Two factors not considered in these calculations will directly impact the actual cost to the system, payment transfer and sample accuracy. Regarding payment transfer, the ASC focus group members explained that if the cost of implantable devices exceeded the group case rate, these procedures would be performed in a hospital setting instead of an ASC. The services would have still been provided and paid by the insurance carriers, but in a different setting. Accordingly, this estimate includes amounts that would have been paid regardless of the changes in the rule (resulting in a payment "shift" rather than a true cost increase to the system). The sample used to determine the potential increase in ASC reimbursement was derived from pending, but unresolved, medical fee dispute cases involving orthopedic procedures in an ASC. Accordingly, the selected sample likely included a higher number of surgical procedures involving surgically implanted, inserted or otherwise applied devices and therefore more implant device costs than the workers' compensation population. This means that while the estimate represents the potential risk to the system, the actual costs to the system are anticipated to be less than the forecasted amount.

It is anticipated that the site of service negotiations will assist in reducing overall system costs by allowing a surgical procedure to be performed in a less expensive setting.

Insurance carriers/employers and health care providers will experience some increases in administrative costs. There will be costs for insurance carriers to further adjust their automated systems to accommodate the proposed exceptions to the Medicare based methodology. These costs are difficult to quantify since each insurance carrier has unique processing systems and internal controls. However, most insurance carriers are already processing workers compensation claims utilizing the general Medicare methodology, and therefore will not be developing new procedures/systems from scratch. For ASCs there may be costs associated with modifying their administrative systems to accommodate procedures not already included on the ASC List of Medicare Approved Procedures.

In terms of small or micro-businesses, the same basic processes and procedures apply regardless of the size or volume of the business.

Comments on the proposal must be received by 5:00 p.m., January 3, 2005. You may comment via the Internet by accessing the commission's website at www.twcc.state.tx.us and clicking on "Rules" then clicking on "Proposed Rules for Comment." This medium for commenting will help you organize your comments by rule chapter. You may also comment by emailing your comments to RuleComments@ twcc.state.tx.us or by mailing or delivering your comments to Linda Velásquez at the Office of the General Counsel, Mailstop #4-D, Texas Workers' Compensation Commission, 7551 Metro Center Drive, Suite 100, Austin, TX 78744.

Commenters are requested to clearly identify by number the specific rule and paragraph (e.g., 134.402 (a)(1), 134.402(b), 134.402(d)(2), etc.) commented upon. The commission may not be able to respond to comments that cannot be linked to a particular proposed rule. Along with your comment, it is suggested that you include the reasoning for the comment in order for commission staff to fully evaluate your recommendations.

Based upon various considerations, including comments received and the staff's or commissioners' review of those comments, or based upon the commissioners' action at the public meeting, the rule as adopted may be revised from the rule as proposed in whole or in part.

A public hearing on this proposal will be held on January 6, 2005 at the Austin central office of the commission (7551 Metro Center Drive, Suite 100, Austin, Texas). Those persons interested in attending the public hearing should contact the Commission's Office of Executive Communication at (512) 804-4430 to confirm the date, time, and location of the public hearing for this proposal. The public hearing schedule will also be available on the commission's website at www.twcc.state.tx.us.

The new rule is proposed under Texas Labor Code §402.061, which authorizes the commission to adopt rules necessary to administer the Act; Texas Labor Code §408.021, which entitles injured employees to all health care reasonably required by the nature of the injury as and when needed; Texas Labor Code §413.002, which requires the commission's Medical Review Division monitor health care providers, insurance carriers and claimants to ensure compliance with commission rules; Texas Labor Code §413.007, which sets out information to be maintained by the commission's Medical Review Division; Texas Labor Code §413.011, which mandates that the commission by rule establish medical policies and guidelines; Texas Labor Code §413.012, which requires review and revision of the medical policies and fee guidelines at least every two years; Texas Labor Code §413.013, which requires the commission by rule to establish programs related to health care treatments and services for dispute resolution, monitoring, and review; Texas Labor Code §413.014, which requires express preauthorization by the insurance carrier for health care treatments and services; Texas Labor Code §413.015, which requires insurance carriers to pay charges for medical services as provided in the statute and requires that the commission ensure compliance with the medical policies and fee guidelines through audit and review; Texas Labor Code §413.016, which provides for refund of payments made in violation of the medical policies and fee guidelines; Texas Labor Code §413.017, which provides a presumption of reasonableness for medical services fees that are consistent with the medical policies and fee guidelines; Texas Labor Code, §413.019, which provides for payment of interest on delayed payments refunds or overpayments; and Texas Labor Code §413.031, which provides a procedure for medical dispute resolution.

The new rule is proposed under the Texas Labor Code §§402.061, 408.021, 413.002, 413.007, 413.011, 413.012, 413.013, 413.014, 413.015, 413.016, 413.017, 413.019, and 413.031.

The previously cited sections of the Texas Labor Code are affected by this proposed rule action. No other code, statute, or article is affected by this rule action.