surgery and resulting inpatient hospital stay. Therefore, the MFDR Decision correctly determined that Hospital is entitled to reimbursement from Carrier. The ALJ makes the following findings of fact and conclusions of law in support of this decision.

IV. FINDINGS OF FACT

1. An injured worker (Claimant) suffered a compensable injury on (Date of Injury).

2. Texas Public School Workers’ Compensation Project (Carrier) was the responsible workers’ compensation insurer for Claimant.

3. On June 7, 2019, after a peer-to-peer discussion between Claimant’s doctor and a physician advisor working for Carrier’s Injury Management Organization (IMO), a preauthorization determination letter was issued. The preauthorization covered Open Reduction Internal Fixation (ORIF) of the left shoulder with possible Reverse Shoulder Arthroplasty (RSA) to be done on an outpatient basis.

4. If an RSA was performed, an inpatient stay would be necessary.

5. Baylor Scott & White Marble Falls (Hospital) had requested both inpatient and outpatient authorization; however, the IMO utilization review (UR) nurse advised Hospital not to request authorization for an inpatient stay until it was certain that Claimant would be admitted. The UR nurse advised Hospital that if RSA was performed, Hospital should fax the authorization request for an inpatient stay and then call to notify IMO as well.

6. On Tuesday, June 11, 2019, Claimant underwent surgery from 10:15 a.m. to 12:50 p.m. at Hospital. After commencing the operation, Claimant’s doctor decided to proceed with the RSA procedure in lieu of the ORIF procedure. At 2:06 p.m. Hospital left a voicemail for the adjuster with IMO regarding the need for inpatient admission following the surgery. On the same day, Hospital also submitted an online request to IMO seeking preauthorization for an inpatient hospital stay.

7. On June 13, 2019, IMO issued an amended preauthorization determination letter authorizing medical necessity for an inpatient stay for three days for an RSA on an inpatient basis. The amended preauthorization was effective for dates of service from June 12, 2019 through August 12, 2019.

8. Hospital billed Carrier for the surgery and inpatient admission. Carrier, through its administrator Creative Risk Funding, denied reimbursement on the basis that the services were not preauthorized.

9. On May 27, 2020, Hospital filed a request for medical fee dispute resolution with the Texas Department of Insurance, Division of Workers’ Compensation (DWC or the Division).

10. On July 3, 2020, the DWC issued its Medical Fee Dispute Resolution Findings and Decision granting Hospital’s request for reimbursement.

11. Carrier timely requested a hearing at the State Office of Administrative Hearings (SOAH) to contest the Division’s determination.

12. On August 20, 2021, the Division issued a notice of the hearing. The notice contained a statement of the time, place, and nature of the hearing; a statement of 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 factual matters asserted.

13. On December 1, 2021, the SOAH Administrative Law Judge (ALJ) issued Order No. 2 with a statement of the time and place of the hearing and instructions for participating in the hearing.

14. A hearing was convened before ALJ Meitra Farhadi on January 20, 2022, by Zoom videoconferencing. Carrier appeared and was represented by attorney John Molinar. Hospital appeared and was represented by attorney Alan Barker. The record closed upon conclusion of the hearing on January 20, 2022.

V. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031 and Tex. Gov’t Code ch. 2003.

2. Adequate and timely notice of the hearing was provided. Tex. Gov’t Code §§ 2001.051 and 2001.052.

3. Carrier had the burden of proof in this proceeding by a preponderance of the evidence. 1 Tex. Admin. Code § 155.427; 28 Tex. Admin. Code § 148.14(b), (e).

4. A medical fee dispute is a dispute over the amount of payment for services that have been determined to be medically necessary and appropriate for treatment of an injured employee’s compensable injury. 28 Tex. Admin. Code § 133.305(a)(4).

5. The Division may adopt rules regarding preauthorization and the insurance carrier is not liable for treatments and services requiring preauthorization unless preauthorization is sought by the claimant or health care provider and obtained from either the insurance carrier or ordered by the commissioner. Tex. Lab. Code § 413.014.

6. An insurance carrier may not condition an approval or change any elements of the request unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented. 28 Tex. Admin. Code § 134.600(n).

7. Carrier impermissibly conditioned or changed an element of the preauthorization request. 28 Tex. Admin. Code § 134.600(n).

8. Hospital is entitled to reimbursement by Carrier of $27,148.52, plus any applicable interest.

ORDER

THEREFORE, IT IS ORDERED that Texas Public School Workers’ Compensation Project is required to pay the sum of $27,148.52, plus any applicable interest, to Baylor Scott & White Marble Falls for the services at issue in this case.

NONPREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 Texas Administrative Code § 133.307(h) require the nonprevailing party to reimburse the Division for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires SOAH to identify the nonprevailing party and any costs for services provide by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, Texas Public School Workers’ Compensation Project is the nonprevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED March 16, 2022.

MEITRA FARHADI
ADMINISTRATIVE LAW JUDGE
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1 This is the amount in dispute identified in the MFDR Decision. See Respondent Ex. 10; Petitioner Ex. 8.

2 Tex. Lab. Code § 408.021(a).

3 Id.

4 28 Tex. Admin. Code § 134.600(c)(1)(B), (p)(1)-(2).

5 28 Tex. Admin. Code § 134.600(c)(1)(A).

6 28 Tex. Admin. Code § 133.2(5)(A).

7 28 Tex. Admin. Code § 134.600(f)(9).

8 28 Tex. Admin. Code § 134.600(i)-(j).

9 28 Tex. Admin. Code § 134.600(l)(1)-(2).

10 28 Tex. Admin. Code § 134.600(n).

11 Tex. Lab. Code § 413.031(a).

12 Tex. Lab. Code § 413.0312(e).

13 28 Tex. Admin. Code § 148.14(b), (e).

14 See Vista Med. Ctr. Hosp. v. Texas Mut. Ins. Co., 416 S.W.3d 11, 17-18 (Tex. App.—Austin 2013, no pet.).

15 Petitioner Ex. 1 at 1.

16 Respondent Ex. 1 at 2.

17 Respondent Ex. 2 at 1-3.

18 Respondent Ex. 1 at 1.

19 Petitioner Ex. 2 at 1-3.

20 Petitioner Ex. 3 at 1.

21 Id.

22 Petitioner Ex. 4.

23 Petitioner Ex. 5.

24 Petitioner Ex. 1.

25 28 Tex. Admin. Code § 134.600(n).

DECISION AND ORDER

This case involves ambulatory surgical services rendered by Laser Surgery Holding Company, Ltd. (Provider) to an injured employee covered by the workers’ compensation insurance system. The Texas Department of Insurance, Division of Workers’ Compensation (Division) conducted medical fee dispute resolution (MFDR) and declined to order Texas Mutual Insurance (Carrier) to reimburse Provider in the amount of $70,000.1 The Administrative Law Judge (ALJ) concludes that Provider is not entitled to additional reimbursement and affirms the MFDR Decision.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no disputed issues regarding notice or jurisdiction in this proceeding. Therefore, those matters are addressed in the findings of fact and conclusions of law without further discussion here.

On November 13, 2019, the Division received Provider’s request for MFDR.2 On December 11, 2019, the Division issued its MFDR decision, denying reimbursement.3 Provider requested a hearing at the State Office of Administrative Hearings (SOAH) to contest the Division’s determination. On August 18, 2021, the Division issued a Notice of Hearing.

On December 7, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. Provider was represented by its practice manager, BT. Carrier appeared through attorney BJ. The record closed on February 4, 2022, the date the parties filed their final written closing arguments.

II. DISCUSSION

A. Applicable Law

A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing ambulatory surgical services to the worker.4 The request can be made by the health care provider or its designated representative, including office staff or a referral health care provider or health care facility that requests preauthorization.5 The insurance carrier is generally not liable for treatments or services requiring preauthorization unless preauthorization was sought and obtained from the insurance carrier.6

A preauthorization request can be sent by telephone, facsimile, or electronic transmission and must include, among other things, the estimated date of the proposed health care.7 The insurance carrier must contact the requestor by telephone, facsimile, or electronic transmission within three working days of receipt of a request for preauthorization to approve or deny the request, and must also send written notification of the decision to the injured employee and requestor.8 An approval must include, among other things, the specific health care and the specific period of time to complete the treatments.9 The insurance carrier cannot condition an approval or change any elements of the request unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.10

If a health care provider is denied or paid a reduced amount for the medical service rendered, the provider is entitled to review by the Division.11 If a dispute remains after that review, a party may request a contested case hearing at SOAH.12 As the party requesting a hearing at SOAH to challenge an adverse MFDR decision, Provider has the burden of proof to show by a preponderance of the evidence that Provider is entitled to additional reimbursement.13 The hearing before SOAH is a de novo review of the issues involved.14

B. The Claim and MFDR Decision

This case involves ambulatory surgical services—specifically, a replacement of a spinal cord stimulator—performed by Provider for an injured worker on July 1, 2019. Carrier had preapproved the procedure, but the preapproval specified that the surgery had to be performed between April 26 and June 26, 2019. When Provider submitted its claim for $70,000 reimbursement, Carrier denied the claim because the surgery had been performed outside of the approved dates.

Provider requested MFDR from the Division, and the MFDR Decision issued on December 11, 2019. The MFDR Decision agreed with Carrier that, because the services had been rendered outside the preauthorized period, no payment was due to Provider.15

C. Evidence

At the hearing, Carrier had four exhibits admitted into evidence and presented testimony from two witnesses: ASt, the review agent who issued the preauthorization for the injured worker’s surgery; and JT, Carrier’s Senior Manager of Provider Network and Medical Operations, who addressed why Provider’s reimbursement claim was denied. Provider had one exhibit admitted into evidence and presented testimony from Mr. T.

1. Testimony of AS

Ms. S has been employed by Carrier for fourteen years. She is a licensed vocational nurse and is currently a medical care coordinator, but was formerly a preauthorization nurse and was responsible for preauthorization of the surgical procedure at issue.

Ms. S testified that on April 23, 2019, CU, acting as an authorized representative for Provider, sent a preauthorization request for a procedure to remove and replace a spinal cord stimulator for the injured worker. The request from Mr. U included the correct procedure codes and other information to support the procedure, but the request did not include a specific period of time during which Provider would complete the procedure. Instead, according to Ms. S, the request stated only “TBD” where the procedure date was supposed to be given.

Ms. S called Mr. U to discuss the incomplete preauthorization request, and he stated that he was submitting the request on behalf of Dr. AP, the physician who would perform the procedure. Ms. S testified that on the phone, she and Mr. U agreed to a time period for the procedure—April 26-June 26, 2019. That is the date range she included in the preapproval letter she prepared on April 26, 2019. Specifically, the preapproval letter stated:

Per Physician Advisor, and per mutual agreement with C at Dr. P’s, authorization is given for Outpt Spinal Cord Stimulator Replacement 63663 x 2, 63685, 95972, per Dr. P, to be done at Laser Surgery Center between 4/26/19-6/26/19. If a change in the facility is necessary, please contact the Preauthorization department prior to completion of services. Treatment(s) or procedure(s) are to be completed within the agreed upon period of time.16

The preapproval letter was faxed to Mr. U on April 26, 2019, according to Ms. S, and she received fax confirmation that it was received on the same date. A copy was also mailed to Dr. P that day.

On cross-examination, Ms. S explained that Mr. U worked for the company that provided the battery and other hardware used in the surgery, and that it is typical for such companies to submit the preauthorization requests for procedures to be performed by a physician.

Mr. U expressly stated that he was seeking preauthorization on behalf of Dr. P, and no one else from Provider’s office ever sought preauthorization for the procedure or responded to the preauthorization letter.

2. Testimony of JT

Ms. T has been Carrier’s Senior Manager of Provider Network and Medical Operations since December 2016. She supervises eleven employees and is the point of contact for utilization review agents who issue preauthorization decisions.

According to Ms. T, the preauthorization letter here was required to include a specific time period during which the approved procedure had to be performed. Dr. P performed the preapproved surgery, but the surgery was performed on July 1, 2019, several days outside the period that had been approved. Ms. T testified that Provider did not request or obtain an extension of the preauthorization. When Provider later sent the bill for Dr. P’s surgery, Carrier denied payment because the procedure had not been performed during the agreed-upon time frame, and therefore preauthorization was absent.

3. Testimony of BT17

Mr. T denied that Provider ever agreed with Carrier to limit the dates of service, and he contended that Mr. U lacked authority to bind Provider to any such agreement. He argued that Carrier cannot point to any signed agreement or other writing where Provider agreed the surgery would be performed before June 26, 2019.

Mr. T described Mr. U at various points as a “rep. of the Stimulator supplier” and a “Patient Therapy Access Specialist,”18 and denied that Mr. U requested preauthorization on Provider’s behalf. According to Mr. T, Provider had asked Mr. U to confirm that the correct procedure codes were listed on the preauthorization request before sending it on to Carrier. He did not consider Mr. U to be acting as Provider’s representative in this process. Rather, he asserted that Mr. U was “merely forwarding” Provider’s preauthorization request to Carrier, although Mr. U’s phone number was listed on the cover sheet as the contact number for the preauthorization.

Mr. T agreed that Provider learned of the preauthorization from Mr. U on the same day it was issued via an “Authorization Confirmation” email that Mr. U sent to Provider on April 26, 2021, informing Provider that the surgery had been approved. Mr. T acknowledged receiving the “Authorization Confirmation” and further acknowledged that it included the preauthorization number and the date range approved for the procedure. However, Mr. T insisted “we never agreed to that” and therefore Provider considered the time limit to be “superfluous.” Mr. T testified that, upon learning that there was a putative date restriction on the preauthorization, he asked Mr. U why he had agreed to those dates. Mr. U responded that Ms. S had told him Carrier would not approve the procedure without a date range for the surgery. Mr. T testified that, in response, he told Mr. U “Okay, if that is the case you can put whatever date you want.”

Though he admitted receiving notice of the preauthorization from Mr. U, Mr. T denied that he received the copy of the preauthorization letter that Carrier mailed to Provider, or seeing any copy of the letter prior to performing the surgery at issue. He claimed that the letter was forwarded to Provider by Mr. U for the first time on November 10, 2021, after the surgery and after Carrier had denied reimbursement. However, on cross-examination he agreed that the authorization code provided in the April 26, 2019 preauthorization letter had been included when the claim for reimbursement was submitted to Carrier. He did not explain how Provider could have included the authorization number if it had not yet seen the preauthorization letter.

Mr. T explained that the injured worker’s surgery had originally been scheduled in June 2019, but had to be rescheduled at the patient’s request to July 1, 2019. The Carrier has not contested the need for or expense of the surgery, Mr. T noted, and the patient would be suffering today if the surgery had not been performed. Therefore, he believes it is unfair to deny Provider reimbursement for performing the surgery.

C. Analysis

The preponderance of the evidence shows that Mr. U was acting as Carrier’s designated representative when he submitted the preauthorization request for Provider, and that in his capacity as representative he agreed that Provider would perform the authorized surgery between April 26 and June 26, 2019. The distinction Mr. T would draw between authorizing Mr. U to request preauthorization for Provider (which he denies) and authorizing him to “merely forward” the request for Provider (which he admits) is not supported by the evidence.

At Provider’s behest, Mr. U sent Provider’s preauthorization request to Carrier. That request was required to include an estimated date for the proposed surgery.19 When the Carrier’s representative, Ms. S, raised that issue with Mr. U and told him the request could not be approved without a date by which the surgery would be complete, Mr. T told Mr. U to “put whatever date [he] want[ed]” for the procedure. Mr. U followed this direction when he agreed with Ms. S that the surgery would be performed between April 26 and June 26, 2019. Mr. U also promptly emailed the Carrier’s preauthorization approval to Provider on the same day it was issued. Provider has relied on that preauthorization obtained by Mr. U in seeking reimbursement from Carrier. Despite Mr. T’s testimony that Provider “never agreed” to any date limitation, the preponderant evidence shows that Provider knew about the date limitation in the preauthorization and authorized Mr. U to agree to it.

Provider argues that including a date limitation constitutes an impermissible condition or change to its request for preauthorization. The ALJ does not agree. While Mr. U’s initial request had given only “TBD” as the date of the procedure, the evidence shows that Mr. U and Ms. S subsequently agreed to change that element of the request in their phone conversation and mutually agreed to the date range included in the preauthorization letter. Mr. T acknowledged that Mr. U had spoken with Ms. S and agreed with her on a date range for performing the patient’s surgery, and the Division’s rules clearly contemplate that such discussions can be had by telephone.20 Ms. S’s note stating that “per mutual agreement with C at Dr. P’s” the surgery would “be done at Laser Surgery Center between 4/26/19-6/26/19” is sufficient to meet the requirement in the Division’s rule that such agreements be “documented.”21

Alternatively, if, as Mr. T seems to contend, Mr. U lacked authority to obtain preauthorization or agree to preauthorization terms on Provider’s behalf, then Provider performed the surgery without any valid preauthorization at all. Other than the April 26, 2019 preauthorization letter that Mr. Uribe requested and obtained for Provider—which included a date limitation—there is no preauthorization for the surgery for which Provider is seeking reimbursement.

Provider correctly notes that the Division’s rules prohibit an insurance carrier from withdrawing a preauthorization once it has been issued.22 Mr. T contends Carrier has tried to do so here by denying reimbursement for the injured worker’s July 1, 2019 surgery. Contrary to Provider’s argument that open-ended preauthorization could be given, the Division’s rules unambiguously state that the approval had to include a “specific period of time to complete the treatments” for which preauthorization was sought.23 There is no evidence that authorization was ever given for a surgery performed after June 26, 2019. Carrier has not withdrawn its preauthorization but has instead held Provider to the express terms of its approval.24

For these reasons, the ALJ concludes that Provider has not met its burden of showing there was preauthorization for the surgery performed on July 1, 2019. Therefore, the MFDR Decision correctly determined that Provider is not entitled to reimbursement from Carrier. The ALJ makes the following findings of fact and conclusions of law in support of this decision.

III. FINDINGS OF FACT

1. On July 1, 2019, Laser Surgery Holding Company, Ltd. (Provider) performed ambulatory surgical services—specifically, replacement of a spinal cord stimulator—for an injured worker covered by the workers’ compensation insurance system.

2. Texas Mutual Insurance (Carrier) was the responsible workers’ compensation insurer for the injured worker.

3. On April 23, 2019, Provider requested preauthorization for the surgery from Carrier. The preauthorization request was submitted by CU, acting as Provider’s designated representative.

4. The preauthorization request did not include a specific period of time during which Provider would complete the procedure, prompting Carrier’s review agent to call to Mr. U to address the need to provide a time period for the surgery.

5. Mr. U and the review agent agreed by phone that the surgery would be performed between April 26 and July 26, 2019, and the review agent documented their agreement.

6. Carrier issued a preauthorization letter that approved the surgery “to be done at Laser Surgery Center between 4/26/19-6/26/19,” and specified that the treatment or procedures had to be completed “within the agreed upon period of time.”

7. The preapproval letter was faxed to Mr. U on April 26, 2019, and he forwarded it to Provider the same day. Carrier also mailed a copy to Provider that day.

8. Provider knew about the date limitation in the preauthorization letter and had authorized Mr. U to agree to it.

9. Other than Mr. U, no one with Provider’s office ever sought preauthorization for the injured worker’s surgery or responded to the preauthorization letter.

10. Provider did not request or obtain an extension of the preauthorization.

11. When Provider submitted its claim for $70,000 reimbursement, it relied on the preauthorization number in the April 26, 2019 preapproval letter.

12. Carrier denied the claim because the surgery had been performed outside of the approved dates.

13. Carrier has not withdrawn its preauthorization but has instead held Provider to the express terms of its approval.

14. Carrier requested a Medical Fee Dispute Resolution (MFDR) from the Texas Department of Insurance, Division of Workers’ Compensation (Division).

15. On December 11, 2019, the Division issued an MFDR Decision denying Provider’s claim for reimbursement.

16. Provider timely requested a hearing at the State Office of Administrative Hearings (SOAH) to contest the MFDR Decision.

17. On August 18, 2021, the Division issued a notice to the parties with a statement of the nature of the hearings; 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 either a short, plain statement of the factual matters asserted or an attachment that incorporated by reference the factual matters asserted in the complaint or petition filed with the state agency.

18. On September 20, 2021, the Administrative Law Judge (ALJ) issued Order No. 2 with a statement of the time and place of the hearing and instructions for participating in the hearing.

19. On December 7, 2021, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. Provider was represented by its practice manager, BT. Carrier appeared through attorney BJ. The record closed on February 4, 2022, the date the parties filed their final written closing arguments.

IV. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031; Tex. Gov’t Code ch. 2003.

2. Adequate and timely notice of the hearing was provided to the parties. Tex. Gov’t Code §§ 2001.051-.052.

3. A medical fee dispute is a dispute over the amount of payment for services that have been determined to be medically necessary and appropriate for treatment of an injured employee’s compensable injury. 28 Tex. Admin. Code § 133.305(a)(4).

4. A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing ambulatory surgical services to the worker. Tex. Labor Code § 413.014(c)(5); 28 Tex. Admin. Code § 134.600(f), (p)(2).

5. When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments, and specific period of time to complete the treatments. 28 Tex. Admin. Code § 134.600(l).

6. An insurance carrier may not condition an approval or change any elements of the request unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented. 28 Tex. Admin. Code § 134.600(n).

7. Carrier has not impermissibly conditioned or changed an element of the preauthorization request. 28 Tex. Admin. Code § 134.600(n).

8. Because Provider did not obtain preauthorization to perform ambulatory surgical services for the injured worker after June 26, 2019, Provider is not entitled to reimbursement. 28 Tex. Admin. Code § 134.600(c)(1)(B), (p)(2).

9. Provider has failed to meet its burden of proof to show that the MFDR Decision was incorrect. The MFDR Decision is affirmed.

ORDER

IT IS ORDERED that Carrier is not required to reimburse Provider the requested $70,000.

NONPREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 Texas Administrative Code § 133.307(h) require the nonprevailing party to reimburse the Division for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires SOAH to identify the nonprevailing party and any costs for services provided by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, Provider is the nonprevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED March 4, 2022.

Sarah Starnes
Administrative Law Judge
State Office of Administrative Hearings

1 This is the amount in dispute identified in the MFDR Decision. Ex. R-1 at 5.

2 Ex. R-1 at 10.

3 Ex. R-1 at 5-7.

4 Tex. Labor Code § 413.014(c)(5); 28 Tex. Admin. Code § 134.600(f), (p)(2).

5 28 Tex. Admin. Code § 134.600(a)(9).

6 Tex. Labor Code §§ 401.011(8), 413.014(d).

7 28 Tex. Admin. Code § 134.600(f)(9).

8 28 Tex. Admin. Code § 134.600(i)-(j).

9 28 Tex. Admin. Code § 134.600(l)(1)-(2).

10 28 Tex. Admin. Code § 134.600(n).

11 Tex. Labor Code § 413.031(a).

12 Tex. Labor Code § 413.0312(e).

13 28 Tex. Admin. Code § 148.14(b), (e).

14 See Vista Med. Ctr. Hosp. v. Texas Mut. Ins. Co., 416 S.W.3d 11, 17-18 (Tex. App.—Austin 2013, no pet.).

15 Ex. R-1 at 5-6.

16 Ex. R-1 at 31.

17 Mr. T testified at the hearing and also had a sworn statement admitted into evidence as Exhibit P-1.

18 Petitioner’s Closing Arguments at 3; Ex. R-1 at 1.

19 28 Tex. Admin. Code § 134.600(f)(9).

20 28 Tex. Admin. Code § 134.600(f)(i) (request for reauthorization and carrier’s approval can be sent “by telephone, facsimile, or electronic transmission . . . .”) (Emphasis added).

21 Ex. R-1 at 31; 28 Tex. Admin. Code § 134.600(n).

22 29 Tex. Admin. Code § 134.600(l).

23 28 Tex. Admin. Code § 134.600(l)(2).

24 Provider’s written closing arguments raised additional arguments citing to provisions of the Division’s rules on concurrent utilization review. See, e.g., 28 Tex. Admin. Code § 134.600(a)(3), (q). These arguments are inapt as this claim does not involve a patient’s ongoing care. Provider’s briefs also cited at length to other statutes, rules, and secondary sources. To the extent those authorities are relevant, they have been addressed in the Discussion section of this Decision and Order.

DECISION AND ORDER

The State Office of Risk Management (SORM) challenges the decisions of the Texas Department of Insurance, Division of Workers’ Compensation (Division) to award additional reimbursement to Angleton Rehabilitation and Wellness (Angleton) for physical therapy services provided for an injured worker in April-July 2020. SORM preauthorized the physical therapy sessions, but denied payment to Angleton for the portion of the sessions that exceeded one hour. The Administrative Law Judge (ALJ) concludes that SORM was not authorized to condition its approval on a time limitation that Angleton did not agree to. Therefore, the ALJ affirms the Division’s Medical Fee Dispute (MFD) Decisions, and orders SORM to reimburse Angleton $2,880.70 for the services at issue in this proceeding.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no disputed issues regarding notice or jurisdiction in this proceeding. Therefore, those matters are addressed in the findings of fact and conclusions of law without further discussion here.

After SORM made reduced payments on Angleton’s claims for reimbursement for the services in question, Angleton filed requests for medical fee dispute resolution with the Division. This Decision and Order addresses the following MFD Decisions issued by the Division:

  1. August 27, 2020 MFD Decision, ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.1
  2. September 25, 2020 MFD Decision, ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.2
  3. October 15, 2020 MFD Decision, ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.3
  4. November 19, 2020 MFD Decision, ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.4
  5. January 29, 2021 MFD Decision, ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.5

Angleton requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. On September 8, 2021, the Division issued a Notice of Hearing in each case. Subsequently, these cases were joined into a single proceeding for all purposes other than appeal and scheduled for a hearing on the merits.6

On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

II. DISCUSSION

A. Applicable Law

A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker.7 The insurance carrier is not liable for treatments or services requiring preauthorization unless preauthorization was sought and obtained from the insurance carrier or has been ordered by the Commissioner of Worker’s Compensation.8

A request for preauthorization must include, among other things, the specific health care requested, the number of specific treatments and the period of time to complete the treatments, information to support the medical necessity of the requested treatments, and the estimated date of the proposed health care.9 When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability.10 Further, the insurance carrier “shall not condition an approval or change any elements of the request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”11 Once a treatment has been preauthorized, the treatment or service is not subject to retrospective review for medical necessity.12

The Texas Department of Insurance has adopted the Official Disability Guidelines (ODGs) for workers’ compensation medical treatment in Texas.13 Treatment provided in accordance with the ODGs is presumed reasonable and, absent an emergency, the insurance carrier is typically not liable for the costs of treatments or services that exceed those guidelines if they were not preauthorized.14 Relevant to physical therapy, the ODGs provide:

Generally, there should be no more than 4 modalities/procedural units in total per visit, allowing the PT visit to focus on treatments that have shown evidence of functional improvement and limiting the total length of the visit to 45-60 minutes, unless additional circumstances require an extended length of treatment. Treatment times per session may vary based upon the patient’s medical presentation but typically may be 45-60 minutes to provide full, optimal care to the patient. Additional time may be required for the more complex and slow-to-respond patients. While an average of 3 or 4 modalities/procedural units per visit reflect a typical visit, this is not intended to limit or cap the number of units that are medically necessary for a patient (for example, in unusual cases where co-morbidities involve completely separate body domains), but documentation should support any average that exceeds 4 units per visit. These additional units should be reviewed for medical necessity and then authorized if determined to be medically appropriate for the individual injured worker.15

If a health care provider is denied or paid a reduced amount for the medical service rendered, the provider is entitled to review by the Division.16 If a dispute remains after that review, a party may request a contested case hearing at SOAH.17 As the party requesting a hearing at SOAH to challenge adverse MFD Decisions, SORM has the burden of proof to show by a preponderance of the evidence that Angleton is not entitled to additional reimbursement.18 The hearing before SOAH is a de novo review of the issues involved.19

B. Evidence

At the hearing, SORM had 55 exhibits admitted into evidence and presented testimony from two witnesses: Jennifer Cooper, a utilization review manager with CareWorks, a company contracted to perform workers’ compensation medical bill reviews for SORM; and Janine Lyckman, the cost-containment director for SORM. Mr. Pesnell testified on behalf of Angleton, and Angleton did not offer any additional exhibits. The underlying facts are not in dispute.

In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder.20 Angleton requested preauthorization and CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The preauthorization letter specified that what was approved was “physical therapy left upper extremity 2-3x4 (12 visits),” and that the services were approved from February 26-May 31, 2020.21 The letter went on to state, “Per CMS Guidelines,22 treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.”23

In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks also approved from March 27-June 27, 2020.24 Another 12 sessions were requested and approved in April 2020 (approved from April 29-July 15, 2020),25 then 14 more sessions were requested and approved in June 2020 (approved from July 2, 2020-January 31, 2021).26 Each of the preauthorization requests specified the number of sessions proposed and the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request, but none of the requests specified the length of time to complete the treatments at each session. Each approval letter set a date range for the approved services and included the caveat that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session.27 Angleton did not seek preauthorization for any of the sessions to exceed 60 minutes and disputes that it was required to do so.

Mr. Pesnell is a physical therapist and supervised the sessions at issue in this case. He testified that Angleton complied with the frequency and number of sessions that were preauthorized by SORM and that the services were provided within the time periods specified in the preauthorization letters. Mr. Pesnell denied that Angleton provided any treatments or services that were not preauthorized. He admitted that many of the sessions exceeded 45-60 minutes but disputed that the preauthorization letters put any cap on the treatment time allowed per session.

Mr. Pesnell testified that he continued having sessions that exceeded 60 minutes despite learning from Angleton’s benefits coordinator that SORM was reducing or denying bills for exceeding preauthorization. Mr. Pesnell explained that Angleton was ethically bound to treat the patient and help the patient improve and that the longer sessions were medically necessary in view of the patient’s condition and history. He also asserted that the documentation submitted with the preauthorization requests was sufficient to support the level and duration of service he provided.

In reliance on its position that it only preauthorized 45-60 minutes per session, SORM approved reimbursement for only four units per visit and denied payment for other/additional units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.28 Angleton appealed to the Division. At issue in this case are Angleton’s bills for thirteen visits between February 27 and March 31, 202029; thirteen visits between April 1-23, 202030; six visits between May 6-21, 202031; four visits between May 27 and June 3, 202032; and ten visits between July 8-22, 2020.33

The MFD Decisions found that Angleton was entitled to additional reimbursement for the disputed visits and that SORM’s preauthorization letters did not limit reimbursement to four units/one hour per visit. Specifically, the MFD Decisions each state that the Division “finds the preauthorization reports are not in accordance with [28 Texas Administrative Code §] 134.600 because they don’t list the ‘number of specific health care treatments and the specific period of time requested to complete the treatments.’”34 The MFD Decision also held that SORM’s reliance on CMS was inapt because the Division’s rules take precedence over any conflicting provision in the Medicare program.35 SORM appealed those decisions to SOAH.

C. Analysis

SORM contends that reimbursement to Angleton was properly limited to four units per visit, consistent with the preauthorization letters and ODGs. Angleton contends that each of the preauthorization letters approved the total number of visits and treatments requested, without any limitation on the number of units that could be billed per visit, and therefore all of the billed units should be reimbursed.

The ALJ finds that the preauthorization requests and approvals cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes. While the preauthorization letters unequivocally state the number of sessions approved and the date range during which the services had to be provided, they do not clearly contain a time limit for each session. Rather, the letters state only that “treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.” They do not indicate whether or not Angleton’s preauthorization requests, which included medical records for the injured worker, had already established that medical necessity. Therefore, the ALJ agrees with the MFD Decisions’ determination that SORM failed to include the “number of specific health care treatments and the specific period of time requested to complete the treatments” in the preauthorization letters.36

Further, even if the preauthorization letters could be construed as limiting the duration of each session, that limitation would not apply because SORM was prohibited from changing Angleton’s preauthorization requests, or conditioning its approval of the requests, without first discussing the change with and documenting the approval of Angleton. Under 28 Texas Administrative Code § 134.600(n), “[t]he insurance carrier shall not condition an approval or change any elements of the [preapproval] request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”37 Nowhere in the preauthorization requests did Angleton limit its request for preauthorization to only four units per session. By limiting its approval to only four units per session without first reaching an agreement with Angleton, SORM has impermissibly conditioned or changed an element of the preauthorization request in violation of the Division’s rules.

The ALJ further finds that Angleton’s treatment of the injured worker was consistent with the ODGs. The ODGs state that although it is typical for a physical therapy session to last only 45-60 minutes, more treatment time may be required for some patients and the guidelines do “not intend[] to limit or cap the number of units that are medically necessary for a particular patient.”38 The ODGs provide that an insurance carrier may authorize additional units if medically necessary due to the individual patient’s needs. In this case, Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient; the requests were supported by medical documentation and did not limit treatment to only four units per session. Therefore, the preponderance of the evidence shows that the additional units per session were medically necessary and appropriate for this patient and complied with the ODGs.

In sum, for the reasons stated in this decision, the ALJ finds that SORM cannot limit the number of units in the absence of agreement with Angleton. Further, Angleton’s preauthorization requests for treatment of the injured worker were consistent with the ODGs, and SORM should reimburse Angleton for those health care services not previously paid.39 The ALJ concludes that the MFD Decisions correctly determined that SORM is required to pay to Angleton the disputed amount of $1,369.58 in Case No. 454-22-0043.M4-NP; $531.31 in Case No. 454-22-0044.M4-NP; $348.86 in Case No. 454-22-0040.M4-NP; $241.22 in Case No. 454-22-0045.M4-NP; and $389.73 in Case No. 454-22-0039.M4-NP, for a total reimbursement of $2,880.70.

The ALJ makes the following findings of fact and conclusions of law in support of this decision.

III. FINDINGS OF FACT

1. In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder. The injured worker became a patient of Angleton Rehabilitation and Wellness (Angleton).

2. The State Office of Risk Management (SORM) was the responsible workers’ compensation insurer for the injured worker.

3. SORM contracts with CareWorks to perform workers’ compensation medical bill reviews for SORM.

4. Angleton requested preauthorization for two or three physical therapy visits per week for four weeks.

5. CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The February 26, 2020 preauthorization letter approved 12 physical therapy visits from February 26-May 31, 2020.

6. In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from March 27-June 27, 2020, in a letter dated March 27, 2020.

7. In April 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from April 29-July 15, 2020, in a letter dated April 29, 2020.

8. In June 2020, Angleton submitted a preauthorization request for an additional 14 sessions of physical therapy, which CareWorks approved July 2, 2020-January 31, 2021, in a letter dated July 2, 2020.

9. Each of the preauthorization requests specified the number and frequency of sessions proposed. All but the initial preauthorization request specified the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request.

10. Angleton requested approval of all procedure codes or modalities on the basis that all were medically necessary and appropriate for the patient.

11. None of Angleton’s preapproval requests specified how long was requested to complete the treatments at each session.

12. Angleton did not limit the requests for approval to only four units per session.

13. Each approval letter set a date range for the approved services and stated that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

14. The approval letters did not indicate whether Angleton’s preauthorization requests, which included medical records for the injured worker, had or had not already established the medical necessity for longer visits.

15. Prior to issuing its approvals, SORM did not contact Angleton about limiting the number of units per session.

16. The approval letters cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes.

17. Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020.

18. Angleton requested and provided treatment in accordance with the Official Disability Guidelines (ODGs). The ODGs are used to determine if a modality is medically necessary and appropriate.

19. Although the ODGs provide that physical therapy sessions typically last only 45-60 minutes with three or four modalities or procedural units per visit, the ODGs acknowledge that some patients require more treatment time.

20. The ODGs do not limit or cap the number of units that are medically necessary for a particular patient at each visit.

21. Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient. The requests were supported by medical documentation and did not limit treatment to only four units per session.

22. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session for a number of sessions.

23. SORM approved reimbursement for only four units per visit and denied payment for other units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.

24. Angleton requested a Medical Fee Dispute (MFD) resolution from the Texas Department of Insurance, Division of Workers’ Compensation (Division).

25. On August 27, 2020, the Division issued an MFD Decision ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.

26. On September 25, 2020, the Division issued an MFD Decision ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.

27. On October 15, 2020, the Division issued an MFD Decision ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.

28. On November 19, 2020, the Division issued an MFD Decision ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.

29. On January 29, 2021, the Division issued an MFD Decision ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.

30. Angleton timely requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. The cases were docketed separately at SOAH.

31. On September 8, 2021, the Division issued a notice to the parties in each case with a statement of the nature of the hearings; 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 either a short, plain statement of the factual matters asserted or an attachment that incorporated by reference the factual matters asserted in the complaint or petition filed with the state agency.

32. On October 15, 2021, the Administrative Law Judge (ALJ) issued Order No. 2 joining the five cases into a single proceeding for all purposes other than appeal. Order No. 2 also included a statement of the time and place of the hearing and instructions for participating in the hearing.

33. On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

IV. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031; Tex. Gov’t Code ch. 2003.

2. Adequate and timely notice of the hearing was provided to the parties. Tex. Gov’t Code §§ 2001.051-.052.

3. A medical fee dispute is a dispute over the amount of payment for services that have been determined to be medically necessary and appropriate for treatment of an injured employee’s compensable injury. 28 Tex. Admin. Code § 133.305(a)(5).

4. A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker. Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

5. The Texas Department of Insurance has adopted the ODGs for workers’ compensation medical treatment in Texas, and treatment provided in accordance with the ODGs is presumed reasonable. 28 Tex. Admin. Code § 137.100(c)-(d).

6. When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability. 28 Tex. Admin. Code § 134.600(l).

7. An insurance carrier may not condition an approval or change any elements of the request unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented. 28 Tex. Admin. Code § 134.600(n).

8. By limiting the approval to only four units per session without first contacting Angleton and reaching agreement on that limitation, SORM impermissibly conditioned or changed an element of the preauthorization request. 28 Tex. Admin. Code § 134.600(n).

9. Angleton is entitled to receive a total of $2,880.70 for the physical therapy provided to the injured worker and not paid for by SORM as follows:

a. $1,369.58 for physical therapy services provided from February 27-March 31, 2020 (Case No. 454-22-0043.M4-NP);

b. $531.31 for physical therapy services provided from April 1-23, 2020 (Case No. 454-22-0044.M4-NP);

c. $348.86 for physical therapy services provided from May 6-21, 2020 (Case No. 454-22-0040.M4-NP);

d. $241.22 or physical therapy services provided from May 27-June 3, 2020 (Case No. 454-22-0045.M4-NP); and

e. $389.73 for physical therapy services provided from July 8-22, 2020 (Case No. 454-22-0039.M4-NP).

ORDER

IT IS ORDERED that Carrier must pay Provider the additional sum of $2,880.70, plus accrued interest.

NONPREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 Texas Administrative Code § 133.307(h) require the nonprevailing party to reimburse the Division for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires SOAH to identify the nonprevailing party and any costs for services provided by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, SORM is the nonprevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED February 25, 2022.

SARAH STARNES
ADMINISTRATIVE LAW JUDGE
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1 SORM Ex. 14. The appeal from the August 27, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0043.M4-NP.

2 SORM Ex. 24. The appeal from the September 25, 2020 MFD Decision was docketed at SOAH as Case No. 454-22-0044.M4-NP.

3 SORM Ex. 32. The appeal from the October 15, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0040.M4-NP.

4 SORM Ex. 41. The appeal from the November 19, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0045.M4-NP.

5 SORM Ex. 51. The appeal from the January 29, 2021 MFD Decision was docketed at SOAH at Case No. 454-22-0039.M4-NP.

6 Order No. 2, issued October 15, 2021.

7 Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

8 Tex. Labor Code §§ 401.011(8), 413.014(c).

9 28 Tex. Admin. Code § 134.600(f)(2)-(4), (9).

10 28 Tex. Admin. Code § 134.600(l).

11 28 Tex. Admin. Code § 134.600(n).

12 Tex. Labor Code § 413.014(e).

13 28 Tex. Admin. Code § 137.100.

14 28 Tex. Admin. Code § 137.100(c)-(d).

15 Ex. 5 at SORM-000012-13.

16 Tex. Labor Code § 413.031(a).

17 Tex. Labor Code § 413.0312(e).

18 28 Tex. Admin. Code § 148.14(b), (e).

19 See Vista Med. Ctr. Hosp. v. Texas Mut. Ins. Co., 416 S.W.3d 11, 17-18 (Tex. App.—Austin 2013, no pet.).

20 Ex. 1.

21 Ex. 2. SORM witness Jennifer Cooper testified that the letter’s abbreviations meant that two or three visits per week were approved for a period of four weeks, for a total of up to twelve preapproved visits.

22 CMS is an abbreviation of Centers for Medicare and Medicaid Services. See 28 Tex. Admin. Code § 134.203(a)(5). Ms. Cooper testified that CMS guidelines are a “preface to” or equal to ODG guidelines.

23 Ex. 2 at 003.

24 Exs. 3-4.

25 Exs. 18-19.

26 Exs. 45-46.

27 Exs. 10, 20, 28, 37, and 47.

28 Ms. Lyckman testified that SORM approved the highest-paying CPT codes submitted for each visit, but approved no more than four units per visit.

29 Ex. 10. These are the charges at issue in SOAH Docket No. 454-22-0043.M4-NP.

30 Ex. 20. These are the charges at issue in SOAH Docket No. 454-22-0044.M4-NP.

31 Ex. 28. These are the charges at issue in SOAH Docket No. 454-22-0040.M4-NP.

32 Ex. 37. These are the charges at issue in SOAH Docket No. 454-22-0045.M4-NP.

33 Ex. 47. These are the charges at issue in SOAH Docket No. 454-22-0039.M4-NP.

34 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293.

35 Ex. 10 at SORM-000080-81; See also 28 Tex. Admin. Code § 134.203(a)(7).

36 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293 (emphasis added).

37 28 Tex. Admin. Code § 134.600(n).

38 Ex. 5 at SORM-000012-13.

39 Though not cited by either party, the same conclusions were reached by ALJ Kerrie Qualtrough in a previous SOAH docket, 454-14-3636.M4-NP (Decision and Order issued September 14, 2014). The undersigned ALJ finds Judge Qualtrough’s Decision and Order more persuasive than the 2008 and 2011 decisions cited by SORM. Exs. 7-9.

DECISION AND ORDER

The State Office of Risk Management (SORM) challenges the decisions of the Texas Department of Insurance, Division of Workers’ Compensation (Division) to award additional reimbursement to Angleton Rehabilitation and Wellness (Angleton) for physical therapy services provided for an injured worker in April-July 2020. SORM preauthorized the physical therapy sessions, but denied payment to Angleton for the portion of the sessions that exceeded one hour. The Administrative Law Judge (ALJ) concludes that SORM was not authorized to condition its approval on a time limitation that Angleton did not agree to. Therefore, the ALJ affirms the Division’s Medical Fee Dispute (MFD) Decisions, and orders SORM to reimburse Angleton $2,880.70 for the services at issue in this proceeding.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no disputed issues regarding notice or jurisdiction in this proceeding. Therefore, those matters are addressed in the findings of fact and conclusions of law without further discussion here.

After SORM made reduced payments on Angleton’s claims for reimbursement for the services in question, Angleton filed requests for medical fee dispute resolution with the Division. This Decision and Order addresses the following MFD Decisions issued by the Division:

  1. August 27, 2020 MFD Decision, ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.1
  2. September 25, 2020 MFD Decision, ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.2
  3. October 15, 2020 MFD Decision, ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.3
  4. November 19, 2020 MFD Decision, ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.4
  5. January 29, 2021 MFD Decision, ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.5

Angleton requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. On September 8, 2021, the Division issued a Notice of Hearing in each case. Subsequently, these cases were joined into a single proceeding for all purposes other than appeal and scheduled for a hearing on the merits.6

On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

II. DISCUSSION

A. Applicable Law

A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker.7 The insurance carrier is not liable for treatments or services requiring preauthorization unless preauthorization was sought and obtained from the insurance carrier or has been ordered by the Commissioner of Worker’s Compensation.8

A request for preauthorization must include, among other things, the specific health care requested, the number of specific treatments and the period of time to complete the treatments, information to support the medical necessity of the requested treatments, and the estimated date of the proposed health care.9 When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability.10 Further, the insurance carrier “shall not condition an approval or change any elements of the request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”11 Once a treatment has been preauthorized, the treatment or service is not subject to retrospective review for medical necessity.12

The Texas Department of Insurance has adopted the Official Disability Guidelines (ODGs) for workers’ compensation medical treatment in Texas.13 Treatment provided in accordance with the ODGs is presumed reasonable and, absent an emergency, the insurance carrier is typically not liable for the costs of treatments or services that exceed those guidelines if they were not preauthorized.14 Relevant to physical therapy, the ODGs provide:

Generally, there should be no more than 4 modalities/procedural units in total per visit, allowing the PT visit to focus on treatments that have shown evidence of functional improvement and limiting the total length of the visit to 45-60 minutes, unless additional circumstances require an extended length of treatment. Treatment times per session may vary based upon the patient’s medical presentation but typically may be 45-60 minutes to provide full, optimal care to the patient. Additional time may be required for the more complex and slow-to-respond patients. While an average of 3 or 4 modalities/procedural units per visit reflect a typical visit, this is not intended to limit or cap the number of units that are medically necessary for a patient (for example, in unusual cases where co-morbidities involve completely separate body domains), but documentation should support any average that exceeds 4 units per visit. These additional units should be reviewed for medical necessity and then authorized if determined to be medically appropriate for the individual injured worker.15

If a health care provider is denied or paid a reduced amount for the medical service rendered, the provider is entitled to review by the Division.16 If a dispute remains after that review, a party may request a contested case hearing at SOAH.17 As the party requesting a hearing at SOAH to challenge adverse MFD Decisions, SORM has the burden of proof to show by a preponderance of the evidence that Angleton is not entitled to additional reimbursement.18 The hearing before SOAH is a de novo review of the issues involved.19

B. Evidence

At the hearing, SORM had 55 exhibits admitted into evidence and presented testimony from two witnesses: Jennifer Cooper, a utilization review manager with CareWorks, a company contracted to perform workers’ compensation medical bill reviews for SORM; and Janine Lyckman, the cost-containment director for SORM. Mr. Pesnell testified on behalf of Angleton, and Angleton did not offer any additional exhibits. The underlying facts are not in dispute.

In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder.20 Angleton requested preauthorization and CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The preauthorization letter specified that what was approved was “physical therapy left upper extremity 2-3x4 (12 visits),” and that the services were approved from February 26-May 31, 2020.21 The letter went on to state, “Per CMS Guidelines,22 treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.”23

In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks also approved from March 27-June 27, 2020.24 Another 12 sessions were requested and approved in April 2020 (approved from April 29-July 15, 2020),25 then 14 more sessions were requested and approved in June 2020 (approved from July 2, 2020-January 31, 2021).26 Each of the preauthorization requests specified the number of sessions proposed and the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request, but none of the requests specified the length of time to complete the treatments at each session. Each approval letter set a date range for the approved services and included the caveat that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session.27 Angleton did not seek preauthorization for any of the sessions to exceed 60 minutes and disputes that it was required to do so.

Mr. Pesnell is a physical therapist and supervised the sessions at issue in this case. He testified that Angleton complied with the frequency and number of sessions that were preauthorized by SORM and that the services were provided within the time periods specified in the preauthorization letters. Mr. Pesnell denied that Angleton provided any treatments or services that were not preauthorized. He admitted that many of the sessions exceeded 45-60 minutes but disputed that the preauthorization letters put any cap on the treatment time allowed per session.

Mr. Pesnell testified that he continued having sessions that exceeded 60 minutes despite learning from Angleton’s benefits coordinator that SORM was reducing or denying bills for exceeding preauthorization. Mr. Pesnell explained that Angleton was ethically bound to treat the patient and help the patient improve and that the longer sessions were medically necessary in view of the patient’s condition and history. He also asserted that the documentation submitted with the preauthorization requests was sufficient to support the level and duration of service he provided.

In reliance on its position that it only preauthorized 45-60 minutes per session, SORM approved reimbursement for only four units per visit and denied payment for other/additional units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.28 Angleton appealed to the Division. At issue in this case are Angleton’s bills for thirteen visits between February 27 and March 31, 202029; thirteen visits between April 1-23, 202030; six visits between May 6-21, 202031; four visits between May 27 and June 3, 202032; and ten visits between July 8-22, 2020.33

The MFD Decisions found that Angleton was entitled to additional reimbursement for the disputed visits and that SORM’s preauthorization letters did not limit reimbursement to four units/one hour per visit. Specifically, the MFD Decisions each state that the Division “finds the preauthorization reports are not in accordance with [28 Texas Administrative Code §] 134.600 because they don’t list the ‘number of specific health care treatments and the specific period of time requested to complete the treatments.’”34 The MFD Decision also held that SORM’s reliance on CMS was inapt because the Division’s rules take precedence over any conflicting provision in the Medicare program.35 SORM appealed those decisions to SOAH.

C. Analysis

SORM contends that reimbursement to Angleton was properly limited to four units per visit, consistent with the preauthorization letters and ODGs. Angleton contends that each of the preauthorization letters approved the total number of visits and treatments requested, without any limitation on the number of units that could be billed per visit, and therefore all of the billed units should be reimbursed.

The ALJ finds that the preauthorization requests and approvals cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes. While the preauthorization letters unequivocally state the number of sessions approved and the date range during which the services had to be provided, they do not clearly contain a time limit for each session. Rather, the letters state only that “treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.” They do not indicate whether or not Angleton’s preauthorization requests, which included medical records for the injured worker, had already established that medical necessity. Therefore, the ALJ agrees with the MFD Decisions’ determination that SORM failed to include the “number of specific health care treatments and the specific period of time requested to complete the treatments” in the preauthorization letters.36

Further, even if the preauthorization letters could be construed as limiting the duration of each session, that limitation would not apply because SORM was prohibited from changing Angleton’s preauthorization requests, or conditioning its approval of the requests, without first discussing the change with and documenting the approval of Angleton. Under 28 Texas Administrative Code § 134.600(n), “[t]he insurance carrier shall not condition an approval or change any elements of the [preapproval] request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”37 Nowhere in the preauthorization requests did Angleton limit its request for preauthorization to only four units per session. By limiting its approval to only four units per session without first reaching an agreement with Angleton, SORM has impermissibly conditioned or changed an element of the preauthorization request in violation of the Division’s rules.

The ALJ further finds that Angleton’s treatment of the injured worker was consistent with the ODGs. The ODGs state that although it is typical for a physical therapy session to last only 45-60 minutes, more treatment time may be required for some patients and the guidelines do “not intend[] to limit or cap the number of units that are medically necessary for a particular patient.”38 The ODGs provide that an insurance carrier may authorize additional units if medically necessary due to the individual patient’s needs. In this case, Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient; the requests were supported by medical documentation and did not limit treatment to only four units per session. Therefore, the preponderance of the evidence shows that the additional units per session were medically necessary and appropriate for this patient and complied with the ODGs.

In sum, for the reasons stated in this decision, the ALJ finds that SORM cannot limit the number of units in the absence of agreement with Angleton. Further, Angleton’s preauthorization requests for treatment of the injured worker were consistent with the ODGs, and SORM should reimburse Angleton for those health care services not previously paid.39 The ALJ concludes that the MFD Decisions correctly determined that SORM is required to pay to Angleton the disputed amount of $1,369.58 in Case No. 454-22-0043.M4-NP; $531.31 in Case No. 454-22-0044.M4-NP; $348.86 in Case No. 454-22-0040.M4-NP; $241.22 in Case No. 454-22-0045.M4-NP; and $389.73 in Case No. 454-22-0039.M4-NP, for a total reimbursement of $2,880.70.

The ALJ makes the following findings of fact and conclusions of law in support of this decision.

III. FINDINGS OF FACT

1. In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder. The injured worker became a patient of Angleton Rehabilitation and Wellness (Angleton).

2. The State Office of Risk Management (SORM) was the responsible workers’ compensation insurer for the injured worker.

3. SORM contracts with CareWorks to perform workers’ compensation medical bill reviews for SORM.

4. Angleton requested preauthorization for two or three physical therapy visits per week for four weeks.

5. CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The February 26, 2020 preauthorization letter approved 12 physical therapy visits from February 26-May 31, 2020.

6. In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from March 27-June 27, 2020, in a letter dated March 27, 2020.

7. In April 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from April 29-July 15, 2020, in a letter dated April 29, 2020.

8. In June 2020, Angleton submitted a preauthorization request for an additional 14 sessions of physical therapy, which CareWorks approved July 2, 2020-January 31, 2021, in a letter dated July 2, 2020.

9. Each of the preauthorization requests specified the number and frequency of sessions proposed. All but the initial preauthorization request specified the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request.

10. Angleton requested approval of all procedure codes or modalities on the basis that all were medically necessary and appropriate for the patient.

11. None of Angleton’s preapproval requests specified how long was requested to complete the treatments at each session.

12. Angleton did not limit the requests for approval to only four units per session.

13. Each approval letter set a date range for the approved services and stated that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

14. The approval letters did not indicate whether Angleton’s preauthorization requests, which included medical records for the injured worker, had or had not already established the medical necessity for longer visits.

15. Prior to issuing its approvals, SORM did not contact Angleton about limiting the number of units per session.

16. The approval letters cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes.

17. Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020.

18. Angleton requested and provided treatment in accordance with the Official Disability Guidelines (ODGs). The ODGs are used to determine if a modality is medically necessary and appropriate.

19. Although the ODGs provide that physical therapy sessions typically last only 45-60 minutes with three or four modalities or procedural units per visit, the ODGs acknowledge that some patients require more treatment time.

20. The ODGs do not limit or cap the number of units that are medically necessary for a particular patient at each visit.

21. Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient. The requests were supported by medical documentation and did not limit treatment to only four units per session.

22. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session for a number of sessions.

23. SORM approved reimbursement for only four units per visit and denied payment for other units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.

24. Angleton requested a Medical Fee Dispute (MFD) resolution from the Texas Department of Insurance, Division of Workers’ Compensation (Division).

25. On August 27, 2020, the Division issued an MFD Decision ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.

26. On September 25, 2020, the Division issued an MFD Decision ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.

27. On October 15, 2020, the Division issued an MFD Decision ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.

28. On November 19, 2020, the Division issued an MFD Decision ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.

29. On January 29, 2021, the Division issued an MFD Decision ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.

30. Angleton timely requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. The cases were docketed separately at SOAH.

31. On September 8, 2021, the Division issued a notice to the parties in each case with a statement of the nature of the hearings; 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 either a short, plain statement of the factual matters asserted or an attachment that incorporated by reference the factual matters asserted in the complaint or petition filed with the state agency.

32. On October 15, 2021, the Administrative Law Judge (ALJ) issued Order No. 2 joining the five cases into a single proceeding for all purposes other than appeal. Order No. 2 also included a statement of the time and place of the hearing and instructions for participating in the hearing.

33. On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

IV. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031; Tex. Gov’t Code ch. 2003.

2. Adequate and timely notice of the hearing was provided to the parties. Tex. Gov’t Code §§ 2001.051-.052.

3. A medical fee dispute is a dispute over the amount of payment for services that have been determined to be medically necessary and appropriate for treatment of an injured employee’s compensable injury. 28 Tex. Admin. Code § 133.305(a)(5).

4. A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker. Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

5. The Texas Department of Insurance has adopted the ODGs for workers’ compensation medical treatment in Texas, and treatment provided in accordance with the ODGs is presumed reasonable. 28 Tex. Admin. Code § 137.100(c)-(d).

6. When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability. 28 Tex. Admin. Code § 134.600(l).

7. An insurance carrier may not condition an approval or change any elements of the request unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented. 28 Tex. Admin. Code § 134.600(n).

8. By limiting the approval to only four units per session without first contacting Angleton and reaching agreement on that limitation, SORM impermissibly conditioned or changed an element of the preauthorization request. 28 Tex. Admin. Code § 134.600(n).

9. Angleton is entitled to receive a total of $2,880.70 for the physical therapy provided to the injured worker and not paid for by SORM as follows:

a. $1,369.58 for physical therapy services provided from February 27-March 31, 2020 (Case No. 454-22-0043.M4-NP);

b. $531.31 for physical therapy services provided from April 1-23, 2020 (Case No. 454-22-0044.M4-NP);

c. $348.86 for physical therapy services provided from May 6-21, 2020 (Case No. 454-22-0040.M4-NP);

d. $241.22 or physical therapy services provided from May 27-June 3, 2020 (Case No. 454-22-0045.M4-NP); and

e. $389.73 for physical therapy services provided from July 8-22, 2020 (Case No. 454-22-0039.M4-NP).

ORDER

IT IS ORDERED that Carrier must pay Provider the additional sum of $2,880.70, plus accrued interest.

NONPREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 Texas Administrative Code § 133.307(h) require the nonprevailing party to reimburse the Division for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires SOAH to identify the nonprevailing party and any costs for services provided by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, SORM is the nonprevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED February 25, 2022.

SARAH STARNES
ADMINISTRATIVE LAW JUDGE
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1 SORM Ex. 14. The appeal from the August 27, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0043.M4-NP.

2 SORM Ex. 24. The appeal from the September 25, 2020 MFD Decision was docketed at SOAH as Case No. 454-22-0044.M4-NP.

3 SORM Ex. 32. The appeal from the October 15, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0040.M4-NP.

4 SORM Ex. 41. The appeal from the November 19, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0045.M4-NP.

5 SORM Ex. 51. The appeal from the January 29, 2021 MFD Decision was docketed at SOAH at Case No. 454-22-0039.M4-NP.

6 Order No. 2, issued October 15, 2021.

7 Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

8 Tex. Labor Code §§ 401.011(8), 413.014(c).

9 28 Tex. Admin. Code § 134.600(f)(2)-(4), (9).

10 28 Tex. Admin. Code § 134.600(l).

11 28 Tex. Admin. Code § 134.600(n).

12 Tex. Labor Code § 413.014(e).

13 28 Tex. Admin. Code § 137.100.

14 28 Tex. Admin. Code § 137.100(c)-(d).

15 Ex. 5 at SORM-000012-13.

16 Tex. Labor Code § 413.031(a).

17 Tex. Labor Code § 413.0312(e).

18 28 Tex. Admin. Code § 148.14(b), (e).

19 See Vista Med. Ctr. Hosp. v. Texas Mut. Ins. Co., 416 S.W.3d 11, 17-18 (Tex. App.—Austin 2013, no pet.).

20 Ex. 1.

21 Ex. 2. SORM witness Jennifer Cooper testified that the letter’s abbreviations meant that two or three visits per week were approved for a period of four weeks, for a total of up to twelve preapproved visits.

22 CMS is an abbreviation of Centers for Medicare and Medicaid Services. See 28 Tex. Admin. Code § 134.203(a)(5). Ms. Cooper testified that CMS guidelines are a “preface to” or equal to ODG guidelines.

23 Ex. 2 at 003.

24 Exs. 3-4.

25 Exs. 18-19.

26 Exs. 45-46.

27 Exs. 10, 20, 28, 37, and 47.

28 Ms. Lyckman testified that SORM approved the highest-paying CPT codes submitted for each visit, but approved no more than four units per visit.

29 Ex. 10. These are the charges at issue in SOAH Docket No. 454-22-0043.M4-NP.

30 Ex. 20. These are the charges at issue in SOAH Docket No. 454-22-0044.M4-NP.

31 Ex. 28. These are the charges at issue in SOAH Docket No. 454-22-0040.M4-NP.

32 Ex. 37. These are the charges at issue in SOAH Docket No. 454-22-0045.M4-NP.

33 Ex. 47. These are the charges at issue in SOAH Docket No. 454-22-0039.M4-NP.

34 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293.

35 Ex. 10 at SORM-000080-81; See also 28 Tex. Admin. Code § 134.203(a)(7).

36 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293 (emphasis added).

37 28 Tex. Admin. Code § 134.600(n).

38 Ex. 5 at SORM-000012-13.

39 Though not cited by either party, the same conclusions were reached by ALJ Kerrie Qualtrough in a previous SOAH docket, 454-14-3636.M4-NP (Decision and Order issued September 14, 2014). The undersigned ALJ finds Judge Qualtrough’s Decision and Order more persuasive than the 2008 and 2011 decisions cited by SORM. Exs. 7-9.

DECISION AND ORDER

The State Office of Risk Management (SORM) challenges the decisions of the Texas Department of Insurance, Division of Workers’ Compensation (Division) to award additional reimbursement to Angleton Rehabilitation and Wellness (Angleton) for physical therapy services provided for an injured worker in April-July 2020. SORM preauthorized the physical therapy sessions, but denied payment to Angleton for the portion of the sessions that exceeded one hour. The Administrative Law Judge (ALJ) concludes that SORM was not authorized to condition its approval on a time limitation that Angleton did not agree to. Therefore, the ALJ affirms the Division’s Medical Fee Dispute (MFD) Decisions, and orders SORM to reimburse Angleton $2,880.70 for the services at issue in this proceeding.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no disputed issues regarding notice or jurisdiction in this proceeding. Therefore, those matters are addressed in the findings of fact and conclusions of law without further discussion here.

After SORM made reduced payments on Angleton’s claims for reimbursement for the services in question, Angleton filed requests for medical fee dispute resolution with the Division. This Decision and Order addresses the following MFD Decisions issued by the Division:

  1. August 27, 2020 MFD Decision, ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.1
  2. September 25, 2020 MFD Decision, ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.2
  3. October 15, 2020 MFD Decision, ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.3
  4. November 19, 2020 MFD Decision, ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.4
  5. January 29, 2021 MFD Decision, ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.5

Angleton requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. On September 8, 2021, the Division issued a Notice of Hearing in each case. Subsequently, these cases were joined into a single proceeding for all purposes other than appeal and scheduled for a hearing on the merits.6

On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

II. DISCUSSION

A. Applicable Law

A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker.7 The insurance carrier is not liable for treatments or services requiring preauthorization unless preauthorization was sought and obtained from the insurance carrier or has been ordered by the Commissioner of Worker’s Compensation.8

A request for preauthorization must include, among other things, the specific health care requested, the number of specific treatments and the period of time to complete the treatments, information to support the medical necessity of the requested treatments, and the estimated date of the proposed health care.9 When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability.10 Further, the insurance carrier “shall not condition an approval or change any elements of the request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”11 Once a treatment has been preauthorized, the treatment or service is not subject to retrospective review for medical necessity.12

The Texas Department of Insurance has adopted the Official Disability Guidelines (ODGs) for workers’ compensation medical treatment in Texas.13 Treatment provided in accordance with the ODGs is presumed reasonable and, absent an emergency, the insurance carrier is typically not liable for the costs of treatments or services that exceed those guidelines if they were not preauthorized.14 Relevant to physical therapy, the ODGs provide:

Generally, there should be no more than 4 modalities/procedural units in total per visit, allowing the PT visit to focus on treatments that have shown evidence of functional improvement and limiting the total length of the visit to 45-60 minutes, unless additional circumstances require an extended length of treatment. Treatment times per session may vary based upon the patient’s medical presentation but typically may be 45-60 minutes to provide full, optimal care to the patient. Additional time may be required for the more complex and slow-to-respond patients. While an average of 3 or 4 modalities/procedural units per visit reflect a typical visit, this is not intended to limit or cap the number of units that are medically necessary for a patient (for example, in unusual cases where co-morbidities involve completely separate body domains), but documentation should support any average that exceeds 4 units per visit. These additional units should be reviewed for medical necessity and then authorized if determined to be medically appropriate for the individual injured worker.15

If a health care provider is denied or paid a reduced amount for the medical service rendered, the provider is entitled to review by the Division.16 If a dispute remains after that review, a party may request a contested case hearing at SOAH.17 As the party requesting a hearing at SOAH to challenge adverse MFD Decisions, SORM has the burden of proof to show by a preponderance of the evidence that Angleton is not entitled to additional reimbursement.18 The hearing before SOAH is a de novo review of the issues involved.19

B. Evidence

At the hearing, SORM had 55 exhibits admitted into evidence and presented testimony from two witnesses: Jennifer Cooper, a utilization review manager with CareWorks, a company contracted to perform workers’ compensation medical bill reviews for SORM; and Janine Lyckman, the cost-containment director for SORM. Mr. Pesnell testified on behalf of Angleton, and Angleton did not offer any additional exhibits. The underlying facts are not in dispute.

In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder.20 Angleton requested preauthorization and CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The preauthorization letter specified that what was approved was “physical therapy left upper extremity 2-3x4 (12 visits),” and that the services were approved from February 26-May 31, 2020.21 The letter went on to state, “Per CMS Guidelines,22 treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.”23

In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks also approved from March 27-June 27, 2020.24 Another 12 sessions were requested and approved in April 2020 (approved from April 29-July 15, 2020),25 then 14 more sessions were requested and approved in June 2020 (approved from July 2, 2020-January 31, 2021).26 Each of the preauthorization requests specified the number of sessions proposed and the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request, but none of the requests specified the length of time to complete the treatments at each session. Each approval letter set a date range for the approved services and included the caveat that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session.27 Angleton did not seek preauthorization for any of the sessions to exceed 60 minutes and disputes that it was required to do so.

Mr. Pesnell is a physical therapist and supervised the sessions at issue in this case. He testified that Angleton complied with the frequency and number of sessions that were preauthorized by SORM and that the services were provided within the time periods specified in the preauthorization letters. Mr. Pesnell denied that Angleton provided any treatments or services that were not preauthorized. He admitted that many of the sessions exceeded 45-60 minutes but disputed that the preauthorization letters put any cap on the treatment time allowed per session.

Mr. Pesnell testified that he continued having sessions that exceeded 60 minutes despite learning from Angleton’s benefits coordinator that SORM was reducing or denying bills for exceeding preauthorization. Mr. Pesnell explained that Angleton was ethically bound to treat the patient and help the patient improve and that the longer sessions were medically necessary in view of the patient’s condition and history. He also asserted that the documentation submitted with the preauthorization requests was sufficient to support the level and duration of service he provided.

In reliance on its position that it only preauthorized 45-60 minutes per session, SORM approved reimbursement for only four units per visit and denied payment for other/additional units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.28 Angleton appealed to the Division. At issue in this case are Angleton’s bills for thirteen visits between February 27 and March 31, 202029; thirteen visits between April 1-23, 202030; six visits between May 6-21, 202031; four visits between May 27 and June 3, 202032; and ten visits between July 8-22, 2020.33

The MFD Decisions found that Angleton was entitled to additional reimbursement for the disputed visits and that SORM’s preauthorization letters did not limit reimbursement to four units/one hour per visit. Specifically, the MFD Decisions each state that the Division “finds the preauthorization reports are not in accordance with [28 Texas Administrative Code §] 134.600 because they don’t list the ‘number of specific health care treatments and the specific period of time requested to complete the treatments.’”34 The MFD Decision also held that SORM’s reliance on CMS was inapt because the Division’s rules take precedence over any conflicting provision in the Medicare program.35 SORM appealed those decisions to SOAH.

C. Analysis

SORM contends that reimbursement to Angleton was properly limited to four units per visit, consistent with the preauthorization letters and ODGs. Angleton contends that each of the preauthorization letters approved the total number of visits and treatments requested, without any limitation on the number of units that could be billed per visit, and therefore all of the billed units should be reimbursed.

The ALJ finds that the preauthorization requests and approvals cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes. While the preauthorization letters unequivocally state the number of sessions approved and the date range during which the services had to be provided, they do not clearly contain a time limit for each session. Rather, the letters state only that “treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.” They do not indicate whether or not Angleton’s preauthorization requests, which included medical records for the injured worker, had already established that medical necessity. Therefore, the ALJ agrees with the MFD Decisions’ determination that SORM failed to include the “number of specific health care treatments and the specific period of time requested to complete the treatments” in the preauthorization letters.36

Further, even if the preauthorization letters could be construed as limiting the duration of each session, that limitation would not apply because SORM was prohibited from changing Angleton’s preauthorization requests, or conditioning its approval of the requests, without first discussing the change with and documenting the approval of Angleton. Under 28 Texas Administrative Code § 134.600(n), “[t]he insurance carrier shall not condition an approval or change any elements of the [preapproval] request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”37 Nowhere in the preauthorization requests did Angleton limit its request for preauthorization to only four units per session. By limiting its approval to only four units per session without first reaching an agreement with Angleton, SORM has impermissibly conditioned or changed an element of the preauthorization request in violation of the Division’s rules.

The ALJ further finds that Angleton’s treatment of the injured worker was consistent with the ODGs. The ODGs state that although it is typical for a physical therapy session to last only 45-60 minutes, more treatment time may be required for some patients and the guidelines do “not intend[] to limit or cap the number of units that are medically necessary for a particular patient.”38 The ODGs provide that an insurance carrier may authorize additional units if medically necessary due to the individual patient’s needs. In this case, Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient; the requests were supported by medical documentation and did not limit treatment to only four units per session. Therefore, the preponderance of the evidence shows that the additional units per session were medically necessary and appropriate for this patient and complied with the ODGs.

In sum, for the reasons stated in this decision, the ALJ finds that SORM cannot limit the number of units in the absence of agreement with Angleton. Further, Angleton’s preauthorization requests for treatment of the injured worker were consistent with the ODGs, and SORM should reimburse Angleton for those health care services not previously paid.39 The ALJ concludes that the MFD Decisions correctly determined that SORM is required to pay to Angleton the disputed amount of $1,369.58 in Case No. 454-22-0043.M4-NP; $531.31 in Case No. 454-22-0044.M4-NP; $348.86 in Case No. 454-22-0040.M4-NP; $241.22 in Case No. 454-22-0045.M4-NP; and $389.73 in Case No. 454-22-0039.M4-NP, for a total reimbursement of $2,880.70.

The ALJ makes the following findings of fact and conclusions of law in support of this decision.

III. FINDINGS OF FACT

1. In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder. The injured worker became a patient of Angleton Rehabilitation and Wellness (Angleton).

2. The State Office of Risk Management (SORM) was the responsible workers’ compensation insurer for the injured worker.

3. SORM contracts with CareWorks to perform workers’ compensation medical bill reviews for SORM.

4. Angleton requested preauthorization for two or three physical therapy visits per week for four weeks.

5. CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The February 26, 2020 preauthorization letter approved 12 physical therapy visits from February 26-May 31, 2020.

6. In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from March 27-June 27, 2020, in a letter dated March 27, 2020.

7. In April 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from April 29-July 15, 2020, in a letter dated April 29, 2020.

8. In June 2020, Angleton submitted a preauthorization request for an additional 14 sessions of physical therapy, which CareWorks approved July 2, 2020-January 31, 2021, in a letter dated July 2, 2020.

9. Each of the preauthorization requests specified the number and frequency of sessions proposed. All but the initial preauthorization request specified the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request.

10. Angleton requested approval of all procedure codes or modalities on the basis that all were medically necessary and appropriate for the patient.

11. None of Angleton’s preapproval requests specified how long was requested to complete the treatments at each session.

12. Angleton did not limit the requests for approval to only four units per session.

13. Each approval letter set a date range for the approved services and stated that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

14. The approval letters did not indicate whether Angleton’s preauthorization requests, which included medical records for the injured worker, had or had not already established the medical necessity for longer visits.

15. Prior to issuing its approvals, SORM did not contact Angleton about limiting the number of units per session.

16. The approval letters cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes.

17. Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020.

18. Angleton requested and provided treatment in accordance with the Official Disability Guidelines (ODGs). The ODGs are used to determine if a modality is medically necessary and appropriate.

19. Although the ODGs provide that physical therapy sessions typically last only 45-60 minutes with three or four modalities or procedural units per visit, the ODGs acknowledge that some patients require more treatment time.

20. The ODGs do not limit or cap the number of units that are medically necessary for a particular patient at each visit.

21. Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient. The requests were supported by medical documentation and did not limit treatment to only four units per session.

22. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session for a number of sessions.

23. SORM approved reimbursement for only four units per visit and denied payment for other units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.

24. Angleton requested a Medical Fee Dispute (MFD) resolution from the Texas Department of Insurance, Division of Workers’ Compensation (Division).

25. On August 27, 2020, the Division issued an MFD Decision ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.

26. On September 25, 2020, the Division issued an MFD Decision ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.

27. On October 15, 2020, the Division issued an MFD Decision ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.

28. On November 19, 2020, the Division issued an MFD Decision ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.

29. On January 29, 2021, the Division issued an MFD Decision ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.

30. Angleton timely requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. The cases were docketed separately at SOAH.

31. On September 8, 2021, the Division issued a notice to the parties in each case with a statement of the nature of the hearings; 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 either a short, plain statement of the factual matters asserted or an attachment that incorporated by reference the factual matters asserted in the complaint or petition filed with the state agency.

32. On October 15, 2021, the Administrative Law Judge (ALJ) issued Order No. 2 joining the five cases into a single proceeding for all purposes other than appeal. Order No. 2 also included a statement of the time and place of the hearing and instructions for participating in the hearing.

33. On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

IV. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031; Tex. Gov’t Code ch. 2003.

2. Adequate and timely notice of the hearing was provided to the parties. Tex. Gov’t Code §§ 2001.051-.052.

3. A medical fee dispute is a dispute over the amount of payment for services that have been determined to be medically necessary and appropriate for treatment of an injured employee’s compensable injury. 28 Tex. Admin. Code § 133.305(a)(5).

4. A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker. Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

5. The Texas Department of Insurance has adopted the ODGs for workers’ compensation medical treatment in Texas, and treatment provided in accordance with the ODGs is presumed reasonable. 28 Tex. Admin. Code § 137.100(c)-(d).

6. When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability. 28 Tex. Admin. Code § 134.600(l).

7. An insurance carrier may not condition an approval or change any elements of the request unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented. 28 Tex. Admin. Code § 134.600(n).

8. By limiting the approval to only four units per session without first contacting Angleton and reaching agreement on that limitation, SORM impermissibly conditioned or changed an element of the preauthorization request. 28 Tex. Admin. Code § 134.600(n).

9. Angleton is entitled to receive a total of $2,880.70 for the physical therapy provided to the injured worker and not paid for by SORM as follows:

a. $1,369.58 for physical therapy services provided from February 27-March 31, 2020 (Case No. 454-22-0043.M4-NP);

b. $531.31 for physical therapy services provided from April 1-23, 2020 (Case No. 454-22-0044.M4-NP);

c. $348.86 for physical therapy services provided from May 6-21, 2020 (Case No. 454-22-0040.M4-NP);

d. $241.22 or physical therapy services provided from May 27-June 3, 2020 (Case No. 454-22-0045.M4-NP); and

e. $389.73 for physical therapy services provided from July 8-22, 2020 (Case No. 454-22-0039.M4-NP).

ORDER

IT IS ORDERED that Carrier must pay Provider the additional sum of $2,880.70, plus accrued interest.

NONPREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 Texas Administrative Code § 133.307(h) require the nonprevailing party to reimburse the Division for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires SOAH to identify the nonprevailing party and any costs for services provided by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, SORM is the nonprevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED February 25, 2022.

SARAH STARNES
ADMINISTRATIVE LAW JUDGE
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1 SORM Ex. 14. The appeal from the August 27, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0043.M4-NP.

2 SORM Ex. 24. The appeal from the September 25, 2020 MFD Decision was docketed at SOAH as Case No. 454-22-0044.M4-NP.

3 SORM Ex. 32. The appeal from the October 15, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0040.M4-NP.

4 SORM Ex. 41. The appeal from the November 19, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0045.M4-NP.

5 SORM Ex. 51. The appeal from the January 29, 2021 MFD Decision was docketed at SOAH at Case No. 454-22-0039.M4-NP.

6 Order No. 2, issued October 15, 2021.

7 Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

8 Tex. Labor Code §§ 401.011(8), 413.014(c).

9 28 Tex. Admin. Code § 134.600(f)(2)-(4), (9).

10 28 Tex. Admin. Code § 134.600(l).

11 28 Tex. Admin. Code § 134.600(n).

12 Tex. Labor Code § 413.014(e).

13 28 Tex. Admin. Code § 137.100.

14 28 Tex. Admin. Code § 137.100(c)-(d).

15 Ex. 5 at SORM-000012-13.

16 Tex. Labor Code § 413.031(a).

17 Tex. Labor Code § 413.0312(e).

18 28 Tex. Admin. Code § 148.14(b), (e).

19 See Vista Med. Ctr. Hosp. v. Texas Mut. Ins. Co., 416 S.W.3d 11, 17-18 (Tex. App.—Austin 2013, no pet.).

20 Ex. 1.

21 Ex. 2. SORM witness Jennifer Cooper testified that the letter’s abbreviations meant that two or three visits per week were approved for a period of four weeks, for a total of up to twelve preapproved visits.

22 CMS is an abbreviation of Centers for Medicare and Medicaid Services. See 28 Tex. Admin. Code § 134.203(a)(5). Ms. Cooper testified that CMS guidelines are a “preface to” or equal to ODG guidelines.

23 Ex. 2 at 003.

24 Exs. 3-4.

25 Exs. 18-19.

26 Exs. 45-46.

27 Exs. 10, 20, 28, 37, and 47.

28 Ms. Lyckman testified that SORM approved the highest-paying CPT codes submitted for each visit, but approved no more than four units per visit.

29 Ex. 10. These are the charges at issue in SOAH Docket No. 454-22-0043.M4-NP.

30 Ex. 20. These are the charges at issue in SOAH Docket No. 454-22-0044.M4-NP.

31 Ex. 28. These are the charges at issue in SOAH Docket No. 454-22-0040.M4-NP.

32 Ex. 37. These are the charges at issue in SOAH Docket No. 454-22-0045.M4-NP.

33 Ex. 47. These are the charges at issue in SOAH Docket No. 454-22-0039.M4-NP.

34 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293.

35 Ex. 10 at SORM-000080-81; See also 28 Tex. Admin. Code § 134.203(a)(7).

36 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293 (emphasis added).

37 28 Tex. Admin. Code § 134.600(n).

38 Ex. 5 at SORM-000012-13.

39 Though not cited by either party, the same conclusions were reached by ALJ Kerrie Qualtrough in a previous SOAH docket, 454-14-3636.M4-NP (Decision and Order issued September 14, 2014). The undersigned ALJ finds Judge Qualtrough’s Decision and Order more persuasive than the 2008 and 2011 decisions cited by SORM. Exs. 7-9.

DECISION AND ORDER

The State Office of Risk Management (SORM) challenges the decisions of the Texas Department of Insurance, Division of Workers’ Compensation (Division) to award additional reimbursement to Angleton Rehabilitation and Wellness (Angleton) for physical therapy services provided for an injured worker in April-July 2020. SORM preauthorized the physical therapy sessions, but denied payment to Angleton for the portion of the sessions that exceeded one hour. The Administrative Law Judge (ALJ) concludes that SORM was not authorized to condition its approval on a time limitation that Angleton did not agree to. Therefore, the ALJ affirms the Division’s Medical Fee Dispute (MFD) Decisions, and orders SORM to reimburse Angleton $2,880.70 for the services at issue in this proceeding.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no disputed issues regarding notice or jurisdiction in this proceeding. Therefore, those matters are addressed in the findings of fact and conclusions of law without further discussion here.

After SORM made reduced payments on Angleton’s claims for reimbursement for the services in question, Angleton filed requests for medical fee dispute resolution with the Division. This Decision and Order addresses the following MFD Decisions issued by the Division:

  1. August 27, 2020 MFD Decision, ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.1
  2. September 25, 2020 MFD Decision, ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.2
  3. October 15, 2020 MFD Decision, ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.3
  4. November 19, 2020 MFD Decision, ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.4
  5. January 29, 2021 MFD Decision, ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.5

Angleton requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. On September 8, 2021, the Division issued a Notice of Hearing in each case. Subsequently, these cases were joined into a single proceeding for all purposes other than appeal and scheduled for a hearing on the merits.6

On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

II. DISCUSSION

A. Applicable Law

A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker.7 The insurance carrier is not liable for treatments or services requiring preauthorization unless preauthorization was sought and obtained from the insurance carrier or has been ordered by the Commissioner of Worker’s Compensation.8

A request for preauthorization must include, among other things, the specific health care requested, the number of specific treatments and the period of time to complete the treatments, information to support the medical necessity of the requested treatments, and the estimated date of the proposed health care.9 When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability.10 Further, the insurance carrier “shall not condition an approval or change any elements of the request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”11 Once a treatment has been preauthorized, the treatment or service is not subject to retrospective review for medical necessity.12

The Texas Department of Insurance has adopted the Official Disability Guidelines (ODGs) for workers’ compensation medical treatment in Texas.13 Treatment provided in accordance with the ODGs is presumed reasonable and, absent an emergency, the insurance carrier is typically not liable for the costs of treatments or services that exceed those guidelines if they were not preauthorized.14 Relevant to physical therapy, the ODGs provide:

Generally, there should be no more than 4 modalities/procedural units in total per visit, allowing the PT visit to focus on treatments that have shown evidence of functional improvement and limiting the total length of the visit to 45-60 minutes, unless additional circumstances require an extended length of treatment. Treatment times per session may vary based upon the patient’s medical presentation but typically may be 45-60 minutes to provide full, optimal care to the patient. Additional time may be required for the more complex and slow-to-respond patients. While an average of 3 or 4 modalities/procedural units per visit reflect a typical visit, this is not intended to limit or cap the number of units that are medically necessary for a patient (for example, in unusual cases where co-morbidities involve completely separate body domains), but documentation should support any average that exceeds 4 units per visit. These additional units should be reviewed for medical necessity and then authorized if determined to be medically appropriate for the individual injured worker.15

If a health care provider is denied or paid a reduced amount for the medical service rendered, the provider is entitled to review by the Division.16 If a dispute remains after that review, a party may request a contested case hearing at SOAH.17 As the party requesting a hearing at SOAH to challenge adverse MFD Decisions, SORM has the burden of proof to show by a preponderance of the evidence that Angleton is not entitled to additional reimbursement.18 The hearing before SOAH is a de novo review of the issues involved.19

B. Evidence

At the hearing, SORM had 55 exhibits admitted into evidence and presented testimony from two witnesses: Jennifer Cooper, a utilization review manager with CareWorks, a company contracted to perform workers’ compensation medical bill reviews for SORM; and Janine Lyckman, the cost-containment director for SORM. Mr. Pesnell testified on behalf of Angleton, and Angleton did not offer any additional exhibits. The underlying facts are not in dispute.

In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder.20 Angleton requested preauthorization and CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The preauthorization letter specified that what was approved was “physical therapy left upper extremity 2-3x4 (12 visits),” and that the services were approved from February 26-May 31, 2020.21 The letter went on to state, “Per CMS Guidelines,22 treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.”23

In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks also approved from March 27-June 27, 2020.24 Another 12 sessions were requested and approved in April 2020 (approved from April 29-July 15, 2020),25 then 14 more sessions were requested and approved in June 2020 (approved from July 2, 2020-January 31, 2021).26 Each of the preauthorization requests specified the number of sessions proposed and the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request, but none of the requests specified the length of time to complete the treatments at each session. Each approval letter set a date range for the approved services and included the caveat that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session.27 Angleton did not seek preauthorization for any of the sessions to exceed 60 minutes and disputes that it was required to do so.

Mr. Pesnell is a physical therapist and supervised the sessions at issue in this case. He testified that Angleton complied with the frequency and number of sessions that were preauthorized by SORM and that the services were provided within the time periods specified in the preauthorization letters. Mr. Pesnell denied that Angleton provided any treatments or services that were not preauthorized. He admitted that many of the sessions exceeded 45-60 minutes but disputed that the preauthorization letters put any cap on the treatment time allowed per session.

Mr. Pesnell testified that he continued having sessions that exceeded 60 minutes despite learning from Angleton’s benefits coordinator that SORM was reducing or denying bills for exceeding preauthorization. Mr. Pesnell explained that Angleton was ethically bound to treat the patient and help the patient improve and that the longer sessions were medically necessary in view of the patient’s condition and history. He also asserted that the documentation submitted with the preauthorization requests was sufficient to support the level and duration of service he provided.

In reliance on its position that it only preauthorized 45-60 minutes per session, SORM approved reimbursement for only four units per visit and denied payment for other/additional units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.28 Angleton appealed to the Division. At issue in this case are Angleton’s bills for thirteen visits between February 27 and March 31, 202029; thirteen visits between April 1-23, 202030; six visits between May 6-21, 202031; four visits between May 27 and June 3, 202032; and ten visits between July 8-22, 2020.33

The MFD Decisions found that Angleton was entitled to additional reimbursement for the disputed visits and that SORM’s preauthorization letters did not limit reimbursement to four units/one hour per visit. Specifically, the MFD Decisions each state that the Division “finds the preauthorization reports are not in accordance with [28 Texas Administrative Code §] 134.600 because they don’t list the ‘number of specific health care treatments and the specific period of time requested to complete the treatments.’”34 The MFD Decision also held that SORM’s reliance on CMS was inapt because the Division’s rules take precedence over any conflicting provision in the Medicare program.35 SORM appealed those decisions to SOAH.

C. Analysis

SORM contends that reimbursement to Angleton was properly limited to four units per visit, consistent with the preauthorization letters and ODGs. Angleton contends that each of the preauthorization letters approved the total number of visits and treatments requested, without any limitation on the number of units that could be billed per visit, and therefore all of the billed units should be reimbursed.

The ALJ finds that the preauthorization requests and approvals cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes. While the preauthorization letters unequivocally state the number of sessions approved and the date range during which the services had to be provided, they do not clearly contain a time limit for each session. Rather, the letters state only that “treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.” They do not indicate whether or not Angleton’s preauthorization requests, which included medical records for the injured worker, had already established that medical necessity. Therefore, the ALJ agrees with the MFD Decisions’ determination that SORM failed to include the “number of specific health care treatments and the specific period of time requested to complete the treatments” in the preauthorization letters.36

Further, even if the preauthorization letters could be construed as limiting the duration of each session, that limitation would not apply because SORM was prohibited from changing Angleton’s preauthorization requests, or conditioning its approval of the requests, without first discussing the change with and documenting the approval of Angleton. Under 28 Texas Administrative Code § 134.600(n), “[t]he insurance carrier shall not condition an approval or change any elements of the [preapproval] request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”37 Nowhere in the preauthorization requests did Angleton limit its request for preauthorization to only four units per session. By limiting its approval to only four units per session without first reaching an agreement with Angleton, SORM has impermissibly conditioned or changed an element of the preauthorization request in violation of the Division’s rules.

The ALJ further finds that Angleton’s treatment of the injured worker was consistent with the ODGs. The ODGs state that although it is typical for a physical therapy session to last only 45-60 minutes, more treatment time may be required for some patients and the guidelines do “not intend[] to limit or cap the number of units that are medically necessary for a particular patient.”38 The ODGs provide that an insurance carrier may authorize additional units if medically necessary due to the individual patient’s needs. In this case, Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient; the requests were supported by medical documentation and did not limit treatment to only four units per session. Therefore, the preponderance of the evidence shows that the additional units per session were medically necessary and appropriate for this patient and complied with the ODGs.

In sum, for the reasons stated in this decision, the ALJ finds that SORM cannot limit the number of units in the absence of agreement with Angleton. Further, Angleton’s preauthorization requests for treatment of the injured worker were consistent with the ODGs, and SORM should reimburse Angleton for those health care services not previously paid.39 The ALJ concludes that the MFD Decisions correctly determined that SORM is required to pay to Angleton the disputed amount of $1,369.58 in Case No. 454-22-0043.M4-NP; $531.31 in Case No. 454-22-0044.M4-NP; $348.86 in Case No. 454-22-0040.M4-NP; $241.22 in Case No. 454-22-0045.M4-NP; and $389.73 in Case No. 454-22-0039.M4-NP, for a total reimbursement of $2,880.70.

The ALJ makes the following findings of fact and conclusions of law in support of this decision.

III. FINDINGS OF FACT

1. In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder. The injured worker became a patient of Angleton Rehabilitation and Wellness (Angleton).

2. The State Office of Risk Management (SORM) was the responsible workers’ compensation insurer for the injured worker.

3. SORM contracts with CareWorks to perform workers’ compensation medical bill reviews for SORM.

4. Angleton requested preauthorization for two or three physical therapy visits per week for four weeks.

5. CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The February 26, 2020 preauthorization letter approved 12 physical therapy visits from February 26-May 31, 2020.

6. In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from March 27-June 27, 2020, in a letter dated March 27, 2020.

7. In April 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from April 29-July 15, 2020, in a letter dated April 29, 2020.

8. In June 2020, Angleton submitted a preauthorization request for an additional 14 sessions of physical therapy, which CareWorks approved July 2, 2020-January 31, 2021, in a letter dated July 2, 2020.

9. Each of the preauthorization requests specified the number and frequency of sessions proposed. All but the initial preauthorization request specified the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request.

10. Angleton requested approval of all procedure codes or modalities on the basis that all were medically necessary and appropriate for the patient.

11. None of Angleton’s preapproval requests specified how long was requested to complete the treatments at each session.

12. Angleton did not limit the requests for approval to only four units per session.

13. Each approval letter set a date range for the approved services and stated that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

14. The approval letters did not indicate whether Angleton’s preauthorization requests, which included medical records for the injured worker, had or had not already established the medical necessity for longer visits.

15. Prior to issuing its approvals, SORM did not contact Angleton about limiting the number of units per session.

16. The approval letters cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes.

17. Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020.

18. Angleton requested and provided treatment in accordance with the Official Disability Guidelines (ODGs). The ODGs are used to determine if a modality is medically necessary and appropriate.

19. Although the ODGs provide that physical therapy sessions typically last only 45-60 minutes with three or four modalities or procedural units per visit, the ODGs acknowledge that some patients require more treatment time.

20. The ODGs do not limit or cap the number of units that are medically necessary for a particular patient at each visit.

21. Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient. The requests were supported by medical documentation and did not limit treatment to only four units per session.

22. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session for a number of sessions.

23. SORM approved reimbursement for only four units per visit and denied payment for other units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.

24. Angleton requested a Medical Fee Dispute (MFD) resolution from the Texas Department of Insurance, Division of Workers’ Compensation (Division).

25. On August 27, 2020, the Division issued an MFD Decision ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.

26. On September 25, 2020, the Division issued an MFD Decision ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.

27. On October 15, 2020, the Division issued an MFD Decision ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.

28. On November 19, 2020, the Division issued an MFD Decision ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.

29. On January 29, 2021, the Division issued an MFD Decision ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.

30. Angleton timely requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. The cases were docketed separately at SOAH.

31. On September 8, 2021, the Division issued a notice to the parties in each case with a statement of the nature of the hearings; 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 either a short, plain statement of the factual matters asserted or an attachment that incorporated by reference the factual matters asserted in the complaint or petition filed with the state agency.

32. On October 15, 2021, the Administrative Law Judge (ALJ) issued Order No. 2 joining the five cases into a single proceeding for all purposes other than appeal. Order No. 2 also included a statement of the time and place of the hearing and instructions for participating in the hearing.

33. On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

IV. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031; Tex. Gov’t Code ch. 2003.

2. Adequate and timely notice of the hearing was provided to the parties. Tex. Gov’t Code §§ 2001.051-.052.

3. A medical fee dispute is a dispute over the amount of payment for services that have been determined to be medically necessary and appropriate for treatment of an injured employee’s compensable injury. 28 Tex. Admin. Code § 133.305(a)(5).

4. A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker. Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

5. The Texas Department of Insurance has adopted the ODGs for workers’ compensation medical treatment in Texas, and treatment provided in accordance with the ODGs is presumed reasonable. 28 Tex. Admin. Code § 137.100(c)-(d).

6. When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability. 28 Tex. Admin. Code § 134.600(l).

7. An insurance carrier may not condition an approval or change any elements of the request unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented. 28 Tex. Admin. Code § 134.600(n).

8. By limiting the approval to only four units per session without first contacting Angleton and reaching agreement on that limitation, SORM impermissibly conditioned or changed an element of the preauthorization request. 28 Tex. Admin. Code § 134.600(n).

9. Angleton is entitled to receive a total of $2,880.70 for the physical therapy provided to the injured worker and not paid for by SORM as follows:

a. $1,369.58 for physical therapy services provided from February 27-March 31, 2020 (Case No. 454-22-0043.M4-NP);

b. $531.31 for physical therapy services provided from April 1-23, 2020 (Case No. 454-22-0044.M4-NP);

c. $348.86 for physical therapy services provided from May 6-21, 2020 (Case No. 454-22-0040.M4-NP);

d. $241.22 or physical therapy services provided from May 27-June 3, 2020 (Case No. 454-22-0045.M4-NP); and

e. $389.73 for physical therapy services provided from July 8-22, 2020 (Case No. 454-22-0039.M4-NP).

ORDER

IT IS ORDERED that Carrier must pay Provider the additional sum of $2,880.70, plus accrued interest.

NONPREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 Texas Administrative Code § 133.307(h) require the nonprevailing party to reimburse the Division for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires SOAH to identify the nonprevailing party and any costs for services provided by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, SORM is the nonprevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED February 25, 2022.

SARAH STARNES
ADMINISTRATIVE LAW JUDGE
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1 SORM Ex. 14. The appeal from the August 27, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0043.M4-NP.

2 SORM Ex. 24. The appeal from the September 25, 2020 MFD Decision was docketed at SOAH as Case No. 454-22-0044.M4-NP.

3 SORM Ex. 32. The appeal from the October 15, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0040.M4-NP.

4 SORM Ex. 41. The appeal from the November 19, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0045.M4-NP.

5 SORM Ex. 51. The appeal from the January 29, 2021 MFD Decision was docketed at SOAH at Case No. 454-22-0039.M4-NP.

6 Order No. 2, issued October 15, 2021.

7 Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

8 Tex. Labor Code §§ 401.011(8), 413.014(c).

9 28 Tex. Admin. Code § 134.600(f)(2)-(4), (9).

10 28 Tex. Admin. Code § 134.600(l).

11 28 Tex. Admin. Code § 134.600(n).

12 Tex. Labor Code § 413.014(e).

13 28 Tex. Admin. Code § 137.100.

14 28 Tex. Admin. Code § 137.100(c)-(d).

15 Ex. 5 at SORM-000012-13.

16 Tex. Labor Code § 413.031(a).

17 Tex. Labor Code § 413.0312(e).

18 28 Tex. Admin. Code § 148.14(b), (e).

19 See Vista Med. Ctr. Hosp. v. Texas Mut. Ins. Co., 416 S.W.3d 11, 17-18 (Tex. App.—Austin 2013, no pet.).

20 Ex. 1.

21 Ex. 2. SORM witness Jennifer Cooper testified that the letter’s abbreviations meant that two or three visits per week were approved for a period of four weeks, for a total of up to twelve preapproved visits.

22 CMS is an abbreviation of Centers for Medicare and Medicaid Services. See 28 Tex. Admin. Code § 134.203(a)(5). Ms. Cooper testified that CMS guidelines are a “preface to” or equal to ODG guidelines.

23 Ex. 2 at 003.

24 Exs. 3-4.

25 Exs. 18-19.

26 Exs. 45-46.

27 Exs. 10, 20, 28, 37, and 47.

28 Ms. Lyckman testified that SORM approved the highest-paying CPT codes submitted for each visit, but approved no more than four units per visit.

29 Ex. 10. These are the charges at issue in SOAH Docket No. 454-22-0043.M4-NP.

30 Ex. 20. These are the charges at issue in SOAH Docket No. 454-22-0044.M4-NP.

31 Ex. 28. These are the charges at issue in SOAH Docket No. 454-22-0040.M4-NP.

32 Ex. 37. These are the charges at issue in SOAH Docket No. 454-22-0045.M4-NP.

33 Ex. 47. These are the charges at issue in SOAH Docket No. 454-22-0039.M4-NP.

34 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293.

35 Ex. 10 at SORM-000080-81; See also 28 Tex. Admin. Code § 134.203(a)(7).

36 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293 (emphasis added).

37 28 Tex. Admin. Code § 134.600(n).

38 Ex. 5 at SORM-000012-13.

39 Though not cited by either party, the same conclusions were reached by ALJ Kerrie Qualtrough in a previous SOAH docket, 454-14-3636.M4-NP (Decision and Order issued September 14, 2014). The undersigned ALJ finds Judge Qualtrough’s Decision and Order more persuasive than the 2008 and 2011 decisions cited by SORM. Exs. 7-9.

DECISION AND ORDER

The State Office of Risk Management (SORM) challenges the decisions of the Texas Department of Insurance, Division of Workers’ Compensation (Division) to award additional reimbursement to Angleton Rehabilitation and Wellness (Angleton) for physical therapy services provided for an injured worker in April-July 2020. SORM preauthorized the physical therapy sessions, but denied payment to Angleton for the portion of the sessions that exceeded one hour. The Administrative Law Judge (ALJ) concludes that SORM was not authorized to condition its approval on a time limitation that Angleton did not agree to. Therefore, the ALJ affirms the Division’s Medical Fee Dispute (MFD) Decisions, and orders SORM to reimburse Angleton $2,880.70 for the services at issue in this proceeding.

I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY

There are no disputed issues regarding notice or jurisdiction in this proceeding. Therefore, those matters are addressed in the findings of fact and conclusions of law without further discussion here.

After SORM made reduced payments on Angleton’s claims for reimbursement for the services in question, Angleton filed requests for medical fee dispute resolution with the Division. This Decision and Order addresses the following MFD Decisions issued by the Division:

  1. August 27, 2020 MFD Decision, ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.1
  2. September 25, 2020 MFD Decision, ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.2
  3. October 15, 2020 MFD Decision, ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.3
  4. November 19, 2020 MFD Decision, ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.4
  5. January 29, 2021 MFD Decision, ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.5

Angleton requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. On September 8, 2021, the Division issued a Notice of Hearing in each case. Subsequently, these cases were joined into a single proceeding for all purposes other than appeal and scheduled for a hearing on the merits.6

On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

II. DISCUSSION

A. Applicable Law

A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker.7 The insurance carrier is not liable for treatments or services requiring preauthorization unless preauthorization was sought and obtained from the insurance carrier or has been ordered by the Commissioner of Worker’s Compensation.8

A request for preauthorization must include, among other things, the specific health care requested, the number of specific treatments and the period of time to complete the treatments, information to support the medical necessity of the requested treatments, and the estimated date of the proposed health care.9 When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability.10 Further, the insurance carrier “shall not condition an approval or change any elements of the request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”11 Once a treatment has been preauthorized, the treatment or service is not subject to retrospective review for medical necessity.12

The Texas Department of Insurance has adopted the Official Disability Guidelines (ODGs) for workers’ compensation medical treatment in Texas.13 Treatment provided in accordance with the ODGs is presumed reasonable and, absent an emergency, the insurance carrier is typically not liable for the costs of treatments or services that exceed those guidelines if they were not preauthorized.14 Relevant to physical therapy, the ODGs provide:

Generally, there should be no more than 4 modalities/procedural units in total per visit, allowing the PT visit to focus on treatments that have shown evidence of functional improvement and limiting the total length of the visit to 45-60 minutes, unless additional circumstances require an extended length of treatment. Treatment times per session may vary based upon the patient’s medical presentation but typically may be 45-60 minutes to provide full, optimal care to the patient. Additional time may be required for the more complex and slow-to-respond patients. While an average of 3 or 4 modalities/procedural units per visit reflect a typical visit, this is not intended to limit or cap the number of units that are medically necessary for a patient (for example, in unusual cases where co-morbidities involve completely separate body domains), but documentation should support any average that exceeds 4 units per visit. These additional units should be reviewed for medical necessity and then authorized if determined to be medically appropriate for the individual injured worker.15

If a health care provider is denied or paid a reduced amount for the medical service rendered, the provider is entitled to review by the Division.16 If a dispute remains after that review, a party may request a contested case hearing at SOAH.17 As the party requesting a hearing at SOAH to challenge adverse MFD Decisions, SORM has the burden of proof to show by a preponderance of the evidence that Angleton is not entitled to additional reimbursement.18 The hearing before SOAH is a de novo review of the issues involved.19

B. Evidence

At the hearing, SORM had 55 exhibits admitted into evidence and presented testimony from two witnesses: Jennifer Cooper, a utilization review manager with CareWorks, a company contracted to perform workers’ compensation medical bill reviews for SORM; and Janine Lyckman, the cost-containment director for SORM. Mr. Pesnell testified on behalf of Angleton, and Angleton did not offer any additional exhibits. The underlying facts are not in dispute.

In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder.20 Angleton requested preauthorization and CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The preauthorization letter specified that what was approved was “physical therapy left upper extremity 2-3x4 (12 visits),” and that the services were approved from February 26-May 31, 2020.21 The letter went on to state, “Per CMS Guidelines,22 treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.”23

In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks also approved from March 27-June 27, 2020.24 Another 12 sessions were requested and approved in April 2020 (approved from April 29-July 15, 2020),25 then 14 more sessions were requested and approved in June 2020 (approved from July 2, 2020-January 31, 2021).26 Each of the preauthorization requests specified the number of sessions proposed and the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request, but none of the requests specified the length of time to complete the treatments at each session. Each approval letter set a date range for the approved services and included the caveat that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session.27 Angleton did not seek preauthorization for any of the sessions to exceed 60 minutes and disputes that it was required to do so.

Mr. Pesnell is a physical therapist and supervised the sessions at issue in this case. He testified that Angleton complied with the frequency and number of sessions that were preauthorized by SORM and that the services were provided within the time periods specified in the preauthorization letters. Mr. Pesnell denied that Angleton provided any treatments or services that were not preauthorized. He admitted that many of the sessions exceeded 45-60 minutes but disputed that the preauthorization letters put any cap on the treatment time allowed per session.

Mr. Pesnell testified that he continued having sessions that exceeded 60 minutes despite learning from Angleton’s benefits coordinator that SORM was reducing or denying bills for exceeding preauthorization. Mr. Pesnell explained that Angleton was ethically bound to treat the patient and help the patient improve and that the longer sessions were medically necessary in view of the patient’s condition and history. He also asserted that the documentation submitted with the preauthorization requests was sufficient to support the level and duration of service he provided.

In reliance on its position that it only preauthorized 45-60 minutes per session, SORM approved reimbursement for only four units per visit and denied payment for other/additional units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.28 Angleton appealed to the Division. At issue in this case are Angleton’s bills for thirteen visits between February 27 and March 31, 202029; thirteen visits between April 1-23, 202030; six visits between May 6-21, 202031; four visits between May 27 and June 3, 202032; and ten visits between July 8-22, 2020.33

The MFD Decisions found that Angleton was entitled to additional reimbursement for the disputed visits and that SORM’s preauthorization letters did not limit reimbursement to four units/one hour per visit. Specifically, the MFD Decisions each state that the Division “finds the preauthorization reports are not in accordance with [28 Texas Administrative Code §] 134.600 because they don’t list the ‘number of specific health care treatments and the specific period of time requested to complete the treatments.’”34 The MFD Decision also held that SORM’s reliance on CMS was inapt because the Division’s rules take precedence over any conflicting provision in the Medicare program.35 SORM appealed those decisions to SOAH.

C. Analysis

SORM contends that reimbursement to Angleton was properly limited to four units per visit, consistent with the preauthorization letters and ODGs. Angleton contends that each of the preauthorization letters approved the total number of visits and treatments requested, without any limitation on the number of units that could be billed per visit, and therefore all of the billed units should be reimbursed.

The ALJ finds that the preauthorization requests and approvals cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes. While the preauthorization letters unequivocally state the number of sessions approved and the date range during which the services had to be provided, they do not clearly contain a time limit for each session. Rather, the letters state only that “treatment past 45-60 minutes requires documentation substantiating the medical necessity of the additional time.” They do not indicate whether or not Angleton’s preauthorization requests, which included medical records for the injured worker, had already established that medical necessity. Therefore, the ALJ agrees with the MFD Decisions’ determination that SORM failed to include the “number of specific health care treatments and the specific period of time requested to complete the treatments” in the preauthorization letters.36

Further, even if the preauthorization letters could be construed as limiting the duration of each session, that limitation would not apply because SORM was prohibited from changing Angleton’s preauthorization requests, or conditioning its approval of the requests, without first discussing the change with and documenting the approval of Angleton. Under 28 Texas Administrative Code § 134.600(n), “[t]he insurance carrier shall not condition an approval or change any elements of the [preapproval] request . . . unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented.”37 Nowhere in the preauthorization requests did Angleton limit its request for preauthorization to only four units per session. By limiting its approval to only four units per session without first reaching an agreement with Angleton, SORM has impermissibly conditioned or changed an element of the preauthorization request in violation of the Division’s rules.

The ALJ further finds that Angleton’s treatment of the injured worker was consistent with the ODGs. The ODGs state that although it is typical for a physical therapy session to last only 45-60 minutes, more treatment time may be required for some patients and the guidelines do “not intend[] to limit or cap the number of units that are medically necessary for a particular patient.”38 The ODGs provide that an insurance carrier may authorize additional units if medically necessary due to the individual patient’s needs. In this case, Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient; the requests were supported by medical documentation and did not limit treatment to only four units per session. Therefore, the preponderance of the evidence shows that the additional units per session were medically necessary and appropriate for this patient and complied with the ODGs.

In sum, for the reasons stated in this decision, the ALJ finds that SORM cannot limit the number of units in the absence of agreement with Angleton. Further, Angleton’s preauthorization requests for treatment of the injured worker were consistent with the ODGs, and SORM should reimburse Angleton for those health care services not previously paid.39 The ALJ concludes that the MFD Decisions correctly determined that SORM is required to pay to Angleton the disputed amount of $1,369.58 in Case No. 454-22-0043.M4-NP; $531.31 in Case No. 454-22-0044.M4-NP; $348.86 in Case No. 454-22-0040.M4-NP; $241.22 in Case No. 454-22-0045.M4-NP; and $389.73 in Case No. 454-22-0039.M4-NP, for a total reimbursement of $2,880.70.

The ALJ makes the following findings of fact and conclusions of law in support of this decision.

III. FINDINGS OF FACT

1. In February 2020, a physician ordered physical therapy “2-3 days per week for 4 weeks” to treat an injured worker’s left arm and shoulder. The injured worker became a patient of Angleton Rehabilitation and Wellness (Angleton).

2. The State Office of Risk Management (SORM) was the responsible workers’ compensation insurer for the injured worker.

3. SORM contracts with CareWorks to perform workers’ compensation medical bill reviews for SORM.

4. Angleton requested preauthorization for two or three physical therapy visits per week for four weeks.

5. CareWorks reviewed the claim and approved the services or treatment, agreeing that they were medically necessary or appropriate. The February 26, 2020 preauthorization letter approved 12 physical therapy visits from February 26-May 31, 2020.

6. In March 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from March 27-June 27, 2020, in a letter dated March 27, 2020.

7. In April 2020, Angleton submitted a preauthorization request for an additional 12 sessions of physical therapy, which CareWorks approved from April 29-July 15, 2020, in a letter dated April 29, 2020.

8. In June 2020, Angleton submitted a preauthorization request for an additional 14 sessions of physical therapy, which CareWorks approved July 2, 2020-January 31, 2021, in a letter dated July 2, 2020.

9. Each of the preauthorization requests specified the number and frequency of sessions proposed. All but the initial preauthorization request specified the procedure codes (CPT codes) for the treatments, referencing between five and ten CPT codes per request.

10. Angleton requested approval of all procedure codes or modalities on the basis that all were medically necessary and appropriate for the patient.

11. None of Angleton’s preapproval requests specified how long was requested to complete the treatments at each session.

12. Angleton did not limit the requests for approval to only four units per session.

13. Each approval letter set a date range for the approved services and stated that treatment past 45-60 minutes required documentation substantiating the medical necessity for more time.

14. The approval letters did not indicate whether Angleton’s preauthorization requests, which included medical records for the injured worker, had or had not already established the medical necessity for longer visits.

15. Prior to issuing its approvals, SORM did not contact Angleton about limiting the number of units per session.

16. The approval letters cannot be reasonably construed as limiting physical therapy visits to four units or 60 minutes.

17. Angleton provided physical therapy to the injured worker at a number of visits beginning February 27, 2020.

18. Angleton requested and provided treatment in accordance with the Official Disability Guidelines (ODGs). The ODGs are used to determine if a modality is medically necessary and appropriate.

19. Although the ODGs provide that physical therapy sessions typically last only 45-60 minutes with three or four modalities or procedural units per visit, the ODGs acknowledge that some patients require more treatment time.

20. The ODGs do not limit or cap the number of units that are medically necessary for a particular patient at each visit.

21. Angleton’s preauthorization requests demonstrated that five or more procedure codes were medically necessary for the patient. The requests were supported by medical documentation and did not limit treatment to only four units per session.

22. On the health insurance claim forms seeking reimbursement, services are billed in 15-minute increments, or units. Angleton submitted its bills to SORM and requested payment for four or more units per each session for a number of sessions.

23. SORM approved reimbursement for only four units per visit and denied payment for other units on the grounds that those charges had not been preauthorized and/or exceeded the preauthorization.

24. Angleton requested a Medical Fee Dispute (MFD) resolution from the Texas Department of Insurance, Division of Workers’ Compensation (Division).

25. On August 27, 2020, the Division issued an MFD Decision ordering SORM to pay $1,369.58 in additional reimbursement to Angleton for physical therapy services provided from February 27-March 31, 2020.

26. On September 25, 2020, the Division issued an MFD Decision ordering SORM to pay $531.31 in additional reimbursement to Angleton for physical therapy services provided from April 1-23, 2020.

27. On October 15, 2020, the Division issued an MFD Decision ordering SORM to pay $348.86 in additional reimbursement to Angleton for physical therapy services provided from May 6-21, 2020.

28. On November 19, 2020, the Division issued an MFD Decision ordering SORM to pay $241.22 in additional reimbursement to Angleton for physical therapy services provided from May 27-June 3, 2020.

29. On January 29, 2021, the Division issued an MFD Decision ordering SORM to pay $389.73 in additional reimbursement to Angleton for physical therapy services provided from July 8-22, 2020.

30. Angleton timely requested a hearing at the State Office of Administrative Hearings (SOAH) to contest each of the MFD Decisions. The cases were docketed separately at SOAH.

31. On September 8, 2021, the Division issued a notice to the parties in each case with a statement of the nature of the hearings; 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 either a short, plain statement of the factual matters asserted or an attachment that incorporated by reference the factual matters asserted in the complaint or petition filed with the state agency.

32. On October 15, 2021, the Administrative Law Judge (ALJ) issued Order No. 2 joining the five cases into a single proceeding for all purposes other than appeal. Order No. 2 also included a statement of the time and place of the hearing and instructions for participating in the hearing.

33. On January 25, 2022, ALJ Sarah Starnes convened a hearing on the merits via the Zoom government videoconferencing platform before SOAH in Austin, Texas. SORM appeared through attorney Deea Western. Angleton appeared through its non-attorney representative, Keith Pesnell. The record closed at the conclusion of the hearing on that same date.

IV. CONCLUSIONS OF LAW

1. SOAH has jurisdiction over this proceeding, including the authority to issue a decision and order. Tex. Lab. Code § 413.031; Tex. Gov’t Code ch. 2003.

2. Adequate and timely notice of the hearing was provided to the parties. Tex. Gov’t Code §§ 2001.051-.052.

3. A medical fee dispute is a dispute over the amount of payment for services that have been determined to be medically necessary and appropriate for treatment of an injured employee’s compensable injury. 28 Tex. Admin. Code § 133.305(a)(5).

4. A healthcare provider must request preauthorization from an injured worker’s insurance carrier prior to providing physical therapy to the worker. Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

5. The Texas Department of Insurance has adopted the ODGs for workers’ compensation medical treatment in Texas, and treatment provided in accordance with the ODGs is presumed reasonable. 28 Tex. Admin. Code § 137.100(c)-(d).

6. When an insurance carrier approves a preauthorization request, the approval must include the specific health care, the approved number of treatments and specific period of time to complete the treatments, and notice of any unresolved dispute regarding the denial of compensability or liability. 28 Tex. Admin. Code § 134.600(l).

7. An insurance carrier may not condition an approval or change any elements of the request unless the condition or change is mutually agreed to by the health care provider and insurance carrier and is documented. 28 Tex. Admin. Code § 134.600(n).

8. By limiting the approval to only four units per session without first contacting Angleton and reaching agreement on that limitation, SORM impermissibly conditioned or changed an element of the preauthorization request. 28 Tex. Admin. Code § 134.600(n).

9. Angleton is entitled to receive a total of $2,880.70 for the physical therapy provided to the injured worker and not paid for by SORM as follows:

a. $1,369.58 for physical therapy services provided from February 27-March 31, 2020 (Case No. 454-22-0043.M4-NP);

b. $531.31 for physical therapy services provided from April 1-23, 2020 (Case No. 454-22-0044.M4-NP);

c. $348.86 for physical therapy services provided from May 6-21, 2020 (Case No. 454-22-0040.M4-NP);

d. $241.22 or physical therapy services provided from May 27-June 3, 2020 (Case No. 454-22-0045.M4-NP); and

e. $389.73 for physical therapy services provided from July 8-22, 2020 (Case No. 454-22-0039.M4-NP).

ORDER

IT IS ORDERED that Carrier must pay Provider the additional sum of $2,880.70, plus accrued interest.

NONPREVAILING PARTY DETERMINATION

Texas Labor Code § 413.0312(g) and 28 Texas Administrative Code § 133.307(h) require the nonprevailing party to reimburse the Division for the cost of services provided by SOAH. Texas Labor Code § 413.0312(i) requires SOAH to identify the nonprevailing party and any costs for services provided by SOAH in its final decision. For purposes of Texas Labor Code § 413.0312, SORM is the nonprevailing party. The costs associated with this decision are set forth in Attachment A to this Decision and Order and are incorporated herein for all purposes.

SIGNED February 25, 2022.

SARAH STARNES
ADMINISTRATIVE LAW JUDGE
STATE OFFICE OF ADMINISTRATIVE HEARINGS

1 SORM Ex. 14. The appeal from the August 27, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0043.M4-NP.

2 SORM Ex. 24. The appeal from the September 25, 2020 MFD Decision was docketed at SOAH as Case No. 454-22-0044.M4-NP.

3 SORM Ex. 32. The appeal from the October 15, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0040.M4-NP.

4 SORM Ex. 41. The appeal from the November 19, 2020 MFD Decision was docketed at SOAH at Case No. 454-22-0045.M4-NP.

5 SORM Ex. 51. The appeal from the January 29, 2021 MFD Decision was docketed at SOAH at Case No. 454-22-0039.M4-NP.

6 Order No. 2, issued October 15, 2021.

7 Tex. Labor Code § 413.014(c)(4); 28 Tex. Admin. Code § 134.600(f), (p)(5).

8 Tex. Labor Code §§ 401.011(8), 413.014(c).

9 28 Tex. Admin. Code § 134.600(f)(2)-(4), (9).

10 28 Tex. Admin. Code § 134.600(l).

11 28 Tex. Admin. Code § 134.600(n).

12 Tex. Labor Code § 413.014(e).

13 28 Tex. Admin. Code § 137.100.

14 28 Tex. Admin. Code § 137.100(c)-(d).

15 Ex. 5 at SORM-000012-13.

16 Tex. Labor Code § 413.031(a).

17 Tex. Labor Code § 413.0312(e).

18 28 Tex. Admin. Code § 148.14(b), (e).

19 See Vista Med. Ctr. Hosp. v. Texas Mut. Ins. Co., 416 S.W.3d 11, 17-18 (Tex. App.—Austin 2013, no pet.).

20 Ex. 1.

21 Ex. 2. SORM witness Jennifer Cooper testified that the letter’s abbreviations meant that two or three visits per week were approved for a period of four weeks, for a total of up to twelve preapproved visits.

22 CMS is an abbreviation of Centers for Medicare and Medicaid Services. See 28 Tex. Admin. Code § 134.203(a)(5). Ms. Cooper testified that CMS guidelines are a “preface to” or equal to ODG guidelines.

23 Ex. 2 at 003.

24 Exs. 3-4.

25 Exs. 18-19.

26 Exs. 45-46.

27 Exs. 10, 20, 28, 37, and 47.

28 Ms. Lyckman testified that SORM approved the highest-paying CPT codes submitted for each visit, but approved no more than four units per visit.

29 Ex. 10. These are the charges at issue in SOAH Docket No. 454-22-0043.M4-NP.

30 Ex. 20. These are the charges at issue in SOAH Docket No. 454-22-0044.M4-NP.

31 Ex. 28. These are the charges at issue in SOAH Docket No. 454-22-0040.M4-NP.

32 Ex. 37. These are the charges at issue in SOAH Docket No. 454-22-0045.M4-NP.

33 Ex. 47. These are the charges at issue in SOAH Docket No. 454-22-0039.M4-NP.

34 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293.

35 Ex. 10 at SORM-000080-81; See also 28 Tex. Admin. Code § 134.203(a)(7).

36 Ex. 10 at SORM-000080; Ex. 24 at SORM-000147; Ex. 32 at SORM-000191; Ex. 41 at SORM-000224-25; Ex. 51 at SORM-000293 (emphasis added).

37 28 Tex. Admin. Code § 134.600(n).

38 Ex. 5 at SORM-000012-13.

39 Though not cited by either party, the same conclusions were reached by ALJ Kerrie Qualtrough in a previous SOAH docket, 454-14-3636.M4-NP (Decision and Order issued September 14, 2014). The undersigned ALJ finds Judge Qualtrough’s Decision and Order more persuasive than the 2008 and 2011 decisions cited by SORM. Exs. 7-9.

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