Court of Appeals of Texas, Austin.

TEXAS POLITICAL SUBDIVISIONS JOINT SELF-INSURANCE FUND, Appellant

v.

TEXAS DEPARTMENT OF INSURANCE–DIVISION OF WORKERS’ COMPENSATION and Commissioner Cassie Brown in her Official Capacity, Appellees

NO. 03-22-00241-CV

|

Filed: October 31, 2023

Attorneys & Firms

Dennis M. McKinney, for Appellees.

Dan C. Kelley, for Appellant.

Before Chief Justice Byrne, Justices Triana and Smith

OPINION

Gisela D. Triana, Justice

*1 Appellant Texas Political Subdivisions Joint Self-Insurance Fund (TPS Fund) challenges the trial court's order denying its combined plea to the jurisdiction and summary-judgment motion. In the underlying suit, the TPS Fund seeks judicial review of two Commissioner's Orders issued by appellees Texas Department of Insurance–Division of Workers’ Compensation and Commissioner Cassie Brown in her official capacity (collectively, the Division). In the orders, the Division assessed administrative penalties totaling $132,500 against the TPS Fund for violations of the Texas Labor Code involving the nonpayment or late payment of workers’ compensation benefits. In the TPS Fund's plea and motion, it asserted that it retains governmental immunity from liability for administrative penalties assessed against it. For the reasons explained below, we affirm the trial court's order.

BACKGROUND

Statutory Framework

The Texas Workers’ Compensation Act is a comprehensive legislative framework that creates a statewide no-fault insurance system for workers injured or killed in the course and scope of their employment. See generally Tex. Lab. Code §§ 401.001-419.007; see also Texas W. Oaks Hosp., LP v. Williams, 371 S.W.3d 171, 186 (Tex. 2012) (explaining that when employer elects to subscribe to workers’ compensation insurance, employer's insurance carrier is liable for compensation of employee's injury if employee is subject to Workers’ Compensation Act and employee's injury arises out of course and scope of employment). The Texas Department of Insurance is the state agency designated to oversee the workers’ compensation system, and within the Department, the Division was established to administer and operate the workers’ compensation system. See Tex. Lab. Code § 402.001.

The TPS Fund is a joint fund formed under the Interlocal Cooperation Act by certain self-insured governmental entities for the purpose of providing workers’ compensation benefits for its participants’ employees. See generally Tex. Gov't Code Ch. 791 (governing Interlocal Cooperation Contracts); see also Tex. Lab. Code § 406.003 (establishing that employers may obtain workers’ compensation insurance coverage through licensed insurance company or through self-insurance as provided by Act). The TPS Fund describes itself as a political subdivision of the State that operates as a risk-management pool and workers’ compensation claim administrator for its members, which are public-school districts, counties, cities, and other units of local government.

The Commissioner's Orders

In November 2019, the Division's staff initiated two separate cases before an administrative-law judge (ALJ) at the State Office of Administrative Hearings (SOAH), seeking to sanction the TPS Fund. In one case, the Division sought sanctions in the amount of $160,000 based on allegations that a 2018 audit identified multiple instances in which the TPS Fund failed to accurately pay death benefits and failed to timely or accurately report claim data. The ALJ ultimately found that the TPS Fund underpaid the death-benefit amounts for three claims by a total of $384,132.¹ In the other case, the Division sought sanctions in the amount of $7,500 based on allegations that the TPS Fund failed to timely pay benefits to an injured employee that should have begun by October 30, 2017. The ALJ ultimately found that the TPS Fund paid the injured employee the principal amount 112 days late and paid accrued interest 526 days late.

*2 In each of the proceedings, the TPS Fund filed a plea to the jurisdiction, asserting that, at the time of the TPS Fund's alleged violations, the TPS Fund enjoyed governmental immunity from suit and liability for administrative penalties and sanctions, based on a recent amendment to Texas Labor Code Section 504.053(e). See Act of May 26, 2019, 86th Leg., R.S. ch. 701, § 6, sec. 504.053, 2019 Tex. Gen. Laws 2005, 2006 (SB 2551 or Act) (codified at Tex. Labor Code § 504.053(e)). In the proposals for decision (PFDs) in each case, the ALJ explained that she had denied the TPS Fund's pleas to the jurisdiction and her reasoning for those denials. The ALJ determined that the enforcement actions had been brought by Division staff under Chapters 408, 409, and 415 of the Labor Code, not Chapter 504, and that “[t]he Texas Workers’ Compensation Act contains a clear and unambiguous waiver of sovereign immunity for governmental entities that self-insure, either individually or collectively.” Based on the evidence of violations and the applicable law, the ALJ recommended that the TPS Fund be ordered to pay $125,000 as an administrative penalty in the death-benefits case and $7,500 as an administrative penalty in the injured-employee case.

The Commissioner subsequently issued two Orders incorporating the ALJ's PFDs by reference. The Orders also incorporated and adopted by reference the findings of fact and conclusions of law listed in the PFDs. Accordingly, the Division assessed administrative penalties of $7,500 and $125,000 against the TPS Fund.

The TPS Fund subsequently sought judicial review of the Commissioner's Orders in Travis County District Court. The TPS Fund filed a combined plea to the jurisdiction and summary-judgment motion, again asserting that its governmental immunity has not been waived for the assessment of administrative penalties by the Division and seeking attorneys’ fees and costs under Texas Civil Practice and Remedies Code Sections 105.005 and 37.009.² See Tex. Civ. Prac. & Rem. Code § 37.009 (allowing court to “award costs and reasonable and necessary attorney's fees as are equitable and just” in proceeding brought under Uniform Declaratory Judgments Act); id. § 105.005 (allowing court to award prevailing party “reasonable attorney's fees and costs incurred in defending against a frivolous regulatory action during the contested case and judicial review of the decision in the contested case if ... there is a final determination that the regulatory action is frivolous”).

After a hearing, the trial court denied the plea and motion. This interlocutory appeal followed. See id. § 51.014(a)(5), (8).

ANALYSIS

In two issues, the TPS Fund asserts that the trial court erred by denying its plea to the jurisdiction and request for attorneys’ fees. We first address the jurisdictional issue.

Sovereign immunity protects the State of Texas and its agencies from suit and liability, while governmental immunity provides similar protections to the State's political subdivisions. Chambers-Liberty Cntys. Navigation Dist. v. State, 575 S.W.3d 339, 344 (Tex. 2019). The Division does not dispute that the TPS Fund is a political subdivision of the State for immunity purposes. Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Texas Pol. Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d320, 326 (Tex. 2006) (concluding in property-loss insurance case “that the Fund's ‘nature, purposes and powers’ demonstrate legislative intent that it exist as a distinct governmental entity entitled to assert immunity in its own right for the performance of a governmental function”). Governmental immunity therefore protects the TPS Fund from suit and liability unless the Legislature has waived the TPS Fund's immunity. See Chambers-Liberty Cntys. Navigation Dist., 575 S.W.3d at 344.

The Legislature may waive immunity by statute. Id. (citing Texas Nat. Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 853-54 (Tex. 2002)). If the Legislature elects to waive immunity by statute, it must do so by clear and unambiguous language. Tex. Gov't Code § 311.034; Chambers-Liberty Cntys. Navigation Dist., 575 S.W.3d at 344.

*3 Governmental immunity from suit defeats a trial court's jurisdiction. Ben Bolt-Palito Blanco CISD, 212 S.W.3d at 323. Whether a trial court has jurisdiction is a question of law that we review de novo. Id. Therefore, we review de novo the issue of the trial court's ruling on the TPS Fund's plea to the jurisdiction and summary-judgment motion raising the issue of the TPS Fund's immunity from the Division's imposition of administrative penalties. See Chambers-Liberty Cntys. Navigation Dist., 575 S.W.3d at 345.

The TPS Fund focuses its argument on the Texas Legislature's enactment of SB 2551 in 2019. SB 2551 added to Texas Labor Code Section 504.053(e) language expressly waiving political subdivisions’ governmental immunity “for sanctions, administrative penalties, and other remedies authorized by Chapter 415 [the section of the Workers’ Compensation Act governing administrative violations].” The parties do not contend that this language is ambiguous, and we agree that it is a clear and unambiguous waiver of political subdivisions’ governmental immunity for administrative penalties. The parties join issue on whether this unambiguous language represents a change in the existing law. The TPS Fund contends that the Legislature added this language to waive immunity for administrative penalties for violations occurring after June 10, 2019 (the effective date of SB 2551), while the Division contends that the addition of the waiver language was merely a codification or clarification of the existing law.

The construction of a statute is a question of law that we review de novo. Atmos Energy Corp. v. Cities of Allen, 353 S.W.3d 156, 160 (Tex. 2011). When construing a statute, our task is to give effect to the Legislature's expressed intent. Id. Thus, to determine whether the added language constitutes a waiver of immunity only for violations occurring after June 10, 2019, or is a codification of existing law, we may consider the object sought to be obtained; the circumstances under which the statute was enacted; the legislative history; prior law, including common law; and the consequences of a particular construction. See Tex. Gov't Code § 311.023(1)-(5) (establishing nonexclusive list of matters courts may consider to aid “[i]n construing a statute, whether or not the statute is considered ambiguous on its face”); Atmos Energy, 353 S.W.3d at 160; Cities of Austin, Dallas, Ft. Worth & Hereford v. Southwestern Bell Tel. Co., 92 S.W.3d 434, 442 (Tex. 2002). In addition, we avoid “construing a statutory provision in isolation from the rest of the statute; we should consider the act as a whole, and not just single phrases, clauses, or sentences.” Cities of Austin, Dallas, 92 S.W.3d at 442.

Viewing SB 2551 as a whole demonstrates that the Act's overarching purpose was to clarify the law and change the claim process governing first responders’ workers’ compensation claims for death or disability from cancer. SB 2551, titled “Liability, Payment, and Benefits for Certain Workers’ Compensation Claims,” amended the Government Code to specifically identify the types of cancer that firefighters or emergency medical technicians are rebuttably presumed to have developed from their job if they regularly responded to calls involving fires or firefighting or regularly responded to an event involving the documented release of radiation or a known or suspected carcinogen while the person was employed as a firefighter or emergency medical technician. See SB 2551, § 1 (codified at Tex. Gov't Code § 607.055(b)) (replacing prior definition of work-related cancers with list of specific types), § 2 (codified at Tex. Gov't Code § 607.058(a)-(c)) (amending rebuttable-presumption standard). SB 2551 further added a provision allowing a political subdivision or a pool of political subdivisions that self-insures to establish an account for the payment of death benefits and lifetime-income benefits and promulgating guidelines for establishing such an account. See id., § 7 (codified at Tex. Lab. Code § 504.074).

*4 The Act also changed the process for the workers’ compensation insurance carrier to investigate compensability in these presumptive cases, allowing the carrier more than the normal fifteen-day deadline to pay or dispute if certain conditions are met. Compare Tex. Lab. Code § 409.021(a), with SB 2551, § 3 (adding Subsection (a-3) to Tex. Lab. Code § 409.021). SB 2551 added language to the existing provision concerning a carrier's refusal to pay benefits to specify that “[a]n insurance carrier has not committed an administrative violation under Section 409.021 if the carrier has sent notice to the employee as required by Subsection (d) of this section or Section 409.021(a-3).” SB 2551, § 4 (codified at Tex. Lab. Code § 409.022(d-1)). Moreover, SB 2551 added language to the existing provision governing the Division's assessment of administrative penalties to enumerate specific considerations that the Commissioner shall consider when “determining whether to assess an administrative penalty involving a claim in which the insurance carrier provided notice under Section 409.021(a-3).” See id., § 5 (codified at Tex. Lab. Code § 415.021(c-2)(1)-(3)). Finally, SB 2551 included the provision at issue here, amending the existing language in Texas Labor Code Section 504.053 as follows (amended language in boldface type):

(e) Nothing in this chapter waives sovereign immunity or creates a new cause of action, except that a political subdivision that self-insures either individually or collectively is liable for:

(1) sanctions, administrative penalties, and other remedies authorized under Chapter 415;

(2) attorney's fees as provided by Section 408.221(c); and

(3) attorney's fees as provided by Section 417.003.

Id. § 6 (codified at Tex. Lab. Code § 504.053(e)).

The Act stated that the Government Code sections identifying the types of cancer to which the rebuttable presumption applies and containing the amendments to the rebuttable-presumption standard applied only to claims filed after the Act's effective date, and it further stated that Texas Labor Code Section 504.053(e)(1) and (2) applied only to administrative violations that occurred after the effective date of the Act. Id. §§ 8, 10. Furthermore, the Act specified that claims filed and administrative violations that occurred before the effective date are governed by prior applicable law. Id. Thus, the Act's language specifying that claims filed and administrative violations that occurred before the effective date are governed by the law in effect on the date of the claim or violation supports our conclusion that immunity for administrative penalties was waived before SB 2551 went into effect—otherwise there would have been no need for the Legislature to specify that administrative violations before the date of the Act were governed by the law in effect before the Act. In other words, the Legislature directed that the Commission could not go back and seek administrative penalties under the new statutory scheme for carriers’ handling of cancer claims that were filed before the effective date of the Act, not that the Commission could for the first time seek penalties from self-insured political subdivisions.

In addition, SB 2551's legislative history indicates that the Legislature intended that its amendment to Section 504.053 codify existing law, explaining that Section 6 of SB 2551:

(e) Makes a nonsubstantive change. Provides that nothing in this chapter (Workers’ Compensation Insurance Coverage For Employees of Political Subdivisions) waives sovereign immunity or creates a new cause of action, except that a political subdivision that self-insures either individually or collectively is liable for:

(1) sanctions, administrative penalties, and other remedies authorized under Chapter 415 (Administrative Violations);

(2) attorney's fees as provided by Section 408.221(c) (relating to providing that an insurance carrier that seeks judicial review of a certain final decision of the appeals panel is liable for reasonable and necessary attorney's fees incurred by the claimant as a result of the insurance carrier's appeal if the claimant prevails on an issue on which judicial review is sought by the insurance carrier in accordance with the limitation of issues); and

*5 (3) creates this subdivision from existing text and makes no further changes.

Texas Senate Research Center, Bill Analysis, Tex. S.B. 2551, 86th Leg., R.S. (2019) (emphasis added); see also Tex. Gov't Code § 311.023(3) (allowing courts to consider legislative history when construing statutes); Ben Bolt-Palito Blanco CISD, 212 S.W.3d at 327 (relying on legislative history when construing scope of Legislature's unambiguous waiver of local governmental entities’ immunity from suit for enforcement of contracts and determining that Fund was not excluded from immunity waiver and thus it was subject to suit in insurance-coverage dispute with Fund participant).

Consequently, viewed in the context of the rest of the Act and the circumstances of its enactment, we conclude that the Legislature added the new language to Section 504.053(e) to codify existing law establishing that political subdivisions that self-insure—the carriers for many of the State's first responders—are liable for sanctions, administrative penalties, and other Chapter 415 remedies, as well as attorneys’ fees, and to clarify that they would be liable under the new process for cancer claims only for administrative violations that occurred after the effective date of the Act.

Construing the provision at issue as a codification of existing law is consistent with the relevant common law and with the structure of the Workers’ Compensation Act as a whole. The Legislature enacted SB 2551 in 2019. Almost two decades earlier, this Court determined that political subdivisions that self-insure under the Workers’ Compensation Act are subject to administrative penalties assessed by the Division. Texas Workers’ Comp. Comm'n v. City of Eagle Pass/Tex. Mun. League Workers’ Comp. Joint Ins. Fund, 14 S.W.3d 801, 806 (Tex. App.—Austin 2000, pet. denied).

In reaching this holding, we first considered whether political subdivisions enjoyed sovereign immunity from state regulatory authority and concluded that they do not. The Workers’ Compensation Commission (now the Division) argued in Eagle Pass that “because municipalities and other political subdivisions of the State exist under the authority of the State and are subject to the State's regulatory authority, such entities do not enjoy sovereign immunity from state regulatory authority.” Id. at 803 (emphasis added). We agreed, reasoning that a political subdivision's immunity is derived from the State's immunity and so may act as a shield against actions brought by private parties but not against actions brought by the State exercising its regulatory authority over a political subdivision.³ Id. at 804.

*6 Although we concluded that the workers’ compensation insurance fund in Eagle Pass did not have independent sovereign immunity from the State, we also analyzed the Workers’ Compensation Act in its entirety to address the Eagle Pass fund's argument that even if sovereign immunity did not protect it from state regulation, Labor Code Section 415.021, which authorizes the State to assess administrative penalties, does not empower it to assess penalties against political subdivisions. See Eagle Pass, 14 S.W.3d at 804-06; see also Tex. Lab. Code § 415.021 (authorizing commissioner to assess administrative penalty against “a person who commits an administrative violation” as defined by the Texas Workers’ Compensation Act). As an initial matter, we concluded that the Code Construction Act's definition of “person,” which includes “government or governmental subdivision or agency” is the applicable definition, and thus, Section 415.021 authorizes penalties against a political subdivision. See Eagle Pass, 14 S.W.3d at 804-05 (citing Tex. Gov't Code § 311.005(2) (defining “person”)).

We then explained that the Texas Workers’ Compensation Commission (now the Division) is authorized to monitor insurance carriers to determine if they are in compliance with the Workers’ Compensation Act.⁴ Id. at 802, (citing Tex. Lab. Code §§ 414.001-.007 [now id. §§ 414.002-.007]; 28 Tex. Admin. Code §§ 180.1–.8 (1999)). We further noted that the definition of “insurance carrier” includes political subdivisions that self-insure. See Eagle Pass, 14 S.W.3d at 802-03 (citing Tex. Lab. Code § 401.011(27)(C) [now codified at id. § 401.011(27)(D)]). Relying on the unambiguous language in the Labor Code, we summarized the applicable provisions as follows:

The Workers’ Compensation Act specifically requires political subdivisions to provide workers’ compensation benefits to their employees. See Tex. Lab. Code Ann. § 504.011. If a subdivision chooses to provide such benefits through self-insurance, then the subdivision falls under the Act's definition of “insurance carrier,” which expressly includes “a governmental entity that self-insures, either individually or collectively.” Id. § 401.011(27)(C) [now codified as id. § 401.011(27)(D)]. Section 409.023 of the Act defines when an insurance carrier commits an administrative violation .... See id. § 409.023 [additional provisions now codified at id. §§ 415.002, .0035, .021]. Section 415.022 of the Act specifies the amount of administrative penalties that can be assessed for each class of an administrative violation. See id. § 415.022 (West 1996) [since repealed; see id. § 415.021 (providing for commissioner's assessment of administrative penalties)]. Read in its entirety, the Act clearly subjects political subdivisions to administrative penalties.

Id. at 806. Therefore, we concluded that “[t]he plain meaning of the statutory text and the structure of the Act as a whole support the conclusion that political subdivisions and municipalities are subject to administrative penalties under the Workers’ Compensation Act.” Id. Accordingly, we rejected the “appellees’ argument that the Commission lacks the statutory authority to impose penalties against them, and we resolve[d] any conflict in favor of the Commission.” Id. In other words, we held that Labor Code Section 415.021 unambiguously “subjects political subdivisions to administrative penalties” assessed by the Division. Id.

No case, either from our Court or from the Texas Supreme Court, has directly overruled our holding in Eagle Pass. In fact, in City of Galveston, the Texas Supreme Court cited Eagle Pass as an example of a case in which the State was allowed to seek money damages from a political subdivision because “a statute unambiguously rendered cities liable for workers’ compensation penalties.” 217 S.W.3d at 471 & n.33 (citing Eagle Pass, 14 S.W.3d at 806; Tex. Lab. Code § 415.021; Tex. Gov't Code § 311.005(2)). Nevertheless, the TPS Fund argues that our holding in Eagle Pass is undercut by later decisions of the Texas Supreme Court that it characterizes as holding that the State cannot seek claims for fees, penalties, and costs from political subdivisions because those are claims for retroactive money damages that are barred by political subdivisions’ governmental immunity. We disagree. The three cases relied on by the TPS Fund are all distinguishable from Eagle Pass because none of them involve a state agency exercising its regulatory authority granted by an unambiguous statute over a political subdivision. See Chambers-Liberty Cntys. Navigation Dist., 575 S.W.3d at 347-348 (concluding that Parks and Wildlife Code did not authorize State to seek retrospective monetary damages against navigation district based on State's claim that Parks and Wildlife Department, not navigation district, had sole power to decide who could cultivate oysters in disputed area); Rolling Plains Groundwater Conservation Dist. v. City of Aspermont, 353 S.W.3d 756, 760 (Tex. 2011) (per curiam) (holding that although Water Code did not unambiguously authorize suit for or assessment of penalties by one political subdivision against another, conservation district could seek declaratory relief from city but not retroactive money damages consisting of past-due fees, penalties, and costs); City of Galveston, 217 S.W.3d at 474 (concluding that absent clear and unambiguous consent from Legislature, State could not sue home-rule city for damages for negligence resulting in damage to State property).

*7 The TPS Fund also argues that Eagle Pass is not controlling because our analysis was based in part upon the Code Construction Act's definition of a “person,” which includes a governmental subdivision, but the case was decided before the enactment of Texas Government Code Section 311.034 in 2001. Section 311.034 provides as follows:

In order to preserve the legislature's interest in managing state fiscal matters through the appropriations process, a statute shall not be construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language. In a statute, the use of “person,” as defined by Section 311.005 to include governmental entities, does not indicate legislative intent to waive sovereign immunity unless the context of the statute indicates no other reasonable construction. Statutory prerequisites to a suit, including the provision of notice, are jurisdictional requirements in all suits against a governmental entity.

(Emphasis added.) We disagree that Section 311.034 negates our reliance in Eagle Pass on Section 311.005’s definition of “person.” Our analysis of the Workers’ Compensation Act in its entirety led to our conclusion that the statute unambiguously supports a waiver of immunity and provides the Division with authority to impose administrative penalties. We did not rely solely on the definition of “person” to conclude that the Legislature intended to waive political subdivisions’ governmental immunity—we concluded that the context of the statute indicated no other reasonable construction, given the Workers’ Compensation Act's specific requirement that political subdivisions provide workers’ compensation benefits to their employees, and its inclusion of self-insured subdivisions in the Act's definition of “insurance carrier.”

Finally, the TPS Fund contends that two Texas Supreme Court cases have held that the 2005 amendment to Texas Labor Code Chapter 504 (the Political Subdivisions Law), which added Section 504.053(e)’s original language stating that “[n]othing in this chapter waives sovereign immunity or creates a new cause of action,” so “muddled the issue” of immunity that we cannot conclude that the waiver of its immunity for administrative penalties is clear and unambiguous. See Travis Cent. Appraisal Dist. v. Norman, 342 S.W.3d 54, 59 (Tex. 2011) (holding court could no longer conclude that Political Subdivisions Law waived political subdivisions’ immunity for retaliatory-discharge claims under Chapter 451 after addition of Section 504.053(e)’s broadly worded no-waiver provision); see also Manbeck v. Austin Indep. Sch. Dist., 381 S.W.3d 528, 530 (Tex. 2012) (per curiam) (holding that inclusion of fee-shifting provision in list of adopted provisions set out in Political Subdivisions Law did not amount to waiver of governmental immunity from such fees). We disagree that the holdings in these two cases abrogate our prior holding in Eagle Pass or require us to hold that Eagle Pass has been superseded by changes to Section 504.053. In both Manbeck and Norman, the Texas Supreme Court was considering whether the political subdivisions’ immunity had been waived for damages or attorneys’ fees claims by their employees, not for the regulatory action by the Division that is at issue here. In both cases, the primary arguments for the waiver of immunity were that the provisions at issue had been included in Section 504.002's list of provisions from the general Workers’ Compensation Act laws that are included in the Political Subdivisions Law. See Manbeck, 381 S.W.3d at 530-32 (holding that although fee-shifting provision had been included in list of adopted provisions, new no-waiver provision made Political Subdivisions Law too internally inconsistent to constitute unambiguous immunity waiver); Norman, 342 S.W.3d at 57-59 (holding that inclusion in list of adopted provisions and election-of-remedies provision were not enough to constitute unambiguous immunity waiver in light of new no-waiver provision).

*8 In contrast, in Eagle Pass, as discussed at length above, our Court analyzed the entirety of the Workers’ Compensation Act and its interaction with the Political Subdivisions Law to reach its conclusion that political subdivisions’ immunity is waived for regulatory action by the Division. When the Legislature amended the Political Subdivisions Law in 2005 as part of the larger overhaul of the workers’ compensation system, it added Section 504.053 to require self-insuring political subdivisions to provide workers’ compensation medical benefits in the manner provided by the section, and as part of that requirement to provide medical benefits, stated that nothing waived sovereign immunity or created a new cause of action. In the larger context of the Workers’ Compensation Act, as described in Eagle Pass, we do not agree that this no-waiver provision abrogates our conclusion that political subdivisions’ immunity is waived for regulatory action by the Division. Accordingly, we conclude that the 2019 amendment to Section 504.053(e) represents a codification of prior common law. See Tex. Gov't Code § 311.023(4) (permitting courts to consider prior law when construing statutes).

Therefore, we hold that the TPS Fund's governmental immunity is waived for the administrative penalties imposed by the Division. We overrule the TPS Fund's first issue.

Because we have held that the TPS Fund's governmental immunity is waived for the administrative penalties, we cannot conclude that the trial court abused its discretion by refusing to award the TPS Fund attorneys’ fees for defending against a frivolous regulatory action. See Tex. Civ. Prac. & Rem. Code § 105.005. Accordingly, we overrule the TPS Fund's second issue.

CONCLUSION

Having held that the TPS Fund's governmental immunity is waived under the Workers’ Compensation Act for the administrative penalties imposed by the Division, we affirm the trial court's order denying the Fund's plea to the jurisdiction and summary-judgment motion.

	Footnotes
1	By the time the ALJ issued the proposal for decision in the SOAH proceeding, the TPS Fund had paid all outstanding amounts, including interest, to the beneficiaries for the underpaid death-benefit amounts.
2	The TPS Fund also sought a declaratory judgment that its governmental immunity has not been waived for the assessment of administrative penalties by the Division and that the TPS Fund's substantial rights had been prejudiced by the Orders.
3	We note that the reasoning in Eagle Pass was based on a narrower argument than a similar argument regarding the derivative nature of political subdivisions’ immunity that the Texas Supreme Court has since considered and rejected in a different context. See Chambers-Liberty Cntys. Navigation Dist. v. State, 575 S.W.3d 339, 345 (Tex. 2019) (noting that Texas Supreme Court had previously declined to adopt State's argument in negligence suit that municipality had no immunity against State “because the City's immunity is derived from the State,” citing City of Galveston v. State, 217 S.W.3d 466, 473 (Tex. 2007), and that State did not ask supreme court to reconsider it in instant case where State pursued money damages against navigation district). As discussed in more detail below, in City of Galveston, the Texas Supreme Court cited Eagle Pass with approval as a case in which the State was allowed to seek money damages from a political subdivision because “a statute unambiguously rendered cities liable for workers’ compensation penalties.” 217 S.W.3d at 471 & n.33.
4	In 2005, the Texas Legislature made adjustments to the workers’ compensation system that included abolishing the Texas Workers’ Compensation Commission and transferring its duties to the Division. See generally Act of May 29, 2005, 79th Leg., R.S., ch. 265, 2005 Tex. Gen. Laws 469, 476 (H.B. 7).

Court of Appeals of Texas, Austin.

Norman ENGEL, Appellant

v.

TEXAS DEPARTMENT OF INSURANCE-DIVISION OF WORKERS’ COMPENSATION and Commissioner Cassie Brown, in Her Official Capacity; The State of Texas and the Attorney General of the State of Texas by and through Ken Paxton in His Official Capacity as Attorney General of the State of Texas; and Illinois National Insurance Company, Appellees

NO. 03-23-00077-CV

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Publication Ordered June 13, 2023

FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-19-001342, THE HONORABLE KARIN CRUMP, JUDGE PRESIDING

Attorneys & Firms

Dennis M. McKinney, for Appellees Texas Department of Insurance-Division of Workers’ Compensation and Commissioner Cassie Brown, in Her Official Capacity, The State of Texas and the Attorney General of the State of Texas by and through Ken Paxton in His Official Capacity as Attorney General of the State of Texas.

John V. Fundis, for Appellee Illinois National Insurance Company.

Bradley Dean McClellan, for Appellant.

Before Justices Baker, Smith, and Jones

ORDER

PER CURIAM

*1 On March 14, 2023, we notified appellant Norman Engel that no clerk’s record had been filed and requested that he make arrangments for the clerk’s record and submit a status report to the Court. We further advised that his failure to comply with this request could result in the dismissal of his appeal. After appellant failed to file status report or otherwise respond to our notice, on April 21, 2023, we dismissed the appeal for want of prosecution. See Engel v. Texas Dep’t of Insur.-Division of Workers’ Comp., No. 03-23-00077-CV, 2023 WL 3042311, at *1 (Tex. App.—Austin Apr. 21, 2023, no pet. h.) (mem. op.).

On May 2, 2023, the clerk’s record was filed with this Court.

Appellant has now filed a motion for rehearing, which the appellees have not opposed, explaining that due to extenuating personal circumstances he was unable to make arrangements for the clerk’s record before our dismissal. We grant Engel’s motion for rehearing, withdraw our opinion and judgment dated April 21, 2023, and reinstate this appeal. We order appellant to file his appellant’s brief on or before July 13, 2023.

It is ordered on June 13, 2023.

Court of Appeals of Texas, Austin.

Eric HANDY, Sr., Appellant

v.

ZURICH AMERICAN INSURANCE COMPANY, Appellee

NO. 03-21-00418-CV

|

Filed: June 2, 2023

FROM THE 459TH DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-20-003365, THE HONORABLE KARIN CRUMP, JUDGE PRESIDING

Attorneys & Firms

Eric Handy Senior, Pro Se.

Paul L. Kelley, for Appellee.

Before Justices Baker, Smith, and Theofanis

MEMORANDUM OPINION

Edward Smith, Justice

*1 Pro se appellant Eric Handy, Sr., filed his notice of appeal complaining of the trial court’s granting of a no-evidence motion for summary judgment filed by appellee Zurich American Insurance Company. As explained below, we affirm the trial court’s order granting summary judgment and dismissing Handy’s claims against Zurich American.

FACTUAL AND PROCEDURAL SUMMARY

Handy filed a petition for judicial review of the determination made in a contested case by an administrative law judge (ALJ) that an injury Handy sustained on the job did not “extend [to] and include the entire extent of [Handy’s] injury.”¹ The ALJ recited that the parties had stipulated that Handy suffered “a compensable injury in the form of at least a cervical sprain/strain and right shoulder sprain/strain” on January 23, 2019. The parties disagreed, however, about whether the workplace injury extended to “a disc protrusion at C2-C3, C3-C4, C4-C5, and C5-C6.” The ALJ found that the compensable injury “was not a producing cause” of the disc protrusion or “an enhancement, acceleration, or worsening of any of those conditions.” The ALJ also found that the evidence supported Zurich American’s medical-examination doctor’s certification that Handy reached maximum medical improvement (MMI) on January 30, 2019, and had a zero-percent impairment rating.² In accordance with those findings, the ALJ issued conclusions of law determining that Handy’s compensable injury did not extend to or include the complained-of disc protrusion, that he reached MMI on January 30, 2019, and that he had a zero-percent impairment rating.

Handy’s petition for judicial review challenged the ALJ’s determination that Handy’s workplace injury “did not extend and include the entire extent of [Handy’s] injury” without specifying which findings he was contesting. See Tex. Lab. Code § 410.302(b) (trial for judicial review is limited to issues “on which judicial review is sought,” and pleadings must specify which determinations are challenged). On May 21, 2021, Zurich American filed a no-evidence motion for summary judgment, setting the motion for a hearing on June 28. In its motion, Zurich American explained that the ALJ had considered whether Handy’s compensable injury extended to and included his right shoulder sprain/strain and disc protrusions, whether he had reached MMI, and, if so, when he reached MMI and with what impairment rating. To prevail in his suit for judicial review, Zurich American asserted, Handy had to present expert medical evidence proving that the ALJ’s conclusions on those issues were erroneous. It specifically argued that there was “no expert medical evidence” that Handy’s compensable injury extended to and included his disc protrusions; that he did not reach MMI on January 30, 2019; and that his impairment rating is “not zero percent.” See Tex. R. Civ. P. 166a(i) (no-evidence motion “must state the elements as to which there is no evidence”).

*2 On June 28, the day of the summary-judgment hearing, Handy filed a response stating that his condition had “substantially changed since the appeals hearing” and arguing that evidence of that change should be considered by the trial court pursuant to section 410.307 of the labor code.³ He attached as exhibits a copy of his March 2021 Social Security Disability Decision, which found that Handy had “full favored disability since August 13, 2019”; copies of his medical records related to a December 6, 2019 neck surgery; copies of his medical bills related to that surgery; and a letter he had written “to highlight the difficulties and issues [he had] been dealing with since this workplace injury.” Zurich American immediately filed an objection to Handy’s response asserting that the response was untimely filed, see id. R. 166a(c) (response to motion for summary judgment must be served at least seven days before hearing unless party obtains permission from trial court), that the response “contains no summary judgment evidence,” that Handy’s exhibits were hearsay and lacked authentication or certification, and that the social-security decision and Handy’s letter contained “medical conclusions made by persons who are not demonstrated to be qualified as medical experts.” Following the hearing, the trial court signed orders sustaining Zurich American’s objections to Handy’s exhibits and granting Zurich American’s no-evidence motion for summary judgment.

DISCUSSION

The bulk of Handy’s appellate brief consists of his description of his workplace injury and events occurring after he was injured. As far as asserting that the trial court committed reversible error, he states, “The Judge went [with] opposing counsel and let one of Zurich’s doctors testify over the phone and Dr. Garzia should have been in the court room or it should [have] been continued.” He also asserts that in the hearing, the trial court “agreed with” Handy and said he “had abundance of evidence but [then] 30 days later ... went with” Zurich American, granting summary judgment against Handy. However, he presents nothing in the way of argument or authority that would allow us to reverse the trial court’s judgment.⁴ See Tex. R. App. P. 38.1(i) (“The brief must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record.”). We must “hold pro se litigants to the same procedural standards as we do litigants represented by counsel to avoid giving pro se litigants an unfair advantage,” although we “will read the briefs liberally so as to obtain a just, fair and equitable adjudication of the parties’ rights.” Veigel v. Texas Boll Weevil Eradication Found., Inc., 549 S.W.3d 193, 195 n.1 (Tex. App.—Austin 2018, no pet.) (citing Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989); Mansfield State Bank v. Cohn, 573 S.W.2d 181, 184–85 (Tex. 1978)). We thus have no choice but to hold that Handy has waived any argument that the ALJ’s findings were erroneous or that the trial court erred in excluding his untimely filed exhibits (indeed, Handy does not attempt to explain why it would have been erroneous to exclude his exhibits). See Onkst v. Onkst, No. 03-15-00636-CV, 2017 WL 2628245, at *4 (Tex. App.—Austin June 16, 2017, no pet.) (mem. op.); Thomas v. Graham Mortg. Corp., 408 S.W.3d 581, 595 (Tex. App.—Austin 2013, pet. denied); Professional Res. Plus v. University of Tex., No. 03-10-00524-CV, 2011 WL 749352, at *1 (Tex. App.—Austin Mar. 4, 2011, no pet.) (mem. op.).

*3 Even if Handy had preserved the issue and we were to hold that the documents should not have been excluded from the trial court’s consideration, the documents he attempted to provide in his summary-judgment response do not raise a fact issue as to whether the ALJ’s rulings were erroneous.

Handy, as the party seeking judicial review of the ALJ’s decision, had “the burden of proof by a preponderance of the evidence,” Tex. Lab. Code § 410.303, and after Zurich American moved for a no-evidence summary judgment, Handy had the burden of producing evidence raising a genuine issue of material fact about the challenged elements, including whether his workplace injury was a producing cause of his disc protrusion, see Tex. R. Civ. P. 166a(i) (if party moves for no-evidence summary judgment after adequate time for discovery, burden shifts to respondent to produce evidence raising fact question on elements challenged by movant). A “producing cause in workers’ compensation cases is defined as a substantial factor in bringing about an injury or death, and without which the injury or death would not have occurred.” Transcontinental Ins. v. Crump, 330 S.W.3d 211, 223 (Tex. 2010); see Kelley v. Aldine Indep. Sch. Dist., No. 14-15-00899-CV, 2017 WL 421980, at *2 (Tex. App.—Houston [14th Dist.] Jan. 31, 2017, pet. denied) (mem. op.) (party challenging workers’ compensation decision had burden of proving by preponderance of evidence that work-related injury was producing cause of disc herniation, cervical radiculitis, and lumbar radiculopathy). “The general rule has long been that expert testimony is necessary to establish causation as to medical conditions outside the common knowledge and experience of jurors.” Guevara v. Ferrer, 247 S.W.3d 662, 665 (Tex. 2007); Kelley, 2017 WL 421980, at *2.

A disc protrusion is not a common or basic injury, and its causation and whether it can be linked to the kind of injury suffered by Handy on the job are issues that require expert medical evidence. See Guevara, 247 S.W.3d at 665; Kelley, 2017 WL 421980, at *3; see also City of Laredo v. Garza, 293 S.W.3d 625, 632–33 (Tex. App.—San Antonio 2009, no pet.) (lay testimony alone insufficient to prove medical causation of disc herniations and radiculopathy). Handy did not provide expert medical evidence on the issue of whether his workplace injury caused the disc protrusion. Moreover, the proffered documents indicate that after his workplace injury, he suffered from pain and eventually underwent surgery—they do not establish that the later pain and surgery were the result of the workplace injury and not some other source.

The Social Security Disability Decision contains findings that Handy had not worked since August 13, 2019, “the alleged onset date,” and that he suffered from several “severe impairments,” including “degenerative disc disease.” The decision states that the evidence “confirms a work-related back injury in January 2019,” followed by an MRI “that confirmed postoperative changes at C6-7 from an anterior cervical diskectomy and fusion and C5-6 junctional disease.” However, the document does not correlate the compensable injury to the continued neck pain and eventual surgery. The same is true of Handy’s medical records from the December 2019 surgery—the fact that he required surgery does not tend to show that the workplace injury caused the disc protrusion. See State Office of Risk Mgmt. v. Larkins, 258 S.W.3d 686, 690–91 (Tex. App.—Waco 2008, no pet.) (even if medical records could be considered expert testimony, they did not establish that mental diagnoses were causally related to workplace head injury because records did not explain how injury could or did cause diagnoses). Nor can Handy’s letter, asserting his layperson’s belief that the workplace injury caused his later neck problems, be viewed as evidence of that fact. See Guevara, 247 S.W.3d at 665; Kelley, 2017 WL 421980, at *3.

*4 The various documents, even if they had been considered by the trial court, would not have raised a fact issue about whether Handy’s compensable injury extended to and included his disc protrusion. And because the documents do not speak to the issue of causation, they cannot be viewed as having any relevance to the issues of when he reached MMI or his impairment rating—both of which are statutorily defined in relation to a worker’s recovery from a compensable injury. See Tex. Lab. Code § 401.011(10), (23), (24), (30). Because Handy did not respond to Zurich American’s motion by providing evidence raising a fact issue on the challenged elements, the trial court did not err in granting the no-evidence motion for summary judgment—indeed, the court was required to do so. See Tex. R. Civ. P. 166a(i) (“The court must grant the motion unless the respondent produces summary judgment evidence raising a genuine issue of material fact.”)

CONCLUSION

Zurich American’s motion specified elements of which there was no evidence, and Handy failed to provide evidence raising a genuine issue of material fact as to those elements. The trial court was therefore required to grant Zurich American’s no-evidence motion. See id. We affirm the trial court’s order granting summary judgment in favor of Zurich American.

Footnotes
1	Handy also named his former employer, HC Beck, as a defendant. HC Beck filed a traditional motion for summary judgment, which was also granted. Handy did not complain of that ruling in his notice of appeal, and HC Beck is thus not a party to this appeal.
2	A compensable injury under the labor code is an “injury that arises out of and in the course and scope of employment for which compensation is payable under this subtitle”; impairment is “anatomic or functional abnormality or loss existing after maximum medical improvement that results from a compensable injury and is reasonably presumed to be permanent”; an impairment rating is “the percentage of permanent impairment of the whole body resulting from a compensable injury”; and MMI is the earlier of “the earliest date after which, based on reasonable medical probability, further material recovery from or lasting improvement to an injury can no longer reasonably be anticipated,” two years from the date “on which income benefits begin to accrue,” or a date arrived at under section 408.104, which governs the determination of MMI after spinal surgery. Tex. Lab. Code § 401.011(10), (23), (24), (30); see id. § 408.104 (“Maximum Medical Improvement After Spinal Surgery”).
3	Section 410.307 provides that in a proceeding for judicial review, “[e]vidence of the extent of impairment is not limited to that presented to the division if the court, after a hearing, finds that there is a substantial change of condition.” Id. § 410.307(a). A finding of a substantial change must be based on evidence by the same doctors whose opinions were considered in the administrative proceeding, “evidence that has come to the party’s knowledge since the contested case hearing,” “evidence that could not have been discovered earlier with due diligence,” and evidence that would probably produce a different result if admitted at trial. Id. However, the fact that Handy’s condition worsened between October 29, 2019, when the contested-case hearing was held, and December 6, 2019, when he underwent surgery, is not relevant to whether the disc protrusion—the cause of his worsening pain—arose out of his workplace injury.
4	The appellate record does not include a reporter’s record from the hearing on Zurich American’s motion for summary judgment, and oral evidence is not permitted at such hearings. See Tex. R. Civ. P. 166a(c) (“No oral testimony shall be received at the hearing.”). It is clear from the record that Handy’s summary-judgment response was untimely, and the record does not reflect that Handy sought or obtained the trial court’s permission to file a late response. See id. (“Except on leave of court, the adverse party, not later than seven days prior to the day of hearing may file and serve opposing affidavits or other written response.”).

2023 WL 3042311

Only the Westlaw citation is currently available.

SEE TX R RAP RULE 47.2 FOR DESIGNATION AND SIGNING OF OPINIONS.

Court of Appeals of Texas, Austin.

Norman ENGEL, Appellant

v.

TEXAS DEPARTMENT OF INSURANCE-DIVISION OF WORKERS’ COMPENSATION and Commissioner Cassie Brown, in Her Official Capacity; The State of Texas and the Attorney General of the State of Texas by and through Ken Paxton in His Official Capacity as Attorney General of the State of Texas; and Illinois National Insurance Company, Appellees

NO. 03-23-00077-CV

|

Filed: April 21, 2023

FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-19-001342, THE HONORABLE KARIN CRUMP, JUDGE PRESIDING

Attorneys & Firms

Dennis M. McKinney, for Appellees Texas Department of Insurance-Division of Workers’ Compensation and Commissioner Cassie Brown, in Her Official Capacity, The State of Texas and the Attorney General of the State of Texas by and through Ken Paxton in His Official Capacity as Attorney General of the State of Texas.

John V. Fundis, for Appellee Illinois National Insurance Company.

Bradley Dean McClellan, for Appellant.

Before Justices Baker, Smith, and Jones^*

MEMORANDUM OPINION

J. Woodfin Jones, Justice

*1 The clerk’s record in this appeal was due for filing in this Court on March 13, 2023. On March 14, 2023, we notified appellant that no clerk’s record had been filed due to his failure to pay or make arrangements to pay the trial clerk’s fee for preparing the clerk’s record. The notice requested that appellant make arrangements for the clerk’s record and submit a status report regarding this appeal by March 24, 2023. Further, the notice advised appellant that his failure to comply with this request could result in the dismissal of the appeal for want of prosecution. To date, appellant has not filed a status report or otherwise responded to this Court’s notice, and the clerk’s record has not been filed.

If a trial-court clerk fails to file the clerk’s record due to an appellant’s failure to pay or make arrangements to pay for the clerk’s fee for preparing the record, the appellate court may dismiss the appeal for want of prosecution unless the appellant was entitled to proceed without payment of costs. Tex. R. App. P. 37.3(b). In this case, appellant has not established that he is entitled to proceed without payment of costs. See Tex. R. Civ. P. 145. Because appellant has failed to pay or make arrangements to pay the clerk’s fee for preparing the clerk’s record, this appeal is dismissed for want of prosecution.

Footnotes
*	Before J. Woodfin Jones, Chief Justice (Retired), Third Court of Appeals, sitting by assignment. See Tex. Gov’t Code § 74.003(b).

Court of Appeals of Texas, Austin.

Appellant, Texas Department of Insurance, Division of Workers’ Compensation// Cross-Appellants, Accident Fund Insurance Company of America and Texas Cotton Ginners’ Trust

v.

Appellees, Accident Fund Insurance Company of America and Texas Cotton Ginners’ Trust// Cross-Appellee, Texas Department of Insurance, Division of Workers’ Compensation

NO. 03-21-00074-CV

|

Filed: February 28, 2023

FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-18-000341, THE HONORABLE MAYA GUERRA GAMBLE, JUDGE PRESIDING

Before Chief Justice Byrne, Justices Triana and Kelly

MEMORANDUM OPINION

Darlene Byrne, Chief Justice

*1 This declaratory-judgment action was brought pursuant to Section 2001.038 of the Texas Government Code. Appellees and cross-appellants, Accident Fund Insurance Company of America and Texas Cotton Ginners’ Trust, are two insurance carriers that successfully challenged the validity and applicability of an agency rule regarding eligibility for workers’ compensation supplemental income benefits (SIB), 28 Texas Administrative Code Section 130.102 (the Rule), which adopted rules pursuant to Texas Labor Code Section 408.142 (the Statute). 28 Tex. Admin. Code § 130.102 (2009) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Eligibility for Supplemental Income Benefits; Amount).¹ The appellant and cross-appellee, the Department of Insurance, Division of Workers’ Compensation (the Division) is the state agency designated to oversee the workers’ compensation system and that promulgated the challenged rule. Tex. Lab. Code § 402.001. The Division appeals the district court’s rulings that Section (d)(1)(D) of the Rule was invalid and that Section (f)’s mention of “work search contacts” is inapplicable to individuals who complete work searches on their own without the involvement of the Texas Workforce Commission (TWC). In their cross-appeal, the carriers challenge various agency materials of the Division as invalid ad hoc rules, which the district court ruled were not ad hoc rules.² Accident Fund Insurance Company also challenges on cross-appeal, the district court granting the Division’s motion to exclude Accident Fund’s expert witness. We will reverse in part and affirm in part the district court’s order.

BACKGROUND

The Workers’ Compensation Act was enacted “to balance the competing interests of providing ‘compensation for injured employees while protecting employers from the costs of litigation.’ ” SeaBright Ins. v. Lopez, 465 S.W.3d 637, 642 (Tex. 2015). The system offers “four levels of income benefits: 1) temporary income benefits; 2) impairment income benefits; 3) supplemental income benefits; and 4) lifetime benefits.” Texas Workers’ Comp. Comm’n v. Garcia, 893 S.W.2d 504, 513 (Tex. 1995). At issue here, are the SIB. SIB are longer term disability compensation that apply after temporary and impairment benefits have ceased, and the injured employee has a remaining impairment rating of 15 percent or more and is unemployed or underemployed. See Tex. Lab. Code § 408.142; Garcia, 893 S.W.2d at 513 (Tex. 1995). To be eligible for quarterly SIB payments, an injured worker who meets all other requirements, must “demonstrate an active effort to obtain employment,” by either participating in a vocational rehabilitation program or completing the required “work search efforts” for the qualifying period. Id. § 408.142(a); 28 Tex. Admin. Code § 130.102(d) (Eligibility for Supplemental Income Benefits; Amount).

*2 Relevant here are the statutory requirements for satisfactory “work search efforts” to receive SIB payments. Specifically, the parties dispute what the Statute requires of an injured employee that is searching for work on their own—compared to through a vocational rehabilitation program or through the TWC—to be entitled to SIB payments. The carriers are insurance companies who provide coverage of SIB for employers of injured workers. The Division promulgated the challenged rule. See 28 Tex. Admin. Code § 130.102(d), (f) (Eligibility for Supplemental Income Benefits; Amount).

The Statute was amended during the 2005 legislative session, and the Section relevant here currently reads:

(a) The commissioner by rule shall adopt compliance standards for supplemental income benefit recipients that require each recipient to demonstrate an active effort to obtain employment. To be eligible to receive supplemental income benefits under this chapter, a recipient must provide evidence satisfactory to the division of:

(1) active participation in a vocational rehabilitation program conducted by the Department of Assistive and Rehabilitative Services or a private vocational rehabilitation provider;

(2) active participation in work search efforts conducted through the Texas Workforce Commission; or

(3) active work search efforts documented by job applications submitted by the recipient.

(b) In adopting rules under this section, the commissioner shall:

(1) establish the level of activity that a recipient should have with the Texas Workforce Commission and the Department of Assistive and Rehabilitative Services;

(2) define the number of job applications required to be submitted by a recipient to satisfy the work search requirements; and

(3) consider factors affecting the availability of employment, including recognition of access to employment in rural areas, economic conditions, and other appropriate employment availability factors.

(c) The commissioner may consult with the Texas Workforce Commission, the Department of Assistive and Rehabilitative Services, and other appropriate entities in adopting rules under this section.

Tex. Lab. Code § 408.1415.

In 2009 the Division amended the Rule, adding the new work-search-efforts standard to the SIB-eligibility rules:

(d) Work Search Requirements.

(1) An injured employee demonstrates an active effort to obtain employment by meeting at least one or any combination of the following work search requirements each week during the entire qualifying period:

(A) has returned to work in a position which is commensurate with the injured employee’s ability to work;

(B) has actively participated in a vocational rehabilitation program as defined in § 130.101 of this title (relating to Definitions);

(C) has actively participated in work search efforts conducted through the Texas Workforce Commission (TWC);

(D) has performed active work search efforts documented by job applications; or

(E) has been unable to perform any type of work in any capacity, has provided a narrative report from a doctor which specifically explains how the injury causes a total inability to work, and no other records show that the injured employee is able to return to work.

(2) An injured employee who has not met at least one of the work search requirements in any week during the qualifying period is not entitled to SIBs unless the injured employee can demonstrate that he or she had reasonable grounds for failing to comply with the work search requirements under this section.

....

(f) Work Search Efforts. As provided in subsection (d)(1)(C) and (D) of this section regarding active participation in work search efforts and active work search efforts, an injured employee shall provide documentation sufficient to establish that he or she has, each week during the qualifying period, made the minimum number of job applications and or work search contacts consistent with the work search contacts established by TWC which are required for unemployment compensation in the injured employee’s county of residence pursuant to the TWC Local Workforce Development Board requirements. If the required number of work search contacts changes during a qualifying period, the lesser number of work search contacts shall be the required minimum number of contacts for that period. If residing out of state, the minimum number of work search contacts required will be the number required by the public employment service in accordance with applicable unemployment compensation laws for the injured employee’s place of residence.

*3 28 Tex. Admin. Code § 130.102(d), (f) (Eligibility for Supplemental Income Benefits; Amount). In the district court, the carriers sought a determination of the validity and applicability of the Rule as well as alleged ad hoc rules on the same topic. All parties filed motions for summary judgment. The carriers argued that the statute on its face limits the types of work-search efforts that may be conducted by an injured worker to entitle them to receipt of SIB payments to three—and only three—pathways: (1) active participation in a vocational rehabilitation program; (2) work-search efforts through TWC; or (3) job applications submitted by the recipient. They further argued that the discretion given to the Division in the Statute Section (b) is limited to determining the number of actions required to satisfy eligibility and did not give the Division any discretion to modify the three types of activity that may qualify.

The carriers’ challenges to the Rule focused on the Rule Sections (d)(1)(D), and (f). Specifically, the carriers argued that the Rule Section (d)(1)(D) is invalid because the exclusion of “submitted by the recipient” from the end of “active work search efforts documented by job applications” in the Rule compared to the Statute, allows for job seekers searching independently outside of TWC to count any “work search contact,”—an umbrella term used by TWC to refer to a list of activities that count towards eligibility for unemployment compensation benefits,—as a “work search effort,” which is the term used in the Statute, without having to document with job applications as the legislature intended to require. Compare 40 Tex. Admin. Code § 815.28(b)(4) (2004) (Tex. Workforce Comm’n, Work Search Requirements), with Tex. Lab. Code § 408.1415(a)(3), and 28 Tex. Admin. Code § 130.102(d)(1)(D) (Eligibility for Supplemental Income Benefits; Amount). They also argued that the Rule Section (f) authorizes activities other than “job applications” to count as “work search efforts” by conflating “job applications” with the broader term “work-search contacts” through the following Rule language: “made the minimum number of job applications and or work search contacts consistent with the work search contacts established by TWC.” 28 Tex. Admin. Code § 130.102(f) (Eligibility for Supplemental Income Benefits; Amount).

The Division argued that: (1) the statute when read as a whole does not limit job-search activities to only three categories but rather gave the Division broad discretion to consider various market factors in setting job-search criteria; and (2) the Division has the discretion to define what a “job application” is and defining it as a “work search contact” under the definition used by TWC is consistent with the Statute’s direction in Sections (b)(3), and (c), for the Division to consider various factors in adopting rules under the statute through consultation with TWC. The district court ordered:

1. 28 Tex. Admin. Code § 130.102(d)(1)(D) is invalid because it authorizes a fourth method of showing entitlement to Supplemental Income Benefits which conflicts with Labor Code § 408.1415(a)(3);

2. Defendant is permanently enjoined from applying this invalid rule.

3. The language in 28 Tex. Admin. Code § 130.102(f) pertaining to making “work search contacts” is not applicable to a claimant that is not participating in work search efforts through the Texas Workforce Commission; and

4. Defendant is permanently enjoined from applying the language in 28 Tex. Admin. Code § 130.102(f) pertaining to making “work search contacts” to a claimant that is not participating in work search efforts through the Texas Workforce Commission.

The carriers also challenged the Division’s preamble to Rule 130.102, Appeals Panel Decision 10029-s, the Division’s Appeals Panel Decision Manual, and the Application for Supplemental Income Benefits as containing invalid ad hoc rules. Specifically, the carriers argued that these materials contained ad hoc rules because they created a fourth pathway to receive SIB payments in which an injured employee may complete a wider category of “work search contacts” without being required to document those efforts with job applications. The Division argued that these were not rules, but rather were restating or explaining a valid rule.

*4 The district court concluded that these materials were not ad hoc rules but rather part of the Division’s “adjudicative duties.” The district court noted that the Division could no longer rely on these materials to support decisions that conflict with its ruling and that the Division would likely need to make revisions to the preamble, the manual, and the application.

Additionally, the district court granted the Division’s motion to exclude Accident Fund’s expert witness—which Accident Fund argues was an abuse of the district court’s discretion. This appeal followed.

DISCUSSION

The Division alleges that the district court erred in ruling that the Rule Section (d)(1)(D) is invalid and Subsection (f)’s “work search contact” language is not applicable to a claimant not participating in work-search efforts through TWC. The carriers on cross-appeal challenge the district court’s ruling that the challenged agency materials were not ad hoc rules. Accident Fund also challenges on cross appeal the district court granting the Division’s motion to exclude its expert witness.

VALIDITY AND APPLICABILITY OF RULE 130.102

We review the district court’s summary-judgment rulings de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Statutory construction is a question of law that we also review de novo. Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex. 1989). We construe statutory provisions to ascertain and effectuate legislative intent. Texas Dep’t of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 176 (Tex. 2004). “To do this, we look to and rely on the plain meaning of a statute’s words as expressing legislative intent unless a different meaning is supplied, is apparent from the context, or the plain meaning of the words leads to absurd or nonsensical results.” Cadena Comercial USA Corp. v. Texas Alcoholic Beverage Comm’n, 518 S.W.3d 318, 325 (Tex. 2017). When a statute’s language is clear and unambiguous “the statute’s plain language most reliably reveals the legislature’s intent.” Texas Health Presbyterian Hosp. of Denton v. D.A., 569 S.W.3d 126, 136 (Tex. 2018). Further, we “read every word, phrase, and expression in a statute as if it were deliberately chosen, and presume the words excluded from the statute are done so purposefully.” See Gables Realty Ltd. P’ship v. Travis Cent. Appraisal Dist., 81 S.W.3d 869, 873 (Tex. App.—Austin 2002, pet. denied). For facial challenges to a rule, we do not consider the merits of the rule on a case-by-case basis. Mid-Century Ins. v. Texas Workers’ Comp. Comm’n, 187 S.W.3d 754, 758 (Tex. App.—Austin 2006, no pet.). “Rather, we consider whether the rule: (1) contravenes specific statutory language; (2) runs counter to the general objectives of the statute; or (3) imposes additional burdens, conditions, or restrictions in excess of or inconsistent with the relevant statutory provisions.” Id. An agency’s construction of a statute that is within its area of expertise should be given serious consideration as long as the construction is both reasonable and does not contradict the plain language of the statute. Id. The parties challenging the rule have the burden of proving it is invalid. Texas State Bd. of Exam’rs of Marriage & Family Therapists v. Texas Med. Ass’n, 511 S.W.3d 28, 33 (Tex. 2017).

VALIDITY OF RULE 130.102(D)(1)(D)

The district court ruled that Section (d)(1)(D) of the Rule is invalid because “it authorizes a fourth method of showing entitlement to Supplemental Income Benefits which conflicts with Tex. Lab. Code § 408.1415(a)(3).” The carriers argued below—and continue to argue in support of the district court’s ruling—that the Statute authorizes three pathways of showing eligibility for the work-search requirement for SIB payments: (1) active participation in a vocational rehabilitation program under Section (a)(1); (2) active participation in work-search efforts conducted through TWC under Section (a)(2); and (3) active work-search efforts documented by job applications submitted by the recipient under Section (a)(3). They argue that the Division has created a fourth way of qualifying for benefits by not requiring the submission of any job applications but rather only requiring individuals searching on their own to make “work search contacts.” They also argue that a “job application” is limited to a writing on paper or online that conveys information to an employer about the individual. The carriers’ facial challenge to Rule Section (d)(1)(D) alleges that the exclusion of the statutory language “submitted by the recipient” from the Rule’s language following “active work search efforts documented by job applications” authorizes this alleged fourth pathway.

*5 The Division argues on appeal that the carriers’ rule challenge is rooted in an overly restrictive construction of Statute Section 408.1415(a)(3) and a disregard for the broad discretion that the Statute vested in the Commissioner to create rules to implement the new work-search compliance standards. Specifically, the Division argues that after consultation with TWC and considering the appropriate employment availability factors as directed by Statute Sections (b)(3) and (c), the amendments to the challenged Rule allow for injured workers to request and apply for jobs in a variety of ways, including in person, over the phone, or submitting copies of written physical or online forms, and documenting these applications for employment on the Application for Supplemental Income Benefits. The Division argues that limiting “job applications” as narrowly as the carriers’ definition would run counter to the general objectives of the statute because it would exclude job markets in certain areas which do not typically require a formal written form for applying for employment.

As a state agency, the Division may only exercise powers that the Legislature confers upon it in clear and express language and cannot exercise what amounts to a new or additional power for the purpose of administrative expediency. Texas Nat. Res. Conservation Comm’n v. Lakeshore Util. Co., 164 S.W.3d 368, 377 (Tex. 2005). This is because the Division is a creature of the legislature with no inherent authority of its own. Id. However, “[w]hen the Legislature expressly confers a power on an agency, it also impliedly intends that the agency have whatever powers are reasonably necessary to fulfill its express functions or duties.” Id. at 378.

The Division has been given the express power to oversee the workers’ compensation system. Tex. Lab. Code § 402.001. Regarding SIB eligibility under the “work search efforts” standard, an independent job seeker must “provide evidence satisfactory to the division of ... active work search efforts documented by job applications submitted by the recipient.” Id. § 408.1415(a)(3). Thus, the legislature conferred some power on the Division to determine “satisfactory evidence.” Id. The legislature explicitly mandated that the Division adopt rules that:

(1) establish the level of activity that a recipient should have with the Texas Workforce Commission and the Department of Assistive and Rehabilitative Services;

(2) define the number of job applications required to be submitted by a recipient to satisfy the work search requirements; and

(3) consider factors affecting the availability of employment, including recognition of access to employment in rural areas, economic conditions, and other appropriate employment availability factors.

Id. § 408.1415(b). The Statute does not limit the Division’s rulemaking under the Statute to only these three objectives, but it requires that the three objectives be met when the Division adopts new rules under the Statute. Id. The Division is also expressly allowed but not required to consult with the “Texas Workforce Commission, the Department of Assistive and Rehabilitative Services, and other appropriate entities in adopting rules under this section.” Id. § 408.1415(c).

Rule Section (d)(1)(D) tracks the language of Statute Section (a)(3), stating “active work search efforts documented by job applications,” but does not include the words “submitted by the recipient,” as does the Statute. Compare 28 Tex. Admin. Code § 130.102(d)(1)(D) (Eligibility for Supplemental Income Benefits; Amount), with Tex. Lab. Code § 408.1415(a)(3). We agree with the carriers that the statute unambiguously creates three categories of “work search efforts” that an injured employee may engage in, in order to satisfy the “work search efforts” requirement: (1) active participation in a vocational rehabilitation program; (2) work-search efforts through TWC; or (3) work-search efforts done outside of TWC participation by an independent job seeker that must be documented by job applications submitted by the recipient. Tex. Lab. Code § 408.1415(a). The differing language used in Sections (a)(2) and (a)(3) unambiguously demonstrates that the legislature set different standards for work-search efforts, depending on whether they were done with or without the involvement of TWC. Thus, injured employees completing job searches outside of a vocational rehabilitation program and TWC must document their work-search efforts through job applications submitted by the applicant.

*6 The crux of the issue before us is whether the exclusion of “submitted by the recipient” in Rule Section (d)(1)(D) creates a definition of “job application” that: (1) contravenes the specific statutory language; (2) runs counter to the general objectives of the statute; or (3) imposes additional burdens, conditions, or restrictions in excess of or inconsistent with the relevant statutory provisions. See Mid-Century Ins., 187 S.W.3d at 758. For the following reasons, we conclude it does not.

To determine the validity of Rule Section (d)(1)(D), we first determine if the Rule contravenes specific statutory language. See id. The carriers argue that as a compound word “job application” means, “a letter or form containing details of your qualifications, skills, experience, etc. that you send to an organization when you are applying for a job with them.” Job application, Cambridge Dictionary (2023), https://dictionary.cambridge.org/us/dictionary/english/job-application. The Division argues that the words “job” and “application” have multiple meanings that when considered as a whole define “job applications” as “any request for employment, including requests made orally, either in person or over the phone.” Specifically, the Division argues that “job” can mean “a regular, remunerative position;” “a specific role, duty, or function;” and “something that has to be done: a task.” Job, Merriam-Webster Dictionary (2023), www.merriam-webster.com/dictionary/job. The Division also argues that “application” can mean: “a request, as for a job,” and “a written statement of one’s qualifications for employment or admission,” The American Heritage Dictionary Of The English Language 63 (1981); “the act of requesting;” “a written or spoken request or appeal for employment, admission, help, funds, etc.;” “a form to be filled out by an applicant, as for a job or a driver’s license,” Dictionary.com, www.dictionary.com/browse/application; and (c) “the act of applying;” “request, petition;” and “a form used in making a request,” Application, Merriam-Webster Dictionary (2023), www.merriam-webster.com/dictionary/application. These definitions help establish the outer boundaries of what “job applications” could or could not mean. City of Fort Worth v. Pridgen, 653 S.W.3d 176, 183–84 (Tex. 2022) (quoting Philip A. Rubin, War of the Words: How Courts Can Use Dictionaries in Accordance with Textualist Principles, 60 Duke L.J. 167, 191 (2010) (“[D]ictionaries ... should be used only to say what a word could mean, not what it must mean—they can only establish outer boundaries.”)).

The parties frame the validity challenge as relying on the correct meaning of the term “job application.” However, because “job application” is a term used in the Statute, the definition of “job application” is only relevant in this facial rule challenge to Section (d)(1)(D) to the extent that the difference between excluding and including the modifying phrase, “submitted by the recipient,” changes the common meaning of “job applications” or otherwise invalidates the statute on its face. The common meaning of “submitted” is: “to present or propose to another for review, consideration, or decision.” Submitted, Merriam-Webster Dictionary (2023), https://www.merriam-webster.com/dictionary/submitted. Both sets of definitions provided by the parties describe things that may be reviewed, considered, or decided upon. The exclusion of “submitted” does not facially change the use of “job application” in the Rule. Neither party’s definition of job application is made more or less valid by the inclusion or exclusion of the words “submitted by the applicant.” The carriers have not shown that the Rule contravenes specific statutory language. See Mid-Century Ins., 187 S.W.3d at 758.

*7 The carriers’ true complaint is that the Division is applying the Rule to situations in which the documented evidence does not constitute a “job application.” However, fact-specific applications of a rule to specific cases are not properly challenged through a facial rule challenge. Id. (“In a facial challenge to a rule, we do not consider the merits of the Division’s rule on a case-by-case basis.”). Whether the Rule is applicable, i.e., capable of being applied, to a specific situation may be challenged in a Section 2001.038 rule challenge, but whether the Division is correctly applying the Rule in a specific situation may not be challenged. Tex. Gov’t Code § 2001.038(a); LMV-AL Ventures, LLC v. Texas Dep’t of Aging & Disability Servs., 520 S.W.3d 113, 124 (Tex. App.—Austin 2017, pet. denied). If, as the carriers argue, the Division’s application of the Rule is incorrect because it allowed something other than “job applications” to count as a “work search effort” for someone searching on their own, then that argument presents an application challenge that does not contest the facial validity or applicability of the Rule itself. Tex. Gov’t Code § 2001.038(a); LMV-AL Ventures, LLC, 520 S.W.3d at 124. No party argues that the wrong rule is being applied to these situations, but rather that the Rule is being applied incorrectly in some situations. As written, the Rule applies to applicants searching independently who must document their work search through job applications. Whether a specific way of requesting employment constitutes a “job application” is a fact-specific question arising in some situations, and thus it is not properly before us. Tex. Gov’t Code § 2001.038(a); LMV-AL Ventures, LLC, 520 S.W.3d at 124.

The carriers also argue that Rule Section (d)(1)(D) is invalid because it defines “job applications” as “work search contacts” under the definition created by TWC. However, this argument conflates their validity challenges to (d)(1)(D) and (f) and their ad-hoc rulemaking challenge to some agency materials. Section (d)(1)(D) does not mention “work search contacts.” Rather it mentions “work search efforts,” an umbrella term used in the Statute. To the extent that any of the challenged division materials or Rule Subsection (f) invalidly defines job applications as work-search contacts, that is relevant to the validity and applicability challenges to those texts, which are addressed below, but does not invalidate Section (d)(1)(D). Thus, Rule Section (d)(1)(D) does not contravene the specific statutory language.

Next, we consider whether the Rule runs counter to the general objectives of the Statute, which we discern from the plain text of the Statute. See Texas State Bd. of Exam’s of Marriage & Family Therapists, 511 S.W.3d at 33. The Division argues that the Statute’s objective is to improve return-to-work outcomes for employees interacting with the workers’ compensation system. The carriers argue that the Statute’s objective is “to improve access to effective TWC return to work programs and remove ambiguity.” Specifically, they argue that the Sunset Commission’s report regarding the former system shows that the legislative intent was to encourage claimants to go through vocational programs or TWC rather than to search for jobs on their own. However, the source of the general objective of the Statute must come from the text of the statute. See Texas State Bd. of Exam’rs of Marriage & Family Therapists, 511 S.W.3d at 33 (“We discern those ‘general objectives’ from the plain text of the statutes that grant or limit the agency’s authority”); Texas Health Presbyterian Hosp. of Denton v. D.A., 569 S.W.3d 126, 135 (Tex. 2018) (noting courts do not rely on extrinsic aids such as legislative history for unambiguous statutes).

The Workers’ Compensation Act was enacted “to balance the competing interests of providing ‘compensation for injured employees while protecting employers from the costs of litigation.’ ” SeaBright Ins. v. Lopez, 465 S.W.3d 637, 642 (Tex. 2015) (quoting In re Poly-Am., L.P., 262 S.W.3d 337, 350 (Tex. 2008). The SIB Statute facially encourages unemployed or underemployed injured individuals in the Workers’ Compensation System to seek employment by supporting that search through SIB payments. See Tex. Lab. Code § 408.1415. The requirements for what qualifies as a satisfactory work search effort to qualify for SIB payments, demonstrate that the Statue’s purpose is to increase the number of individuals in the Workers’ Compensation System that successful return to work. However, the Statute does not on its face show a preference for employees to do so through a vocational rehabilitation program, through TWC, or through their own job searches. See id.

*8 The Division’s determination that a job application includes asking for a job by phone or in person rather than only by a written document is not counter to that objective. Rather, the Division argues that this broader definition is used based on consideration of employment availability factors through their consultation with TWC. See Tex. Lab. Code § 408.1415 (b)(3), (c). For example, the Division considers that some industries regularly do not require form documents for applying for employment. The Division argues that its wider definition allows for employees to apply in the manner in which an employer prefers and is most likely to result in employment. Further, the agency argues that the carriers’ more restrictive definition of a job application would run counter to the general objectives of the Statute because it would discourage job seekers from applying for jobs that do not require a written form to apply. The Division’s determination does not run counter to the general objectives of the Statute.

Next, we consider whether the Rule imposes additional burdens in excess of or inconsistent with the statute. See Mid-Century Ins., 187 S.W.3d at 758. For the same reasons that the Rule does not contravene the statutory language nor run counter to the general objectives of the statute, it also does not impose additional burdens in excess of or inconsistent with the Statute. The Statute creates guidelines for meeting the requirement of searching for work that entitles injured employees to SIB payments, and it directs the Division to create rules to further implement the guidelines. Defining “job applications” to include ways of applying for a job other than through a written form does not create any additional burdens in excess of or inconsistent with the Statute.

The Division’s exclusion of “submitted by the recipient” from the Rule does not make the Rule invalid, because it does not create a rule that is contrary to the statute, that runs counter to the statute’s objectives, or that imposes additional burdens in excess of or inconsistent with the statute. See id.; see also Tex. Lab. Code § 408.1415; 28 Tex. Admin. Code § 130.102 (Eligibility for Supplemental Income Benefits; Amount). Thus, Rule 103.102(d)(1)(D) is not facially invalid. See 28 Tex. Admin. Code § 130.102 (Eligibility for Supplemental Income Benefits; Amount). We reverse the district court’s ruling to the contrary.

APPLICABILITY CHALLENGE TO RULE 130.102(F)

The carriers asserted below, and the trial court agreed, that Rule Section (f)’s mention of “work search contacts” is invalid and inapplicable when applied to individuals seeking employment on their own. The Division argues that it included Subsection (f) in response to the Statute’s explicit direction to the Division to “establish the level of activity that a recipient should have with the Texas Workforce Commission and the Department of Assistive and Rehabilitative Services,” Section 408.1415(b)(1), and “define the number of job applications required to be submitted by a recipient to satisfy the work search requirements,” Section 408.1415(b)(2). Rule Section (f) reads:

(f) Work Search Efforts. As provided in subsection (d)(1)(C) and (D) of this section regarding active participation in work search efforts and active work search efforts, an injured employee shall provide documentation sufficient to establish that he or she has, each week during the qualifying period, made the minimum number of job applications and[/]or work search contacts consistent with the work search contacts established by TWC which are required for unemployment compensation in the injured employee’s county of residence pursuant to the TWC Local Workforce Development Board requirements. If the required number of work search contacts changes during a qualifying period, the lesser number of work search contacts shall be the required minimum number of contacts for that period. If residing out of state, the minimum number of work search contacts required will be the number required by the public employment service in accordance with applicable unemployment compensation laws for the injured employee’s place of residence.

*9 28 Tex. Admin. Code § 130.102(f) (Eligibility for Supplemental Income Benefits; Amount). Thus, Rule Section (f) requires the number of job applications—combined with the number of work-search contacts—to meet the quantitative requirements set by TWC for unemployment-compensation benefits. The carriers do not challenge the Division’s authority to set this numerical requirement or to use TWC’s system for determining how many job applications must be made by an individual job seeker or how many work-search contacts must be made by job seekers working with TWC.

Rather, the crux of the dispute over Rule Section (f) is whether the section impermissibly allows an injured employee searching for work on their own, outside of TWC, to count “work search contacts,” as defined by TWC, as “work search efforts” without having to document those work-search efforts with job applications as required by the Statute. Id. Specifically, the carriers argue that the inclusion of “and[/]or” in between “job applications” and “work search contacts” creates a fourth pathway for entitlement to SIB payments that is not authorized by the Statute by conflating “work search contacts” and “job applications.”

The Division makes two significantly different arguments regarding this Section. We first address its argument that “work search contacts,” as defined by TWC, is consistent with the legislature’s intended definition of “job applications.” TWC’s “work search contacts” include:

(A) utilizing employment resources available at Workforce Centers that directly lead to obtaining employment, such as:

(i) using local labor market information;

(ii) identifying skills the claimant possesses that are consistent with targeted or demand occupations in the local workforce development area;

(iii) attending job search seminars, or other employment workshops that offer instruction in developing effective work search or interviewing techniques;

(iv) obtaining job postings and seeking employment for suitable positions needed by local employers;

(B) attending job search seminars, job clubs, or other employment workshops that offer instruction in improving individuals’ skills for finding and obtaining employment;

(C) interviewing with potential employers, in-person or by telephone;

(D) registering for work with a private employment agency, placement facility of a school, or college or university if one is available to the claimant in his or her occupation or profession; and

(E) other work search activities as may be provided in Agency guidelines.

40 Tex. Admin. Code § 815.28 (Work Search Requirements).

We look to the definitions of “job application” proffered by the parties and supported by dictionary definitions to establish the outer boundaries of the plain meaning of “job application.” Pridgen, 653 S.W.3d at 183. These outer bounds are carriers’ definition of, “a letter or form containing details of your qualifications, skills, experience, etc. that you send to an organization when you are applying for a job with them,” and the Division’s definition of “any request for employment.” Based on these boundaries, we agree with the carriers that “work-search contacts,” as defined by TWC, include some work-search efforts that do not fall within a reasonable definition of “job application.” While the statute’s explicit allowance of consultation with TWC encompasses defining the number of job applications consistent with work-search contacts, it does not give the agency the discretion to include work-search contacts that are not reasonably “job applications.” See Tex. Lab. Code § 408.1415(c); Mid-Century Ins., 187 S.W.3d at 758.

*10 However, the Division also argues that Rule Section (f) does not act to conflate “job applications” with “work search contacts” but rather the first sentence—“[a]s provided in subsection (d)(1)(C) and (D) of this section regarding active participation in work search efforts”—informs and restricts the rest of the section. Specifically, the Division argues that the mention of job applications relates back to Section (d)(1)(D) and requires “work search efforts documented by job applications,” and the reference to “work search contacts” relates back to Section (d)(1)(C) and only applies to searches done through TWC. It further argues that “consistent with the work search contacts established by TWC which are required for unemployment compensation in the injured employee’s county of residence pursuant to the TWC Local Workforce Development Board requirements,” modifies the word “number,” and thus only sets a numerical standard. This interpretation of the Rule (f) is a reasonable interpretation of the language of the rule, is consistent with the Statute’s language, is consistent with the general objectives of the Statute, does not impose additional burdens, is consistent with the carriers’ argument, and is consistent with the district court’s ruling on this issue. See Tex. Lab. Code § 408.1415(c); Mid-Century Ins., 187 S.W.3d at 758. To the extent Section (f) is applying “work search contacts” to “job applications” solely for the purpose of setting a numerical standard, it is consistent with the Statute and thus valid.

However, Rule Section (f) does not apply to include all work-search contacts within the definition of “job application,” or to allow work-search efforts that are not documented by written or oral job applications to count towards the satisfactory evidence of an active work-search effort for job seekers searching on their own. Thus, we affirm the district court’s ruling on this issue.³

AD HOC RULES CHALLENGE

The carriers challenge on cross-appeal, the district court’s ruling that the Division’s preamble to the Rule, Appeals Panel Decision 10029-s, Appeals Panel Decision Manual, and the Application for Supplemental Income Benefits do not contain invalid ad hoc rules. Specifically, the carriers argue that these materials contain ad hoc rules because they create a fourth pathway to receive SIB payments in which an injured employee may complete a wider category of “work search efforts” without being required to document those efforts with job applications. The Division concedes that with the exception of the appeals-panel decision, the other three challenged materials—the Rule’s preamble, the manual, and the SIBs application—include statements of general applicability. The Division also concedes that all challenged materials concern more than the internal management and organization of the Division. However, the Division argues that none of the challenged materials include ad hoc rules because the Rule’s preamble, the manual, and APD 10029-S do not implement, interpret, or apply law or policy in a way that amounts to an amendment or repeal of an existing Division rule because those statements merely restate Rule 130.102(f); APD 10029-S does not include any statement of general applicability because it resolved a contested case involving only the rights of the parties to that case; and the challenge to the SIB application is not a statement because it is based on an omission of language.

Construction of administrative rules, like statutes, is a question of law that we review de novo under traditional principles of statutory construction. Teladoc, Inc. v. Tex. Med. Bd., 453 S.W.3d 606, 614 (Tex. App.—Austin 2014, pet. denied). It is undisputed that the Division did not promulgate any of the challenged materials in accordance with the APA’s notice-and-comment rulemaking requirements. See Tex. Gov’t Code §§ 2001.023–.030. Thus, we need only determine whether any of the challenged materials contain a “rule” within the meaning established by the APA. See El Paso Hosp. Dist. v. Texas Health & Human Servs. Comm’n, 247 S.W.3d 709, 715 (Tex. 2008) (“When an agency promulgates a rule without complying with the proper rule-making procedures, the rule is invalid.”). A “rule” under the APA:

*11 (A) means a state agency statement of general applicability that:

(i) implements, interprets, or prescribes law or policy; or

(ii) describes the procedure or practice requirements of a state agency;

(B) includes the amendment or repeal of a prior rule; and

(C) does not include a statement regarding only the internal management or organization of a state agency and not affecting private rights or procedures.

Tex. Gov’t Code Ann. § 2001.003(6).

Agency pronouncements that advise third parties about applicable legal requirements may be interpretations of law that constitute “rules” under the APA. Texas Dep’t of Transp. v. Sunset Transp., Inc., 357 S.W.3d 691, 703 (Tex. App.—Austin 2011, no pet.). However, “an informal agency statement that does no more than restate its own formally promulgated rules would not in itself be a ‘rule.’ ” Id. We will consider whether the challenged materials include an invalid “rule” under the APA one source material at a time.

PREAMBLE

The carriers allege that the Rule’s preamble includes two sets of comment and Division response that include an ad hoc rule:

Comment: Commenters suggest expanding the subsection by amending it to show that the active work search applications must be submitted to an employer that has a position currently open, will have one open in the near future, or is hiring during the qualifying period.

Agency Response: The Division disagrees. In establishing what may be considered a job application, the Commissioner has determined it is appropriate to require compliance consistent with that of TWC requirements regarding work search contacts. TWC has implemented rules and provides guidance that describes the type of activities that may constitute a work search contact.

Comment: Commenter requests clarification of the phrase “has performed active work search efforts documented by job applications” that requires an injured employee, who engages in a job search outside of TWC in an effort to establish SIBs entitlement, to document those work search efforts by submitting completed job applications and that other job search activities will not be sufficient to establish SIBs entitlement.

Agency Response: This Division clarifies that, as set forth in adopted § 130.102(f), “work search efforts” encompasses both job applications and work search contacts as described by the TWC rules.

34 Tex. Reg. 2145 (2009) (to be codified at 28 Tex. Admin. Code § 130.102) (proposed October 3, 2008) (Tex. Dep’t of Ins., Div. of Workers’ Comp.). As discussed above, the Statute requires an injured employee searching on their own to document their search with job applications and the wider term of “work search contacts” does not apply qualitatively to that situation. The following language in the preamble expands Rule (d)(1)(D) by defining a “job application” as “work search contacts”: “In establishing what may be considered a job application, the Commissioner has determined it is appropriate to require compliance consistent with that of TWC requirements regarding work search contacts.” Id. When asked what a “job application” is, the Division responded that it is a “work search contact.”

*12 The second challenged response correctly states that both job applications and work-search contacts are under the umbrella term “work search efforts.” As discussed above, work-search contacts not documented by job applications only count as a valid work-search effort for those going through TWC. By including both types of work-search efforts in an answer to a comment that only concerns searches outside of TWC, the Division implies that work-search contacts can qualify as “job applications” for independent job seekers. Although the response does not in isolation expand the properly applied scope of Section (f), in combination with the comment it answers, it implicitly does. This conclusion is further demonstrated by the application of this comment’s language in Appeals Panel decision 100229-s and the Division’s Appeals Panel Division Manual, discussed below.

The Division argues that both comments simply restate the language of Rule Section (f). See 28 Tex. Admin. Code § 130.102(f) (Eligibility for Supplemental Income Benefits; Amount). However, this argument is similar to the Division’s first argument in defense of Section (f) that defining “job applications” as “work search contacts” is consistent with the Statute. See Tex. Lab. Code § 408.1415; 28 Tex. Admin. Code § 130.102(f) (Eligibility for Supplemental Income Benefits; Amount). As we discussed above, the Statute does not support defining “job applications” as “work search contacts.” See Tex. Lab. Code § 408.1415; 40 Tex. Admin. Code § 815.28 (Work Search Requirements). Thus, the preamble’s language that interprets the Rule as equating the two terms is a new rule of general applicability that amends Rules (d)(1)(D) and (f). The new rule was not promulgated through the proper process and is thus invalid. See El Paso Hosp. Dist., 247 S.W.3d at 715; Tex. Gov’t Code § 2001.003(6).

APD 100229-S

In APD 100229-s, the hearing officer had found that the claimant made 65 work-search efforts but was not entitled to SIB payments because only five of those included job applications. The appeals panel reversed the hearing officer’s denial of benefits based on the Division’s interpretation of the Rule included in the preamble that equated job applications with work-search contacts. Appeal No. 100229-s, 2010 WL 1782362, at *3 (Tex. Div. of Worker’s Comp. Apr. 30, 2010) (“Although Rule 130.102(d)(1)(D) requires that the injured employee for each week during the entire qualifying period ‘performed active work search efforts documented by job applications,’ the preamble to Rule 130.102(d)(1)(D) clarifies that ‘work search efforts’ encompass both job applications and work search contacts described by TWC rules.”).

The holding of the challenged appeals decision is not a rule for purposes of the APA because, as the Division argues, it is not an agency statement of general applicability because it resolved a “contested case” involving only the rights of the parties to that case, which is distinguishable from a “rule” under the APA. See Tex. Gov’t Code § 2001.003(1), (6)(a); Railroad Comm’n v. WBD Oil & Gas Co., 104 S.W.3d 69, 79 (Tex. 2003). Thus, the statements in APD 100229-s are not a “rule” for purposes of the APA.

DIVISION’S APPEALS PANEL DECISION MANUAL

The Division maintains an Appeals Panel Decision Manual. As the manual’s introduction establishes, the primary purpose of the manual “is to help the Appeals Panel achieve consistency in its decisions and inform its customers of the legal principles it expects to follow in deciding appeals.” Under the manual’s subheading, “IE Did Meet Work Search Requirements,” is a summary of one appeals decision, which is APD 100229-s. The summary includes a restatement of the holding in APD 100229-s that relies on the invalid rule from the challenged preamble sections. Thus, the challenged section of the manual that interprets the Rule as equating “job applications” and “work search contacts” is a new rule of general applicability that amends the Rules (d)(1)(D) and (f). The new rule was not promulgated through the proper process and is thus invalid. See Tex. Gov’t Code § 2001.003(6); El Paso Hosp. Dist., 247 S.W.3d at 715.

SIB APPLICATION

*13 The carriers argue that the Application for Supplemental Income Benefits, Form DWC-052, contains an invalid rule because it does not require documentation of an active work search by job applications submitted. The carriers argue that this new rule is demonstrated by there being no place on the form where an applicant can specify whether he is looking for work through the TWC. The Division argues that this is not a statement but rather an omission of details and thus cannot constitute a rule. See Tex. Gov’t Code § 2001.003(6)(A).

The application form includes a section for applicants to specify the number of “work search efforts” they completed and a section titled “Notes and Type of Documentation Attached (see instructions).” The form also has the applicant certify that they “have complied with the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) Work Search Requirements (Texas Lab. Code § 408.1415 and Texas Administrative Code § 130.101 and § 130.102).” The instructions include the following regarding documenting work-search efforts:

To Document Work Searches—If you have not returned to work and you are able to work in any capacity, you must look for a job to match your ability to work during each week of the qualifying period. Appropriate documentation includes:

• Work search log attached to DWC Form-052, Application for Supplemental Income Benefits;

• Documentation about any follow-up visits to a potential employer; and/or

• Copies of employment applications or resumes which document your efforts to find a job.

Therefore, although the form does not specify the difference between documenting work-search efforts done through TWC and ones done independently, it cites to the Statute, which as discussed above, unambiguously differentiates between the two situations. Thus, the SIB application form does not contain any statement that equates job applications and work-search contacts. See Tex. Gov’t Code § 2001.003(6). The application does not contain a rule for purposes of the APA.

In sum, the preamble and the manual do contain invalid rules. We reverse the district court’s ruling to the contrary. The Appeals Panel Decision and the SIB application form do not contain rules as defined under the APA. Therefore, we affirm the district court’s ruling as to those two documents.

EXCLUDED EXPERT WITNESS

Accident Fund Insurance Company challenges on cross-appeal, the district court’s grant of the Division’s motion to exclude its expert witness. Accident Fund argues that its expert witness would have testified regarding “whether the fourth pathway authorized by the Division is as likely to lead to employment as the three pathways dictated by the Legislature.” The Division argues that exclusion was proper and that Accident Fund cannot show that the exclusion was harmful.

We review a trial court’s exclusion of expert testimony for abuse of discretion. K-Mart Corp. v. Honeycutt, 24 S.W.3d 357, 360 (Tex. 2000). We can only reverse on trial court error if it was harmful, that is, if the error “probably caused the rendition of an improper judgment,’ ” or “probably prevented the appellant from properly presenting the case to the court of appeals.” Tex. R. App. P. 44.1(a); Diamond Offshore Servs. Ltd. v. Williams, 542 S.W.3d 539, 551 (Tex. 2018).

Without deciding whether the exclusion was error, we agree with the Division that the exclusion of the expert testimony was not harmful. See Tex. R. App. P. 44.1(a); Diamond Offshore Servs. Ltd., 542 S.W.3d at 551. None of the issues raised required consideration of whether a fourth method of SIB eligibility was as likely to result in employment as the three methods explicitly set forth in the Statute. See Tex. Lab. Code § 408.1415.

CONCLUSION

*14 Because Section 130.102(d)(1)(D) of the Rule is facially valid, we reverse the district court’s judgment to the contrary that enjoined the Division from applying that rule. Because job seekers not working with TWC must document their work-search efforts with job applications, the district court’s judgment enjoining the Division from applying the term “work search contacts” in Rule Section (f) qualitatively to independent job seekers is affirmed. Because the preamble and the manual do contain invalid rules, we reverse the district court’s judgment to the contrary. Because the Appeals Panel Decision and the SIB application form do not contain rules as defined under the APA, we affirm the district court’s judgment as to those two documents.

Affirmed in Part, Reversed and Rendered in Part

Footnotes
010582010581cm;vertical-align:top">1	All citations to agency rules are to the current version.
2	The Division argues that the carriers’ ad hoc rules challenge and excluded-witness challenge are improperly before this Court because a party who does not file a notice of appeal may not be granted more favorable relief than did the trial court except for just cause. See Tex. R. App. P. 25.1. However, because the carriers filed timely notices of appeal, we reach the merits of their cross-appeal issues.
3	Texas Cotton Ginners’ Trust raised on cross-appeal an issue that would only become relevant in this appeal if we reversed the district court’s finding that “work search contacts” do not qualitatively apply to individuals conducting independent work search efforts. Specifically, they argued that if “work search contacts” qualitatively—compared to quantitatively—applied to job seekers searching independently then this Court should enter declaratory judgment that all qualitative requirements for “work search contacts” must be enforced by the Division. Because we affirm the district court on this issue, we do not address this alternative argument.

Court of Appeals of Texas, Austin.

Vista Medical Center Hospital, Surgery Specialty Hospital of America, Southeast Houston and Vista Hospital of Dallas, Appellants

v.

Texas Mutual Insurance Company; Louisiana Pacific Corporation; American Home Assurance Co.; Texas Department of Transportation; State Office of Risk Management; Twin City Fire Insurance Company; Continental Casualty Company; Valley Forge Insurance Company; Transportation Insurance Company; Texas Hospital Insurance Exchange; Mid-Century Insurance Company; TPCIGA for United Pacific Insurance Co.; TPCIGA for Legion Insurance Co.; TPCIGA for Home Indemnity Co.; TPCIGA for Freestone Insurance f/k/a Dallas National Insurance Co.; National Fire Insurance; Hartford Underwriters Insurance Co.; National Fire Insurance Co. of Hartford; ACIG Insurance Co.; TPCIGA for Petrosurance Casualty Co.; TASB Risk Management Fund; Midwest Employers Casualty Co.; TPCIGA for Lumbermens Mutual Casualty Co.; National American Insurance Co.; Aberdeen Insurance Co.; Highlands Casualty Co.; TPCIGA for American Motorists Insurance Co.; Transcontinental Insurance Co.; United States Fire Insurance Co.; Reliance National Indemnity Co.; TPCIGA for Centennial Insurance Co.; American Casualty Co. of Reading, PA; Zenith Insurance Co.; Hartford Casualty Insurance Co.; TPCIGA for Credit General Indemnity; TPCIGA for Fremont Indemnity Co; TPCIGA for Paula Insurance Co.; Ace Insurance Co. of Texas; Ace American Insurance Co.; Lockheed Martin Corp.; Insurance Co. of the State of PA; International Paper Co.; Lowes Home Center, Inc.; Pacific Employers Insurance Co.; American Zurich Insurance Co.; Fireman’s Fund Insurance Co.; American Insurance Co.; Federal Insurance Co.; Kmart Corp.; Great Northern Insurance Co.; Onebeacon Insurance Co.; Liberty Mutual Fire Insurance Co.; Liberty Insurance Corp.; Liberty Mutual Insurance Co.;American States Insurance Co. of Texas; Employers Insurance Co. of Wausau; Service Lloyds Insurance Co.; Texas Association of Counties RMP; LM Insurance Corp.; Wausau Business Insurance Co.; JC Penny Corporation, Inc.; Zurich American Insurance Co.; Sentry Insurance a Mutual Company; Sentry Select Insurance Co.; Dallas I.S.D., self-insured; Albertson’s, Inc., self-insured; RCH Protect Cooperative; Commerce & Industry Insurance Co.; Illinois National Insurance Co.; Fidelity & Guaranty Insurance Co.; Facility Insurance Corp.; City of Pasadena, self-insured; City of Rowlett, self-insured, City of Hempstead, self-insured; Employers Mutual Casualty Co.; American Guarantee & Liability Ins.; Gray Insurance Co.; East Texas Educational Insurance Association, self-insured; Harbor Specialty Insurance Co.; New Hampshire Insurance Co.; Bitco General Insurance Corp., formerly Bituminous Casualty Corp.; America First Lloyds Insurance Co.; Arrowood Indemnity Co. for Royal Insurance Co. of America WC Solutions; Old Glory Insurance Co.; Old Republic Insurance Co.; Houston General Insurance Co.; Beaumont I.S.D., self-insured; Arrowood Indemnity Co. for Security Insurance Co. of Hartford; Target Corp.; Federated Mutual Insurance Co.; St. Paul Fire & Marine Insurance Co.; Indemnity Insurance Co. of North America; Dallas County; Bankers Standard Insurance Co.; Travelers Indemnity Co. of Connecticut; Travelers Casualty and Surety Co.; Travelers Indemnity Co. of America; Travelers Property Casualty Co.; Phoenix Insurance Co.; Wausau Underwriters Ins. Co., Appellees

NO. 03-21-00242-CV

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Filed December 28, 2022

FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY

NO. D-1-GN-19-004290,¹ THE HONORABLE JAN SOIFER, JUDGE PRESIDING

Before Justices Goodwin, Baker, and Smith

MEMORANDUMOPINION

Edward Smith, Justice

*1 This appeal arises from a dispute over the proper reimbursement of workers’ compensation medical benefits provided by Vista Medical Center Hospital, Surgery Specialty Hospital of America, Southeast Houston, and Vista Hospital of Dallas (collectively, Vista Parties) to workers covered by insurance policies issued by appellees (Carriers). The Vista Parties requested a contested case hearing before the State Office of Administrative Hearings (SOAH). After the SOAH hearing, the administrative law judges (ALJs) signed an order (the SOAH Order) concluding that the Vista Parties were not entitled to additional reimbursement. The district court affirmed the SOAH Order, and the Vista Parties appealed to this Court. We affirm the district court’s judgment.

BACKGROUND

Statutory Context

The Texas Workers’ Compensation Act requires insurers to make “appropriate payment of charges for medical services” provided to covered workers. Tex. Lab. Code § 413.015(a).² In 1989, the legislature required the Division of Workers’ Compensation in the Texas Department of Insurance (Division) to promulgate reimbursement guidelines to ensure the quality of medical care without unnecessary expense to insurance carriers.³ See Act of Dec. 13, 1989, 71st Leg., 2d C.S., ch. 1, § 8.01, 1989 Tex. Gen. Laws 1, 68 (codified as amended at Tex. Lab. Code § 413.011). Once the Division adopts guidelines addressing a certain type of medical care, insurance carriers must compensate a provider of that care in “accordance with the fee guidelines.” Tex. Lab. Code § 408.027(f).

If an insurance carrier denies or reduces the charges in a provider’s bill, either entity may seek review of the claim by the Division. Id. § 413.031(a)(1); see 28 Tex. Admin. Code § 133.307 (2021) (Tex. Dep’t-Ins., MDR—General). In cases where the dispute is “over the amount of payment due for services determined to be medically necessary and appropriate for treatment of a compensable injury,” as it is here, the Division “is to adjudicate the payment given the relevant statutory provisions and commissioner rules.” Tex. Lab. Code § 413.031(c). If the dispute “remains unresolved” after the review, a party may seek a de novo contested case hearing conducted by SOAH. See Tex. Lab. Code § 413.031(k); 28 Tex. Admin. Code § 133.307(g)(2). The burden of proof before SOAH is on the party seeking review of the Division’s initial decision. Patients Med. Ctr. v. Facility Ins. Corp., 623 S.W.3d 336, 343 (Tex. 2021). Following the hearing, the ALJ renders the final decision on the claim. See Tex. Lab. Code § 402.073(b); Vista Med. Ctr. Hosp. v. Texas Mut. Ins., 416 S.W.3d 11, 18 (Tex. App.—Austin 2013, no pet.) [Vista II]. A party who is aggrieved by the ALJ’s final order may seek judicial review under the Administrative Procedures Act (APA) in Travis County District Court. See Tex. Lab. Code § 413.013(k-1) (“Judicial review under this subsection shall be conducted in the manner provided for judicial review of a contested case under Subchapter G, Chapter 2001, Government Code[.]”); Vista II, 416 S.W.3d at 18. “The Division is not considered to be a party to the dispute for purposes of the contested case hearing and the judicial-review proceeding.” Patients Med. Ctr., 623 S.W.3d at 338 (citing Tex. Lab. Code § 413.031(k-2)).

Stop-Loss Controversy

*2 This case is the latest dispute over fee guidelines the Commission promulgated in 1997 governing the amount of medical reimbursement carriers must pay for inpatient hospital admissions.⁴ See 22 Tex. Reg. 6305, 6305–08 (1997) repealed by 33 Tex. Reg. 5319 (former 28 Tex. Admin Code § 134.401) (Former Rule 134.401). Former Rule 134.401 generally requires reimbursement according to a per diem methodology based on the category of admission, such as “medical” or “surgical.” Former Tex. Admin Code § 134.401(c)(1)-(2). It requires additional reimbursement for certain types of services or admissions. For example, implantables, orthotics, and prosthetics are reimbursed to the hospital at cost plus 10%. Id. § 134.401(c)(4)(A). Admissions for “trauma” and “rehabilitation” are also reimbursed “at a fair and reasonable rate.” Id. § 134.401(c)(6)(A). We refer to reimbursement according to this methodology—per diem plus any applicable additional reimbursements—as the per diem methodology.

In the event of “an unusually costly or lengthy stay,” Former Rule 134.401 establishes an independent reimbursement methodology—called the “stop loss exception”—“to ensure fair and reasonable compensation to the hospital for unusually costly services rendered during treatment to an injured worker.” Id. § 134.401(c)(6); see Texas Mut. Ins. Co. v. Vista Cmty. Med. Ctr., LLP, 275 S.W.3d 538, 550 (Tex. App.—Austin 2008, pet. denied) [Vista I]. When applicable, the stop-loss exception requires the carrier to pay the provider 75% of the hospital’s total audited charges for the entire hospital stay.⁵ Former Tex. Admin Code § 134.401(c)(6)(A)(iii). Application of the exception “tends to yield hospitals reimbursement for a given hospital admission that is substantially more generous—indeed, potentially several times larger—than the amounts prescribed under the standard per diem methodology.” Vista II, 416 S.W.3d at 18.

Former Rule 134.401 states that a hospital’s total audited charges must meet a “minimum stop-loss threshold” of $40,000 for the stop-loss exception to apply. Former Tex. Admin Code § 134.401(c)(6)(A)(i). Various hospital operators, including Vista, interpreted this to mean that charges for admission need only exceed $40,000 for the exception to apply. See Vista I, 275 S.W.3d at 545. On the other hand, insurance carriers argued that providers must exceed the threshold and demonstrate, by a case-by-case analysis, that admission involved unusually costly and unusually expensive services. Id.

This Court addressed the issue in Vista I and concluded that, for the exception to apply, “total audited charges exceed $40,000 and that an admission involved unusually costly and unusually extensive services.” Id. at 550. Our conclusion rested on the structure of the rule, which provides that reimbursement will be by the per diem method unless an exception applies. Id. (citing former Tex. Admin Code § 134.401(c)(2)). It further provides that “independent reimbursement” is allowed under the stop-loss exception “on a case-by-case basis if the particular case exceeds the stoploss threshold[.]” Id. (citing former Tex. Admin Code § 134.401(c)(2)(C)). When read together, these provisions suggest that the stop-loss exception “was meant to apply on a case-by-case basis in relatively few cases.” Vista I, 275 S.W.3d at 550. Without a case-by-case determination of whether an admission involved unusually costly and unusually extensive services, the stop-loss exception “would mechanically apply in all cases where total audited charges exceeded $40,000.” Id. “What is unusually costly and unusually extensive in any particular fee dispute remains a fact-intensive inquiry best left to the Division’s determination on a case-by-case basis.” Id. at 554.

Current Litigation

*3 This appeal arises from disputes over reimbursement for medical services—mostly spinal surgeries—provided to 542 injured workers from 1997–2008. In each case, the provider submitted a reimbursement claim to the relevant provider who generally paid at the per diem rate. Following this Court’s decision in Vista I, the Vista Parties initiated medical fee dispute resolution in these cases seeking additional reimbursement, mainly stop-loss payments. The Division issued a decision in each case, most of which were in favor of the Carriers. Vista Hospitals and certain carriers timely requested contested case hearings in those cases determined adversely to them. SOAH appointed a panel of five ALJs to hear the disputes.

The cases were set for a final hearing in February of 2016. The parties submitted extensive pre-filed testimony and exhibits. Much of the expert testimony concerned the method for determining whether an admission that exceeds the stop-loss threshold “involved unusually costly and unusually extensive services.” The Carriers submitted testimony from, inter alia, Dr. Ronald Luke, a health care billing expert. Dr. Luke testified that this process should involve three steps. The first is to determine whether the per diem payment covered the hospital’s costs. If it did, there was no “loss” to “stop” and the analysis ends. If it did not, the second step calls for a physician with the same or similar specialty as the physician who performed the “principal procedure during the admission” to review the medical records and determine whether any of the services provided were “unusually extensive” “relative to other admissions with the same principal procedure.” According to Luke, the final step is a “case-by-case” analysis to determine if the hospital’s loss was due to the unusually extensive services or some other factor.

The Vista Parties, in contrast, proposed “determining whether the admission was assigned to a Medicare DRG with a relative weight greater than 1.6 or some other number.” A “DRG” is a group of admissions that the Center for Medicaid and Medicare Services (CMS) expects to require similar amounts of hospital resources. Each discharge is assigned to a DRG “based on factors including diagnosis, procedure, complications, comorbidities, and patient age.” CMS assigns a weight to each DRG “that reflects the average relative costliness of cases in that group compared with the costliness for the average Medicare case.” The higher the relative weight, the more costly the admission. Bruce Malone, M.D., testified for the Vista Parties that, in his opinion, “a relative weight of 1.6 means that the procedure in question significantly exceeds the average admission’s complexity and cost[.]”

The Vista Parties also submitted a cost worksheet for each disputed admission. The worksheet includes the charges billed, the procedures performed, certain patient information, the allowable costs reimbursable using Medicare cost-to-charge ratios, the amount paid by the insurance carrier, and the outstanding amount. In total, the Vista Parties claimed that their costs exceeded the reimbursements already paid by $8,822,532.18.

The ALJs held a final hearing on the merits on February 23–24, 2016. They considered the prefiled testimony and exhibits and heard live testimony. Following that hearing, the ALJs issued a Decision and Order (SOAH Order). They began by recounting the history of litigation over the stop-loss exception and stating that Vista I left unresolved the question of defining what constitutes “unusually costly and unusually extensive” services. They rejected the Vista Parties’ proposal because it used “bright line comparisons” rather than the case-by-case analysis mandated by Vista I.⁶

*4 The ALJs did not explicitly adopt one of the proposed methodologies but adopted a two-part analysis that shares certain features with Dr. Luke’s analysis. For the “unusually costly” determination, the ALJs began by comparing the hospital’s costs for the admission against the per diem reimbursement for that admission. They calculated the costs using the CMS departmental cost-to-charge ratio methodology. Broadly, this methodology entails multiplying the charges billed by each hospital department by a ratio assigned by CMS—such as .33—to arrive at the actual costs for the admission.⁷ If the costs were covered by the per diem reimbursement, “then no further analysis is required.”

If the costs exceeded the per diem reimbursement, the ALJs moved to the “unusually extensive” prong. This part of the analysis “attempts to determine why the hospital’s costs ... were not covered by the per diem reimbursement.” To do this, they considered “the injured worker’s prior medical history, condition and medical events at the time of admission through time of surgery, the surgery and medical events during surgery, and post-operative condition and post-operative medical events until time of discharge.” If the ALJs concluded that the services provided were unusually extensive, the ALJs applies the stop-loss exception and ordered reimbursement of 75% of the total audited charges for the admission. See former Tex. Admin Code § 134.401(c)(6)(A)(iii). Even if the ALJs’ analysis determined the admission did not require unusually extensive services, “the reimbursement deficiency may simply reflect that the per diem reimbursement was inadequate” for other reasons. Because the ALJs examined each dispute “on a case-by-case basis, they attempted to address some deficiencies in implant reimbursement calculations and some calculation errors.”

Applying this methodology, the ALJs concluded that:

• 14 admissions qualified for the stop-loss exception and ordered the relevant carriers to make stop-loss payments in those cases;

• 461 admissions did not qualify for a stop-loss payment and the Carriers did not owe any additional payments;

• 57 admissions did not qualify for stop-loss payments but the Vista Hospitals were entitled to additional payments under the per diem methodology;

• 10 admissions were for trauma or rehabilitation and were to be reimbursed under the separate, fair-and-reasonable rate.

Based on these findings, the ALJs awarded the Vista Parties a total of $1,002,191 in additional reimbursement. The Vista Parties sought judicial review of the SOAH Order. The district court affirmed the order in its entirety, and the Vista Parties appealed.

STANDARD OF REVIEW

Judicial review of the SOAH Order in a medical fee dispute is under the substantial evidence rule. See Tex. Lab. Code § 413.031(k-1); Patients Med. Ctr., 623 S.W.3d at 340. Under that standard, a reviewing court “shall reverse or remand the case for further proceedings” if the appellant’s substantial rights “have been prejudiced because the administrative findings, inferences, conclusions, or decisions” are:

*5 (A) in violation of a constitutional or statutory provision;

(B) in excess of the agency’s statutory authority;

(C) made through unlawful procedure;

(D) affected by other error of law;

(E) not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or

(F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

Tex. Gov’t Code § 2001.174(2). The reviewing court presumes the order is valid, and the burden is on the contestant to demonstrate otherwise. See Facility Ins. Corp. v. Patients Med. Ctr., No. 03-17-00666-CV, 2022 WL 4099832, at *7 (Tex. App.—Austin Sept. 8, 2022, no pet. h.) (mem. op.) (op. on remand) (citing Texas Comm’n on Envtl. Quality v. Maverick County, 642 S.W.3d 537, 547 (Tex. 2022)); see also Jenkins v. Crosby Indep. Sch. Dist., 537 S.W.3d 142, 149 (Tex. App.—Austin 2017, no pet.). We apply this analysis without deference to the trial court’s judgment. See Texas Dep’t of Pub. Safety v. Alford, 209 S.W.3d 101, 103 (Tex. 2006) (per curiam); R.E. Janes Gravel Co. v. Texas Comm’n on Envtl. Quality, 522 S.W.3d 506, 511 (Tex. App.—Houston [14th Dist.] 2016, pet. denied).

DISCUSSION

The Vista Parties argue on appeal that the SOAH Order is arbitrary and capricious and not reasonably supported by substantial evidence. See Tex. Gov’t Code § 2001.174(2)(E), (F).

Arbitrary and Capricious

The Vista Parties argue that the SOAH Order is arbitrary and capricious because the ALJs (1) “failed to consider Medicare methodologies, models, and values or weights” as required by the legislature when deciding whether the stop-loss exception applies; (2) considered an irrelevant factor in making that determination; (3) reached an unreasonable result even if they considered only relevant factors, and (4) failed to make adequate findings of fact.

Consideration of Medicare Methodologies

First, the Vista Parties argue that the SOAH Order is arbitrary and capricious because the ALJs disregarded a legislative mandate that they consider the most current “Medicare methodologies, models, and values or weights” in resolving medical fee reimbursement disputes. The Vista Parties allege this mandate arises from Section 413.011 of the Act, which provides:

The commissioner shall adopt health care reimbursement policies and guidelines that reflect the standardized reimbursement structures found in other health care delivery systems with minimal modifications to those reimbursement methodologies as necessary to meet occupational injury requirements. To achieve standardization, the commissioner shall adopt the most current reimbursement methodologies, models, and values or weights used by the federal Centers for Medicare and Medicaid Services, including applicable payment policies relating to coding, billing, and reporting, and may modify documentation requirements as necessary to meet the requirements of Section 413.053.

Tex. Lab. Code § 413.011(a) (emphasis added). They argue that we held in Vista I that this provision “applies not only to fee guidelines but to individual adjudications such as the cases in this appeal.” In other words, they argue that Vista I interpreted Subsection 413.011(a) to require the ALJs to use “methodologies, models, and values or weights” even though Former Rule 134.401 does not. The Carriers respond that Vista I did not impose such a requirement.

*6 We agree with the Carriers. The requirement that the Division’s fee guidelines follow Medicare reimbursement policies and methodologies was not part of the statute in 1997 when the Division adopted Former Rule § 134.401. See Act of May 22, 1993, 73rd Leg., R.S., ch. 269, § 413.011, 1993 Tex. Sess. Law Serv. 1, 1223, codified as amended, Tex. Lab. Code § 413.011(a). The legislature added that requirement in 2001. See Act of May 25, 2001, 77th Leg., R.S., ch. 1456, § 6.02, 2001 Tex. Gen. Laws 5167, 5185. The Division repealed Former Rule 134.401 in 2008 but it remains in effect for “reimbursements related to admissions prior to March 1, 2008.” 33 Tex. Reg. 5319–20. In Vista I, certain insurance carriers argued that the amendments to Subsection 413.011(a) rendered Former Rule § 134.401 invalid. 275 S.W.3d at 551. We disagreed because Subsection 413.011(a) did not include that requirement when the Division adopted the rule. See id. at 551 & n.9 (explaining that courts generally measure the validity of rule by whether it comports with statutes in effect at its adoption). Nothing in Vista I requires application of Medicare reimbursement methodologies in fee disputes in which Former Rule 134.401 is applicable. The ALJs did not err by applying Former Rule 134.401’s reimbursement methodologies to the fee disputes here. See, e.g., Rodriguez v. Serv. Lloyds Ins. Co., 997 S.W.2d 248, 255 (Tex. 1999) (if agency “does not follow the clear, unambiguous language of its own regulation, we reverse its action as arbitrary and capricious”).

We overrule the Vista Parties’ first issue.

Irrelevant Factor

Next, the Vista Parties argue that the ALJs erred by considering an irrelevant factor: “why the hospital’s costs for Per Diem Services were not covered by per diem reimbursement.” They argue that there is “nothing in the Labor Code, [Former Rule § 134.401] or case law which suggests that either providers or SOAH should ask and answer ‘why’ per diem is inadequate as a condition to stop-loss reimbursement.” Instead, the ALJs should have considered only whether the services provided were “unusually extensive.” The Carriers respond that the ALJs did not consider a new factor but characterized the “unusually extensive” inquiry as asking “why” the per diem reimbursement was inadequate.

We agree with the Carriers. The Court held in Vista I that what constitutes “unusually costly and unusually extensive” services in any particular fee dispute is “a fact-intensive inquiry best left to the Division’s determination on a case-by-case basis.” 275 S.W.3d at 554. Here, the ALJs explained in the SOAH Order that they conducted just such a case-by-case inquiry. They considered (1) each injured worker’s prior medical history, (2) the worker’s condition and medical events from the time of admission through surgery, (3) the surgery and medical events during surgery, (4) the worker’s post-operative condition and post-operative medical events until time of discharge, and the (5) “need and scope of consulting specialists” (but not the cost of those services) needed during the admission. Construing the SOAH Order as a whole, the ALJs characterized the “unusually extensive” inquiry as analyzing “why the hospital’s costs” were “not covered by per diem reimbursement.” See In re Piatt Services Int’l, Inc., 493 S.W.3d 276, 281 (Tex. App.—Austin 2016, orig. proceeding [mand. denied]) (noting that when construing court orders, “we look first and foremost to the text of the judgment as written” (citing Shanks v. Treadway, 110 S.W.3d 444, 447–48 (Tex. 2003))). We overrule the Vista Parties’ second issue.

Findings of Fact

Next, the Vista Parties argue that the ALJs failed to make adequate findings of fact. See Tex. Gov’t Code § 2001.141. Section 2001.141 of the APA provides that a final administrative order “must include findings of fact and conclusions of law, separately stated” and that findings “may be based only on the evidence and on matters that are officially noticed.” Id. § 2001.141(b)–(c). “Findings of fact, if set forth in statutory language, must be accompanied by a concise and explicit statement of the underlying facts supporting the findings.” Id. § 2001.141(d).

The ALJs made the following findings of ultimate fact:

25. For the cases set forth in Attachment 1, the preponderance of the credible evidence in the record shows the inpatient hospital stay qualifies for the Stop-Loss Exception to the per diem methodology and that additional reimbursement is owed to Provider by the respective Carrier.

*7 26. For the cases set forth in Attachment 2, the preponderance of the credible evidence in the record shows the inpatient hospital stay does not qualify for the Stop-Loss Exception to the per diem methodology and that no additional reimbursement is owed to Provider by the respective Carrier.

27. For the cases set forth in Attachment 3, the preponderance of the credible evidence in the record shows the inpatient hospital stay does not qualify for the Stop-Loss Exception to the per diem methodology but that additional reimbursement is owed to Provider by the respective Carrier.

The Vista Parties argue that the ALJs were obligated to make findings of underlying fact regarding the “unusually costly” and “unusually extensive” elements in each case. They argue that the absence of these findings makes it difficult for them to “intelligently prepare and present this appeal” and hinders our review of the order. Cf. West Tex. Utilities Co. v. Office of Pub. Util. Counsel, 896 S.W.2d 261, 270 (Tex. App.—Austin 1995, writ dism’d) (“The requirement that an agency make findings of fact to support a decision grew out of several objectives: to restrain an agency from making a decision without full consideration of the evidence, to inform parties of the facts so that they may intelligently prepare and present an appeal, and to assist the courts in properly exercising their reviewing function.”). The Carriers respond that Section 2001.141 does not require findings of underlying fact in this instance.

We agree with the Carriers. The supreme court has held that findings of underlying fact are not required in a final administrative order unless “an ultimate fact embodies a mandatory fact finding set forth in the relevant enabling act” or when the ultimate fact represents a criterion “the legislature has directed the agency to consider in performing its function.” Texas Health Facilities Comm’n v. Charter Med.-Dall., Inc., 665 S.W.2d 446, 451 (Tex. 1984). “Stated conversely, when an agency’s enabling act does not require it to make any particular finding of fact or does not direct it to consider any particular criterion,” then “the agency is not obligated to make any findings of basic fact at all.” Harrison v. Texas State Bd. of Dental Exam’rs, No. 03-18-00229-CV, 2020 WL 370886, at *5 (Tex. App.—Austin Jan. 23, 2020, no pet.) (mem. op.). Subsection 2001.141(d) does not apply to findings required by an administrative rule. See Charter Med.-Dall., 665 S.W.2d at 451 (“By limiting the fact-finding requirement to findings ‘set forth in statutory language,’ the legislature has expressed its intention in this matter.”); Texas Comm’n on Envtl. Quality v. Maverick Cnty., No. 03-17-00785-CV, 2022 WL 2960797, at *5 (Tex. App.—Austin July 27, 2022, no pet.) (mem. op.) (“The plain language of section 2001.141(d) applies only to statutory findings, not regulatory findings.”). Section 2001.141 did not require the ALJs to make findings of underlying fact here. See West Tex. Utilities Co., 896 S.W.2d at 270 (“An agency’s finding of ultimate fact that does not embody a mandatory fact finding set forth in the relevant enabling act need not be supported by findings of basic fact, regardless of how conclusory the finding of ultimate fact may be.”).

The Vista Parties nonetheless argue that specific findings on the “unusually costly” and “unusually extensive” prongs are necessary to demonstrate the ALJs in fact considered the relevant factors. See, e.g., Heritage on San Gabriel Homeowners Ass’n v. Texas Comm’n on Envtl. Quality, 393 S.W.3d 417, 423 (Tex. App.—Austin 2012, pet. denied) (“[W]e must remand for arbitrariness if we conclude that the agency has not genuinely engaged in reasoned decision-making.”). First, they argue that without a specific finding regarding the actual costs for each admission, there is “no evidence that either SOAH or any other party did any cost analysis of each case that would support the conclusions reached by SOAH that per diem was sufficient” to cover the hospital’s costs. Similarly, they argue that findings are necessary for the “unusually extensive” prong to show how the ALJs weighed each of the factors enumerated in the SOAH Order. In effect, the Vista Parties argue that we should presume the SOAH Order is arbitrary and capricious unless the ALJs made findings demonstrating the contrary. However, Section 2001.174 requires us to presume the factfinder acted in compliance with the law and places the burden on the contestant to demonstrate otherwise. See Facility Ins. Corp., 2022 WL 4099832, at *7 (citing Maverick County, 642 S.W.3d at 547); see also State Bd. for Educator Certification v. Tran, No. 03-18-00855-CV, 2020 WL 6834219, at *8 (Tex. App.—Austin Nov. 20, 2020, pet. denied) (mem. op) (“We presume that the agency’s order is ‘a valid exercise of [the agency’s] power and discretion’ and that the agency ‘performed [its] duties in compliance with the law’; the party challenging the order has ‘the burden to show [that the agency] did not.’ ” (quoting Vandygriff v. First Sav. & Loan Ass’n of Borger, 617 S.W.2d 669, 673 (Tex. 1981))). We decline to treat the absence of findings of underlying fact that are not required by the APA as showing the ALJs did not engage in reasoned decision making.

*8 We overrule the Vista Parties’ third issue.

Unreasonable Result

The Vista Parties argue in their fourth issue that even if the ALJs considered only legally relevant factors, they reached an unreasonable result. Specifically, they argue that the “gross disparity” between the $1,002,191.00 award and their $8,822,532.18 in unreimbursed costs makes the award unreasonable. The Carriers respond that the disparity is not a relevant consideration and, in the alternative, that the record shows the Vista Parties’ costs are unreasonably high.

We agree with the Carriers that the disparity is not relevant in this context. The Vista Parties argue that we have previously considered the disparity between a provider’s costs and the reimbursement amount and should do the same here. See Vista Med. Ctr. Hosp. v. State Office of Risk Mgmt., No. 03-17-00352-CV, 2018 WL 3999595, at *2 (Tex. App.—Austin Aug. 22, 2018, no pet.) (mem. op.) [Vista Medical]. However, Vista Medical concerned reimbursement for medical services that were not covered by a fee guideline or contract. 2018 WL 3999595, at *1. If no fee guideline or contract applies, Division rules require carriers to provide “a fair and reasonable reimbursement amount.” Id.; see 28 Tex. Admin. Code § 134.1(e)(3) (2022) (Tex. Dep’t -Ins., Medical Reimbursement). We recognized in Vista Medical that evidence showing that the insurer’s “proposed reimbursement was less than half the billed rate ... and did not cover the actual cost of performing most of the procedures at issue” were “relevant considerations” in determining whether a reimbursement amount was fair and reasonable. 2018 WL 3999595, at *2.

Here, in contrast, Former Rule § 134.401 generally requires reimbursement at specified rates. The Vista Parties ask us to take the disparity between their costs and the reimbursement due to them under Former Rule § 134.401 in determining whether the amount is reasonable. For those services and admissions reimbursable at a rate other than fair and reasonable, we decline that invitation. Nothing in Former Rule § 134.401 makes the disparity between claimed costs and reimbursement relevant under those rates, and we must enforce the rule as written. See Patients Med. Ctr., 623 S.W.3d at 341 (“[W]e strive to give effect to the promulgating agency’s intent, ‘which is generally reflected in the [rules’] plain language.’ ” (quoting Zanchi v. Lane, 408 S.W.3d 373, 376 (Tex. 2013))). We are similarly unpersuaded regarding those ten admissions for “trauma” for which the ALJs ordered fair and reasonable reimbursement. Even assuming that Vista Medical applies in this context, the Vista Parties do not explain how the reimbursement amount in any of those cases fails to meet the “fair and reasonable” standard.⁸

*9 We overrule the Vista Parties’ fourth issue.

Substantial Evidence

The Vista Parties argue in their fifth issue that the SOAH Order is not supported by substantial evidence in the record. See Tex. Gov’t Code § 2001.174(2)(E). Substantial evidence review for purposes of Subsection 2001.174(2)(E) is essentially “a rational-basis test to determine, as a matter of law, whether an [administrative order finds reasonable support in the record.” Jenkins, 537 S.W.3d at 149. Substantial evidence in this sense “does not mean a large or considerable amount of evidence, but such relevant evidence as a reasonable mind might accept as adequate to support a conclusion of fact.” Slay v. Texas Comm’n on Envtl. Quality, 351 S.W.3d 532, 549 (Tex. App.—Austin 2011, pet. denied). Put differently, the test “is not whether the agency reached the correct conclusion, but whether some reasonable basis exists in the record for the action taken by the agency.” Facility Ins. Corp., 2022 WL 4099832, at *4 (citing Maverick County, 642 S.W.3d at 544).

Although briefed as a single issue, the Vista Parties present several related challenges to the SOAH Order. First, they assert that the ALJs could not have used the “CMS departmental cost-to-charge ratios methodology” to conclude that “only $1,002,191.00 was needed to cover [the Vista Parties’] actual costs.” The Vista Parties assert that the only information regarding their costs comes from the worksheets they submitted, which show $8,822,532.18 in unreimbursed costs.

We disagree. The Vista Parties presume they are entitled to recover 100% of their costs whether calculated using Medicare cost-to-charge ratios or another methodology. Former Rule § 134.401 does not require reimbursement of 100% of a provider’s total costs for an admission. If the stop-loss exception applies, providers are reimbursed for 75% of their audited costs for the admission. See former Tex. Admin Code § 134.401(c)(6)(A)(iii). Although the rule prescribes other methodologies for services that qualify for “additional reimbursement,” see id. § 134.401(c)(4)(A)–(C), nothing in Former Rule § 134.401 ensures that reimbursement will cover a provider’s costs in every case, see id.; see also Tex. Lab. Code § 413.016(a) (requiring Division to order providers to refund payments that exceed guidelines).

The Vista Parties also argue that the record does not support the ALJs conclusion that only fourteen admissions qualified for the stop-loss exception. They contend that the only evidence in the record—their cost worksheets and supporting evidence and testimony—supports applying the exception in every case. However, the SOAH Order reflects that the award of $1,002,191.00 constitutes stop-loss payments, additional reimbursement under the per diem rate, and fair-and-reasonable reimbursement for admissions for trauma and rehabilitation. It is not clear how much of that award constitutes stop-loss payments. In any event, we need not decide whether the record supports that every case was “unusually costly” because the record supports that the Vista Parties failed to prove the “unusually extensive” prong. See Tex. R. App. P. 47.1

*10 As set out in the SOAH Order, the ALJs considered a variety of case-specific factors in determining whether an admission involved unusually extensive services: “the injured worker’s prior medical history, condition and medical events at the time of admission through time of surgery, the surgery and medical events during surgery, and post-operative condition and post-operative medical events until time of discharge.” The Vista Parties argue that analyzing these factors to determine whether the services provided in a particular case were “unusually extensive” requires “medical evidence” and expert testimony. They assert that the Carriers did not provide this evidence because their experts did not evaluate all the disputed admissions. However, even assuming that “medical” expert testimony is always required to prove whether services were “unusually extensive” for purposes of Former Rule § 134.401, the Vista Parties bore the burden of proof before SOAH. See Patients Med. Ctr., 623 S.W.3d at 343 (burden of proof before SOAH in medical fee dispute is on party seeking relief). The Vista Parties sought to prove the “unusually extensive” prong through the relative-weight analysis. The Vista Parties proposed that all admissions assigned to a Medicare DRG with a relative weight of 1.6 be treated as involving unusually extensive services. Dr. Malone testified that, in his view, “a relative weight of 1.6 means that the procedure in question significantly exceeds the average admission’s complexity and cost[.]”

This approach is not the type of case-by-case inquiry envisioned by Vista I. Such an inquiry is necessary to prevent the stop-loss exception from applying to all cases that exceeded the minimum threshold. 275 S.W.3d at 550. Dr. Luke testified without contradiction that the Vista Parties’ method would deem every back surgery assigned to DRGs 496, 497, 498, 500 or 520, “no matter how routine” to “have involved unusually extensive and unusually costly hospital services.” This would result in the stop-loss exception applying to essentially every case involving those procedures.⁹ Far from disputing this, Dr. Malone testified that the advantage of the relative weight approach was that it allowed him to evaluate whether an admission involved unusually extensive services “without going through every page of a chart.” In other words, the Vista Parties employed this procedure precisely because it treats cases as categories rather than limiting the application of the stop-loss exception to truly unusual cases. See id. (stating that Division intended reimbursement under stop-loss method to be exception to general rule). Because this approach conflicts with Vista I, the ALJs did not err by disregarding the Vista Parties’ evidence.

We overrule the Vista Parties’ fifth issue.

CONCLUSION

We affirm the district court’s judgment.

Affirmed

Footnotes
1	The district court consolidated the following cause numbers for briefing and decision: Cause Nos. D-1-GN-19-004290, D-1-GN-19-004628, D-1-GN-19-004329, D-1-GN-19-004362, D-1-GN-19-004372, D-1-GN-19-004365, D-1-GN-19-004279.
2	Unless otherwise noted, we cite to the current version of statutes for convenience.
3	The events here involve the Division and its predecessor agency, the Workers Compensation Commission. In 2005, the legislature abolished the Commission and transferred its responsibilities and powers to the Division. See Act of May 29, 2005, 79th Leg., R.S., ch. 265, §§ 8.001(b), .004(a), 2005 Tex. Gen. Laws 607, 608. For simplicity, we refer to both agencies as “the Division.”
4	This Court has adjudicated several other cases involving disputes between Vista Parties and insurers. See Facility Ins. Co. v. Vista Hosp. of Dall., No. 03-18-00663-CV, 2019 WL 6603168, at *1 (Tex. App.—Austin Dec. 5, 2019, pet. denied) (mem. op.) (citing this Court’s previous decisions).
5	Audited charges are defined as those billed charges that remain after the carrier has excluded charges for personal items, services that are not documented as having been provided, and services determined to be unrelated to the compensable injury. Former Rule § 134.401(c)(6)(A)(v). In this case, we construe “billed charges” as synonymous with “audited charges” because none of the carriers elected to perform an audit.
6	Both the Carriers and the Vista Parties proposed multiple approaches for determining whether an admission required unusually costly and unusually extensive services. We discuss only the theories relevant to the Vista Parties’ appellate issues.
7	CMS creates cost-to-charge ratios by using the information supplied by a hospital in its annual reports. By using billing records, an auditor determines the total amount of nominal charges billed by the hospital for covered services. See generally 42 C.F.R. §§ 413.9, .20. This amount is then divided by the auditor-determined amount of actual costs to arrive at a cost-to-charge ratio. See generally El Paso Healthcare Sys., LTD v. Molina Healthcare of New Mexico, Inc., 683 F. Supp. 2d 454, 477 (W.D. Tex. 2010). Thus, a cost-to-charge ratio of 33% “means that, on average, the cost of services is just one third of what the hospital seeks to bill for its services.” Id. CMS assigns ratios both for entire hospitals and departments within the hospital.
8	Some of the other admissions involved services that Former Rule § 134.401 states are reimbursed at a fair and reasonable rate even if the fair-and-reasonable methodology does not apply to the overall admission. See, e.g., former Tex. Admin Code § 134.401(c)(4)(B) (listing four services, including “blood” that are reimbursable at fair and reasonable rate). Our reasoning here applies equally to reimbursement for those services.
9	According to Dr. Luke, such surgeries constitute 79% of the 509 disputed claims that he analyzed.

Court of Appeals of Texas, Austin.

Facility Insurance Corporation, Appellant

v.

Patients Medical Center, Appellee

NO. 03-17-00666-CV

|

Filed: September 8, 2022

ON REMAND

FROM THE 200TH DISTRICT COURT OF TRAVIS COUNTY

NO. D-1-GN-13-003388, THE HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING

Before Justices Goodwin, Triana, and Kelly

MEMORANDUM OPINION

Melissa Goodwin, Justice

*1 This appeal concerns a medical fee dispute under the Texas Workers’ Compensation Act (TWCA), see generally Tex. Lab. Code §§ 401.001–419.007, between the insurance carrier Facility Insurance Corporation (the Carrier) and the provider Patients Medical Center (the Provider) for medical services the Provider provided to an injured worker (the Claimant). After the Provider initiated the process for medical fee dispute resolution (MFDR), an MFDR officer with the Texas Department of Insurance, Division of Workers’ Compensation (the Division) adjudicated the dispute and awarded the Provider $20,495.78 in additional reimbursement. The Carrier requested a contested case hearing before the State Office of Administrative Hearings (SOAH). After the SOAH hearing, the administrative law judge (the ALJ) signed a Decision and Order (the SOAH Order) concluding that the Carrier “failed to carry its burden that Provider is not entitled to $20,495.78” in additional reimbursement.

The Carrier sought judicial review, raising multiple issues. The district court affirmed the SOAH Order, and the Carrier appealed to this Court. We reversed on a single issue—determining that the ALJ improperly shifted the burden of proof from the Provider to the Carrier in the contested case hearing before SOAH—and remanded the case to the Division for further proceedings. See Facility Ins. Corp. v. Patients Med. Ctr., 574 S.W.3d 436, 444 (Tex. App.—Austin 2018), rev’d and remanded, 623 S.W.3d 336 (Tex. 2021). But the Texas Supreme Court reversed our ruling, holding that “in a worker’s compensation proceeding, the burden of proof in a contested case hearing before SOAH is on the party seeking review of the Division’s initial MFDR decision.” Patients Med. Ctr. v. Facility Ins. Corp., 623 S.W.3d 336, 343 (Tex. 2021); see also id. at 338 n.2, 341 (noting that rules authorized party to “seek review of the [MFDR] decision” by requesting contested case hearing and that burden of proof is on “ ‘the party seeking relief’ ” (quoting 28 Tex. Admin. Code §§ 133.307(f) (MDR of Fee Disputes), 148.14(b) (Burden of Proof))).¹ The Texas Supreme Court remanded the case to this Court to consider the Carrier’s other appellate issues that we did not initially reach:

(1) whether the ALJ erred in failing to apply a contractual fee rate; (2) whether [the Provider] failed to submit a timely, complete medical bill; (3) whether [the Provider] waived its entitlement to MFDR by failing to request reconsideration of [the Carrier]’s denial of the “corrected bill”; and (4) whether the ALJ incorrectly determined [the Provider]’s entitlement to and the amount of reimbursement.

Id. at 340 n.6, 343.

On remand, although we overrule the first three issues, see Texas Comm’n on Env’tl Quality v. Maverick County, 642 S.W.3d 537, 550 (Tex. 2022) (noting that appellate court could reach issues “not strictly necessary to each court’s disposition of the case” and “particularly in a complex administrative appeal”), we reverse the SOAH Order in part based on the Carrier’s fourth issue and remand the case to the Division for further proceedings consistent with this opinion, see Tex. Gov’t Code § 2001.174(2); Freightliner Corp. v. Motor Vehicle Bd. of Tex. Dep’t of Transp., 255 S.W.3d 356, 366 (Tex. App.—Austin 2008, pet. denied) (“Courts are legislatively empowered to limit the scope of a remand to the part of an order that contains error.”). We affirm the SOAH Order in all other respects. See Tex. Gov’t Code § 2001.174(1).

BACKGROUND

*2 The Texas Supreme Court has provided an overview of the legal framework for MFDR proceedings, see Patients Med. Ctr., 623 S.W.3d at 338; see also Vista Med. Ctr. Hosp. v. Texas Mut. Ins., 416 S.W.3d 11, 15–18 (Tex. App.—Austin 2013, no pet.), and both our initial opinion and the Texas Supreme Court’s opinion in this appeal provide the procedural and factual background of this case, see Patients Med. Ctr., 623 S.W.3d at 338–40; Facility Ins., 574 S.W.3d at 439–41. Accordingly, we limit our background discussion here to what is necessary to resolve this appeal and refer readers to those opinions for additional factual and legal background.

On August 19, 2009, Dr. Chris Fuke with the Provider submitted a Pre-authorization Request/Procedure Order to perform two procedures on the Claimant: “Spinal cord stimulator-revision” and “Programming,” coded as Current Procedural Terminology (CPT) 63660 and 95972, respectively.² The request also stated, “Please consider the following procedures for pre-authorization. I am also faxing[.] See attached documentation ....” (Ellipsis in original.) The appellate record, however, does not include any “attached documentation” to the preauthorization request.

On September 22, the Carrier’s agent UniMed Direct faxed the Provider an August 24 report by Dr. Lisa Gill that recommended approving the request.³ Dr. Gill was an “anesthesiologist reviewer,” and “one of [UniMed Direct’s] physician advisers, who—who renders the decision on these approvals.” In the report, Dr. Gill described the Claimant’s “history of condition” as “hav[ing] an spinal cord stimulator (SCS) in that worked well but the leads were removed in 10/08 due to migration” and noted that “[t]he MD is requesting replacement of the leads.” In the report’s conclusion, Dr. Gill explained: “The [Claimant] had good relief with her last SCS and poor relief (pain 10/10) now that it is out. The leads had moved so were pulled. The generator remains. The MD wants to replace the leads, hook them back up, and reprogram the unit to get maximum coverage. This is a very reasonable tx plan.”

On September 23, Dr. Fuke performed surgery on the Claimant and signed the Operative Note describing the procedure. The Operative Note lists three procedures performed—“Spinal cord stimulator lead and generator revision,” “Fluoroscopic guidance for the above procedure,” and “Epidural blood patch”—and narratively describes the placement, adjustment, and anchoring of leads and the dissection and placement of the generator.

On September 30, the Provider sent a medical bill to UniMed Direct, listing nineteen items that totaled $94,640.48. In November, UniMed Direct sent the Provider a check for $2,354.75 with an explanation of benefits (the 2010 EOB) that denied most of the billed items. The only item that was not denied was for “revise/remove neuroelectrode” code 63660, but UniMed reduced the amount from $2,558.75 to $2,354.05, stating as the reason: “A2-contractual adjustment any reduction is in in accordance with the Focus/AETNA Worker’s Comp Access LLC contract. For questions regarding reductions please call 1-800-238-8288.” (Capitalization removed.) The reasons listed next to the denied items were either “workers compensation state fee schedule adjustment. Fee guideline MAR reduction” or “payment denied/reduced for exceeded precertification/authorization.” (Capitalization removed.)

*3 On March 11, 2010, the Provider sent UniMed Direct the original bill with “1st Request for Reconsideration–Not Duplicate” handwritten on it and accompanying documentation, including the Operative Note. In a cover letter, the Provider explained:

Our facility is requesting for the above claim to be reviewed and reconsidered. We have received a small payment of $2,354.75; being informed that 2 of the procedures performed were denied, as well as all the implants. I have obtained a copy of all of the invoices for implants and ask that you review those. According to our vendor the implants were used for Revision/removal of NeuroElectroders therefore at least some of our implants should have been considered and not denied in its entirety.

On March 25, UniMed Direct responded with an explanation of review, reasserting its original payment decision and again listing itemized reasons for denial of payment.⁴

On April 19, the Provider sent a “2nd level of Reconsideration” to UniMed Direct. Across the bill was handwritten “2nd Level of Appeal” and under the remarks section of the bill was handwritten “Corrected Bill.” The cover letter states:

Our facility received our 1^st level response from our appeal, we are now submitting the 2^nd level, after reviewing the billed charges it was determined that line charges for CPT Code 360 were billed incorrectly. On this corrected bill you will find that there are (3) line items for this Rev Code; we understand that only one procedure was allowed CPT code 63660 since our Aetna Network was used on re pricing this claim, the allowed amount of the corrected charges are:

CPT Code:63660

$3,411.68 @ 92% =$3,138.75 less the amount previously paid $2,354.75 leaving a balance of $784.00 in which we are seeking reimbursement for.

The attached “Corrected Bill” increased the “Total Charges” for each of three items—“revise/remove neuroelect 63660,” “revise/remove neurorecei 63688,” and “treat epidural spine les 62273”—from the $2,558.75 listed on the original bill to $3,411.68 and omitted a fourth item—“analyze neurostim, compl 95972”—from the original bill. (Capitalization removed.) On the line for “revise/remove neuroelect 63660”—the only item the Carrier paid after receiving the original bill—was handwritten “@92% $3,138.75.” Finally, the bill code “0131” on the “Corrected Bill” was crossed out and “137” and “CORRECTED” were handwritten instead. On April 30, UniMed Direct sent the Provider another explanation of review, reasserting its original payment decision and raising the additional explanation code “29 The time limit for filing has expired. $0.00.” The Provider did not request reconsideration of the “Corrected Bill.”

On September 22, 2010, the Provider requested MFDR and asserted that the Carrier owes a remaining $92,285.73, as reflected on the original bill. On November 3, the Division sent the Carrier a fax requesting additional information, including “[a] copy of the contract between the informal/voluntary network and [the Provider]” and “[d]ocumentation to support that [the Provider] was notified in accordance with 28 Tex. Admin. Code § 133.4.” On November 19, Aetna Worker’s Comp Access submitted to the Division a March 14, 2008 Hospital Services Agreement (the Aetna Contract) between the Provider and Aetna Health, Inc. In the cover letter to the Division, Aetna’s representative stated, “In response to the [Division]’s inquiry regarding compliance with 28 Tex. Admin. Code 133.4, [the Provider] has been made aware of their participation status with [Aetna Worker’s Comp Access] since April 15, 2008.”

*4 On March 13, 2013, the MFDR officer signed her findings and decisions. As to the Aetna Contract, the MFDR officer found:

Review of the submitted information found insufficient documentation to support that the disputed services were subject to a contractual fee arrangement between the parties to this dispute. Nevertheless, on November 3, 2010, the Division requested the respondent to provide a copy of the referenced contract as well as documentation to support notification to the healthcare provider, as required by 28 Texas Administrative Code § 133.4, that the healthcare provider had been given access to the contracted fee arrangement. Review of the submitted information finds that the documentation does not support notification to the healthcare provider in the time and manner required. The Division concludes that, pursuant to § 133.4(g), the insurance carrier is not entitled to pay the health care provider at a contracted fee.

The MFDR officer also made findings that some of the Carrier’s reasons for denial were supported as to some items but not others and made various adjustments, reducing the amount due from $92,285.73 to $20,495.78.

The Provider did not contest the $20,495.78 amount, but on April 2, the Carrier requested a contested case hearing before SOAH. At the SOAH hearing, the documents described above were admitted into evidence and Paul Hanson, the Provider’s chief financial officer, and Ian Bladuell, an employee with UniMed Direct, testified as witnesses. On August 28, the ALJ signed the SOAH Order. Among other findings and conclusions, the ALJ found that “[t]he initial bill, with all fields completed, was received by Carrier within 95 days from the date of service but contained a procedure coding error” and concluded that it “was a complete medical bill as defined by 28 Texas Administrative Code § 133.2” and that “Carrier failed to carry its burden that [the Provider] is not entitled to $20,495.78 in additional reimbursement.” The Carrier sought judicial review of the SOAH Order, and the district court affirmed.

DISCUSSION

On remand, the Carrier reasserts its four appellate issues challenging the SOAH Order that were not addressed in our initial opinion and in the Texas Supreme Court opinion. Our review of the SOAH Order is governed by the “substantial evidence rule.” See Tex. Gov’t Code § 2001.174; Tex. Lab. Code § 410.255(b). Under that standard, we must reverse or remand the case for further proceedings “if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are” “in violation of a constitutional or statutory provision,” “in excess of the agency’s statutory authority,” “made through unlawful procedure,” “affected by other error of law,” “not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole,” or “arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.” Tex. Gov’t Code § 2001.174(2). When applying the substantial evidence rule, “a court may not substitute its judgment for the judgment of the state agency on the weight of the evidence on questions committed to agency discretion.” Id. § 2001.174. “The true test is not whether the agency reached the correct conclusion, but whether some reasonable basis exists in the record for the action taken by the agency.” Maverick County, 642 S.W.3d at 544 (quoting Texas Health Facilities Comm’n v. Charter Med.–Dall., Inc., 665 S.W.2d 446, 452 (Tex. 1984)).

Complete Medical Bill

*5 We begin with the Carrier’s second appellate issue. The Carrier argues that the Provider’s September 2009 bill, which was the subject of the SOAH Order, did not qualify as a “complete medical bill” because it had an incorrect service code. Thus, according to the Carrier, the Provider forfeited the right to reimbursement on that claim because it did not submit a “complete medical bill”—i.e., the “Corrected Bill”—until after the 95-day deadline. See Tex. Lab. Code § 408.027(a) (providing that provider’s failure to timely submit claim for payment within 95 days after date of health care services constitutes forfeiture of provider’s right to reimbursement). The Division rules define “[c]omplete medical bill” as:

A medical bill that contains all required fields as set forth in the billing instructions for the appropriate form specified in § 133.10 of this chapter (relating to Required Billing Forms/Formats), or as specified for electronic medical bills in § 133.500 of this chapter (relating to Electronic Formats for Electronic Medical Bill Processing.

28 Tex. Admin. Code § 133.2(2) (Definitions). In the SOAH Order, the ALJ made the following relevant findings of fact and conclusion of law: “The initial bill, with all fields completed, was received by Carrier within 95 days from the date of service but contained a procedure coding error”; “The initial bill was complete”; and “The medical bill Provider sent on September 30, 2009, was a complete medical bill as defined by 28 Texas Administrative Code § 133.2.”

In challenging the SOAH Order on appeal, the Carrier does not argue that any “required fields” in the Provider’s medical bill were left blank. Instead, the Carrier limits its challenge to arguing that “[a] bill with incorrect coding or charge amounts is not complete” because the Division’s Medical Contested Case Hearing Decision Manual-Medical Fee Disputes (Decision Manual) “states that to be entitled to payment, a medical bill with even one coding error is not a complete bill, and must be corrected within the 95-day deadline.” (Capitalization removed.) In the SOAH proceeding, the Carrier submitted excerpts from the Decision Manual as an exhibit, which state, as relevant here:

Complete Bill Required

The bill must be complete, with any corrections submitted during the 95-day period. M4-08-3413-01. There is no provision allowing for the resubmission of an incomplete or improperly submitted bill after the 95-day period. M4-09-1662-01. HCP shall include correct billing codes from the applicable Division fee guidelines in effect on the date or dates of service when submitting medical bills. See Rule 133.20(c).

Incomplete Bill – Incorrectly Coded

MFDR found that HCP did not submit a timely request for reimbursement to IC. Although the first bill for $68.25 was submitted within 95 days from the date of service, it was incorrectly coded. Approximately six months after the date of service, HCP submitted a corrected bill which was properly coded. IC denied the bill, citing § 408.027, and the fact that the corrected bill was not submitted within 95 days. HO affirmed the decision of MFDR that HCP failed to timely request reimbursement pursuant to § 408.027.

M4-08-3413-01.

The Carrier asserts that the decisions in the Decision Manual “are the agency’s expression of its interpretation and application of its rules, which the ALJ was bound to follow and to which the courts are bound to defer.”⁵

We need not decide, however, whether the September 2009 original bill constituted a “complete medical bill,” notwithstanding any coding errors. Even if the ALJ erred in concluding that the original bill was complete, the conclusion would not have prejudiced the Carrier’s substantial rights as explained below, and therefore we are not authorized to reverse or remand the ALJ’s decision on this ground. See Tex. Gov’t Code § 2001.174(2).

*6 A provider’s delivery of a “complete medical bill” triggers a carrier’s obligation to take final action within a certain time period. See 28 Tex. Admin. Code § 133.240(a) (Medical Payments and Denials) (“An insurance carrier shall take final action after conducting bill review on a complete medical bill, or determine to audit the medical bill ... not later than the 45th day after the date the insurance carrier received a complete medical bill.”). But here it is undisputed that the Carrier took final action on the September 2009 bill and on the March 2010 request for reconsideration by making a $2,354.75 payment and denying the rest of the charges. See id. §§ 133.2(4) (“Final action on a medical bill—(A) sending a payment that makes the total reimbursement for that bill a fair and reasonable reimbursement ... and/or (B) denying a charge on the medical bill.” (emphasis added)), .250(f) (Reconsideration for Payment of Medical Bills) (“The insurance carrier shall take final action on a reconsideration request within 21 days of receiving the request for reconsideration. The insurance carrier shall provide an explanation of benefits for all items included in a reconsideration request in the form and format prescribed by the Division.”). And it is the Carrier’s “final action” on a medical bill, regardless of whether the bill is a “complete medical bill,” that triggers the Provider’s right to request reconsideration and MFDR. See id. §§ 133.240(h) (“If dissatisfied with the insurance carrier’s final action, the health care provider may request reconsideration of the bill ....”), (i) (“If dissatisfied with the reconsideration outcome, the health care provider may request medical dispute resolution ....”), .250(a) (“If the health care provider is dissatisfied with the insurance carrier’s final action on a medical bill, the health care provider may request that the insurance carrier reconsider its action.” (emphasis added)), (h) (“If the health care provider is dissatisfied with the insurance carrier’s final action on a medical bill after reconsideration, the health care provider may request medical dispute resolution in accordance with § 133.305 ....” (emphasis added)), .305(a)(3)(A), (4)(A) (MDR—General) (defining “Medical dispute resolution” to include “process for resolution of” “a medical fee dispute” and defining “Medical fee dispute” to include “a health care provider (provider) ... dispute of an insurance carrier (carrier) reduction or denial of a medical bill” (emphasis added)).⁶

If the medical bill is not complete, the Division’s rules provide a mechanism by which the Carrier may satisfy its obligations without taking final action. See id. § 133.200(a), (c) (Insurance Carrier Receipt of Medical Bills from Health Care Providers) (requiring carriers to take certain action upon receipt of “a medical bill that is not complete as defined in § 133.2” and providing that “[t]he proper return of an incomplete medical bill in accordance with this section fulfills the insurance carrier’s obligations with regard to the incomplete bill”). Here, however, the Carrier admits that it did not follow Rule 133.200 regarding the proper response to an incomplete medical bill and instead took final action on receiving the original medical bill.⁷

In sum, a provider has the right under the relevant rules to seek reconsideration and MFDR when it is dissatisfied with a carrier’s “final action on a medical bill.” And the rules do not require that the medical bill be complete for a carrier to take “final action” on the medical bill. Because it is undisputed that (1) the Carrier took final action on both the September 2009 medical bill and the March 2010 request for reconsideration, (2) the Provider requested MFDR based on dissatisfaction with the Carrier’s final actions, and (3) the September 2009 medical bill and the March 2010 request for reconsideration were timely filed, we conclude that the Provider did not forfeit its right to reimbursement for failure “to timely submit a claim for payment,” regardless of whether the September 2009 medical bill was “complete.” See Tex. Lab. Code § 408.027(a).⁸ Accordingly, we overrule the Carrier’s second issue.

Corrected Bill

*7 In its third issue, the Carrier argues that “[a]s defined by Medicare and [the Division] rules and [Division] authority interpreting those rules, the ‘Corrected’ bill was a new bill.” Thus, the Carrier argues, because the Provider submitted a “Corrected Bill” on April 19, 2010—a bill denied by the Carrier as untimely—“[a]ny fee dispute had to be directed to the ‘Corrected’ bill.” Moreover, the Carrier argues, because the “Corrected Bill” is a new bill, “[t]he [Provider] was not entitled to [MFDR] in the absence of a Request for Reconsideration,” and it is undisputed that the [Provider] did not request reconsideration of the Carrier’s denial of the “Corrected Bill.”

However, as we have noted above, the Carrier took “final action” on both the September 2009 medical bill and the March 2010 request for reconsideration, and under the Division rules the Provider is entitled to request MFDR if dissatisfied with the Carrier’s “final action” on a medical bill and request for reconsideration. See 28 Tex. Admin. Code §§ 133.240(h), (i), .250(h), .337(b)(1). The Carrier argues that “there is no statute, rule or mechanism allowing the ALJ to resurrect the original bill and wish away the new corrected one.” The Provider responds that the “rules do not state that an untimely claim extinguishes a prior, timely-filed claim.”

Although the Carrier may be correct that the “Corrected Bill” is a “new bill,” the Carrier does not cite authority for the proposition that a provider’s untimely corrected bill filed after a carrier has taken “final action” on an original bill and request for reconsideration prevents a provider from seeking MFDR of the original bill.⁹ See Maverick County, 642 S.W.3d at 547 (noting that agency finding and conclusions “are presumed to be supported by substantial evidence, and the burden is on the contestant to prove otherwise” (quoting Charter Med.–Dall. 665 S.W.2d at 453)). Thus, even though the Provider would likely not be entitled to MFDR of the Carrier’s denial of the “Corrected Bill” as there was no request for reconsideration of that bill, the Carrier has not met its appellate burden to demonstrate that the Provider was not entitled to MFDR of the Carrier’s denial of the original bill and request for reconsideration.¹⁰ We overrule the Carrier’s third appellate issue.

AETNA Contract

*8 The Carrier’s first issue states: “Did the ALJ have the legal and factual grounds to (impliedly) avoid the Aetna-Patients Medical Center network fee arrangement that both Hospital and Carrier acknowledged and invoked in the billing, payment and dispute resolution process?” For the relevant time here, the Texas Labor Code permitted providers and carriers to contract for terms and medical fee schedules in what were called informal or voluntary networks. See Tex. Lab. Code § 413.011(d-1)–(d-6). The Carrier asserts that the Aetna Contract provides for an “agreed rate of reimbursement” of “92% of the ‘Allowable’ as defined in the contract.”

The Division rules, however, provide that “[t]he insurance carrier is not entitled to pay a health care provider at a contracted fee negotiated by an informal network or voluntary network if: (1) the notice to the health care provider does not meet the requirements of Labor Code § 413.011 and this section.” 28 Tex. Admin. Code § 133.4(g) (Written Notification to Health Care Providers of Contractual Agreements for Informal and Voluntary Networks). Rule 133.4 requires that “[e]ach informal network or voluntary network, or the insurance carrier, or the insurance carrier’s authorized agent, as appropriate, shall notify each affected health care provider of any person that is given access to the informal or voluntary network’s fee arrangement with that health care provider within the time and manner provided by this section.” Id. § 133.4(c). The notice “may be provided through a website link,” but “only if the website: (A) contains the information stated in paragraphs (1), (2)(A) and (2)(B) of this subsection; and (B) is updated at least monthly with current and correct information.” Id. § 133.4(d)(4). Paragraph (2) requires that the body of the notice must include: (A) “name, physical address, and telephone number of any person that is given access to the informal or voluntary network’s fee arrangement”; and (B) “the start date and any end date during which any person has been given access to the health care provider’s contracted fee arrangement.” Id. § 133.4(d)(2). Rule 133.4 also requires that “[t]he informal or voluntary network, insurance carrier, or the insurance carrier’s authorized agent, as appropriate, shall document the information provided in the notice as required by subsection (d) of this section, the method of delivery, to whom the notice was delivered, and the date of delivery.” Id. § 133.4(e). Finally, Rule 133.4 provides that “[f]ailure to provide documentation upon the request of the Division or failure to provide notice that complies with the requirements of Labor Code § 413.011 and this section creates a rebuttable presumption ... in a medical fee dispute that the health care provider did not receive the notification.” Id.

In addition to requesting a copy of the Aetna Contract, the Division requested from the Carrier “Documentation to support that [the Provider] was notified in accordance with 28 Tex. Admin. Code § 133.4.” However, the appellate record does not include documentation showing “the information provided in the notice as required by subsection (d) of this section, the method of delivery, to whom the notice was delivered, and the date of delivery.” See id. § 133.4(e). Instead, the cover letter responding to the request merely states, “In response to the [Division]’s inquiry regarding compliance with 28 Tex. Admin. Code 133.4, [the Provider] has been made aware of their participation status with AWCA since April 15, 2008.” Accordingly, the MFDR officer found that “[r]eview of the submitted information finds that the documentation does not support notification to the healthcare provider in the time and manner required” and concluded that “pursuant to § 133.4(g), the insurance carrier is not entitled to pay the health care provider at a contracted fee.” And in the SOAH Order, the ALJ concluded that the “Carrier failed to carry its burden that [the Provider] is not entitled to $20.495.78 in additional reimbursement.”

*9 Because the Texas Supreme Court has determined that the Carrier had the burden of proof in the contested case hearing before SOAH, see Patients Med. Ctr., 623 S.W.3d at 343, our inquiry on this issue under the substantial evidence rule is whether “some reasonable basis exists in the record,” see Maverick County, 642 S.W.3d at 544 (quoting Charter Med.–Dall., 665 S.W.2d at 452), for the ALJ to impliedly conclude that the Carrier did not meet its burden to demonstrate that any alleged notice provided to the Provider satisfied Rule 133.4 such that the Aetna Contract applied.¹¹

The Carrier argues that the rules “only required the contract be supplied to the [Division], and that Aetna provide documentation of the website where the [Provider] could have reviewed to determine if this Carrier had access to the network contract,” and asserts that “Aetna documented the time and manner of its notice relevant to this [Provider] and this outpatient encounter.” But this assertion does not accurately convey what the rules require. Although the record includes the Aetna Contract, which includes a website link,¹² the record does not demonstrate that the Carrier was listed on the website link as having been given access to the network’s fee arrangement. See 28 Tex. Admin. Code § 133.4(d)(2), (4) (providing that notice may be provided through website link but “only if” website contains “name, physical address, and telephone number of any person that is given access to the informal or voluntary network’s fee arrangement” and “the start date and any end date during which any person has been given access”). Given the Carrier’s failure to provide documentation that it was required to keep in response to the Division’s request as required under Rule 133.4, the presumption is that the Provider did not receive notice that met the requirements of Rule 133.4. See id. § 133.4(e).

*10 The Carrier asserts that even if it failed to provide the necessary documentation, “that would only have created a rebuttable presumption the [Provider] did not receive notification of the time and manner of that information.” The Carrier argues, “The Carrier’s witness testified the Carrier had access to and had applied the Aetna contract, and that the [Provider] was clearly aware of it.” But even if the Provider was “aware” of the Aetna Contract, the Carrier is only entitled to the contracted fee if the notice to the Provider satisfied Rule 133.4. See id. § 133.4(g). And the Carrier does not identify any evidence that the provided notice—i.e., the website link in the Aetna Contract—satisfied the requirement of containing the “name, physical address, and telephone number of any person that is given access to the informal or voluntary network’s fee arrangement with a health care provider.” See id. § 133.4(d)(2), (4).¹³ Accordingly, we overrule the Carrier’s first appellate issue.

Reimbursement Calculation

In the Carrier’s final appellate issue, it challenges the MFDR officer’s reimbursement calculations and the ALJ’s conclusion that the Carrier did not meet its burden in the contested case hearing before SOAH to show that the Provider is not entitled to the reimbursement amount. The Carrier argues that “[w]hile there are numerous errors [in the reimbursement calculations], the fundamental and most egregious error is the failure to exclude from the outlier calculations all the charges for implants and other items that were associated with surgical services for which the Carrier is not liable” and that “the Carrier has no liability for items ancillary to services that were not preauthorized.” As we noted in our initial decision:

As outlined in great detail in Carrier’s brief, a critical component of the formula used in the [MFDR officer]’s calculation of the reimbursement amount is the so-called “sum of all packaged costs,” which the [MFDR officer]—without any explanation—declared to be $20,649.75. This “packaged costs” amount was determinative in the [MFDR officer’s] conclusion that Provider was entitled to so-called “outlier payments,” which comprised the largest component of the total reimbursement awarded.

Facility Ins., 574 S.W.3d at 444 n.8. Among other challenged calculation concerns, the Carrier specifically argues, “The ALJ erred by including the charges and costs for a spinal cord stimulator/generator (C1820) in any calculations, including outlier calculations.”

In its original bill, the Provider billed the Carrier, as relevant for this issue, the following four charges, among other charges:

*11 • “generator neuro rechg ba,” code C1820, for $47,250,¹⁴

• “revise/remove neurorecei,” code 63688, for $2,558.75,

• “revise/remove neuroelect,” code 63660, for $2,558.75, and

• “analyze neurostim, compl,” code 95972, for $2,558.75.

(Capitalization removed.) During the SOAH proceedings, the Carrier submitted excerpts from the American Medical Association’s Current Procedural Terminology (2004) (AMA’s CPT), which described some of these CPT Codes. AMA’s CPT explains that “Codes 63650-63688 apply to both simple and complex neurostimulators”; that “[f]or insertion of neurostimulator pulse generator, see 61885, 63685, 63688, 64590,” “[f]or revision or removal of neurostimulator pulse generator or receiver, see 61888, 63688, 64595,” and “[f]or initial or subsequent electronic analysis and programming of neurostimulator pulse generators, see codes 95970-95975”; and that “Codes 95972 and 95973 describe intraoperative (at initial insertion/revision) or subsequent electronic analysis of an implanted complex brain, spinal cord or peripheral (except cranial nerve) neurostimulator pulse generator system, with programming.” AMA’s CPT defines code 63660 as “Revision or removal of spinal neurostimulator electrode percutaneous array(s) or plate/paddle(s)”; code 63688 as “Revision or removal of implanted spinal neurostimulator pulse generator or receiver”; and code 95972 as “complex brain, spinal cord or peripheral (except cranial nerve) neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming, first hour.” The excerpts from the AMA’s CPT did not include a definition of code C1820, but Bladuell testified at the SOAH hearing that C1820 is “a charge for an implant, which would have been the generator.”

In determining what rule to apply to calculate the reimbursement amount due, the MFDR officer found:

This dispute relates to facility services performed in an outpatient hospital setting with reimbursement subject to the provisions of 28 Texas Administrative Code § 134.403, which requires that the reimbursement calculation used for establishing the maximum allowable reimbursement (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 with the application of minimal modifications as set forth in the rule. Per § 134.403(f)(1), the sum of the Medicare Facility specific reimbursement amount and any applicable outlier payment amount shall be multiplied by 200 percent, unless a facility or surgical implant provider requests separate reimbursement of implantables. Review of the submitted documentation finds that separate reimbursement for implantables was not requested.

....

Under the [OPPS], each billed service is assigned an Ambulatory Payment Classification (APC) based on the procedure code used, the supporting documentation and the other services that appear on the bill. A payment rate is established for each APC.... Payment for ancillary and supportive items and services, including services that are billed without procedure codes, is packaged into payment for the primary service.

*12 See 28 Tex. Admin. Code § 134.403 (Hospital Facility Fee Guideline—Outpatient). The Provider did not challenge the finding that “separate reimbursement for implantables was not requested,” and the Carrier does not challenge the application of Rule 134.403, assuming that the contractual fee arrangement does not apply, which we have concluded above that it does not. The MFDR officer also found that the denial reason for code 63688 “is supported” and denied reimbursement for that coded billing item, which the Provider has not challenged.¹⁵ As to code C1820, however, the MFDR officer concluded that “[p]er Medicare policy, payment for the surgical implantable supply item is included in the reimbursement for surgical services that had been preauthorized by the insurance carrier”; that “[r]eview of the submitted information finds no documentation to support [the Carrier’s] denial reason”; and that “code C1820 will therefore be reviewed per applicable Division rules and fee guidelines,” presumably by being packaged into payment for the primary services.

The Carrier argues, however, that “[t]here is no preauthorized or billed surgical procedure to which C1820 could attach” because the two primary surgical services relied on by the MFDR officer—codes 63660 and 95972—“did not require a new generator.”¹⁶ Although “removal of the already implanted generator (CPT 63688) was billed,” the Carrier argues that it cannot be a surgical procedure to which C1820 could attach because it was “found not to be preauthorized by the [MFDR officer]—a finding unchallenged by the [Provider].” And the Carrier notes that “implantation of a new generator (CPT 63685) was not preauthorized or billed.”

Other than to state that this “surgical implantable supply item” was “included in the reimbursement for surgical services that had been preauthorized by the insurance carrier,” the MFDR officer does not explain to which preauthorized surgical service the C1820 implant applied. At the SOAH hearing, the following exchange occurred between the Carrier’s counsel and Bladuell:

Q Okay. Now, I’d refer you to finding and decision, section 4—or finding number 4 in the [MFDR officer’s] findings and decision. And it refers to CPT C-1820. Do you know what that is?

A That’s a—I think that’s a charge for an implant, which would have been the generator.

Q And what was the charge for that generator?

A It appears to be $47,250.

Q Okay. And the—in respect to an implantable such as that generator, do the rules specifically require the provider to ask for preauthorization to purchase the generator?

A If it’s an implant for surgery that indicates that’s going to be implanted into the patient, it would not require preauth, because once we preauthorize the service, which would require an implant, the implant falls within that.

Q Okay. So in order for someone to be entitled to reimbursement for the implant—in this case, the generator—they had to have requested and received preauthorization for the procedure that required the implantation?

A That is correct.

Q In this case, did the hospital—or did the doctor ever request preauthorization for the CPT code related to the implantation of a new generator?

*13 A They did not.

Q And if they didn’t ask for a preauthorization, I assume it was never given; is that correct?

A That’s correct.

Q Did the hospital bill for the procedure “insertion of a new generator”? And for the record, that would be CPT code 63685, based on—

A They didn’t. They did not.

Q And so your—your testimony is they did not request preauthorization for, or bill for, the procedure where they were implanting the generator?

A That is correct.

The exchange continued:

Q ... And you agree that there was no specific award of the C-1820, correct?

A Correct

Q But did the Division, in their calculations for outlier payments, include the charges for and cost of the neurostimulator?

A That’s what it appears that they’re stating on their decision.

Q Okay. So it certainly had an effect on the outlier payments. It increased them substantially; did it not?

A Yes.

As noted by Bladuell, the MFDR officer appears to have included the $47,250 in calculating the outlier payment when the MFDR officer concluded that “[t]he sum of all packaged costs is $20,649.75,” although it is unclear exactly how she calculated this number. In its written closing argument before SOAH, the Carrier explained:

Based upon the Cost-to-Charge Ratio (CCR) used in the Decision (0.2379) and reversing that calculation, the [MFDR officer] would have started with total packaged charges of $86,800.13 [i.e., $20,649.75 ÷ 0.2379]. This total is only $7,840.35 shy of the total charges of $94,640.48. The $7,740.35 the [MFDR officer] carved out corresponds to the sum of the charges for three surgical services on the bill, ($2,558.75 x 3) + $164.00 = $7,840.25.... Improperly using the original bill which had been replaced, the [MFDR officer] carved out the billing for 63660, 95972 and 62273. The $164.00 comes from HCPCS code J2405 for a separately payable Ondansetron injection. CPT 63688 was also on that bill, but the [MFDR officer] did recognize it as a non-covered charge. It had been determined not to be preauthorized. These calculations are $0.10 off the [MFDR officer]’s. Note that during testimony Mr. Bladuell had not determined exactly how the [MFDR officer] had come to her $20,649.75 number. The above mathematical explanation is as close as we can come.

Thus, according to this explanation, the $47,250 would have been utilized in calculating the total packaged charges of $86,800.13 before applying the CCR. The Provider did not present evidence or provide an alternative explanation of how the $20,649.75 amount for the “sum of all packaged costs” was derived without utilizing the $47,250 amount that was billed for C1820. Nevertheless, the ALJ concluded that the “Carrier failed to carry its burden that Provider is not entitled to $20,495.78 in additional reimbursement.”

Based upon the Carrier’s evidence and argument, we conclude that the Carrier met its appellate burden to demonstrate that substantial evidence did not support the ALJ’s conclusion that the Carrier failed to carry its burden regarding the calculation of the amount of additional reimbursement due. See Tex. Gov’t Code § 2001.174(2). Accordingly, we sustain the Carrier’s fourth issue.

*14 The Carrier also challenged the calculated reimbursement amount based on other specified coded billing items, including for codes 95972, 62273, C1778, and C1883. But because we do not have the power to render the decision that the ALJ should have rendered in the SOAH Order, see id.; Freightliner Corp., 255 S.W.3d at 367 (“Although courts are empowered to affirm, reverse, or remand agency decisions, we do not find a power in this type of situation to render a decision that the agency should have rendered.”), we need not address the Carrier’s other challenges to the reimbursement calculations within this issue to reverse and remand the case for further proceedings. Our remand is limited to the Carrier’s fourth issue on appeal, and we leave it to the agency to decide how to conduct its review of the remanded issue. See Freightliner Corp., 255 S.W.3d at 362 (“Although courts may not be authorized to dictate how an agency conducts its review of remanded issues or decides them, the express power to affirm in part necessarily means that courts have some control over what issues the agency can reconsider on remand subject to the limitations of judicial authority over agencies.”).

CONCLUSION

For these reasons, we (1) reverse the SOAH Order in part insofar as it concludes that “Carrier failed to carry its burden that Provider is not entitled to $20,495.78 in additional reimbursement” and orders reimbursement in that amount, (2) affirm the SOAH Order in all other respects, and (3) remand the case to the Division for further proceedings consistent with this opinion. See Tex. Gov’t Code § 2001.174(2).

Affirmed in Part; Reversed and Remanded in Part on Remand

Footnotes
1	We cite to the versions of Division rules that were in effect during the time frame relevant to the underlying MFDR proceeding. All citations to Title 28 of the Texas Administrative Code are to rules promulgated by the Texas Department of Insurance.
2	In the American Medical Association’s Current Procedural Terminology (2004), which was included in the record, CPT 63660 is described as “Revision or removal of spinal neurostimulator electrode percutaneous array(s) or plate/paddle(s)” and CPT 95972 is described as “complex brain, spinal cord, or peripheral (except cranial nerve) neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming, first hour.”
3	UniMed Direct is “the bill review company who processes the bills” for “the third-party administrator for [the Carrier].” At the SOAH hearing, UniMed Direct’s employee Ian Bladuell testified that the report is “summarizing what the physician wants to do” and is the reviewing doctor’s “conclusion after reviewing what’s submitted for preauthorization.”
4	These reasons included: “Payment denied/reduced for exceeded precertification/authorization. UMD recommends $0.00”; “Payment is included in the allowance for another service/procedure. Included in global reimbursement. UMD recommends $0.00”; “Original audit decision is being maintained. Upon review, it was determined that this treatment was processed properly. $0.00”; and “Reconsideration no additional payment. Original payment decision is being maintained. Upon review, it was determined that this claim was processed properly.” (Capitalization removed.)
5	The Carrier relies entirely on these excerpts and does not rely upon statutory or rule language to argue that the Provider’s bill was not a “complete medical bill.”
6	At the time of the Provider’s billing of the Carrier for the provided health care services, Chapter 133 of Title 28 of the Texas Administrative Code contained multiple references to a medical bill being complete or incomplete. See 28 Tex. Admin. Code §§ 133.2(2) (Definitions), .20(f), (g) (Medical Bill Submission by Health Care Provider), .200(a), (c) (Insurance Carrier Receipt of Medical Bills from Health Care Providers), .230(b)(1), (4) (Insurance Carrier Audit of a Medical Bill), .240(a), (j), (k) (Medical Payments and Denials), .250(e) (Reconsideration for Payment of Medical Bills), .501(b)(2), (3), (c)(3), (4) (Electronic Medical Bill Processing). These references primarily concerned the triggering of deadline obligations to provide notice or final action, and none bestow rights such that the ALJ’s conclusion that the bill was complete would have prejudiced the Carrier’s substantial rights were it erroneous.
7	In its appellate reply brief, the Carrier notes, “The [Provider] responds that upon receipt of the original bill, the Carrier did not follow the rules regarding the proper response to an incomplete bill. That is true.”
8	Moreover, as we have previously noted, Section 408.027(a) “applies to ‘claim[s] for payment’ ” while the rules “apply to ‘medical bill[s].’ ” Facility Ins. Co. v. Vista Hosp. of Dall., No. 03-18-00663-CV, 2019 WL 6603168, at *6 (Tex. App.—Austin Dec. 5, 2019, pet. denied) (mem. op.). The Carrier does not discuss the distinction between the terms “claim” and “medical bill” such that the former would require a “complete medical bill” to constitute a “claim.”
9	Rule 133.20 states that providers “shall not resubmit medical bills to insurance carriers after the insurance carrier has taken final action on a complete medical bill and provided an explanation of benefits except in accordance with § 133.250” but “may correct and resubmit as a new bill an incomplete bill that has been returned by the insurance carrier.” See 28 Tex. Admin. Code § 133.20(f), (g) (Medical Bill Submission by Health Care Provider). The Carrier cites this rule to support its denial of the “Corrected Bill” but does not explain how it obviates the Provider’s right to MFDR of the Carrier’s final action on the original bill and request for reconsideration. In its briefing on remand, the Carrier argues that “[b]y rule, the corrected bill [Bill Type 137] not only withdrew and replaced the original bill, its submission constitutes an admission and declaration that the original bill was not a ‘complete’ bill [and] that the corrected bill constituted a ‘new’ bill (restarting all the regulatory deadlines).” The Carrier does not explain how “[b]y rule” the untimely corrected bill withdrew the original bill. At the SOAH hearing, Bladuell testified that “bill type 137” can be “interpreted as the replacement bill for the original submission,” and with its closing argument before SOAH, the Carrier submitted an excerpt from “UB-04/CMS-1450 Reference Material” of a chart “Type of Bill Codes” that notes code 137 is “Hospital” “Outpatient” “Replacement of Prior Claim.” However, the cover letter also described the “Corrected Bill” as a “2nd level of Reconsideration” and on the bill was handwritten “2nd Level of Appeal.” Given the substantial evidence standard of review, we conclude that there was a reasonable basis for the ALJ to conclude that the original bill was not withdrawn such that MFDR of the original bill following the Carrier’s “final action” would be improper.
10	The Carrier also relies on the excerpts from the Decision Manual and its cited decisions. However, in those decisions, the parties seeking MFDR sought to rely on their corrected bills, not the original bills, to establish their entitlement to reimbursement. Here, on the other hand, as the Provider notes, “The [Division] did not consider [the Provider’s] corrected claim, nor did the ALJ.”
11	The Carrier argues that the Provider “offered no evidence the contract did not apply or that payer access information had not been available to it.” But as determined by the Texas Supreme Court, the Carrier, not the Provider, had the burden of proof in the contested case hearing. See Patients Med. Ctr. v. Facility Ins. Corp., 623 S.W.3d 336, 343 (Tex. 2021). In arguing that the ALJ erred in placing the burden of proof on the Carrier, the Carrier appears to concede that the Provider did not need to offer proof if the Carrier bore the burden: “The ALJ’s presumptive adoption of everything the [MFDR officer] found, and the reversal of the burden of proof to the Carrier to disprove every finding and conclusion of the [MFDR officer], relieved the [Provider] of doing or saying anything related to this avoidance of its contract—a claim that it had never made. The [Provider] was relieved of even having to claim at the [contested case hearing] it did not have the required notice, even though all its actions and words said otherwise.”
12	The Aetna Contract states, “Authorized Agent; Contractual Fee Arrangement. Participating Provider understands and agrees that Company is the authorized agent for a number of workers’ compensation carriers, including The Hartford (and its affiliates, including Specialty Risk Services), Amerisure, Utica National Insurance Company (and any other carriers listed at http://awca.aetna.com), for the purposes of developing a network of workers’ compensation providers and negotiating fee arrangements with such providers on the carrier’s behalf. The contractual fee arrangement is between the Participating Provider and AWCA.”
13	The Carrier also argues, “The [Provider] had not disputed application of the Aetna network contract, and in any event, waived any such claim.” But the MFDR concerned the Carrier’s denial of the Provider’s billing statement that did not apply the contractual rate, and before SOAH, the Provider argued: “The evidence presented does not support that the required notification of the contracted fee arrangement claimed by the carrier was timely and appropriately provided to the healthcare provider as required by 28 Texas Administrative Code § 133.4. Therefore, pursuant to § 133.4(g), the insurance carrier is not entitled to pay the health care provider at a contracted fee.” At the SOAH hearing, the Carrier’s counsel asked the Provider’s chief financial officer Hanson, “[D]o you have any reason to believe that contract—the Aetna contract in evidence didn’t apply,” to which Hanson responded, “No.” But on cross examination, the Provider’s counsel asked, “Do you have any reason to believe the contract did apply? Do you know whether the contract applied one way or the other?” Hanson responded, “No. Because, again, I wasn’t here when they registered the patient, so I don’t know what the circumstance was.” Hanson also testified that he was not aware of any notification from the Carrier that “it was a participant in the contract.”
14	In its corrected bill, however, the Provider dropped this charge.
15	As to code 63688, the MFDR officer’s finding states, “the carrier is liable for all reasonable and necessary medical costs relating to the health care listed in subsection (p) only in the case of an emergency of ‘preauthorization of any health care listed in subsection (p) ... that was approved prior to providing the health care.’ § 134.600(p)(2) states that the non-emergency health care requiring preauthorization includes ‘outpatient surgical or ambulatory surgical services.’ No documentation was found to support a medical emergency, nor was any documentation found to support that this surgical service had been preauthorized.”
16	The MFDR officer calculated a reimbursement amount for one other primary service, code 62273, which AMA’s CPT describes as “Injection, epidural, of blood or clot patch.” Because this code is not relevant to the billing of code C1820, we do not discuss it here.

Court of Appeals of Texas, Austin.

TEXAS MUTUAL INSURANCE COMPANY, Appellant

v.

HOFER BUILDERS, INC. and Hartford Underwriters Insurance Company, Appellees

NO. 03-21-00086-CV

|

Filed: August 25, 2022

FROM THE 353RD DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-17-005825, THE HONORABLE JESSICA MANGRUM, JUDGE PRESIDING

Attorneys & Firms

Douglas R. Hafer, for Appellee Hofer Builders, Inc.

Shannon Simmons Pounds, R. Scott Placek, Mary Barrow Nichols, Matthew Foerster, Mary A. Keeney, for Appellant.

Steven J. Knight, for Appellee Hartford Underwriters Insurance Company.

Before Justices Goodwin, Baker, and Smith

MEMORANDUM OPINION

Melissa Goodwin, Justice

*1 In this workers’ compensation case, Texas Mutual Insurance Company appeals from the trial court’s rulings in favor of Hofer Builders, Inc. (HBI) and Hartford Underwriters Insurance Company (Hartford) on the parties’ cross motions for summary judgment in the underlying declaratory judgment action. For the following reasons, we reverse and render judgment in favor of Texas Mutual.¹

BACKGROUND

The parties’ dispute concerns whether Texas Mutual is contractually liable to reimburse HBI or Hartford for Louisiana workers’ compensation benefits that Hartford paid to HBI’s employee David Hope. Hope, who resided in Florida, was injured in December 2014 at a Louisiana construction worksite. Hartford was the workers’ compensation insurer for the general contractor, HBI was a subcontractor, and Texas Mutual was the workers’ compensation insurer for HBI. See Tex. Ins. Code § 2054.151 (explaining that Texas Mutual serves as “insurer of last resort”).

HBI’s workers’ compensation insurance policy with Texas Mutual included a standard form endorsement, entitled “Limited Reimbursement for Texas Employees Injured in other Jurisdictions” (the Endorsement). See Tex. Lab. Code § 406.051(b) (“The contract for coverage must be written on a policy and endorsements approved by the Texas Department of Insurance.”); see also Tex. Ins. Code § 2052.002(b) (prohibiting insurance company from using form other than one prescribed under section for workers’ compensation insurance unless form is endorsement that is “appropriate to company’s plan of operation” and “submitted to and approved by the department”). The Endorsement references Texas Labor Code sections 406.071 and 406.072 and incorporates statutory language from section 406.071. See Tex. Lab. Code §§ 406.071–.072.²

The Endorsement states in relevant part:

This policy does not provide “other states” insurance coverage. This endorsement provides reimbursement coverage to you for those Texas employees who are described in the Texas Labor Code §§ 406.071–.072. Therefore the coverage is for injuries to your Texas employees that occur in another state if (i) the injury would have been compensable had it occurred in Texas and (ii) the employee has significant contacts with Texas or the employment is principally located in Texas. An employee has significant contacts with Texas if the employee was hired or recruited in Texas, and (i) the employee was injured not later than one year after the date of hire; or (ii) has worked in Texas for at least ten working days during the twelve months preceding the date of injury.

*2 Employees hired or recruited by you outside Texas to work in another state are specifically excluded from the terms and provisions of this policy. If you conduct business in states other than Texas, you must comply with those state laws. You must promptly notify your agent before you begin work in any jurisdiction other than Texas. We are not authorized to provide workers’ compensation insurance in any jurisdiction other than Texas. You are responsible for all of your legal obligations for your failure to comply with requirements of the workers’ compensation laws of any jurisdiction other than Texas.

See id. When the Endorsement applies, Texas Mutual is contractually liable to reimburse workers’ compensation benefits paid to Texas employees injured out of state, including in Louisiana.

This is the second appeal from the underlying proceeding. See generally Texas Mut. Ins. v. Hofer Builders, Inc., No. 03-17-00741-CV, 2019 Tex. App. LEXIS 5562 (Tex. App.—Austin July 3, 2019, no pet.) (mem. op.). The prior appeal was also from summary judgment rulings in favor of HBI and Hartford and concerned the scope of the extraterritorial coverage provided by the Endorsement and the Texas Labor Code. See id. Because Hope’s injury occurred within a year of being hired by HBI and his injury would have been compensable if it had occurred in Texas,³ the parties primarily joined issue as to whether Hope had “significant contacts” with Texas because he was “hired or recruited” in Texas. See id. at *19–20; Tex. Lab. Code § 406.071(a)(2), (b)(1) (setting forth test for determining if employee injured within one year of hire date has significant contacts with Texas). We affirmed the portion of the trial court’s order denying Texas Mutual’s motion for summary judgment, reversed the portion of the order granting summary judgment in favor of HBI and Hartford, and remanded the case to the trial court for further proceedings. See Hofer Builders, 2019 Tex. App. LEXIS 5562, at *1.

In determining that the evidence did not establish that Hope was “hired or recruited” in Texas, we noted that Hope’s physical location was in Florida during the hiring process and explained that our interpretation of the Endorsement was consistent with the extraterritorial statutes as a whole:

We further observe that interpreting the phrase “hired or recruited in this state” by focusing on the employee’s physical location is consistent with extraterritorial statutes as a whole. [El Paso Healthcare Sys., Ltd. v. Murphy, 518 S.W.3d 412, 418 (Tex. 2017).] Consistent with determining whether an employee has significant contacts based on the employee’s location at the time the employee is hired or recruited, the focus of the inquiry as to the principal location of employment is on the employee’s location after he or she has begun working—it is either “where” “the employer has a place of business at or from which the employee regularly works” or “the employee resides and spends a substantial part of the employee’s working time.” See Tex. Lab. Code § 406.072; Webster’s Third New Internat’l Dict. at 2602 (defining “where” to mean “at or in what place” and stating that “where” refers to “location” or “place”). This interpretation also adheres to the intent of Texas workers’ compensation laws that the “entire statute is intended for the benefit of Texas employees and because industry in Texas should not have the burden of providing insurance to employees of other states.” Texas Emp’rs’ Ins. Ass’n v. Dossey, 402 S.W.2d 153, 155 (Tex. 1996) (quoting Hale v. Texas Emp’rs’ Ins. Ass’n, 239 S.W.2d 608 (Tex. 1951)).

*3 Id. at *26–27. We further explained that the trial court did not err in denying Texas Mutual’s motion for summary judgment because “even if the summary judgment evidence conclusively established that Hope was not hired or recruited in Texas, Texas Mutual would have had to specifically argue in its motion for summary judgment and then conclusively establish that Hope’s employment was not principally located in this state to be entitled to summary judgment” and that Texas Mutual “did not expressly make this argument in its motion for summary judgment.” Id. at *32 (citing Tex. R. Civ. P. 166a(c) (“Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal.”)).

On remand, the parties again filed cross motions for summary judgment, joining issue as to the principal location of Hope’s employment. See Tex. Lab. Code § 406.071(a)(2) (providing that employee who is injured while working out of state is entitled to benefits if injury would have been compensable in Texas and “the employment is principally located in this state”). The “principal location of a person’s employment is where: (1) the employer has a place of business at or from which the employee regularly works; or (2) the employee resides and spends a substantial part of the employee’s working time.” Id. § 406.072. It was undisputed that (i) Hope’s injury would have been compensable had it occurred in Texas; (ii) because Hope was a Florida resident but spent his working time exclusively in Louisiana, subsection (2) of section 406.072 was inapplicable; and (iii) Texas Mutual was liable under the Endorsement if Hope’s employment was principally located in Texas.

In their motion for summary judgment, HBI and Hartford asserted that Texas was the principal location of Hope’s employment because HBI’s only place of business was its office in Saginaw, Texas. In its cross motion, Texas Mutual countered that Hope’s employment was not principally located in Texas because after he was hired, he worked exclusively in Louisiana until he was injured. Texas Mutual also asserted that Hope’s injury was not covered under part one of HBI’s policy because Hope received workers’ compensation benefits from Louisiana, see id. § 406.075(a), and that the Endorsement did not provide coverage for Hope’s injury because he was not hired or recruited in Texas, see id. § 406.071(b). Without stating its reasoning, the trial court granted final summary judgment in favor of HBI and Hartford and denied Texas Mutual’s motion. This appeal followed.

ANALYSIS

In one appellate issue, Texas Mutual challenges the trial court’s summary judgment rulings, contending that, as a matter of law, neither HBI nor Hartford is entitled to reimbursement from Texas Mutual for Louisiana workers’ compensation benefits paid to Hope.

Standards of Review

“A trial court’s ruling on a motion for summary judgment is reviewed de novo.” Tarr v. Timberwood Park Owners Ass’n, 556 S.W.3d 274, 278 (Tex. 2018) (citing Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 156 (Tex. 2004)). “To prevail on a traditional motion for summary judgment, the movant must show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law.” Id. (citing Tex. R. Civ. P. 166a(c)). When competing motions for summary judgment are filed, as is the case here, “each party bears the burden of establishing that it is entitled to judgment as a matter of law.” Id. (quoting City of Garland v. Dallas Morning News, 22 S.W.3d 351, 356 (Tex. 2000)). “When faced with competing summary judgment motions where the trial court denied one and granted the other, we consider the summary judgment evidence presented by both sides, determine all questions presented, and if the trial court erred, render the judgment the trial court should have rendered.” Southwestern Bell Tel., L.P. v. Emmett, 459 S.W.3d 578, 583 (Tex. 2015).

*4 Resolution of Texas Mutual’s issue also requires this Court to interpret the Endorsement. “When construing an insurance policy, we ordinarily ‘ascertain and give effect to the parties’ intent as expressed by the words they chose to effectuate their agreement.’ ” Wausau Underwriters Ins. v. Wedel, 557 S.W.3d 554, 557 (Tex. 2018) (quoting In re Deepwater Horizon, 470 S.W.3d 452, 464 (Tex. 2015) (orig. proceeding)). Because the Endorsement incorporates sections 406.071 and 406.072 of the Labor Code, we also must consider statutory language. See Ingram v. Deere, 288 S.W.3d 886, 899 (Tex. 2009) (applying rules of construction to contract governed by statutory terms). Statutory construction similarly “ ‘begins with the Legislature’s words,’ looking first to their plain and common meaning.” Murphy, 518 S.W.3d at 418 (quoting Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865–66 (Tex. 1999)); see also Presidio Indep. Sch. Dist. v. Scott, 309 S.W.3d 927, 930 (Tex. 2010) (construing text according to “plain and common meaning unless a contrary intention is apparent from the context or unless such a construction leads to absurd results” (citing City of Rockwall v. Hughes, 246 S.W.3d 621, 625–26 (Tex. 2008))). “In conducting this analysis, ‘we look at the entire act, and not a single section in isolation.’ ” Murphy, 518 S.W.3d at 418. This “text-based approach to statutory construction requires us to study the language of the specific provision at issue, within the context of the statute as a whole, endeavoring to give effect to every word, clause, and sentence.” Id. (quoting Ritchie v. Rupe, 443 S.W.3d 856, 867 (Tex. 2014)).

Part One of HBI’s policy

As one of its grounds supporting summary judgment, Texas Mutual asserted in its motion that it was not liable under part one of HBI’s policy. In response, HBI and Hartford make clear that they only seek reimbursement under the Endorsement. In their briefing to this Court, they affirmatively state that they “are not seeking to recover under Part One of the policy” and “have not asserted a claim for coverage under Part One because Hope pursued and recovered Louisiana, not Texas, workers’ compensation benefits.” Based on HBI and Hartford’s concession that Texas Mutual is not liable under part one of the policy, we need not address this ground. See, e.g., Wojcik v. Wesolick, 97 S.W.3d 335, 336–37 (Tex. App.—Houston [14th Dist.] 2003, no pet.) (concluding that appellee had abandoned ground asserted to trial court by affirmatively “stating in its brief that it ‘does not contend at this time [ground asserted to trial court]’ ”); Hall v. Tomball Nursing Ctr., Inc., 926 S.W.2d 617, 619 (Tex. App.—Houston [14th Dist.] 1996, no writ) (concluding that appellate court did not need to address ground where counsel affirmatively “conceded” during oral argument that “judgment could not stand if it were based on this ground”).

Significant Contacts

Texas Mutual also asserted in its motion for summary judgment that it was not liable under the Endorsement because Hope did not have significant contacts with Texas and was not hired or recruited in Texas. See Tex. Lab. Code § 406.071(a)(2), (b). Concerning this ground, HBI and Hartford refer this Court to our analysis in the prior appeal that addressed whether Hope was hired or recruited in Texas and state that “it is not necessary for this Court to address Texas Mutual’s arguments concerning recruitment” because “the dispositive issue in this case centers on the principal location of Hope’s employment and not where he was hired or recruited.” However, section 406.071(a)(2) provides the alternatives of an employee’s significant contacts with Texas or his principal location of employment. Thus, it was Texas Mutual’s burden to establish that neither alternative applied to conclusively establish that it was entitled to summary judgment. See id. § 406.071(a)(2); Tex. R. Civ. P. 166a(c); Tarr, 556 S.W.3d at 278. After remand, Texas Mutual’s subsequent motion for summary judgment raised additional grounds but was supported by the same evidence concerning HBI’s hiring and recruitment of Hope that we addressed in the prior appeal. Following our analysis of this evidence in our prior opinion, we conclude that Texas Mutual established as a matter of law that Hope was not hired or recruited in Texas. See Hofer Builders, 2019 Tex. App. LEXIS 5562, at *19–32.

Principal Location of Employment

*5 Texas Mutual further asserted in its motion for summary judgment that it was not liable under the Endorsement because Hope’s employment was not principally located in Texas. See Tex. Lab. Code §§ 406.071(a)(2), .072. HBI and Hartford’s motion for summary judgment joined issue on this ground. The remaining question in this appeal then is whether the trial court erred in its summary judgment rulings because Texas Mutual conclusively established that Hope’s employment was not principally located in Texas. Texas Mutual relies on the undisputed evidence that (i) HBI conducts its construction business in many states; (ii) after being hired by HBI in November 2014, Hope traveled directly from his Florida residence to Louisiana and began working for HBI at the Louisiana worksite; (iii) Hope did not travel to HBI’s Texas office during the hiring process or after he started working for HBI in November 2014; and (iv) Hope exclusively worked at the Louisiana worksite until he was injured in December 2014.

As support for their assertion that Hope’s employment was principally located in Texas, HBI and Hartford rely on the evidence of Hope’s prior assignments in Texas when he was employed with related companies; HBI’s plans for Hope’s assignments after the Louisiana project, which included working on projects in Texas as he had done with the related companies; and the location of HBI’s only office in Texas. HBI and Hartford characterize the construction project at the Louisiana worksite and Hope’s assignment there as “temporary” and argue that (i) under section 406.072, “there has to be a single principal location (‘the principal location’), and it is limited to one of two options listed in the statute”; (ii) because subsection (2) of section 406.072 does not apply, it follows that subsection (1) applies; and (iii) the principal location of Hope’s employment was HBI’s Texas office—HBI’s place of business “from which Hope worked.” Although he was not physically present at the Texas office, Hope communicated with people who were there to receive his assignments and to provide reports, and he received payments from there.

For purposes of this appeal, we need not decide the principal location of Hope’s employment. The dispositive question is whether the evidence conclusively established that HBI did or did not have “a place of business [in Texas] at or from which [Hope] regularly work[ed].” See Tex. Lab. Code § 406.072(1); see also Webster’s at 302 (defining “business” as “activity directed toward some end” and “commercial or mercantile activity customarily engaged in as a means of livelihood”), 1727 (defining “place” as “physical environment: space” and “physical surroundings”).⁴ Our determination of this question “focuses on the employee’s location once he or she has begun working (after employment).”⁵ Hofer Builders, 2019 Tex. App. LEXIS 5562, at *24.

Because the evidence established that Hope was located in Louisiana during the entirety of his employment, we apply the plain meaning of the phrase “place of business at or from which the employee regularly works” to conclude that Texas Mutual established as a matter of law that Hope’s employment was not principally located in Texas. See Tex. Lab. Code § 406.072(1); Scott, 309 S.W.3d at 930. The evidence was undisputed that after Hope was hired in November 2014, he was never physically at HBI’s Texas office but worked exclusively “at” the Louisiana worksite until he was injured. See Webster’s at 136 (defining “at” as “function word to indicate presence in, on, or near: as (1) presence or occurrence in a particular place”). HBI and Hartford focus on the phrase “from which” in the statute and define “from” as “out of” to support their position that Hope worked “from” their Texas office. See Black’s Law Dictionary 668 (6th ed. 1990).⁶ But, applying the plain meaning of the words in context, a place of business “from which” an employee works still would require the employee’s physical presence at the place of business at some point. See Webster’s at 913 (defining “from” as “function word to indicate a starting point: as (1) a point or place where an actual physical movement ... has its beginning”); see also Murphy, 518 S.W.3d at 418.

*6 Thus, the evidence established that HBI did not have a place of business in Texas “at or from which” Hope regularly worked. See Tex. Lab. Code § 406.072(1). To hold otherwise would require us to ignore the statutory language and the intent of our workers’ compensation laws. See Murphy, 518 S.W.3d at 418; see also Scott, 309 S.W.3d at 931 (“Courts must not give the words used by the Legislature an “exaggerated, forced, or constrained meaning.”). The “entire statute is intended for the benefit of Texas employees and because industry in Texas should not have the burden of providing insurance to employees of other states.” Dossey, 402 S.W.2d at 155 (quoting Hale, 239 S.W.2d at 608).

Our interpretation of section 406.072(1) that focuses on the employee’s location is consistent with related sections of the Labor Code. See Railroad Comm’n v. Texas Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 628 (Tex. 2011) (explaining that courts “generally avoid construing individual provisions of statute in isolation from the statute as a whole”); see also Texas Dep’t of Ins. v. Jones, 498 S.W.3d, 610, 615 (Tex. 2016) (“We construe the Workers’ Compensation Act, like other statutes, by considering the plain meaning of the text, given the statute as a whole.”). As with section 406.072, the subject in section 406.071 is the “employee.” See Tex. Lab. Code § 406.071(a) (entitling “employee who is injured while working in another jurisdiction or the employee’s legal beneficiary” to rights and remedies), (a)(2) (addressing “employee” who has significant contacts with state), (b) (stating that “employee has significant contacts if the employee was hired or recruited in this state and the employee” was injured within designated times). Similarly, the subject of section 406.073 is the employee’s location. It allows “[a]n employee whose work requires regular travel between the state and at least one other jurisdiction” to “agree in writing” with his or her employer on the employee’s “principal location of the employment.” See id. § 406.073(a); Celadon Trucking Servs., Inc. v. Martinez, 320 S.W.3d 377, 383 (Tex. App.—El Paso 2010, pet. denied) (enforcing agreement between employee and employer that employee’s employment is “principally localized in Indiana”).

We also observe that HBI and Hartford’s proposed interpretation would lead to illogical and unreasonable results and conflicts with other provisions in the standard form Endorsement. See Railroad Comm’n, 336 S.W.3d at 628; Scott, 309 S.W.3d at 930. Under their proposed interpretation, Texas Mutual’s policies issued to employers with offices only in Texas would cover the employers’ nationwide business. But the Endorsement expressly provides that “[e]mployees hired or recruited by you outside Texas to work in another state are specifically excluded from the terms and provisions of this policy” and that Texas Mutual is “not authorized to provide workers’ compensation insurance in any jurisdiction other than Texas.” Cf. Tex. Lab. Code § 406.053 (addressing “All States Coverage”); In re Poly-America, L.P., 262 S.W.3d 337, 349–50 (Tex. 2008) (“The Texas Workers Compensation Act was enacted to protect Texas workers and employees.”); see also Texas Emps’ Ins. v. Miller, 370 S.W.2d 12, 14 (Tex. App.—Texarkana 1963, writ ref’d n.r.e.) (stating that “extra-territorial provision of the Texas Workmen’s Compensation Act is mainly to protect Texas employees temporarily out of the State of Texas, whose employment takes them periodically out of the State”).

For these reasons, we conclude that the trial court erred in granting summary judgment in favor of HBI and Hartford and denying Texas Mutual’s motion for summary judgment. See Emmett, 459 S.W.3d at 583. Thus, we sustain Texas Mutual’s issue.

CONCLUSION

*7 Having sustained Texas Mutual’s issue, we reverse the trial court’s order and render judgment declaring that Texas Mutual is not liable to HBI or Hartford for the Louisiana workers’ compensation benefits paid to Hope.

Footnotes
1	Because the parties’ cross motions for summary judgment rely on evidence that we described in a prior appeal from the underlying proceeding, we do not restate the evidence here except as is necessary to address the issues raised. See Tex. R. App. P. 47.1, .4; Texas Mut. Ins. v. Hofer Builders, Inc., No. 03-17-00741-CV, 2019 Tex. App. LEXIS 5562, at *2–6, *16–19 (Tex. App.—Austin July 3, 2019, no pet.) (mem. op.).
2	Subsections 406.071(a) and (b)(1) provide: (a) An employee who is injured while working in another jurisdiction or the employee’s legal beneficiary is entitled to all rights and remedies under this subtitle if: (1) the injury would be compensable if it had occurred in this state; and (2) the employee has significant contacts with this state or the employment is principally located in this state. (b) An employee has significant contacts with this state if the employee was hired or recruited in this state and the employee: (1) was injured not later than one year after the date of hire; .... Tex. Lab. Code § 406.071(a), (b)(1).
3	Because Hope received Louisiana workers’ compensation benefits, he was not eligible for Texas workers’ compensation benefits. See Tex. Lab. Code § 406.075(a) (“An injured employee who elects to pursue the employee’s remedy under the workers’ compensation laws of another jurisdiction and who recovers benefits under those laws may not recover under this subtitle.”).
4	We observe that the plain meaning of “place of business” encompasses more than an employer’s office and could include a location where an employer is engaged in commercial activity. See TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011) (“We presume that the Legislature chooses a statute’s language with care, including each word chosen for a purpose, while purposefully omitting words not chosen.”). Had the Legislature intended for the principal location inquiry to be limited to offices, it could have easily said so.
5	Focusing on the employee’s location conforms with the Texas Workers Compensation Act’s purpose to provide benefits for work-related injuries that, by definition, occur where the employee is located. See In re Poly-America, L.P., 262 S.W.3d 337, 349–50 (Tex. 2008) (“The Texas Workers Compensation Act was enacted to protect Texas workers and employees.”).
6	HBI and Hartford rely on the definition from the sixth edition of Black’s Law Dictionary that defines “from” as follows: As used as a function word, implies a starting point, whether it be of time, place, or condition; and meaning having a starting point of motion, noting the point of departure, origin, withdrawal, etc., as he travelled “from” New York to Chicago.... One meaning of “from” is “out of.” Word “from” or “after” an event or day does not have absolute and invariable meaning, but each should receive an inclusion or exclusion construction according to intention with which such word is used. ... Words “from” and “to,” used in contract, may be given meaning to which reason and sense entitles them, under circumstances of case. Black’s Law Dictionary 668 (6th ed. 1990) (citations omitted).

Court of Appeals of Texas, Austin.

IN RE HELLAS CONSTRUCTION, INC.

In re Pedro Martinez and Lydia Gonzalez, Individually and on behalf of the estate of Pedro Jovany “Bruno” Martinez

NO. 03-21-00182-CV, NO. 03-21-00233-CV

|

Filed: July 28, 2022

ORIGINAL PROCEEDING FROM TRAVIS COUNTY

Attorneys & Firms

Alberto T. Garcia III, for Real parties in interest Gonzalez, Lydia, Martinez, Pedro.

William Clay, Jessica A. Barger, David P. Boyce, Michael Adams-Hurta, Kirk Willis, Wanda McKee Fowler, for Relator.

David E. Chamberlain, Scott Ralph Taylor, for Real party in interest T.F. Harper & Associates, L.P.

Before Chief Justice Byrne, Justices Kelly and Smith

MEMORANDUM OPINION

Edward Smith, Justice

*1 Before the Court are two original proceedings arising from related lawsuits—each filed in a Travis County district court—resulting from a workplace injury that led to the death of 20-year-old Pedro Jovany “Bruno” Martinez. In cause No. 03-21-00182-CV, alleged employer Hellas Construction, Inc., seeks mandamus relief from the district court’s order lifting the abatement of a tort suit brought by Bruno’s family (Martinez Family) against Hellas. Real parties in interest are the Martinez Family and T.F. Harper & Associates, L.P., the general contractor allegedly responsible for the construction site. In cause No. 03-21-00233-CV, the Martinez Family seeks mandamus relief from the district court’s order overruling its plea to the jurisdiction seeking dismissal of its own suit for judicial review of a final order from the Texas Department of Insurance Division of Workers Compensation (DWC). Real party in interest in the latter cause is Texas Mutual, which provides Hellas’s workers’ compensation policy. For the reasons that follow, we will grant the relief sought by Hellas and deny the relief sought by the Martinez Family.

BACKGROUND

The Workplace Injury

In July of 2019, twenty-year-old Bruno succumbed to injuries caused by heat stroke sustained while working on a construction site overseen by subcontractor Hellas Construction, Inc. Whether Bruno was a Hellas employee at the time of injury is the crux of the litigation in the two courts below. Whether DWC had jurisdiction to decide that issue is the question before this Court.

The Martinez Family insists that Bruno was not yet a Hellas employee at the time of his injury, arguing that Bruno had applied for a position but had not yet been hired and emphasizing that Hellas itself initially denied Bruno’s status as an employee when it learned of the injury. Notwithstanding the status of Bruno’s employment application and its early statements on the subject, Hellas now characterizes Bruno as an employee when he sustained the fatal injuries.

The Tort Suit (No. D-1-GN-19-004416)

Because the Martinez Family does not believe Bruno was an employee at the time of injury, it did not file a claim for workers’ compensation benefits but instead filed a wrongful-death suit (the tort suit) against Hellas.¹ In its answer, Hellas raised the exclusive-remedy defense set forth in Section 408.001 of the Labor Code, which provides, “Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee.” See Tex. Lab. Code § 408.001(a). Hellas then requested a benefit review conference from DWC; the Martinez Family challenged DWC’s jurisdiction over any issues arising from Bruno’s injury. See “Suit for Judicial Review,” below.

*2 Thus, believing that DWC “has the exclusive jurisdiction to make the initial determination of whether Bruno was an employee of Hellas at the time of his fatal injury or illness,” Hellas filed a combined plea to the jurisdiction and motion for abatement. In the filing, Hellas prayed that the Martinez Family’s “suit be dismissed for lack of jurisdiction, or in the alternative, abated pending a final, appealable decision of the DWC or any court to which a proper appeal of the DWC’s decision has been made.” At the hearing on the plea and motion, Hellas argued that the issue of employment status—if decided in its favor—would dispose of all the Martinez Family’s tort theories. Hellas also submitted evidence that it had followed all applicable regulations in providing the Martinez Family with the workers’ compensation claim form and a disclosure of rights under the Workers’ Compensation Act. The Martinez Family, meanwhile, denied that DWC has any jurisdiction over the disputed issues. The district court ultimately took the plea and motion under advisement and then issued an order abating the case until July 1, 2020, “to allow ... the parties to invoke the jurisdiction of [DWC].” It further indicated that if no party had invoked that jurisdiction by July 19, 2020—the one-year anniversary of Bruno’s death and therefore the last day the Martinez Family could file a claim for benefits, see id. § 409.007(a)—the court would lift the abatement.

In November, while the Martinez Family’s challenge to DWC’s jurisdiction was still pending before that agency, the Martinez Family moved the court presiding over the tort suit to lift the abatement, arguing that Bruno’s beneficiaries had never filed a claim for benefits, that the statute of limitations to file such a claim had passed, and that “there is no pending or disputed claim for worker’s compensation benefits for [DWC] to resolve so its exclusive jurisdiction is no longer triggered.” The court took the matter under advisement and ultimately granted the motion to lift the abatement. This original proceeding followed, with Hellas arguing that the district court abused its discretion by lifting the abatement when the administrative order was still subject to judicial review and therefore not final. As relief, Hellas asks this Court to issue a mandamus writ ordering the district court to reinstate the abatement.

The Suit for Judicial Review (No. D-1-GN-20-007696)

As mentioned in the previous section, Texas Mutual filed a “request to schedule, reschedule, or cancel a benefit review conference” in March of 2020, listing the disputed issue as “whether or not Mr. Bruno Martinez was an employee of Hellas Construction, Inc. at the time of injury and subsequent death.” See 28 Tex. Admin. Code § 141.1(b) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Requesting and Setting a Benefit Review Conference). In October, following a contested-case hearing, an administrative law judge (ALJ) determined that “[d]ecedent did sustain a compensable injury on July 19, 2019, that resulted in his death,” and that “Hellas Construction[,] Inc.[,] was Decedent’s employer for purposes of the Texas Workers’ Compensation Act.” The Martinez Family requested review by an appeals panel, arguing that DWC’s jurisdiction had “never been invoked” because the Martinez Family had chosen not to file a claim with the agency. In December, the appeals panel adopted the ALJ’s Decision and Order.

The Martinez Family filed suit for judicial review in Travis County district court. The Martinez Family’s petition for judicial review raised the following arguments:

• the ALJ and Appeals Panel rendered an improper advisory opinion because there was no benefit dispute that needed to be resolved by a benefit proceeding when the ALJ issued her decision;

• the Division does not have exclusive jurisdiction over this matter because there was no benefit dispute when the ALJ rendered her decision;

• The ALJ erred in failing to assign the burden of proof on Texas Mutual;

• Bruno Martinez was not an employee of Hellas at the time of his death, as the term “employee” is defined in section 401.012(a) of the Texas Labor Code;

• Bruno Martinez was not “in the service” of Hellas as is required by section 401.012(a) of the Texas Labor Code;

• Bruno Martinez was not under a “contract of hire” with Hellas as is required by section 401.012(a) of the Texas Labor Code;

• Hellas did not have the contractual right to control the means or details of Bruno Martinez’s activities or work;

*3 • Hellas did not exercise actual control over the means or details of Bruno Martinez’s activities or work;

• Bruno Martinez was not in the “course and scope of employment” with Hellas on July 19, 2019 as that phrase is defined in Section 401.011(12) of the Texas Labor Code; and

• Bruno Martinez did not sustain a “compensable injury” on July 19, 2019, as that phrase is defined in Section 401.011(10) of the Texas Labor Code.

In January, Texas Mutual answered the petition with a one-page general denial and prayed that “upon final hearing hereof, the Court enter judgment denying all relief requested by [the Martinez Family] and affirming the Decision & Order ... rendered on October 13, 2020, finding that Pedro Jovany ‘Bruno’ Martinez sustained a compensable injury in the course and scope of his employment with Hellas Construction, Inc. on July 19, 2019.”

On March 10, 2021, the Martinez Family filed a plea to the jurisdiction, asking to dismiss its own suit for judicial review. The plea was predicated on two theories: 1) that DWC’s final decision was void ab initio because “[w]ithout an actual claim for benefits, there can be no ‘benefit dispute’ for [DWC] to resolve, but only a hypothetical or contingent one,” and 2) to the extent DWC ever had jurisdiction over the contested issue, the question was rendered moot when “the possibility of a claim [for benefits] and a dispute over such a claim was forever foreclosed” when the statute of limitations expired on the Martinez Family’s right to file a claim for benefits.

In May, the district court held a hearing on the plea to the jurisdiction. At the end of the hearing, the district court issued an order overruling the plea to the jurisdiction. The Martinez Family then filed its original proceeding in this Court, arguing that the district court abused its discretion because it has no jurisdiction to review an agency order that, as the Martinez Family characterizes it, is void or moot. The Martinez Family seeks mandamus relief ordering the district court to grant the plea to the jurisdiction and a writ of prohibition “to prohibit Respondent and the district court from considering the merits of the void [agency] Order.”

GOVERNING LEGAL STANDARD

“The standards generally applied in a mandamus proceeding are well established.” In re Turner, 500 S.W.3d 641, 642 (Tex. App.—Austin 2016, orig. proceeding) (cleaned up). “[M]andamus will issue only to correct a clear abuse of discretion or the violation of a duty imposed by law” and only where the petitioning party lacks an adequate remedy by appeal. Id. (quoting In re Columbia Med. Ctr. of Las Colinas, Subsidiary, L.P., 290 S.W.3d 204, 207 (Tex. 2009) (orig. proceeding)). A trial court has no discretion to misapply the law. Id. (citing Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992)). In the two competing petitions for mandamus relief, each petitioner alleges that one of the trial courts misconstrued the governing statutes and existing precedent in evaluating its jurisdiction over this dispute.

DISCUSSION

The parties disagree as to whether DWC had exclusive jurisdiction to determine whether Bruno was an employee acting in the course and scope of employment at the time of the injury. See Tex. Lab. Code § 406.031(a) (“An insurance carrier is liable for compensation for an employee’s injury with regard to fault or negligence if ... at the time of injury, the employee is subject to this subtitle; and ... the injury arises out of and in the course and scope of employment.”). Hellas and Texas Mutual argue that exclusive jurisdiction is vested in the agency, that the agency’s order is not void, that the court presiding over the suit for judicial review of DWC’s order correctly overruled the Martinez Family’s plea to the jurisdiction, and that the court presiding over the tort suit abused its discretion by lifting the abatement before judicial review of the contested order is complete. The Martinez Family contends that DWC had no jurisdiction over the dispute in absence of a pending claim filed by Bruno’s beneficiaries, that the order is consequently void, that the court presiding over the tort suit correctly lifted the abatement once the statute of limitations for filing a workers’ compensation claim had passed, and that the court presiding over the suit for judicial review abused its discretion by failing to overrule the plea to the jurisdiction. If either theory—the one raised by Hellas and Texas Mutual or the one proffered by the Martinez Family—is correct, its proponent has no adequate remedy by appeal. See In re Louisiana-Pac. Corp., 112 S.W.3d 185, 190 (Tex. App.—Beaumont 2003, orig. proceeding) (“Where the outcome of a presently-pending workers’ compensation proceeding would preclude liability in the parallel litigation, there is no adequate remedy by appeal.” (citation omitted)); In re Tyler Asphalt & Gravel Co., 107 S.W.3d 832, 844 (Tex. App.—Houston [14th Dist.] 2003, orig. proceeding) (holding that there is “no adequate remedy by appeal due to the potential for confusion and conflicting judgments if the [tort] suit is tried” while workers’ compensation claim remains pending); cf. Tex. Civ. Prac. & Rem. Code § 51.014(a) (delineating general circumstances permitting interlocutory appeal).

DWC Has Exclusive Jurisdiction to Evaluate Claimant Eligibility.

*4 “An agency has exclusive jurisdiction [over a claim] when a statutory scheme indicates the Legislature intended the statutory process to be the exclusive means of remedying the problem to which the statute is addressed.” Tyler Asphalt, 107 S.W.3d at 838 (citing Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002)). “Typically, if an agency has exclusive jurisdiction [over a claim], a party must exhaust all administrative remedies before seeking judicial review of the agency’s action.” Id. (footnote omitted). “Until then, a trial court lacks subject matter jurisdiction and must dismiss without prejudice those claims within the agency’s exclusive jurisdiction.” Id. (citing Subaru, 84 S.W.3d at 221).

“In some instances, however, the statutory scheme may necessitate that an administrative agency with exclusive jurisdiction make certain findings before a trial court may finally adjudicate a claim.” Id. (citing Subaru, 84 S.W.3d at 221). In other words, a statutory scheme may allow a party to seek redress at common law while still vesting certain issues within the exclusive jurisdiction of an administrative body. “Under those circumstances, if a party files its claims in the trial court before an agency resolves the issue within its exclusive jurisdiction, but the jurisdictional impediment can be removed, then the trial court may abate proceedings to allow a reasonable opportunity for the jurisdictional problem to be cured.” Id. (citing Subaru, 84 S.W.3d at 221–22; Henry v. Dillard Dep’t Stores, Inc., 70 S.W.3d 808, 809 (Tex. 2002)).

The Legislature has vested “the power to determine whether a claimant is entitled to workers’ compensation benefits solely in [DWC], subject to judicial review.” Id. (citing Henry, 70 S.W.3d at 809; American Motorists Ins. v. Fodge, 63 S.W.3d 801, 804 (Tex. 2001)). For example, the supreme court has held that a trial court cannot adjudicate an employee’s claim for bad-faith denial of workers’ compensation benefits without first determining whether that employee was entitled to benefits at the time of the denial, a question within the Commission’s exclusive jurisdiction. Henry, 70 S.W.3d at 809; see also Saenz v. Fidelity & Guar. Ins. Underwriters, 925 S.W.2d 607, 612 (Tex. 1996) (explaining agency’s exclusive jurisdiction to resolve disputes over any entitlement to benefits). And “[t]he Commission’s exclusive jurisdiction to determine compensability necessarily encompasses exclusive jurisdiction to determine whether an injury or death occurred in the course and scope of employment.” Tyler Asphalt, 107 S.W.3d at 838 (citing Tex. Lab. Code § 401.011(10), which defines compensable injury as “an injury that arises out of and in the course and scope of employment for which compensation is payable”).

But Was There Ever a Claim?

Throughout this dispute, the Martinez Family has maintained that DWC’s final order is void—and therefore cannot establish jurisdiction in a suit for judicial review—because they “never filed a claim for death benefits.” The administrative law judge included that fact in her case summary, which was ultimately adopted by the appeals panel, but nevertheless referred to the Martinez Family as “claimants.”

When interpreting a statute, our primary objective is to give effect to the Legislature’s intent, and “the Legislature expresses its intent by the words it enacts and declares to be the law.” Bosque Disposal Sys., LLC v. Parker Cnty. Appraisal Dist., 555 S.W.3d 92, 94 (Tex. 2018) (citing Molinet v. Kimbrell, 356 S.W.3d 407, 414 (Tex. 2011)). “[U]nambiguous statutes are the current law and should not be construed by a court to mean something other than the plain words say unless there is an obvious error such as a typographical one that resulted in the omission of a word ... or application of the literal language of a legislative enactment would produce an absurd result.” Fleming Foods of Tex., Inc. v. Rylander, 6 S.W.3d 278, 284 (Tex. 1999) (citations omitted). With respect to ambiguity, “[i]f an agency’s construction of an ambiguous statute it is charged with administering is reasonable ... it is improper for a court to overturn that interpretation.” Railroad Comm’n v. Texas Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 624-25 (Tex. 2011). We review the resolution of any questions of statutory construction de novo. See id. at 624.

*5 Section 409.003 of the Labor Code provides that a “claim” may be initiated by “[a]n employee or a person acting on the employee’s behalf ... not later than one year after the date on which ... the injury occurred.” Here, it is undisputed that Hellas—not the Martinez Family—requested burial reimbursement from Texas Mutual, which then remitted that sum to Hellas. It is also undisputed that Texas Mutual was the one to request the benefit review conference. The question thus becomes whether either of these parties could be construed as “a person acting on the employee’s behalf” such that, per the statutory definition, that party could initiate a claim. Under the circumstances of this case, it is difficult to characterize Texas Mutual as having acted on Bruno’s behalf given that its stated goal in requesting the benefit review conference was to take a position contrary to that of Bruno’s beneficiaries. See Behalf, Black’s Law Dictionary (referring to actions taken “in the interest, support, or defense of” or “in the name of, on the part of, [or] as the agent or representative of”); Baker v. Travelers Ins., 483 S.W.2d 10, 13 (Tex. App.—Houston [14th Dist.] 1972, no writ) (referring to beneficiaries as standing “in the shoes of a deceased workman”). Hellas similarly adopted a position materially adverse to the legal arguments raised by Bruno’s beneficiaries. Thus, because no one was acting on behalf of Bruno or his beneficiaries in initiating this “claim,” it seems unlikely that there was anything more than a potential claim for benefits at the time of the proceedings before the administrative law judge and the appeals panel. However, we need not resolve that question to dispose of this case, as we conclude that DWC had exclusive jurisdiction over the question of eligibility regardless of whether there was, in fact, a pending claim or merely a potential claim.

We Will Defer to the Agency’s Interpretation of the Statutory Scheme.

Notwithstanding the well-settled jurisprudence indicating that DWC has exclusive jurisdiction to resolve any dispute over eligibility, including questions of employment status, in the context of a pending claim, the Martinez Family asks this Court to hold that DWC has no jurisdiction to resolve the question of employment in the context of an unfiled potential claim.

The description of a benefit review conference is set forth in Section 410.021 of the Workers’ Compensation Act. The Section reads, in its entirety:

A benefit review conference is a nonadversarial, informal dispute resolution proceeding designed to: (1) explain, orally and in writing, the rights of the respective parties to a workers’ compensation claim and the procedures necessary to protect those rights; (2) discuss the facts of the claim, review available information in order to evaluate the claim, and delineate the disputed issues; and (3) mediate and resolve disputed issues by agreement of the parties in accordance with this subtitle and the policies of the division.

See Tex. Lab. Code § 410.021 (emphasis added). The Section refers to the “claim” three times, including to “the respective parties to a workers’ compensation claim,” apparently contemplating the existence of a pending claim as a predicate to the conference. The section is silent as to the question before us—whether DWC, through a benefit review conference, has jurisdiction to resolve issues anticipated to arise from a potential claim. Silence creates statutory ambiguity. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842 (1984); In re American Homestar of Lancaster, Inc., 50 S.W.3d 480, 490 (Tex. 2001). We therefore turn to agency interpretation for guidance. See Texas Citizens, 336 S.W.3d at 623.

DWC promulgated Rule 141.1, et seq., in part to clarify the process governing benefit review conferences. Rule 141.1 provides, “A request for a benefit review conference may be made by an injured employee, a subclaimant, or an insurance carrier.” See 28 Tex. Admin. Code § 141.1. It continues, “An employer may request a benefit review conference to contest compensability when the insurance carrier has accepted the claim as compensable.” See id.

Rule 141.5 outlines the conference itself and instructs the benefit review officer to, inter alia:

(2) thoroughly inform the parties and participants of their rights and responsibilities under the Texas Workers’ Compensation Act;

(3) explain the purpose of the conference and the procedures and time frame to be observed;

(4) identify and describe the disputed issues to be mediated; and

(5) elicit each party’s statement of position regarding each disputed issue.

See id. § 141.5 (Tex. Dep’t of Ins., Div. of Workers’ Comp., Description of the Benefit Review Process). By referring to “issues” rather than “claims,” these regulations suggest that a pending claim might not be a necessary predicate to invoke the agency’s jurisdiction over the dispute. In addition, the agency has now considered this very question, in the context of this dispute, and has made a formal determination, see Texas Citizens, 336 S.W.3d at 625 (citing United States v. Mead Corp., 533 U.S. 218, 229–30 (2001)), that it is jurisdictionally irrelevant that the Martinez Family chose not to file a claim. Because this interpretation is reasonable and does not conflict with the plain language of the statute, we will defer to the agency’s interpretation. Id. at 624. Accordingly, we conclude that DWC had exclusive jurisdiction to resolve any question regarding Bruno’s eligibility for benefits, including the dispute over his employment status.

There Was No Abuse of Discretion in Overruling the Plea to the Jurisdiction.

*6 On March 4, 2020, the court presiding over the tort suit issued an order abating that case until, inter alia, the resolution of any matters properly before DWC. At the time that order issued, the statute of limitations had not yet run on the Martinez Family’s potential claim. After that statute of limitations had run, the Martinez Family sought to lift the abatement of the tort suit so they might pursue any common-law remedies. But when the trial court granted that motion and lifted the abatement on February 11, 2021, Texas Mutual’s suit for judicial review was still pending, and there was therefore no final administrative determination that might allow the court to lift the abatement. See Tyler Asphalt, 107 S.W.3d at 843-44.

The Martinez Family contends that the district court could lift the abatement because the DWC order is void for want of jurisdiction in absence of a pending claim. We have already rejected the Martinez Family’s jurisdictional theory rooted in a distinction between potential claims and pending claims. The Martinez Family also argues that—to whatever extent DWC might otherwise have jurisdiction over the contested issue here—DWC lost that jurisdiction when the claim was rendered moot, which the Martinez Family believes occurred on July 26, 2020, when the statute of limitations had allegedly run on any claim the Martinez Family might file. We reject this argument, as well.

“The mootness doctrine implicates subject-matter jurisdiction.” Pantera Energy Co. v. Railroad Comm’n, 150 S.W.3d 466, 471 (Tex. App.—Austin 2004, no pet.) (citing Speer v. Presbyterian Children’s Home & Serv. Agency, 847 S.W.2d 227, 229 (Tex. 1993)). “A case becomes moot when: ... one seeks to obtain a judgment on some controversy, when in reality none exists, or ... when one seeks a judgment on some matter which, when rendered for any reason, cannot have any practical legal effect on a then-existing controversy.” Id. (citing Texas Health Care Info. Council v. Seton Health Plan, Inc., 94 S.W.3d 841, 846 (Tex. App.—Austin 2002, pet. denied)). Here, there is no doubt a controversy exists: Texas Mutual and the Martinez Family disagree as to the proper mechanism for obtaining redress for Bruno’s fatal injury. For that very reason, the suit for judicial review will result in a judgment that will, indeed, have a “practical legal effect” on the controversy. See id. Moreover, while the statute of limitations governing a claim for death benefits generally runs on the one-year anniversary of the date of the employee’s death, see Tex. Labor Code § 409.007(a), the passing of that anniversary is not an absolute bar to asserting such a claim, see id. § (b)(2) (“Failure to file in the time required ... bars the claim unless ... good cause exists for the failure to file a claim.”). Thus, this case is not moot.

And finally, to whatever extent the Martinez Family might raise additional arguments that the agency’s order is void, we would also reject those arguments as a basis for mandamus relief. We have held that an agency order may be subject to collateral attack as a void order on just two grounds: because “the order shows on its face that the agency exceeded its authority” or because “a complainant shows the order was obtained by extrinsic fraud.” Chocolate Bayou Water Co. & Sand Supply v. Texas Nat. Res. Conservation Comm’n, 124 S.W.3d 844, 853 (Tex. App.—Austin, 2003, pet. denied). Here, the Martinez Family has not shown how the face of the DWC order indicates that the agency exceeded its authority. Nor has the Martinez Family alleged that the DWC order resulted from fraud.

Thus, having rejected the Martinez Family’s arguments that DWC’s final order is void such that the courts have no jurisdiction to review that order, we conclude the district court presiding over the suit for judicial review correctly overruled the plea to the jurisdiction. The Martinez Family therefore has not shown how that court abused its discretion, and we will deny its request for mandamus relief.

Hellas is Entitled to Mandamus Relief from the Order Lifting the Abatement.

*7 A writ of mandamus will issue when a trial court does not abate a tort suit while a suit for judicial review of a DWC decision is pending. See Louisiana-Pac., 112 S.W.3d at 189–90 (affording mandamus relief where trial court failed to abate tort litigation while suit for judicial review of Workers’ Compensation Commission decision remained pending). As already explained, the suit for judicial review is still pending before a Travis County district court. There has been no final resolution of the issues presented in that suit. Accordingly, the trial court abused its discretion by lifting the stay on litigation of the tort suit while the suit for judicial review was still pending. And Texas Mutual and Hellas have no adequate remedy by appeal. See id. at 190. Thus, Hellas has shown its entitlement to the writ of mandamus.

CONCLUSION

For the reasons stated herein, we deny the Martinez Family’s petition for writ of mandamus but conclude that Hellas has met its burden to establish its right to mandamus relief. We therefore grant a conditional writ ordering the district court presiding over the tort suit (Travis County No. D-1-GN-19-004416) to abate the litigation until there is a final decision in the suit for judicial review of the DWC’s final order. See Tex. R. App. P. 52.8(c). The writ will issue only if the trial court fails to comply.

Footnotes
1	The Martinez Family later amended its petition to add T.F. Harper & Associates, L.P., as a defendant.

Court of Appeals of Texas, Austin.

Alvy Childress, Appellant
v.
Sunz Insurance Company, Appellee

NO. 03-22-00266-CV

|
Filed: July 22, 2022

FROM THE 345TH DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-21-005341, THE HONORABLE MAYA GUERRA GAMBLE, JUDGE PRESIDING

Before Chief Justice Byrne, Justices Triana and Smith

MEMORANDUM OPINION

Gisela D. Triana, Justice

*1 Appellant Alvy Childress filed a notice of appeal from the trial court's April 15, 2022 order, which granted appellee Sunz Insurance Company's Motion to Transfer Venue. Upon initial review, the Clerk of this Court sent Childress a letter informing him that this Court appears to lack jurisdiction over the appeal because our jurisdiction is limited to appeals in which there exists a final or appealable judgment or order, and an order granting a motion to transfer venue is not an appealable interlocutory order. See Tex. Civ. Prac. & Rem. Code § 51.012; Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001) (explaining that appeal generally may only be taken from final judgment that disposes of all pending parties and claims in record unless statute provides for interlocutory appeal); Stary v. DeBord, 967 S.W.2d 352, 352-53 (Tex. 1998) (“Appellate courts have jurisdiction to consider immediate appeals of interlocutory orders only if a statute explicitly provides appellate jurisdiction.”); see also Tex. Civ. Prac. & Rem. Code § 51.014 (specifically permitting appeal of various interlocutory orders but not permitting appeal from grant or denial of motion to transfer venue); Tex. Civ. Prac. & Rem. Code § 15.064(a) (providing that there is no interlocutory appeal from trial court's venue determinations); Tex. R. Civ. P. 87(6) (prohibiting interlocutory appeals from orders on motions to transfer venue). The Clerk requested a response on or before July 11, 2022, informing this Court of any basis that exists for jurisdiction.

Childress has filed a response to our notice, but he has not demonstrated this Court's jurisdiction over his appeal of the trial court's order transferring venue. In his response, Childress requests that we review the trial court's order transferring venue as a denial of a temporary injunction, which would render it an appealable interlocutory order under Texas Civil Practice & Remedies Code Section 51.014(a)(4). We decline to do so. There is no indication in the record that the trial court considered any request for injunctive relief related to venue, and Childress does not explain how an application for injunctive relief could enable the trial court to avoid complying with the mandatory venue provision in Texas Labor Code Section 410.252. See Tex. Lab. Code § 410.252(b)(1) (requiring party bringing suit for judicial review of workers' compensation administrative proceeding to file petition in county where employee resided at time of injury); see also Tex. Civ. Prac. & Rem. Code § 15.016 (requiring that case governed by “statute prescribing mandatory venue shall be brought in the county required by that statute”).

To the extent that Childress also seeks in his response to have his notice of appeal construed as an original proceeding seeking “[m]andamus review of this truly unprecedented claim,” we would deny the original proceeding. To the extent Childress may be arguing that he is seeking to enforce mandatory venue in Travis County rather than Tom Green County, on this record, the trial court did not abuse its discretion by transferring venue when Childress's pleadings established that venue was mandatory in Tom Green County. See Tex. Lab. Code § 410.252(b)(1).

*2 Accordingly, for the reasons explained above, we dismiss the appeal for want of jurisdiction. See Tex. R. App. P. 42.3(a).

Dismissed for Want of Jurisdiction