©2005 – Flahive, Ogden & Latson SEPTEMBER 2005 VOLUME 10 ... · an old Burl Ives song: "They are...
Transcript of ©2005 – Flahive, Ogden & Latson SEPTEMBER 2005 VOLUME 10 ... · an old Burl Ives song: "They are...
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 1
©2005 – Flahive, Ogden & Latson SEPTEMBER 2 0 0 5 V O L U M E 10, N O . 9
A P R I V I L E G E D A T T O R N E Y - C L I E N T C O M M U N I C A T I O N B Y F L A H I V E , O G D E N & L A T S O N
continued on p. 24
FOLFOLFOLFOLFOLFOLIOREQUIEM FOR TWCC
It was not so long ago that the Legislature created TWCC. Now, only fifteen years later, the agency created by
that legislation has ceased to exist.
It was a remarkable run during which five executive directors served the TWCC. We are reminded of a line in
an old Burl Ives song: "They are tearing down buildings that I watched them build." Ironically, the most
experienced and therefore most informed, and arguably the most able of the five persons serving in the job was
Bob Shipe, the guy in charge at the time that the shades were drawn.
By the time that you read this newsletter, all employees of TWCC will have become employees of the Texas
Department of Insurance Division of Workers’ Compensation. Nomenclature will evolve for convenient
references. The TDI has released a Bulletin indicating that the new agency name of choice will be DWC, and that
references in past to the Commission should now refer to the Division. The new names just don’t seem to roll
off the tongue quite as easily.
A law that came in with a bang is leaving with a whimper. Although the agency is “abolished” there will be
many familiar names, faces and processes. Unlike 1989, these changes are evolutionary, and not revolutionary.
We will change a lot of forms and templates. We will have a lot of new rules. But the fundamental process in
claims will look a great deal like it looks now.
We look forward to working with you as we begin assimilating the new and exciting opportunities under HB 7.
The 2005 TWCC Annual Conference began with an
introduction by Executive Director Bob Shipe. He
quickly introduced Mike Hachtman, the current
Commissioner whose term will expire on August 31,
2005. Mr. Hachtman was very active in the drafting of
TWCC ANNUAL CONFERENCESenate Bill 1, the 1989 Reform Legislation. Referring to
that bill, the 2001 Medical Reform attempted in House
Bill 2600, and the more recent HB 7, he acknowledged
the great number of changes, and pointed out that
further changes will almost certainly occur.
The new TDI Commissioner, Mike Geeslin,
conveyed his enthusiasm about implementing the
changes proposed in HB 7. Commissioner Geeslin
clearly communicated that he will remain involved in
workers’ compensation as well as all of his other
Bills Affecting Workers' Comp ................
GQ Related to HB 7 ...............................
In This Issue . . .
p. 6
p. 10
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N2
Flahive, Ogden & Latson, a 26 lawyer firm,
defends contested workers’ compensation
cases statewide every day. The firm has
represented insurance companies and
employers before the Texas Workers’
Compensation agency for more than 50 years.
For general questions concerning the
newsletter call (512) 435-2234.
Flahive, Ogden & LatsonP.O. Box 13367
Austin Texas 78711
An electronic copy of FOLIO, our monthly client newsletter, is now
available for clients. If you are interested in receiving FOLIO by e-
mail, please let us know. FOLIO is prepared for the exclusive use of
Flahive, Ogden & Latson clients only. It contains privileged
communications and further sharing of this newsletter (in either hard
copy or electronic format) outside your company without the express
written consent of Flahive, Ogden & Latson is not permitted.
Our regular office hours are 8:15 a.m. to
4:45 p.m.. If you need to call after 4:45,
please call Patsy Shelton at (512) 435-2234.
She will be on duty until 6:00 p.m. daily.
FO&L OFFICE HOURS
Don't wait until the last hour
of the day for deadline filing.
Any faxes with information due
must be received by 3:30 p.m.
for any deadline handling for same day
delivery to the Commission, and faxed
according to the fax directory listed on the last
page of FOLIO.
Furthermore, if you have a last minute
deadline, call our office by 3:00 p.m. and
speak with Tillie Aguirre or Patsy Shelton to
advise that a last minute filing is necessary to
meet a deadline. We will be watching and
waiting for the fax. Otherwise, last minute
faxes could delay receipt. Our last daily run to
the Commission will be at 4:00 p.m., in order
to get across town to meet their 5:00 closing
time.
C&P DIRECTOR DISCUSSESAUDITS
At the TWCC Conference, Teresa Carney addressed groups in
separate breakout sessions about the audit process. Her remarks
were confined to the current process and did not address future
audits.
Ms. Carney reported that TWCC had conducted seven
preauthorization audits. They identified 86% overall compliance.
For peer reviews, TWCC has conducted fourteen audits and
Ms. Carney reported an 83% overall compliance rate. They
identified a 81% compliance rate for the use of out–of-state
doctors not supervised by Texas doctors. In 5% of the cases, the
peer review physician was not a member of the ADL. They also
identified a number of occasions in which the peer review reports
were not appropriately used. There was 74% compliance with the
appropriate denial of medical pursuant to peer reviews.
In SIBs, TWCC identified 94% compliance for disputes, 80%
compliance in timely payments, 86% compliance with proper
SIBs rate, 31% compliance with payment of interest when the
SIBs payment was late, and 67% compliance where the
applications to the injured worker were timely mailed. These
figures are certainly instructive to remind all claims handlers to
pay interest when the benefits are delayed. If any income
benefit is paid after the date it is due, in addition to the
benefit owed, carriers must pay interest with our without an
order from TWCC.
Ms. Carney emphasized that the timely processing of medical
bills is the Number 1 complaint identified by the auditors.
Twenty-four audits were conducted and overall, they discovered
an 86% rate of timely payment! The ECS transmission was
timely 68% of the time and the Data Quality was accurate 34% of
the time.
These overall benchmarks can be used to compare the
performance of your company with the performance of the
industry in general. As we have mentioned in the many seminars
that we have delivered on HB 7, the Legislature has a high
interest in improving compliance, they have raised penalty
maximums, and DWC will issue a “report card” to carriers rating
each carrier as “good,” “average,” or “poor.” Carriers rated as
“good” will be identified on the TWCC website.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 3
MIKE GEESLINTEXAS DEPARTMENT OF INSURANCE
Governor Rick Perry appointed Mike Geeslin as
Texas Insurance Commissioner effective June 7,
2005.
Prior to being appointed Commissioner, Geeslin
joined the Texas Department of Insurance (TDI) in
January 2003 as the
Deputy Commissioner
for Policy. In his role, he
assisted the TDI
Commissioner in the
development and
communication of
regulatory policy,
including
implementation of
reforms directed by the
Texas Legislature during
the 78th Regular Session
in 2003.
Before coming to the TDI, Geeslin served as
budget and policy advisor on insurance and
regulatory matters to Governor Perry at the
Governor’s Office and previously at the Lieutenant
Governor’s Office. He also worked as chief of staff
for the late state Senator Tom Haywood, as a
legislative aide to state Senator Florence Shapiro,
and as an assistant to U.S. Congressman Joe Barton.
Geeslin is a 1991 graduate of Texas A&M
University, where he received a bachelor’s degree in
communications with a minor in business
administration. While attending Texas A&M Geeslin
was a member of the Corps of Cadets and served as
a Ross Volunteer. He attended public schools in
Red Oak, Texas.
He and his wife, Danica Milios-Geeslin, live in
Austin and have three children.
Mike Geeslin
INTOXICATION CASE
We don’t often comment about case law from other
states. However, because the Supreme Court of Arizona
invalidated the WC intoxication defense and the drug
free workplace initiative in Arizona, there has been a
great deal of interest among our clients about this case.
See Grammatico v. The Industrial Commission.
This decision should not be applicable in Texas.
The Constitution of the State of Arizona is very unique
in that it requires that an employee receive workers’
compensation for “any accident arising out of and in the
course of employment.” An employee must only prove
legal causation – and once legal causation is proven, the
Legislature has no power to create a defense that would
preclude discovery for a job-related accident.
Thus, an employee with a .17% blood alcohol
whose benefits were denied by the Industrial
Commission was entitled to recover as a matter of
Arizona Constitutional Law.
In Arizona, an employee must prove that the
intoxication was part of the reason for the accident (a
fault concept). In Texas, there is no need to prove fault.
If an employee is intoxicated, he/she is barred from
recovery whether the intoxication caused the injury or
not. In Texas Workers’ Compensation, fault is
accordingly irrelevant.
As a result, we believe that the Grammatico Arizona
decision is irrelevant to Texas Workers’ Compensation
law.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N4
TDI PUBLISHES PROPOSED NETWORK RULES
continued on pg. 26
According to Teresa Carney, during her presentation
at the TWCC conference, workers’ compensation
carriers are failing to identify late-filed SIBs applications.
The carrier must initiate benefits on the later of seven
days after the beginning date of the period, or ten days
after first receipt of the TWCC order for the 1st Quarter
or within ten days of the Application for SIBs for any
subsequent quarter. Rule 130.107.
If the employee delays in filing an application,
benefits are not owed for the period between the
beginning of the quarter and the date of the
application. According to Ms. Carney, if carriers
simply paid attention to this delay, it would save $1
million in SIBs payments annually.
The Texas Department of Insurance (TDI) has
published the soon to be proposed workers’ compensation
healthcare networks rules. A PDF formatted copy of the
rules is available at: www.tdi.state.tx.us/rules/pdf/0822-
059.pdf, and an HTML formatted copy of the rules is
available at: www.tdi.state.tx.us/rules/0822-059.html.
Public comment must be submitted no later than 5:00
p.m. (Central Standard Time) on October 3, 2005 with:
Gene C. Jarmon, General Counsel and Chief Clerk
Mail Code 113-2A
Texas Department of Insurance
P. O. Box 149104
Austin, Texas 78714-9104
An additional copy of the comments must be
simultaneously submitted to:
Margaret Lazaretti, Deputy Commissioner
HMO Division, Mail Code 103-6A
Texas Department of Insurance
P.O. Box 149104
Austin, Texas 78714-9104
The rules are divided into seven (7) separate
subchapters, identified as follows: general provisions and
definitions, certification standards, contracting
requirements, network requirements, network operations,
utilization and retrospective review, and complaints
processes.
General Provisions and DefinitionsSection 10.1 implements Chapter 1305 of the
Insurance Code, which is the new provision under
HB 7 that creates healthcare networks in workers’
compensation in Texas. The rule makes clear that
carriers, self-insured employers, groups of self-
insured employers, and governmental entities that
self-insure may establish or contract with
networks. The rule specifically excludes
employers who purchase deductible plans under
Insurance Code Art. 5.55C from contracting with
healthcare networks for workers’ compensation.
The rules become effective on January 1, 2006,
which coincides with the date that HB 7 mandates
the Division of Workers’ Compensation shall begin
accepting applications for certification of
healthcare networks.
Section 10.2 provides definitions for many of the terms
used in the rules. As HB 7 provides that a claimant may
treat out of network in an emergency situation, an
“emergency” is defined as “either a medical or mental
health emergency.” A medical emergency means “the
sudden onset of a medical condition manifested by acute
symptoms of sufficient severity, including severe pain, that
the absence of immediate medical attention could reasonably
be expected to result in: (A) placing the patient’s health or
bodily functions in serious jeopardy; or (B) serious
dysfunction of any body organ or part.” A mental health
emergency is “a condition that could reasonably be expected
to present danger to the person experiencing the mental
health condition or another person.”
HB 7 also provides that a claimant must treat
CARRIERS AREOVERPAYING SIBs
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 5
TX COMP BUSINESS IMPROVEMENT PROJECTS
The current commission has drafted several Business
Process Improvement Projects (BPI Projects), including
the following: the MMI TXCOMP Project, the e-SIBs
Project, and the Compensability and Lost Time Project.
These projects are going to complete the TXCOMP Claim
System, which, when completed will be a comprehensive
information and reporting system for the workers’
compensation customers of Texas.
It appears that the projects’ main goals are to streamline
the processes of reporting information, filing documents,
and notifying carriers and claimants of actions in the
claims process. This will be done by the eventual decrease
of paper documents and data entry. These projects will be
subject to continued analysis, but the entire project must
be completed by the end of fiscal year 2007. These
projects potentially change how carriers (and other system
participants) file and receive information with and from
the Division.
Specifically, the MMI TXCOMP Project will establish
methods for collection and reporting MMI/IR and will
allow TXCOMP to notify both carriers and claimants of
MMI certifications without multiple paper copies being
sent to each party. In other words, TXCOMP will allow
providers to file TWCC-69s electronically and will allow
for electronic notification of the results to the parties. The
impetus for this project is that currently, all TWCC-69
information is received as paper hard copies, which must
be manually entered into the system. There is no current
method of retrieving data such as the certifying doctor’s
license number, the ICD-9 codes, whether MMI is reached,
what IR was given, and other vital information. Also, if
there are errors in the TWCC-69, commission staff currently
send EES-60 correction letters to the certifying doctor.
This project’s vision is to eliminate all of this manual data
entry by using the optical or intelligent character recognition
(OCR/ICR) and eliminate the need for any corrections
process at the end of the process. There is no definite
timeline for this multiple-phase project, but it should be
in place by the end of FY2007.
The Division is responsible for determining first
quarter entitlement to SIBs. Currently that process involves
a great deal of data entry and staff involvement. The e-
Supplemental Income Benefits Project has an ultimate
goal of automating the entire SIBs process, from the first
quarter Division determination and notice of entitlement
and potentially to the filing of subsequent SIBs applications
electronically. This Project will likely affect how carriers
will monitor the first SIBs quarter determination. Initially,
the focus will be on the first quarter application and
determination as well as automated methods of determining
entitlement and quarter dates. The implementation of this
Project will be dependent on the MMI/IR Project, as it
expands on that phase of the improvements.
The Compensability and Lost Time Project will allow
carriers to submit their claim EDI transactions via SFTP
or by using the current VAN line and filing first and
subsequent reports online. Additionally, it will allow carrier
to file compensability and liability disputes at the “claim
level, body part level, or the diagnosis level.” TXCOMP
will then automatically generate Plain Language Notices to
claimants. TXCOMP will also track return to work data
from TWCC-6 and TWCC-73 paper forms and extend the
“claim profile” to have the most current information
regarding compensability, return to work and claim status
which should be viewable online. This will be completed
in phases, but it is one of the final phases of the completion
of Tier One of the TXCOMP claim system. Because its
launch is dependent on the completion of other projects,
there is no specific time line for completion. The likely
completion date appears to be FY2006/07.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N6
SUMMARY OF BILLS ENACTED BY THE 79TH LEGISLATURERELATING TO WORKERS' COMPENSATION
continued on pg. 28
The following is a summary prepared by PDI/TWCC
of Bills enacted by the 79th Legislature. FO&L has
seperately summarized workers' comp related Bills in
subsequent pages of FOLIO.
HB 7 by Solomons and Staples
Relates to the continuation and operation of the
workers’ compensation system, the transfer of the
powers and duties of the Texas Workers’ Compensation
Commission to the Division of Workers’ Compensation
with the Texas Department of Insurance, the creation
and establishment of the Office of Injured Employee
Counsel, the provision of workers’ compensation
benefits to injured employees, the regulation of workers’
compensation insurers, and administrative and
criminal penalties. HB 7 is summarized in a separate
document that can be accessed through the following
website links: www.twcc.state.tx.us/commission/
TWCCHB7SummaryofChanges6-23.pdf or
www.tdi.state.tx.us/commish/hb7changes.html
HB 162 by McCall
Amends Section 81.048 and adds Section 81.0955,
Health and Safety Code. Changes are as follows:
n Amends Section 81.408 by adding a detention officer
and a county jailer to the list of persons who must be
notified of a positive test result for a reportable disease.
n Adds Section 81.0955, relating to testing for accidental
exposure (of certified emergency medical services
personnel, firefighters, peace officers or first
responders) to blood or other bodily fluids of a person
who dies at the scene of an emergency or during
transport to the hospital. Requires a hospital, certified
emergency medical services personnel, or a physician
on behalf of the person exposed (following a report of
the exposure) to take reasonable steps to test the
deceased person for communicable diseases.
HB 251 by Eissler
Amends the Labor Code, Section 402.084, Records
Check; Release of Information.
n Amends subsection (b)(8), relating to entities who may
obtain WC claim information – eliminates use of term
“sub-claimant” and instead provides that an insurance
carrier (who has adopted an anti-fraud plan under the
Insurance Code) may obtain specific workers’
comp claim information from the Commission, as
described under subsection (c-3).
n Amends Subsection (c-1) and defines, for purposes of
this Section only, “insurance carrier” to include certified
self insurers, health insurance company, HMOs, self-
funded health plans under ERISA, and certain
governmental plans. Amends Subsection (c-2) to
provide that the insurance carrier does not have to
demonstrate the existence of subclaims to access the
information.
n Amends Subsection (c-3) and provides that an
insurance carrier or a representative of the carrier may
submit requests for claim information (relating to a
person who is or has been insured under the carrier’s
coverage) to the commission on a monthly basis and
defines the specific claim information that the
commission must provide if it is available. The
claim information must be provided in an electronic
format.
n Amends Subsection (c-4) and provides that a potential
sub-claim identified by a carrier or representative
receiving claim information may form the basis for the
identification and prosecution of a sub-claim under this
title.
n Amends Subsection (c-5) and provides that
information received by an insurance carrier or its
representative, remains subject to the confidentiality
requirements of the statute.
n Amends Subsection (c-6) to provide that the
commission may not redact claims records under a
request made under this section.
n Amends Subsection (c-7) to provide that an insurance
carrier may request, and the Commission shall provide,
the records once a month.
n Amends Subsection (d) to provide that the
commission may establish, by rule, a
reasonable fee for all information requested by an
insurance carrier as described under
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 7
ALPHA TREATMENT CENTERSINDICTED FOR FRAUD
TDI BULLETINUNDERWRITING GUIDELINES
The United States District Court in Dallas
indicted Alpha Treatment Centers, dba Texas
Durable Medical Equipment, and a number of its
principals, for fraudulently billing a federal workers’
compensation program and state workers’
compensation insurers. A number of insurers
participated in the investigation.
According to the indictment, beginning in
January 1999 and continuing through December
2004, employees and agents of Alpha had obtained
blank prescription forms and created phony
prescriptions for various durable medical equipment.
They billed the insurers for treatment that had never
been prescribed, was not medically necessary and
was never furnished to the injured worker. The
indictment charges that Alpha bribed various
employees at physician’s offices to obtain the name
of patients and blank DME prescription forms.
Former employees of Alpha have pleaded guilty
to healthcare fraud. Two employees in particular,
Andrew Hillman and Jason White, face up to 265
years of prison because of their participation in the
fraudulent scheme.
According to newspaper accounts, the
investigation is continuing.
TWCC has been migrating to a different electronic
format for reporting medical billing information. There
have been several announced effective dates. TWCC
currently has established a more flexible series of dates
over which carriers will be tested and begin on line
reporting in the new format.
Carriers/trading partners who received their SFTP
file by August 15, 2005 are in Group 1. Group 1
carriers will be approved for transmission no later than
October and will be expected to file all historic data and
current data by December 31, 2005.
Carriers/trading Partners who did not receive an
SFTP test file by August 15, 2005 are considered to be
in Group 2. This group will not be tested until after the
Group 1 testing is complete.
TWCC/DWC expects that all trading partners in
both Group 1 and 2 will achieve 98% accuracy by
January 1, 2006.
On July 22, 2005, the Texas Department of
Insurance issued a bulletin requiring workers’
compensation insurance carriers to file underwriting
guidelines with TDI by September 15, 2005.
The bulletin directed carriers to the TDI website for
a transmittal form to be used when submitting the
guidelines. See FOLAGRAM 119 for details and copy
of form if you are unable to access it on the TDI
website.
These requirements apply only to insurers and not
to certified self-insurers or to governmental self-
insureds.
Questions about this process may be directed to
Phyllis Devine at [email protected], or may be directed to
Gary Gola at the Texas Department of Insurance: (512)
475-3026.
PROGRESS UPDATE ONMEDICAL BILLING DATA/
ELECTRONIC TRANSMISSIONS
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N8
FO&L SUMMARY OF LEGISLATIVE BILLS AFFECTING WC CASES
In addition to HB 7, a number of other bills may affect
workers’ compensation claim handling in certain cases.
HB 162 by McCall amends the Health & Safety
Code and adds detention officers and county jailers to the
list of persons who must be notified of a positive test for
reportable diseases. It also requires the testing of persons
dying at the scene of an emergency or during transport to
a hospital. In the event of a communicable disease,
emergency responders are to be notified of the disease.
HB 251 by Eissler provides for a very expansive
right to claim data for any employee insured by the
carrier. For the purposes of receiving such information,
an insurance carrier is defined to include self-insurers,
health carriers, workers’ compensation carriers, group
medical plans, HMOs and others.
The insurance carrier may submit a written request
for claims information identifying the names of persons
insured under the “carrier’s insurance program.” Upon
providing the list, the Commission “shall” examine the
Commission records to identify all claims related to each
listed person. If a claims record exists, the Commission
shall promptly provide the information on each workers’
compensation claim filed by that person to the carrier in
an electronic format (this information will not include
medical reports – if there is a claim, those may be
separately accessed through requesting the specific claim
file). . The bill specifies the scope of the information to
be provided. Note that one of the items of data to be
provided is the name of the adjuster handling the claim.
The information received from the Division is
subject to confidentiality requirements as will be
prescribed by Division Rule. The Division will be able to
charge up to $.05 per each “claimant listed in an
information request.”
The bill separately requires an autopsy report to be
provided within fifteen days of the request. If the report
has not been prepared, the coroner’s office must identify
the date that the report will become available.
HB 1428 by Isett amends the Government Code
and provides for injury leave without a deduction in
salary for up to one year for an injury resulting from an
assaultive offense under the Penal Code. A police officer
may simultaneously be on injury leave and receive
workers’ compensation medical benefits, but is not
eligible for disability retirement benefits while on injury
leave. The officer would be entitled to workers’
compensation indemnity after the discontinuation or
exhaustion of injury leave allowed under the statute.
HB 3288 by Thompson requires reports to TDI of
any reasonable suspicion or knowledge of fraudulent acts
within thirty days of the knowledge of the potential fraud.
The fraud must be reported in the format prescribed by
the National Association of Insurance Commissioners.
Notice to TDI constitutes notice to other authorized
governmental agencies. An insurance carrier should
report the suspected fraud even if its investigation is not
complete.
The bill also repeals an Insurance Code provision
subjecting an insurance carrier to a civil action if it acted
with “malice, fraudulent intent or bad faith.” The
intention is to relieve complainants from potential liability
for filing a suspected fraud report pursuant to the statute.
Senate Bill 310 by Deuell establishes a rebuttable
presumption of causation of certain diseases, “discovered
during employment as a firefighter or emergency medical
technician.”
The rebuttable presumption establishes medical
causation for diseases of smallpox, “tuberculosis or other
respiratory illness” and heart attack or stroke. For each
listed disease, certain qualifiers apply. The presumption
does not apply to a disease known to be related to
tobacco if the firefighter or EMT, or his/her spouse, has
been a smoker.
The presumption may be rebutted through a
showing by a “preponderance of the evidence that a risk
factor, accident, hazard or other cause not associated with
the individual services of a firefighter or EMT caused the
individual’s disease or illness.”
Accordingly, in the defense of cases in which this
statute applies, the preponderance of the evidence
burden of proof will now be shifted to the carrier or self-
insured.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 9
TEXAS WORKERS' COMPENSATION CLAIM PROCESS(effective 9/1/05)
Injury
Injured Worker Notifies
Employer, Files Claim with
Division of Workers’
Compensation (DWC)
Employer Reports
to Carrier
Carrier Reports
to DWC
Medical
Benefits*
Income
Benefits**
Network
Worker Chooses Treating
Doctor from list of
Network Providers
Return
to Work
Non-
Network
Worker Chooses Treating
Doctor from DWC’s
Approved Doctor List
Worker Receives
Treatment
Doctor Submits
Medical Bill to Carrier
Carrier Reviews Bill and
Pays or Denies
Temporary Income
Benefits (TIBs)Return to Work or
Exhaustion of Benefits
If permanent
impairment
Impairment Income
Benefits (IIBs)
Return to Work or
Exhaustion of Benefits
Impairment rating >15%; has not
returned to work or has returned
at <80% pre injury wage
Supplemental Income
Benefits (SIBs)
MEDICAL DISPUTES regarding a denial of preauthorization ordenial of care that’s already been rendered (retrospectivemedical necessity) are handled by an Independent ReviewOrganization (IRO). Medical disputes regarding fees for networkcare are handled through the network’s complaintprocess. Medical fee disputes for non-network care are handledthrough an administrative dispute process at the DWC.
INCOME BENEFIT DISPUTES can be initiated at any pointduring the claim. These disputes are handled through an
administrative dispute resolution process at the DWC.
* Medical benefits initiated immediately after injury. Certain medical treatments require preapprovalfrom the insurance carrier or network before they can be rendered (“preauthorization”).**Income benefits generally initiated when there have been eight days of lost time. Income benefitspaid for first week of lost time if injured worker is not able to work for two weeks. Maximum of allbenefits is 401 weeks from date of injury. In addition to income benefits shown, Lifetime IncomeBenefits (LIBs) are available for injured workers who meet specified eligibility requirements, andDeath Benefits are paid to dependents in the event of a fatality.
Return to Work or
Exhaustion of Benefits
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N10
What if the treating doctor refers the claimant to achiropractor for physical therapy?
There is nothing that precludes a treating doctorfrom referring the claimant to a chiropractor forphysical therapy. Note, however, that for non-
network care, physical and occupational therapy must bepreauthorized effective September 1, 2005. For networkcare, the preauthorization requirements will be dictated bycontract. A network will be required to establish asufficient number of doctors who can perform chiropracticcare and physical therapy, and a treating doctor will have torefer the claimant to a network provider. The carrier willhave a choice of networks and will be able to select anetwork with only good doctors.
Are Texas employers currently required to obtaina post-accident drug screen when an injury occurson the job, and if not, after September 1, 2005,
will they be required to do so?
Employers are neither currently nor will they afterSeptember 1, 2005 be required to request a post-accident drug screen.
If a network plan is in effect, who designates thetreating doctor?
The claimant is entitled to chose the initial treatingdoctor. If he does not do so within 14 days ofbeing provided notice of the network, the network
may assign the treating doctor. The claimant will beentitled to one “free” change of treating doctor. Anysubsequent changes will have to be approved by thenetwork pursuant to the network established procedures.
When does Section 408.027, regarding thechanges in the payment deadlines for a healthcareprovider and submission of the healthcare
providers bills, go into effect?
September 1, 2005.
Can employers form their own networks asopposed to participating in carrier networks?
An employer may establish a network. As part ofthe contract of insurance between the employerand the carrier, the employer may insist that the
carrier contract with the employer’s network for theprovision of medical services.
Will the network provisions apply retroactively todates of injury prior to January 1, 2006?
The network provisions will apply to all claimantswho have sustained an injury on or after January1, 1991. For those dates of injuries prior to
September 1, 2005, once the insurance carrier contractswith the network, all claimants who live in the network’sservicing area will be required to participate in the networkselected by the carrier, regardless of the employer’s choiceof networks. For dates of injury on or after September 1,2005, an employee will be required to participate in anetwork only if an employer chooses to participate.
Can a network contract stipulate a larger paymentfor services over the fee guidelines?
Absolutely. This may be offered as an incentive toproviders to participate in the network. Ofcourse, the network contract will also provide for
treatment guidelines as well as preauthorizationrequirements. Therefore, although the individual servicemay cost more, there would likely be fewer servicesrequested.
Do you believe that some of the doctors who haveopted out of workers’ compensation over the lastfew years will come back into the system through
the network provisions?
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F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 11
This is entirely possible. In order to participate ina network, the doctor does not have to be on theADL. The doctor does not have to go through
any of the requirements established by the Division ofWorkers’ Compensation. Participation is dictated solelythrough contract with the network. Many doctors haveexpressed excitement about the possibility about becominga member of a network.
If the Appeals Panel is only allowed to reversedecisions, how will the carrier get notice of thefact that a decision was affirmed for purposes of
appealing to judicial review?
This will be established by the Division ofWorkers’ Compensation. However, it is likely thata process similar to the current process will be
utilized. For the last several months, the Appeals Panelhas not issued decisions affirming Hearing Officers.Rather, a copy of the decision of the Hearing Officer, witha cover letter, has been provided to the parties. The datethat it is filed with the Division of Hearings is stamped onthe Hearing Officer’s decision, which starts the deadlinefor appeal.
Will a carrier still be required to attempt to obtainemployee agreement to attend a carrier RME withthe new changes?
This will depend upon the nature of theexamination. If the examination is prior to thedesignated doctor’s appointment for issues such as
the necessity of medical treatment, then the carrier will berequired to seek agreement from the claimant prior torequesting an order from the Division. The statutoryprovisions are somewhat ambiguous as to whether or notthe limitations on the RME apply only to the Division orthe carrier. In any case, to the extent that it is a pre-designated doctor’s appointment, the same procedures willapply. However, the majority of RME appointments willbe post-designated doctor RME appointments. There isno requirement under the statute to request agreementfrom the claimant. The current procedures, which alsoprovide for a post-designated doctor RME appointment,
do not require the carrier to seek agreement from theclaimant. Rather, the carrier has an absolute right to apost-designated doctor RME for any issue on which thedesignated doctor was assigned to issue an opinion. Forthat matter, nothing in the statute requires that the post-designated doctor RME doctor be the same as waspreviously used. Clearly, it is contemplated that you woulduse different doctors for different purposes.
With the expansion of the role of the designateddoctor, do you expect there to be a significantnumber of requests for a designated doctor?
Perhaps. Many of the issues that are currentlydecided by RMEs (whether selected by the carrieror the Commission) will now be selected by a
designated doctor. The new provisions will supercede thePRME provisions. At least to the extent that you currentlysee PRMEs on issues of extent of injury, you can expect tosee designated doctors. You will likely also see requests fordesignated doctors whenever the carrier disputes extent ofinjury or disability.
If the claimant is on a network, how does thisaffect the designated doctor and RME process?
If the claimant is on a network, neither the carriernor the Division has the right to request an RMEfor the purpose of determining medical necessity.
This means that the PRME process will not apply toclaimants who are on networks. However, designateddoctors will still be selected for claimants who are onnetworks, for all issues, including extent of injury anddisability. A designated doctor may not be on the network.Additionally, a post-designated doctor RME may not be adoctor who is on the network. Presumably, as the networkwill have the opportunity to choose the doctors who are onthe network, and the carrier will be able to contract withnetworks that have only decent doctors, this might limitextent of injury issues. Further, as networks will berequired to adopt disability guidelines, this will also affectthese disputes.
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F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N12
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Claimant was excused from work early to
attend a company required random drug screen.
The drug screen is administered off site and the
employee was driving his motorcycle. The employee
was involved in a one-vehicle accident on the way to the
drug screen. Would this be compensable?
The trip from work to the site of the drug test
was probably a special mission and,
consequently, the claimant was in the course
and scope of employment at the time of the accident. I
am assuming that the claimant was on a reasonably
direct route from his workplace to the drug test site at
the time of the accident, and that he had not deviated
from the route for any personal reason. I am also
assuming that the claimant was not intoxicated at the
time of the accident.
The claimant’s doctor charged us $26.00 to
send medical records to the designated doctor.
Do we have to pay?
See Rule 133.2(c). The carrier must reimburse
the treating doctor a “reasonable copying
charge” for records provided to the designated
doctor. I would suggest that a reasonable charge would
be the average per-page price charged by copying
services in the city in question.
I have a denied claim where the claimant
requested to attend a designated doctor’s exam
and the Commission allowed and scheduled
despite the claim being denied. The claimant has not
pursued the claim any further since the DD exam. Do I
have to pay the charges for the exam the claimant
requested on a denied claim?
Under Rule 130.5, the TWCC shall order a DD
exam at the request of the carrier, employee or
the TWCC itself. There is no requirement that the
claim have been found compensable prior to the request
for a DD exam. Therefore you must pay. In fact, we
often recommend requesting a designated doctor even
when compensability is in dispute so as to minimize
your exposure.
Is there a time limit when a medical provider
can submit a request for reconsideration?
There is nothing explicit, but as a medical bill, I
believe that it is limited by the 11-month
provision of Rule 134.801(c) and CPRC
146.003. This is supported by the 1-year provision
requesting medical dispute resolution. Since Rule
133.304(m)(2) provides the right to medical dispute
resolution only after 28 days from the request for
reconsideration being sent to the carrier (if there is no
response from the carrier), it appears that this
interpretation is consistent with TWCC’s intent.
It has been awhile since we did a complete
denial of continuing care on older claims and
need your guidance. I have 2 claims, DOA
1994 and DOA 1995, which have been receiving
chiropractic treatment for non-surgical soft tissue type
injuries. I have peer reviews on both that say nothing
else needed from a medical standpoint. I have faxed the
peer review to both different chiropractors and plan on
denying future billing past the date of the receipt of
their response.
1. I anticipate both chiropractors to object to ceasing
treatment and expect letters stating same. Does it
effect my plans on denying?
2. One claimant has called me wanting to discuss.
What do I tell her?
Note that under no circumstances my you file a
statement with anybody that all future medical
treatment is denied. If the language in Rule
124.2 wasn’t clear enough, the Legislature has now
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F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 13
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huge fine. Since chiropractic treatments are not subject
to preauthorization, you should only deny them
retrospectively. You have no obligation to provide the
peer review to the chiropractor until you actually deny
the bill.
That said, the chiropractor letters should be considered
and perhaps sent to your peer reviewer. If, however,
you believe that nothing has changed, you may maintain
your position. The chiropractor can then pursue
medical dispute resolution.
An RME could strengthen your position if the case is
likely to go to MRD and SOAH. The opinion of a
doctor who has examined the claimant is inherently less
subject to attack than that of a peer reviewer. I would
suggest telling the claimant only that it is up to her or
her doctors to pursue MDR review of disputed bills. I
would not suggest pushing to request a hearing. The
local field office will likely steer the claimant to
requesting a PRME doctor under Rule 134.650. That is
a bad process that can work only against your position.
Otherwise, just keep your peer review up to date and
obtain a new one with any documented change in the
claimant’s condition.
Are there any time guidelines to determining
whether an employee would qualify as a
seasonal worker? I have three claims involving
employees who worked for approximately ten months
of the year. The remaining two months, the workers
received unemployment. Since the rule requires wages
for the year to be divided by fifty, would I utilize all
wages for the entire ten months and divide by fifty to
determine the average weekly wage or do I have to
obtain unemployment benefits for the months it was
received and include those in the calculation?
No, there is no set time guideline as to what
qualifies as seasonal work except that you look
at the employee, not the job. If the employee
works a series of seasonal jobs, but is always employed,
he is not a seasonal employee. Unemployment is never
included in AWW. For TIBs, the AWW would be
adjusted to $0 for the two months of no work. The
claimant presumably is considered laid off for those
months and would apply for unemployment. For the
other ten months, the TIBs AWW would be calculated
by the thirteen weeks prior to the injury. IIBs and
SIBs would be calculated by the earnings for the past
year (not including unemployment) divided by 50. See
TWCC Advisory 93-09 for instructions on how to get
approval for a seasonal adjustment.
The claimant was released to work full duty by
his surgeon following surgery for a hernia. He
then went to his treating doctor and was placed on
modified duty, working only five hours per day at less
than pre-injury wages. Do I owe partial temporary
income benefits?
The modified duty release is evidence of
disability. If the claimant does in fact have
reduced wages based on those restrictions, he
will probably be able to establish disability and
entitlement to partial TIBs based on the difference in
his AWW and his PIE. Disability is, however, a
question of fact. A hearing officer could find the
modified release is not credible in light of the full duty
release and find that the claimant was not disabled.
Does a medical bill or TWCC-73 place us on
notice of a claim and, if so, how much time do
we have to dispute without having a TWCC-1?
Do we need to set up a claim utilizing the medical bill
or TWCC-73 or do we wait on the TWCC-1? If a
company is fully self-insured, does it make a
difference?
Yes. If you receive a medical bill, do not
ignore it. You should go ahead and set up the
claim if you have the employer’s name,
employee’s name, and date of injury. The submission
of the bill to you in itself is an assertion that the injury
or condition is work related.
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F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N14
The Workers’ Compensation Research Institute
(WCRI) recently published an interesting study that
highlights a significant problem in Texas: “adverse
surprise cases.” Adverse surprise cases are those cases
where costs exceed reasonable expectations. The study
measured surprise by seeing how often the claims
adjusters’ expectations about the present and future
medical costs of a case were significantly exceeded.
More specifically, adverse surprise cases were defined
by (1) the amount of the incurred medical costs at the
12-month snapshot, and (2) the extent to which the
incurred medical costs increase from the 12-month
snapshot to the 36-month snapshot. For example, a case
with expected medical costs of $25,000 at 12 months
but actual total costs of three to five times that much
($75,000 to $125,000) at 36 months was considered a
case with a significant adverse surprise.
The study examined three dimensions of adverse
surprises: (1) how their frequency and costs vary from
state to state, (2) how this has changed over time, and
(3) what attributes of cases are associated with these
interstate variations and trends. Twelve large and
geographically diverse states were included in the
analysis: California, Connecticut, Florida, Illinois,
Indiana, Louisiana, Massachusetts, North Carolina,
Pennsylvania, Tennessee, Texas, and Wisconsin. These
states included examples of states that rank high,
medium, and low in terms of overall average cost per
claim. Table A from the study shows the frequency and
costs of adverse surprises. There was substantial
variation in the frequency of adverse surprises in the
states that were studied. It ranged from less than one
percent of cases with more than seven days of lost time
for significant adverse surprises in Indiana and
Wisconsin (less than four percent of cases for those
with moderate or significant adverse surprises) to nearly
six percent in California (nearly 18 percent of cases for
those with moderate or significant adverse surprises).
Unfortunately, adverse surprises were most
common in California and Texas.
What are the attributes of adverse surprise cases?
Generally, WCRI found that chronic conditions with
multiple surgeries represent a disproportionate number
of adverse surprise cases and that they were
disproportionately back pain cases. Adverse surprises
occurred somewhat more frequently for women and are
slightly more likely to involve older workers and those
who are married. Notice of injury in adverse surprise
cases was later in California and, to a lesser extent, in
Texas. They did not find a consistent relationship
between adverse surprise cases and wage level or
industry. Not surprisingly, such cases were more likely
to receive surgery, physical therapy and chiropractic
care, and radiology and mental health services, and
multiple surgeries occurred more often in adverse
surprise cases. Both the initial surgery and the initial
chiropractic visit were more likely to come later in the
adverse surprise cases than in cases that did not have
adverse surprises. This pattern was thought to suggest
that many adverse surprise cases were probably cases
where the first six to 18 months of medical care did not
resolve the worker’s medical problem, raising questions
about the appropriateness and effectiveness of this care.
WCRI suggested that some workers may have turned to
chiropractic care and surgery (even multiple surgeries)
after losing confidence in the care that had been
ADVERSE SURPRISE CASES COST TEXAS' INSURERS MONEY
Table ADistribution of Claims by State and Size of AdverseSurprise — 2000 Cases Evaluated in 2003
Significant Moderate Significant Moderate
Surprise (%) Surprise (%) Surprise (%) Surprise (%)
CA 6 12 31
TX 3.7 8 24 21
FL 2.8 7 22 21
LA 2.6 7 13 21
NC 2.4 5 23 18
PA 1.9 6 17 16
IL 1.7 4 15 14
CT 1.4 5 15 17
TN 1.3 5 12 14
MA 1.1 4 30 16
WI 0.8 3 12 13
Percent of ClaimsPercent of Incurred
Medical Costs
continued on pg.30
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 15
Subject to a different priority established by the
Department of Insurance, TWCC/DWC has adopted a
rule making priority.
The agency will first adopt rules relating to the
transition of TWCC to the new Division. Secondly, rules
required by statute, and for which a specific statutory
timeframe has been prescribed will be the second priority.
Rules that related to the provisions of medical care in and
outside of certified networks will be assigned a third tier
priority.
TWCC/DWC has invited further suggestions relating
to priorities of specific rules. Comments should be
emailed to TDI as soon as possible. They invite comment
by September 2, 2005 at: [email protected]. If you
have a priority request and you have not previously
commented, submit it anyway.
continued on pg. 31
TDI released six different bulletins addressing specific
questions relating to the implementation of HB 7.
Bulletin B-0033-05 – The Division acknowledges that it
will not be able to complete rulemaking until after the
statutory changes become effective. Accordingly, the
Workers’ Compensation Act, as amended, takes
precedence if there is a conflict between the statute and a
workers’ compensation rule.
Bulletin B-0035-05 – Acknowledges the change in appeal
from adverse Medical Review Division decisions.
n All cases not filed at SOAH by 5:00 p.m. on August 31,
2005 may not be appealed to SOAH.
n After August 31, 2005, the appeal must be made
directly to the Travis County District Court as provided
by Subchapter G, Chapter 2001, Government Code
within 30 days of the date of the decision appealed.
Bulletin B-0036-05 - Announces the Division’s first
priority will be to change all notices and letters to notify
the Division and not the Commission. The website will be
modified and there will be a new URL for the agency
website. The full name of the agency will be the Texas
RULE MAKING PRIORITY AT DWC
FREQUENTLY ASKED QUESTIONSFOR CARRIERS
TDI PUBLISHES BULLETINS
If a carrier wants to find a certified network tocontract with in order to offer a workers’
compensation network plan, how does it find one?
House Bill 7 stipulates that a person may notoperate a workers’ compensation health carenetwork unless the person holds a certificate
issued under Insurance Code Chapter 1305 and relatedrules. These rules are scheduled for adoption by December1, 2005, and TDI will begin accepting applications forcertification starting January 1, 2006. In anticipation offiling an application for certification, interested entities maybe forming their networks before January 2006.Information concerning applicants for networkcertification and certified networks is public informationthat is available upon request. In addition, we anticipatethat we will be posting the names of networks on the TDIweb site as they become certified.
If a carrier wants to establish its own network bycontracting directly with providers, how does thenetwork become certified?
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A carrier may apply for certification of its networkin the same manner as any other network.Application forms and instructions will be
available on the TDI website no later than December,2005.
Do medical bills have to be paid according to thesame prompt pay standards as for HMO and PPO
group health insurance claims?
No. HB 7 requires that bills be paid, denied oraudited according to the requirements in LaborCode §408.027 and any rules adopted under that
section.
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F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N16
After Adoption of Networks in 2006
1) After your network is established, you must
immediately notify the network of contests of
compensability. You must pay all medical bills up to a
maximum of $7,000 incurred prior to the notice to the
network - even if you deny the claim within the first 15
days. 1305.153(e). (Not an issue until 2006, but will
be critical from that point forward.)
Effective as of September 1, 2005
2) All medical bills for treatment provided after Sept 1,
2005 should be reviewed in light of whether “evidence
based medicine standards” demonstrate that the medical
treatment is medically effective.
3) For injuries on or after 9/1/2005, change your
waiting period calculation so that it is triggered on the
15th day (instead of the 29th day) of disability, whether
lost time is consecutive or intermittent. There will be
more waiting period cases than before.
4) Deny all claims in which there is a positive drug
screen. There is no need to get a toxicological opinion
first. If the opinion is contested, obtain GC/MS
quantification and then retain a toxicologist to support
your defense.
5) For all SIBs cases, prepare to evaluate SIBs in light
of whether the claimant demonstrated an “active effort
to obtain employment,” and or “active participation” in
voc rehab. Use this language on TWCC 45s when
disputing what we previously called the “good faith”
standard. Do not use “good faith” language in your
filings at DWC.
6) Increase maximum comp rate by one dollar (from
$539 to $540) for injuries on or after 9/1/2005.
7) Remember to never state on a compensable claim:
“Carrier denies all future medical care.” There is no
reason to say that on a denied claim – it is implicit in
the fact that the entire claim is denied. It would
accordingly be best to never state that language or
anything substantively similar since it is either irrelevant
or superfluous. If you have received a persuasive peer
review that further medical care is not necessary, use it
to deny the pending bills, and continue to rely upon it
for future services if there is no change in the facts. But
review each bill individually to see if the service was
addressed by the peer reviewer, and evaluate
accordingly.
Effective after Rules Adopted
8) Suspend the RME process prior to a DDR unless
the issue to be reviewed is medical necessity. After a
DDR, use the RME process if you want to challenge
the DDR opinion.
9) Utilize DDRs for disputes of disability and extent of
injury. Prepare analysis letter to accompany request
setting for the arguments you are relying upon and
include statements, videos etc - everything that you
would provide to a peer review doctor or RME doctor.
10) Evaluate the effectiveness of the Compensability
Exam by the treating doctor. Establish an internal pilot
program to see if it helps control issues of extent of
injury. If the report of the treating doctor is adverse,
request a DDR, and dispute. You may rely upon peer
review opinions or, subsequent to the DDR evaluation,
an RME opinion.
FO&L’s Top Ten List of Important HB 7 ChangesFor the Handling of Claims
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 17
*Attorney's direct dial fax no. is directed to his/her paralegal. ** Alternative e-mail address: first initial+last [email protected] (Example: [email protected])
FLAHIVE, OGDEN & LATSON DIRECTORY
Bobby Stokes 435-2150 867-1705 RDS Anita Drake 435-2249
Carlos Acosta 435-2177 867-1712 CA1 Sally Stephens 435-2242
Chuck Finch 435-2158 867-1713 CCF Marcie Roberts 435-2223
Dana Gannon 435-2151 867-1710 DMG Margo Davis 435-2263
Greg Solcher 435-2175 867-1718 GDS Sally Stephens 435-2242
Jack Latson 435-2156 867-1724 JWL Patsy Shelton 435-2234
James Sheffield 435-2169 867-1703 JRS Sharissa Karol 435-2224
Jeremy Lord 435-2184 867-1711 JXL Anita Drake 435-2249
Katie Flahive 435-2168 867-1702 KMF Gina Mitschke 435-2229
Kevin MacEwan 435-2166 867-1706 KEM Cynthia Sherman 435-2274
Lynette Phillips 435-2165 867-1708 LLP Sharon Youso 435-2233
Nancy Ippolito 435-2181 867-1735 NHI Sharon Youso 435-2233
Pamela Peavy 435-2163 867-1736 PEP Kiran Hashmi 435-2225
Paul Stone 435-2157 867-1716 PBS Bronna Sanders 435-2269
Paul Warren 435-2159 867-1719 PDW Kiran Hashmi 435-2225
Rebecca Strandwitz 435-2160 867-1720 RMS Andrea Tuttle 435-2228
Rhett Robinson 435-2154 867-1709 SRR Marilyn Mueller 435-2236
Rob Dollars 435-2164 867-1707 RAD Karen VanLoo 435-2240
Ron Johnson 435-2178 867-1722 RMJ Marcie Roberts 435-2223
Roy Leatherberry 435-2179 867-1714 RJL Andrea Tuttle 435-2228
Scott Bouton 435-2153 867-1737 SDB Marilyn Mueller 435-2236
Steve Tipton 435-2162 867-1704 SMT1 Mary Casebier 435-2275
Susan Veltman 435-2152 867-1717 SRV Sharon Durr 435-2230
Tom Wilkins 435-2183 867-1727 TRW Gina Mitschke 435-2229
Tricia Blackshear 435-2180 867-1723 PHB Lisa Black 435-2260
Attorneys Direct Dial(512)
Direct Fax*(512)
E-Mail **[email protected]
Paralegal Paralegal(512)
Tillie Aguirre 435-2235 477-4996 TAA
Phyllis Devine 435-2267 867-1748 PAD
Admin. Violations Dianne Townsend 435-2289 867-1724 DLT
BRC Settings (Request for Evidence) Cindi Friedel 435-2244 477-4987 CAF
Disputed Claims (PLNs)Request for BRC (TWCC-45)
General Questions Receptionist 477-4405 867-1700 GQS
Insurance Coverage (TWCC-20)Records Request/Photostats
Medical Dispute Resolution Katie Foster 435-2266 867-1733 KTF
Client Consultant Trina DeCecco 435-2239 867-1700 TAD
PRME Service Brian Fitzgerald 435-2227 477-4987 [email protected]
Designated Doctor Filings Brandi Senters 435-2299 479-5319 BES
TWC Manual Sales Joel Ogden 435-2256 472-9160 JMO
Task Direct Dial(512)
Direct Fax(512)
Contact Person
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N18
Interest Rate Effective from 7/1/2005 through 9/30/2005: 6.88%
1 Determine number of weeks of continuous payment owed. Find corresponding “X” value on chart.
2 Multiply “X” by weekly compensation rate. This is the approximate amount of interest owed on the ending date of benefits.
3 Determine number of weeks between ending date of payments and date benefits are to be paid. Find corresponding “Y” value onchart.
4 Multiply “Y” by the total benefits owed (not including interest determined in steps 1 and 2 above). This is the approximate amount ofinterest owed from benefit ending date to payment date.
5 Determine total benefits plus interest owed by adding interest from steps 2 and 4, and adding total benefits to be paid.TIBs: Calculate interest from the 7th day after first day benefits began, or the 7th day after the first notice, whichever is
LATER.IIBs: Calculate interest from the 5th day after notice of the certification of MMI and impairment, or the date of a
CARRIER dispute of MMI or impairment, whichever is EARLIER.
NOTE: For partial weeks, round up to next week (8 2/7ths weeks = 9 weeks).
Weeks “X” Value Weeks “X” Value Weeks “Y” Value Weeks “Y” Value
1 0.0018 27 0.4993 1 0.0013 27 0.0357
2 0.0045 28 0.5362 2 0.0026 28 0.0370
3 0.0084 29 0.5745 3 0.0040 29 0.0384
4 0.0137 30 0.6140 4 0.0053 30 0.0397
5 0.0203 31 0.6549 5 0.0066 31 0.0410
6 0.0282 32 0.6972 6 0.0079 32 0.0423
7 0.0374 33 0.7407 7 0.0093 33 0.0437
8 0.0480 34 0.7856 8 0.0106 34 0.0450
9 0.0599 35 0.8318 9 0.0119 35 0.0463
10 0.0731 36 0.8793 10 0.0132 36 0.0476
11 0.0876 37 0.9281 11 0.0146 37 0.0490
12 0.1034 38 0.9782 12 0.0159 38 0.0503
13 0.1206 39 1.0297 13 0.0172 39 0.0516
14 0.1390 40 1.0825 14 0.0185 40 0.0529
15 0.1588 41 1.1365 15 0.0198 41 0.0542
16 0.1799 42 1.1920 16 0.0212 42 0.0556
17 0.2024 43 1.2487 17 0.0225 43 0.0569
18 0.2261 44 1.3068 18 0.0238 44 0.0582
19 0.2512 45 1.3661 19 0.0251 45 0.0595
20 0.2776 46 1.4268 20 0.0265 46 0.0609
21 0.3053 47 1.4888 21 0.0278 47 0.0622
22 0.3343 48 1.5522 22 0.0291 48 0.0635
23 0.3647 49 1.6168 23 0.0304 49 0.0648
24 0.3963 50 1.6828 24 0.0318 50 0.0662
25 0.4293 51 1.7501 25 0.0331 51 0.0675
26 0.4636 52 1.8187 26 0.0344 52 0.0688
INTEREST CALCULATORSECOND QUARTER
Accumulated Interest from Beginning toEnd of Continuous Payment
Accumulated Interest from End ofPayment Period to Date Paid
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 19
CASE DECISIONS TEXAS COURT OF APPEALSMorales v. Liberty Mutual Insurance Co., No. 08-04-00135-CV (2005 WL1791593 Tex.App.-El Paso,2005).
HOLDING:
FACTS:
In determining the appropriate forum for judicial review of a TWCC decision, the employee's status is an issue of coverage and notcompensability, thus jurisdiction is proper in Travis County.
Affirmed. The Texas Workers Compensation Act of 1989 Act replaced the old standard of judicial
review with two different standards, substantial evidence and modified de novo, to be determined
based on the nature of the dispute. Tex. Lab. Code Ann. §§ 410.252, 410.301, Texas Workers’Compensation Commission v. Garcia, 893 S.W.2d 504, 510 (Tex. 1995). Under the modified de novo
standard, a district court determined by the employee’s county of residence reviews the commission’s
appeals panel decisions concerning compensability or eligibility for or the amount of income or
death benefits. For all other disputes, a party must appeal the final decision to the district court in
Travis County under the Administrative Procedure Act for a substantial evidence review. Tex. Lab.
Code Ann § 410.255; see also Tex. Gov’t Code Ann. §§ 2001.171-.178 (Vernon 2000).
The court agreed with basis for the appeals panel’s affirmance of the hearing officer’s finding that
the decedent was not an employee of any of the companies, and therefore the claimant beneficiary
was not entitled to benefits. The court further agreed that “[t]he status of being an employee of an
insured for which a carrier is liable is an issue of ‘coverage’ not compensability.” And because the
issue was of coverage, jurisdiction is proper in Travis County and the trial court was correct in
granting Liberty Mutual’s plea to the jurisdiction.
Margarita Morales filed suit seeking judicial review of the decision of the Texas Workers’
Compensation Commission Appeals Panel, which denied her claim for benefits as a result of the
death of her husband Guadalupe Morales. Liberty Mutual Insurance Company (Liberty Mutual)
successfully showed the Appeals Panel that Morales should not be awarded death benefits as the
decedent was not an employee injured in the course and scope of his employment. Morales sought
judicial review; arguing that the status of being an employee or independent contractor is a fact issue
triable by a jury, and is an issue of compensability. Liberty Mutual filed a successful plea to
jurisdiction challenging the jurisdiction of the El Paso trial court.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N20
NO. 051028-S
FACTS:
HOLDING:
APPEALS PANEL DECISIONS
A claimant does not waive an extent of injury contention by failing to raise and resolve that issue prior to the expiration of the firstquarter of supplemental income benefits.
The claimant eventually received a 21% impairment rating that included impairment for the cervical
spine, lumbar spine and left shoulder. At a time after the expiration of the first quarter of
supplemental income benefits, the claimant pursued an issue of whether or not his compensable
injury extended to and included bowel and bladder dysfunction and erectile dysfunction. The
hearing officer found for the claimant. The carrier appealed contending that under Appeals Panel
Decision No. 040150-s the claimant had waived the right to pursue a contention that his injury
included body parts and conditions that were not included in the impairment evaluation.
Affirmed. The Appeals Panel notes that Appeals Panel Decision No. 040150-s included the finding
that the carrier waived the contention that the compensable injury did not include conditions for
which the claimant was rated by failing to raise that contention prior to the expiration of the first
quarter of supplemental income benefits. However, the Appeals Panel notes that it specifically
indicated in that decision that “injuries can evolve over time and claimant’s may claim that additional
injuries or conditions are compensable even after the expiration of the first quarter of supplemental
income benefits.” The Appeals Panel was unwilling to hold that the claimant had waived his right to
pursue an extent of injury issue at least under the facts of this case.
NO. 050874-SThe claimant was in the course and scope of her employment during the course of travel from her home to her initial stop, where theevidence established that prior to leaving her home, she had logged on to her computer, received an assignment by email, confirmed theassignment by email and contacted a supervisor at the company to which she was traveling to perform her assignment.
FACTS:
HOLDING:
The evidence established that the claimant worked for a temporary staffing agency as an on-sight
trainer of office equipment. She worked from her home. On the morning of her motor vehicle
accident, she began her day by logging on to her computer. She received an assignment by email. She
confirmed that assignment by email and contacted the supervisor at the company at which she was
to work that day. Furthermore, there was testimony from the regional sales manager that the
employer began billing for the claimant’s time as soon as the claimant left her home. The claimant
was injured in an automobile accident on her way from her home to her first assignment of the day.
The hearing officer determined that the claimant was not in the course and scope of employment at
the time of the accident. The claimant appealed.
Reversed and rendered. The Appeals Panel determines that the claimant was in the course and
scope of employment at the time of the motor vehicle accident. They reference the facts that the
claimant had begun work by logging in and getting her assignment, by making contact with both the
employer and client company and was being paid at the time the accident occurred. Furthermore,
they rely upon the fact that the claimant’s primary work site was her “office/home.” There was no
other work site involved.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 21
NO. 050729-S
FACTS:
HOLDING:
NO. 050747-S
FACTS:
HOLDING:
Receipt of a narrative report containing an MMI certification and impairment rating without a TWCC-69 is insufficient to begin the90-day period during which a dispute must occur.
The evidence established that the carrier received Dr. D’s narrative report containing an MMI
certification and impairment rating on August 17, 2004 and Dr. D’s TWCC-69 subsequently on
September 13, 2004. The carrier disputed the impairment rating within 90-days of its receipt of the
TWCC-69 but more than 90-days after its receipt of the narrative report. The hearing officer
concluded that the carrier did timely dispute the MMI certification and impairment rating from Dr.
D. The claimant appealed.
Relying upon the provisions of Rule 103.12(c), the Appeals Panel concluded that receipt of the
narrative report alone was insufficient to begin the running of the 90-day period during which the
carrier had to file its dispute.
It is error for a hearing officer to assemble an impairment rating from impairment ratings for different body parts from multiple doctors.
The claimant’s injuries included his neck, bilateral hands and right knee. The Commission appointed
Dr. K as the designated doctor. Dr. K eventually certified MMI. On his TWCC-69 he provided an
impairment rating of 19%. However, his narrative report indicated that the impairment rating was
28%.
The claimant was also seen by an RME doctor. The RME doctor certified MMI and provided
impairment rating of 5%.
A substantial difference between the two impairment ratings was based upon the existence or lack
thereof of cervical radiculopathy. The designated doctor relied upon a positive EMG for his
placement of the claimant in category DRE III. The RME doctor indicated that there was no sign of
radiculopathy and placed the claimant in category DRE II.
The hearing officer determined that the impairment rating was 20% by combining the impairment
awarded by the designated doctor for the bilateral hand and right knee injuries with the 5%
impairment rating award by the RME doctor for the neck injury. The carrier appealed contending
that the hearing officer’s only option in the event the hearing officer concluded that the great weight
of the other medical evidence was contrary to the designated doctor’s impairment rating was to
award impairment based upon the opinion of another doctor providing an impairment rating. As the
carrier’s RME doctor was the only other doctor that examined the claimant and provided an
impairment rating, the carrier argued that that doctor’s rating must be adopted by the hearing officer.
Reversed and remanded. The Appeals Panel does determine that the hearing officer committed error
in assembling an impairment rating from ratings from two different doctors. However, the Appeals
Panel indicates that as the impairment rating from the RME doctor did not include impairment for
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N22
NO. 050120-S
HOLDING:
FACTS:
A prior Contested Case Hearing determination that disability began on a certain date precludes relitigation of that issue for purposes ofdetermining the statutory maximum medical improvement date.
At a Contested Case Hearing held on June 15, 2004 the TWCC considered the following issue: “Did
the claimant have disability resulting from an injury sustained on ________, and if so, for what
periods?” In response to this issue the hearing officer determined that disability began on January
14, 2004 and continued to the date of the Contested Case Hearing. The carrier later discontinued
temporary income benefits on August 16, 2004 contending that the claimant reached MMI statutorily
on that date. That determination was based upon the fact that the claimant had missed time from
work during the period from August 21, 2002 through August 30, 2002. The claimant objected to
the discontinuance contending that the statutory MMI date was actually January 17, 2006 based upon
the hearing officer’s previous determination that disability began on January 14, 2004. The hearing
officer agreed with the carrier’s position. The claimant appealed.
Reversed and rendered that the statutory MMI date is January 17, 2006. The Appeals Panel indicates
that the principles of res judicata do apply to the issue requiring the determination of the eighth day
of disability. The issue as phrased at the June of 2004 hearing required the hearing officer to make a
determination as to the period of disability existing from the date of injury forward. The hearing
officer’s determination that disability began on January 14, 2004 precludes a relitigation of the issue
of disability prior to that date.
the bilateral wrists and right knee injuries, the hearing officer could not adopt that rating. The
Appeals Panel remands to the hearing officer for the appointment of a second designated doctor for
the purpose of evaluating the impairment rating only.
NO. 050523-S
FACTS:
While the provisions of Rule 128.1 do not apply to an overpayment resulting from a delayed determination of entitlement to contribution,the provisions of that rule are instructive with respect to the amount of contribution to be allowed in such circumstance.
The Contested Case Hearing concerned the issues of the claimant’s entitlement to supplemental
income benefits for the first two quarters and the amount of credit the carrier was entitled to take in
order to recoup overpayments resulting from a prior determination of entitlement to contribution.
The initial TWCC-33 was submitted by the carrier on May 16, 2003 and denied by the TWCC on
May 20, 2003. A second TWCC-33 was filed with the Commission on September 18, 2003 and
resulted in a determination that the carrier was entitled to a 28% reduction based upon contribution
from a prior injury. By the time of the Commission’s determination, the case had proceeded past the
IIB stage and into the SIB stage. The carrier argued that it should be able to take 100% credit against
future benefits for the overpayment of impairment income benefits. The carrier argued that the
overpayment should be calculated based upon a 28% reduction beginning with the initial IIB
payment. The hearing officer’s decision was in line with the carrier’s argument. The claimant
appealed.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 23
NO. 050677-S
HOLDING:
HOLDING:
FACTS:
Reversed and rendered in part; and reversed and remanded in part. The Appeals Panel initially
indicates that a contribution finding takes effect only as of the date that the TWCC-33 was filed by
the carrier. In the case at hand the initial TWCC-33 was denied. The carrier did not pursue dispute
resolution proceedings concerning that denial. Instead, the carrier waited approximately four months
to file a second TWCC-33 resulting in the Commission’s eventual order allowing a reduction. The
Appeals Panel determines that the carrier is entitled to reduce benefits only as of the date of the
filing of the second TWCC-33.
Additionally, the Appeals Panel reverses the determination that the carrier is entitled to completely
discontinue future benefits, until such time as the overpayment is recouped. The Appeals Panel
acknowledges that Rule 128.1 applies only to an overpayment resulting from a recalculation of the
average weekly wage; however, the Appeals Panel indicates that the terms of that rule “can be
looked to for guidance as to the factors to be considered in determining a reasonable rate of
recoupment.”
Those factors are the amount of the overpayment, the claimant’s monthly IIB and SIB rate after
contribution, and the claimant’s financial resources. The Appeals Panel remands to the hearing
officer to make a determination as to the amount of credit the carrier is entitled to take based upon
these factors.
For purposes of determining a school district employee’s entitlement to supplemental income benefits, Rule 128.7(C)(1)(B), can be lookedto for guidance.
The claimant is a school teacher. The hearing concerned her entitlement to supplemental income
benefits for the eighth quarter. The qualifying period began July 4th and ended October 2, 2004. The
parties stipulated that 80% of the pre-injury average weekly wage was $675.94.
The claimant worked under a contract for the 2004-2005 school year that paid her $51,065 over a
ten-month contract period. The beginning date of the contract was August 9, 2004 and the ending
date was May 26, 2005.
During the qualifying period for the eighth quarter the claimant received two checks under the
contract totaling $8,427.50. The hearing officer determined that the claimant did not earn 80% of
her pre-injury average weekly wage during the qualifying period by simply multiplying $675.94 by 13
and comparing the total to the total earned by the claimant during the qualifying period. Based upon
these calculations, the hearing officer found the claimant entitled to supplemental income benefits
for the eighth quarter. The carrier appealed.
Reversed and rendered. The Appeals Panel notes that Labor Code Section 401.011(43) defines
wages in terms of that “payable” not paid. Although acknowledging that Rule 128.7 applied only to
injuries occurring on or after December 1, 2001, the panel indicates that the provisions can be
looked to for guidance. Using those provisions the claimant’s salary would be divided by the ten-
month contract period to arrive at a monthly figure. The monthly figure is then divided by 4.34821
to arrive at a weekly wage. Using that method the Appeals Panel determines that the claimant’s
earnings during the qualifying period exceeded 80% of the pre-injury average weekly wage.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N24
NO. 050897-S
FACTS:
The deemed receipt date controls over the actual acknowledged receipt date for purposes of determining whether or not a claimant’s appealis timely.
At issue was whether or not the claimant had timely filed a request for review to appeal a hearing
officer’s decision. The evidence established that the claimant’s appeal was filed one day after the
date due based upon the acknowledged receipt date by the claimant but was timely filed based upon
the date on which the claimant was deemed to have received the hearing officer’s decision under
Rule 143.3(d).
Accordingly, the Appeals Panel renders a decision that the claimant is not entitled to supplemental
income benefits.
HOLDING: The Appeals Panel determines that under the rules discussed, the Appeals Panel opinions applicable
and the Court of Appeals decisions addressing the issue, the “deemed date of receipt” controls over
the actual acknowledged date of receipt by the claimant. Accordingly, the appeal was timely filed.
The Commission receives hundreds of violation
referrals a week. Violation referrals that do not contain
an allegation of fraud are processed by the
Commission’s Audits & Enforcement section within the
Division of Compliance & Practice. Administrative
Violations may include allegations of late payment of
benefits or late filing of required reports. Administrative
Violations are only pursued through administrative
remedies (Warning Letters, Penalties). The numbers
below do not include any fraud cases.
Highlights of Recent Administrative EnforcementActions Following are examples of penalties issued during
the current fiscal year and are based on seriousness of
the violation, history of previous violations,
demonstrated good faith of the violator, economic
benefit from the prohibited act, penalty necessary to
deter future violations, and other matters that justice
may require. The Compliance and Practices Division
calculates penalties using the penalty calculator pursuant
to §415.021(c). The differences in the penalty amounts
for seemingly similar violations are due to the factors
listed above. For instance, if a system participant has
history of committing a similar violation, the penalty
amount may be higher than for a second offense.
Failure to timely pay income benefits:
· The carrier failed to timely pay
temporary income benefits
· 7 days late
· Fined $313
· The carrier failed to initiate impairment
income benefits:
· 23 days late
· Fined $1,425
AdministrativeEnforcement
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 25
responsibilities. He did mention that both Commis-sioners
for TDI and DWC would be “on an equal footing.”
Mike Geeslin is a man of great energy and resolve. He
has been working at TDI for the past two years and
previously worked at the Governor’s office. It is clear that
he is familiar with government administration and will be an
effective leader in the TDI Commissioner role.
In other sessions, TWCC demonstrated its Online
Performance Data site that will be available in late September
or early October. Although the data is not designed as a
predicate for a “report card” as required by HB 7, many of
the data elements will be relevant.
In the Online Data for insurance carriers, one will be
able to identify metrics for timely payment of claims,
percent of claims denied, outcomes of dispute resolution,
timely processing of medical bills and administrative
violation information. This will be carrier specific. For each
healthcare provider, TWCC will provide overall billing
information for medical treatments, rehabilitation services,
manipulations and mobilizations, FCEs, symptoms and
administrative violations. This data is not available at this time, but
should be online within the next two to three months.
TWCC/DWC was charged with developing an informal
dispute resolution process. Before a BRC is granted, it may
be necessary to exchange all relevant information presently
required to be exchanged fourteen days prior to the BRC.
DWC will also develop “proof” requirements to show
attempts to resolve issues. It may be copies of letters; it may
be phone calls documenting claims notes, etc. This will be
defined by Division rule.
As of September 1, 2005, all BROs must be certified
mediators. They are undergoing training at this time.
TDI and TWCC have released a survey form for
interested system participants to indicate the order of priority
for rule development. From the “sold out” attendance, and
the questions asked, there appeared to be a great deal of
interest regarding this implementation of the new law.
TWCC reviewed the statutory changes that we have known
about since the first of June, but speakers were unable to
address the many specific questions that will be later
determined by the rulemaking process.
continued from page 1
· The carrier failed to pay supplemental
income benefits:
· 5 days late
· Fined $1,141
Failure to timely process a medical bill:
· The carrier failed to timely process a
medical bill
· 21 days late
· Fined $5,479
· The carrier failed to timely process a
medical bill
· 7 days late
· Fined $1,836
Failure to timely pay according to an order:
· The carrier failed to timely comply with
a Medical Review Order
· 968 days late
· Fined $10,000
· The carrier failed to timely comply with
a Medical Review Order
· 95 days late
· Fined $1,523
· The carrier failed to timely comply with
an Interlocutory Order
· 5 days late
· Fined $2,854
Failure to pay for preauthorized services:
· The carrier failed to timely pay
for services that were
preauthorized
· 198 days late
· Fined $1,098
Failure to timely file a medical report:
· The medical provider failed to timely
file the TWCC-69
· 29 days late
· Fined $250
· The medical provider failed to timely
complete the TWCC-69
· 57 days late
· Fined $125
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N26
within a network if there are treating doctors in
that service area. The rule therefore addresses how
a claimant’s residence is defined and what
constitutes the network service area. “Live” is
defined as “where a employee lives”, including his
or her principal residence for legal purposes, a
temporary residence necessitated by employment,
or a temporary residence taken by the employee
primarily for the purpose of receiving necessary
assistance with routine daily activities because of a
compensable injury. A network’s “service area”
means a “geographic area within which health care
services from network providers are available and
accessible to employees who live within that
geographic area.”
Most other terms that are defined in this section are
ascribed meanings consistent with the definitions provided
them in the Workers’ Compensation Act and/or through
common usage.
Certification StandardsThe application for certification of a network must
include a non-refundable fee of $5,000.00 under Section
10.21(a). Application forms are available through the TDI
website at www.tdi.state.tx.us, or by mail addressed to
TDI.
The required contents of the application are many, and
are set out in Sec. 10.22. They include a description of the
proposed network organizational structure, a biographical
affidavit of each person who would govern or manage the
network, a copy of the network contract and any
management or third-party contracts, a financial statement,
a description and a map of the proposed network service
area(s), a description of programs and procedures to be
utilized (including a complaint system, credentialing policies
and procedures, utilization and retrospective review, and
procedures for changing treating doctors within the
network), and a host of other requirements.
Section 10.24 mandates that each network shall prepare
financial statements annually, and provide them to each
carrier with whom the network contracts and to TDI.
continued from page 4 Any proposed changes to network management
contracts, to the network configuration, and to the network
service area must first be filed with TDI for approval under
Sec. 10.25. Section 10.26 enumerates the specific
requirements for modifying the network service area, and
Sec. 10.27 lists the requirements for modifying the network
configuration (i.e. the identity of providers, medical
specialties, and medical facilities within the network).
Contracting RequirementsThe rules under this subchapter regulate three (3)
different types of network contracts:
(1) Network management contracts;
(2) Contacts between the network and the carrier; and
(3) Contracts between the network and the providers
within the network.
All contracts must be filed with TDI.
Sec. 10.40 governs management contracts. A
network may contract with another entity for management
services within the network, to include control and decision-
making.
Sec. 10.41 concerns network-carrier contracts.
The network must agree to perform all functions consistent
with the requirements of the Insurance Code and HB 7.
The carrier must retain ultimate responsibility to ensure
that all functions are performed in accordance with the
statutes and rules. Contingency plans must also be
articulated in the event of a termination of the contract or
a failure of one party to perform its agreed functions under
the contract.
Sec. 10.42 governs network contracts with
providers. Such contracts must include provisions that
govern events such as a provider voluntarily leaving the
network, a provider being terminated from the network,
and an appeals process by which a provider may petition
to reenter the network. Most importantly, and consistent
with Sec. 1305.152 of the new Act, this section provides
that “a network is not required to accept an application for
participation in the network from a…provider that
otherwise meets the requirements…if the network
determines that the network has contracted with a sufficient
number of qualified health care providers, including health
care providers of the same license type or specialty.”
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 27
Network RequirementsThe network requirements shall be provided to the
employees of every employer that opts in to the network
via plain language notices from the carrier and employer.
The employees shall complete acknowledgement forms
that confirm receipt of the network requirement information
consistent with Sec. 1305 of the new Act. That form must
include statements that reflect that the employee was
notified of what he or she must do to receive health care
within the network if he or she lives within the network
service area. The rule goes on to list various requirements
of the notice provided to the employees, including
information about how to contact the network, what
happens if the employee seeks treatment outside of the
network, and how the employee can seek emergency care
outside of the network.
Sec. 10.61 mandates that an employee living within the
service area must treat within network, except in the event
of emergency treatment or if he or she is referred out of
network by a network physician. An employee is presumed
to live at the address that he or she provided to the
employer or, if he or she no longer works for the employer,
the address on file with the carrier. An employee who
asserts that he or she does not live in the network service
area may request dispute resolution through TDI (see
below). An employee living outside the service area may
treat within network by mutual agreement. An employee
who makes a material misrepresentation regarding his or
her living status in order to treat out of network may be
liable for payment for that health care.
Under Sec. 10.62, an employee who asserts he or she
does not live within the network service area may request
review from the carrier of its assertion that he or she does,
and provide documentation. Upon review, if the carrier
determines the employee does not live within the service
area, but does live within the service area of any other
network established by the carrier (called an “alternate
network”), the carrier shall provide the employee with the
opportunity to treat within that alternate network. If the
employee disagrees with the carrier’s determination he or
she may file a complaint with TDI and request dispute
resolution.
Network OperationsSec. 10.80 provides a list of mandatory network
requirements, including but not limited to: an adequate
number of doctors and specialists available 24 hours per
day and seven days per week within the service area; a
sufficient number and variety of providers to ensure
“choice, access, and quality of care;” and an adequate
number of physicians with admitting privileges at one or
more network hospitals. Such requirements also include
providing access to general, special, and psychiatric hospitals
as applicable, and “physical and occupational therapy
services and chiropractic services that are available and
accessible within the network’s service area.” If the
network or TDI determines that the network cannot
provide certain types of care because of lack of availability
of that care within the service area, the network must file
an “access plan” that includes a plan for providing that care
in the future. The network may make arrangements with
providers outside the service area to enable employees to
receive a skill or specialty not available within the network
service area. The network is not required, however, to
expand services outside its service area to accommodate
employees who live outside the service area.
Section 10.82 governs the credentialing process for
network doctors. Credentialing is defined in Sec. 10.2 as
the “review, under nationally recognized standards to the
extent that those standards do not conflict with other laws
of this state, of qualifications and other relevant information
relating to a health care provider who seeks a contract with
a network.” The credentialing section mandates that the
network shall implement a documented process for selection
and retention of contracted doctors and health care
practitioners, and lists the elements of that process that are
required. As part of the initial process, the network shall
perform a site visit to the offices of each treating doctor.
The section also discusses re-credentialing, which is required
every three (3) years in order to update information
obtained in the initial credentialing process.
Section 10.83 mandates that each network adopt
treatment and return-to-work guidelines that are “evidence-
based, scientifically valid, outcome-focused, and designed
to reduce inappropriate or unnecessary health care while
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N28
safeguarding access to necessary care.” Sections 10.84 and
10.85 discuss the duties and requirements of the treating
doctor, and the processes of selecting and changing treating
doctors within the network.
Utilization Review and Retrospective ReviewSection 10.101 mandates that screening criteria used
for utilization and retrospective review related to a network
must be consistent with the network’s treatment and
return-to-work guidelines. Further, the carrier’s utilization
review program must include a process requiring a network
provider to request approval from the network for any
deviation from the treatment guidelines, screening criteria
and individual treatment protocols where same are required
by the particular circumstances of an employee’s injury.
Finally, if a carrier or network uses a preauthorization
process within a network, the requirements of Chapter
1305 (under HB 7) and the proposed TDI rules will apply.
The rule prescribes the requirements for notice of
both the performance of utilization or retrospective review
and of any adverse determinations, and covers various
clerical matters dealing with transmission of the
determination and reconsideration of any adverse
determination. Section 10.104 provides for independent
review of any adverse determination by an independent
review organization (IRO) assigned in accordance with
Insurance Code Art. 21.58C and commissioner rules. TDI
shall assign the review request to an IRO, and the carrier
must pay for the independent review. After the IRO issues
a decision, any party disputing the decision may seek
judicial review of it. Any decision related to a request for
preauthorization or concurrent review is binding during
the pendency of the appeal.
ComplaintsSection 10.120 provides that each network shall
implement and maintain a complaint system that complies
with Chapter 1305 of HB 7 and the proposed TDI rules,
and that provides “reasonable procedures” for resolving
an oral or written complaint. Section 10.121 then
enumerates the various requirements of the complaint
process to be set up by the networks, and includes deadlines
for response and resolution of any complaints.
Any person who has attempted to resolve a complaint
through a network’s complaint system process, who is
dissatisfied with resolution of the complaint, may submit
a complaint to TDI, either via its website: www.tdi.state.tx.us
or by mail, under Sec. 10.122.
subsection (b)(8) and caps the fee at 5 cents per
individual claimant information
requested. Amended Subsection (d) also requires the
Commission to adopt rules
regarding security parameters for transfers of
information requested, and the maintenance
of electronic data in the possession of an insurance
carrier described in (c-1) or an
authorized representative.
Amends the Health & Safety Code, Section 671.013,
relating to autopsy reports.
n Amendments to subsection (d) provide that an autopsy
report relating to a workers’
compensation claim must be released no later than the
15th day after the request for such
report is received.
n New subsection (e) provides that if an autopsy report
has not been filed, the office
designated by the autopsy order must (no later than the
10th day after a request for the
report) notify the requestor that the report has not been
received and when the report is
anticipated to be received.
HB 1353 by Cook
Adds Subchapter J to Chapter 407A of the Labor Code,
establishing a guaranty fund for certain
groups certified to self-insure for workers’
compensation coverage.
HB 1428 by Isett
Amends Subchapter Z, Chapter 661, Government
Code, by adding Section 661.918. Injury
Leave for Certain Peace Officers.
n Provides that a peace officer is entitled to injury leave,
without a deduction in salary,
continued from page 6
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 29
without being required to use compensatory time or any
other type of leave, for up to one
year, for an injury resulting from an assaultive offense
under Chapter 22, Penal Code, that
occurs during the course of the person’s performance of
duty.
• Also, a person may simultaneously be on injury leave
and receive workers’ comp medical
benefits, but is not eligible for disability retirement
benefits while on injury leave.
• A person is entitled to workers’ compensation
indemnity benefits which accrue pursuant to
Title 5, Labor Code, after the discontinuation or
exhaustion of injury leave allowed under
this section.
HB 2017 and HB 2018 by Swinford
Re-codification of Insurance Code - non-substantive
revisions of statutes relating to the Texas
Department of Insurance, the business of insurance
including workers’ compensation insurance,
and certain related businesses, including conforming
amendments, repeals, and penalties.
HB 2157 by Smithee
Revisions to Insurance Code relating to receivership of
carriers and penalties. May impact WC
carriers.
HB 2388 by Thompson
Amends Insurance Code, Chapter 701, to require
reports to TDI (of any reasonable suspicion or
knowledge of fraudulent acts being committed or about
to be committed in this state) within 30
days of the determination.
• Provides that a person who is a member of an
organization (primarily dedicated to the
detection, investigation, and prosecution of insurance
fraud) fully complies with the
person’s obligations by authorizing the organization to
report (on the person’s behalf)
information required to be reported. The person retains
any liability resulting from the
failure of the organization to report in a manner that
complies with these requirements.
• Language added also requires the report to be made in
the format prescribed by the fraud
unit or by the National Association of Insurance
Commissioners.
• Provides that a report made to the insurance fraud
unit at TDI constitutes notice to each
other authorized governmental agency.
• Provides that if an insurance carrier is conducting their
own investigation, the carrier does
not have to complete the investigation before making
the report to TDI.
• Removes the provision that allowed an authorized
governmental agency or an insurer to
request any relevant information or material relating to a
matter under investigation.
• Repeals §701.052(f) of the Insurance Code which
required an insurer to exercise
reasonable care concerning the accuracy of information
conveyed to an authorized
governmental agency, the fraud unit, or another insurer,
person, or entity.
SB 310 by Deuell
Modifies Subchapter B, Chapter 607, Government
Code.
• Establishes a rebuttable presumption for certain
diseases and illnesses (small pox,
tuberculosis/ respiratory illness, cancer, acute MI &
stroke) suffered by emergency
medical technicians employed by political subdivisions,
and firefighters, including
certain volunteers, that were contracted during the
course and scope of employment, if
certain conditions, which vary depending on the disease
or illness, are met (no evidence
of disease on a physical during employment, employed
at least 5 yrs, disease discovered
while employed).
• There will be no payment to the Subsequent Injury
Fund for deaths resulting from illness
and diseases addressed by this bill.
SB 665 by Barrientos
Amends Subsection (b), Section 81.050, Health and
Safety Code, to add: an employee,
contractor or volunteer (other than a correctional
officer) who performs a service in a
correctional facility, to the list of persons who may
request the department or a health authority
to order testing of another person who may have
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N30
exposed the person to a reportable disease,
including HIV infection. Applies only to a person
exposed on or after September 1, 2005.
SB 742 by Duncan
Amends Labor Code, Section 406.095 (c), by adding the
Central Hockey League to the list of
professional athletic franchises included in that
subsection.
• The inclusion of the Central Hockey League to the list
of professional athletic franchises
applies only to a workers’ compensation injury that
occurs on or after September 1, 2005.
• This will provide Central Hockey League professional
athletes (hired under a contract or
a collective bargaining agreement) an option of coverage
if injured within the course and
scope of employment. These professional athletes may
either receive benefits in
accordance with this subtitle or benefits as outlined in
the contract or agreement.
continued from page 14 Table BTrend in Percent of Claims with Significant Adverse Surprises (percent of claims with more than 7 days of lost time)
Percent 1996 1997 1998 1999 2000 Percentage
of Point
Claims Change
1996-2000
CA 2.2 2.7 4 4.7 6 3.8
CT 0.6 0.8 0.7 0.8 1.4 0.8
FL 2.2 2.3 2.9 2.8 2.8 0.6
IL 0.9 1.1 1.1 1.3 1.7 0.7
IN 0.3 0.4 0.4 0.5 0.6 0.2
LA 1.9 1.5 1.9 2.1 2.6 0.7
MA 0.6 0.7 0.9 1.1 1.1 0.5
NC 0.9 1 1.5 1.8 2.4 1.5
PA 1.3 1.3 1.3 1.7 1.9 0.6
TN 0.6 0.8 1 1 4.3 0.7
TX 2 2.2 2.7 3.2 3.7 1.7
WI 0.4 0.6 0.5 0.7 0.8 0.4
provided up to that point.
As can be seen in Table B, adverse surprise cases
are increasing.The study did not address specific ways
to address this problem, however, a few common sense
proposals come immediately to mind:
(1) Obtain reliable medical information about the claim
as soon as possible, e.g., through use of RMEs;
(2) Define the accepted injury clearly, especially to any
third-party administrator who is handling the
medical side of the claim, and file your dispute with
the Division;
(3) have the case manager regularly review the medical
information in high risk cases to identify treatment
protocols that fail to result in significant
improvement and fix the problem, especially if
there has been little to no improvement in the first
six months of care;
(4) Carefully review all proposed chronic pain
management and/or work hardening programs to
insure that they are adequately documenting a
multidisciplinary, individualized program whose
satisfactory performance is demonstrated through
objective means. Think about the problem and see
what procedures you can develop to help keep
difficult cases from surprising you.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 31
continued from page 15
Department of Insurance, Division of Workers’
Compensation. TWCC will become DWC. References
to the Commission should refer to the Division.
References to the “The Agency” should refer to the
Division.
Bulletin B–0037-5 - Announces specific statutory
changes that will take precedence over any conflicting
provisions in workers’ compensation rules:
n Medical bills [presumably for services rendered on
or after September 1, 2005] must be submitted to
the insurance carrier within 95 days or the HCP
forfeits the right to reimbursement.
n An insurance carrier may request additional
documentation necessary to clarify a healthcare
provider’s charges at any time within the 45-day bill
review period. The healthcare provider must supply
the documentation within 15 days of receipt of the
request.
n Timeframes to conduct audits [presumably on-site]
as specified by rule. It must be requested within 45
days and completed within 160 days of receipt of
the bill.
n Healthcare providers must pay or appeal an
insurance carrier’s request for refund within 45 days
after the receipt of the request. The insurance
carrier “must act on the appeal” within 45 days of
the healthcare provider’s appeal.
Bulletin B-0038-05 – The Field Safety Representative,
Hazardous Employer, and Drug Free Workplace
Programs are eliminated.
n Employee Field Safety Representatives no longer
be required to have specific qualifications. Carriers
will no longer be required to report annually the
number and qualifications of these representatives.
n Carriers must continue to provide Accident
Prevention Services to its policyholders and these
services may be reviewed by the Division.
n The various functions relating to Safety at TWCC
will be transferred to the Division. The Division
will provide OSHCON consultations, etc.
F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N32
Flahive, Ogden & Latson
P.O. Box 13367
Austin, Texas 78711
FOL FAX DIRECTORYTo help expedite your faxed information to the correct area within FO&L and get it to the responsible person at the earliest
time, use the following fax directory. Please remember the 3:30 p.m. receipt deadline for material required to be date
stamped at the Commission. Material received after 4:00 p.m. does not permit time to deliver it across town prior to the
Commission close.
(512) 477-4996 or Tillie Aguirre PLNs 1 & 11(512) 472-4936 BRC Requests (TWCC-45)
(512) 867-1700 Trina DeCecco Client Consultant
(512) 867-1748 Phyllis Devine Insurance Coverage (TWCC-20)Record Checks
Photostats
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(512) 477-4987 Cindi Friedel BRC & PHC HearingsRFEs, Set Notices, Hearings,
Files, Cancellations
(512) 867-1700 Paralegals All CCH-Related Info.
(512) 867-1700 FOL All materials not listed above
(512) 472-9160 Joel Ogden TWC Manual Orders & Information
Fax Number Attention To Subject Matter