The Texas Workers' Compensation Commission (the commission) adopts new §134.303 concerning the 2005 Dental Fee Guideline with changes to the proposed text published in the March 4, 2005, issue of the Texas Register (30 TexReg 1228).

As required by Government Code §2001.033(a)(1), the commission's reasoned justification for this rule is set out in this order, which includes the preamble, which in turn includes the rule. This preamble contains a summary of the factual basis of the rule, a summary of comments received from interested parties, names of those groups and associations who commented and whether they were in support of or opposition to adoption of the rule.

A public hearing on the proposed 134.303 was held on April 7, 2005, but no comments were received at that public hearing. Changes made to the proposed rule are in response to written public comment received in writing during the comment period.

The commission adopts this new rule to update reimbursement guidelines for dental services provided in the Texas workers' compensation system. The adopted new rule establishes new reimbursement guidelines for dental services by applying a multiplier of 200% to the fees listed in the most current Texas Medicaid Dental Fee Schedule. The increase in the multiplier from 125% to 200% is intended to strike the proper balance between establishing fair and reasonable guidelines for medical services fees that ensure continuing quality of medical care and achieving effective medical cost control. The adopted new rule for dental services provided on or after June 15, 2005, severs the dental component of the Medical Fee Guideline, contained within §134.202 of this title, concerning Medical Fee Guideline (MFG), and creates a standalone Dental Fee Guideline responsive to current economic indicators in this segment of the medical services market.

Dental fees, as a subset of medical fees, must satisfy the standards for medical fees established in Texas Labor Code §413.011. Subsection (d) of that section requires guidelines for medical services fees to be fair and reasonable and designed to ensure the quality of medical care and to achieve effective medical cost control. The guidelines may not provide for payment of a fee in excess of the fee charged for similar treatment of an injured individual of an equivalent standard of living and paid by that individual or by someone acting on that individual's behalf. The commission must consider the increased security of payment afforded by the Texas Workers' Compensation Act in establishing the fee guidelines.

More recent statutory requirements added to §413.011 of the Texas Labor Code also require that the commission use health care reimbursement policies and guidelines that reflect the standardized reimbursement structures found in other health care delivery systems with minimal modifications to those reimbursement methodologies as necessary to meet occupational injury requirements. In order to achieve standardization, the statute additionally requires the commission to adopt the most current reimbursement methodologies, models, and values or weights used by the federal Health Care Financing Administration (HCFA), (now known as the Centers for Medicare and Medicaid Services (CMS)), including applicable payment policies relating to coding, billing, and reporting, and may modify documentation requirements as necessary to meet the requirements of Texas Labor Code §413.053 (relating to Standards of Reporting and Billing). The commission is required to develop conversion factors or other payment adjustment factors in determining appropriate fees, taking into account economic indicators in health care. However, the commission may not adopt conversion factors or other payment adjustment factors based solely on those factors as developed by the HCFA.

Prior to adoption of this new rule, reimbursements for professional dental services provided on or after August 1, 2003 were established by §134.202(c)(4) of this title, concerning Medical Fee Guideline (MFG). With adoption of this new rule, the MFG continues to establish reimbursements for professional dental services provided through June 14, 2005. Procedurally, the MFG provides maximum allowable reimbursement (MAR) amounts for health care providers (HCPs) treating injured workers in Texas. For dental treatments and services, the established MAR amount in the MFG is the Texas Medicaid Dental Fee Schedule multiplied by 125%, as the national Medicare system does not provide for reimbursement to professional dental health care providers. The adopted new rule, applicable to professional dental services provided on or after June 15, 2005, increases the multiplier to 200% to ensure continued access to quality dental services.

The challenge for the commission has been to find a payment adjustment factor, or multiplier, that satisfies the diverse statutory requirements of Texas Labor Code §413.011 and establishes an appropriate dental fee guideline, workable for providers, payers, and injured workers alike. The statutory criteria of §413.011 establish a range within which the commission is directed to exercise administrative discretion to select an appropriate multiplier. Specifically, the statutory requirement 'ensures quality of medical care' requires that fees not be set so low as to deprive covered workers access to qualified providers. Conversely, this requirement does not mandate that fees be set so high in order to induce all dentists to participate. The commission must 'achieve effective medical cost control' in establishing guidelines for medical service fees, thereby setting limits on a new multiplier. Further guidance in finding an appropriate multiplier is found in the statutory requirement that workers' compensation payers not pay more for similar treatments than payers on behalf of patients from populations with equivalent standards of living. This provision establishes parameters on workers' compensation reimbursements relative to those in other payer systems. Any identified special features in the workers' compensation system that warrant additional compensation may, however, offset this limit. Additionally, §413.011 permits the commission to consider reductions in the multiplier based on the security of payment afforded by the Texas Workers' Compensation Act as compared with other payer systems requiring the collection of co-pays, deductibles, and other balance billings. Ultimately, the commission must consider how payments may be set to control medical costs while maintaining access of injured workers to quality medical care.

A Workers' Compensation Research Institute (WCRI) published report entitled Benchmarks for Designing Workers' Compensation Medical Fee Schedules: 2001-2002 (August 2002) further analyzed factors associated with establishing fees. At page 5 it provides:

"The underlying question in most state public policy debates about fee schedules is 'What is the optimal fee level?' Studies to date in either workers' compensation or Medicare have yet to determine the optimal fee level. A review of the literature reveals "Conceptually, most would agree that the optimal fee level is one that provides access to quality care in the most cost-efficient manner. According to the economic model, it is the price that would induce health care providers to supply services that characterize 'good quality care' - not too much, not too little, and only those services that produce positive outcomes whose benefits are more valuable than the costs paid for the services. The optimal fee level, then, is one that minimizes incentives to over treat or treat with more costly services, even though less expensive, equally effective services exist. If, for example, complex surgeries provide relatively high profit margins (and therefore greater financial incentives), the optimal balance between cost and quality would not be achieved. On the other hand, if reimbursements do not provide a fair and competitive rate of return to providers, access to particular services would be hampered by financial disincentives, thereby jeopardizing access to care."

Lacking an established Medicare reimbursement methodology for dental services, the new rule retains and readopts the Texas Medicaid Dental Fee Schedule as the reimbursement methodology. The new rule adopts an appropriate multiplier that meets the statutory requirements of Texas Labor Code §413.011, taking into account all pertinent information and giving full consideration to stakeholder input. The statutory requirements of §413.011 mirror the factors, concerns, and objectives (access, quality, outcomes, utilization, cost) addressed by the WCRI. The commission has considered each in its evaluation, analysis, and adoption of the new multiplier of 200% of the Texas Medicaid Fee Schedule for dental services in the workers' compensation system.

The commission anticipates certain benefits to system participants as a result of adopting this new rule, and these benefits include: (1) for injured workers, access to dental treatments and services as a result of raising reimbursements; (2) for dental health care providers, receiving increased reimbursement for the infrequent provision of dental services in the workers' compensation system; (3) for employers, the prompt return to work of injured workers and the potential for decreased premiums; and (4) for insurance carriers, the injured workers' prompt return to work and decreased indemnity payments.

Commission staff met with dental providers to discuss the current reimbursement methodology contained in §134.202 of this title (relating to Medical Fee Guideline). That reimbursement is currently set at 125% of the Texas Medicaid Dental Fee Schedule.

The dental representative member of the commission's Medical Advisory Committee offered a sampling of 16 dental procedure codes as representative dental services that might be provided in workers' compensation cases. This sampling information contained preferred provider organization reimbursement amounts and the dental representative's usual, customary, and reasonable (UCR) charges. This data was compared to published dental reimbursement amounts for workers' compensation systems in three other states (Kansas, North Carolina, and Florida). The data reflected that total average reimbursement for the 16 codes ranged from 105% (Florida), 170% (Kansas), 228% (North Carolina) to 261% (UCR charges) of the Texas Medicaid Dental Fee Schedule.

The commission also met with carrier representatives and held a stakeholders meeting. A preproposal rule draft was shared with interested parties prior to the stakeholder meeting. As a result of the October 14, 2004 meeting, the commission requested system participants, providers and carriers, to submit their charge and reimbursement information relating to their 20 most frequently utilized dental codes for the 12-month period prior to the implementation of the current Medical Fee Guideline. The commission received information from a limited number of providers. The commission also received additional significant reimbursement information from three carriers.

The payers' reimbursement data specific to Texas workers' compensation reflected that average reimbursement ranged from 186% (Travis County) and 206% (Texas Mutual Insurance Company), to 216% (Texas Association of School Boards (TASB)) of the Texas Medicaid Dental Fee Schedule. The data for Travis County was incorrectly presented as 293% in the proposal, enlarging the reported range. Reanalysis of the data indicated total average reimbursement for Travis County was actually 186% of the Texas Medicaid Dental Fee Schedule, slightly reducing the statistical deviation of all data considered. This result did not affect the value of the adopted multiplier, 200%, as the total number of reported dental claims from Travis County for the select period was statistically insignificant.

Texas Labor Code §413.011 requires the commission to adopt necessary conversion factors or payment adjustment factors to establish fair and reasonable reimbursement in the Texas workers' compensation system. Additionally, the commission must take into account economic indicators in health care and the requirements found in subsection (d) of §413.011. The statute also states that the commission shall not adopt a conversion or payment adjustment factor based solely on those factors developed by the CMS.

The commission received information from system stakeholders including health care providers and carriers, and received UCR information from the dental representative on the Medical Advisory Committee and the Texas Dental Association. A health care information data collection service and the dental representative on the MAC provided payment information which included some information relating to preferred provider organization reimbursements. The commission also reviewed and compared data regarding reimbursement in workers' compensation systems in other states.

In considering subsection (d) of §413.011, the above information, and the specific data from three payers in the Texas workers' compensation system (discussed above), and the other data and information received and obtained, the adopted multiplier of 200% to be applied to the most current Texas Medicaid Dental Fee Schedule reimbursement rates for professional dental treatments and services, establishes fair and reasonable reimbursement that is designed to ensure continued access to quality care, along with appropriate medical cost control.

As previously stated in this preamble, dental treatments and services are infrequently provided in the workers' compensation system and, as such, are unlikely to be a significant contributor to Texas' high medical costs per claim. The adopted multiplier for dental treatment and services is higher than that of the 2002 Medical Fee Guideline because its multiplier of 125%, as applied to the Texas Medicaid Dental Fee Schedule, has been determined to be at the lower end of the average reimbursements for the dental procedure codes analyzed by commission staff. The multiplier of 200% has been chosen to ensure continued access to quality dental care for injured workers, and is responsive to the cited economic indicators in this segment of the medical services market.

Adopted new §134.303 establishes reimbursements for professional dental treatments and services. The new rule provides standardized reimbursement methods and billing procedures by aligning the workers' compensation reimbursement structure with the structures used by CMS and the Texas Medicaid Program.

There are changes from the text of subsection (a) as proposed, which establishes the applicability of this guideline to reimbursements for professional dental services. The dates of service to which this guideline applies have been changed from 'on or after June 1, 2005' to 'on or after June 15, 2005.' This change to the applicable dates of service from proposal is necessary to provide the requisite 20-day period between the filing date of the adopted rule with the Secretary of State and its effective date. Correspondingly, the rule now clarifies that for professional dental services provided August 1, 2003 through June 14, 2005, §134.202 of this title (relating to Medical Fee Guideline) shall be applicable. Further, professional dental services provided December 1, 1996 through July 31, 2003 shall be reimbursed in accordance with §134.302 of this title, concerning the commission's previous Dental Fee Guideline. Specific provisions contained in the Texas Workers' Compensation Act and commission rules shall take precedence over any provision adopted or utilized by Texas Medicaid in administering the Texas Medicaid Dental Fee Schedule. Subsection (a) establishes that Independent Review Organization (IRO) decisions regarding medical necessity are made on a case-by-case basis. The commission will monitor IRO decisions to determine whether commission rulemaking action would be appropriate. Subsection (a) additionally provides that whenever a component of the Texas Medicaid Dental Fee Schedule is revised and effective, use of the revised component shall be required for compliance with commission rules, decisions and orders for services rendered on or after the effective date of the revised component. This will prevent the new rule from falling out of synchronization with the Texas Medicaid Dental Fee Schedule and will achieve the standardization goals established in Texas Labor Code §413.011.

There are no changes from the text of subsection (b) as proposed, which requires system participants to utilize the Texas Medicaid Dental Fee Schedule, including its coding, billing, reporting, and reimbursement of dental treatments and services, in effect on the date a service is provided, with further application of any additions or exceptions in this section. This allows for the basic reimbursements of the Texas Medicaid Dental Fee Schedule to be applied to the Texas workers' compensation system.

There are no changes from the text of subsection (c) as proposed, which establishes the method to be used for determining the MAR for dental treatments and services in the Texas workers' compensation system. In establishing the multiplier of 200% to be applied to the current Texas Medicaid Dental Fee Schedule for the rule, the commission considered the statutory requirements and objectives and utilized current commission reimbursement levels, available dental provider payer information, and other states' workers' compensation reimbursements for comparable dental treatments and services.

Subsection (c) also provides that for products and services for which the Texas Medicaid Dental Fee Schedule does not establish a value, the carrier shall assign a relative value, which may be based on nationally recognized published relative value studies, published commission medical dispute decisions, and values assigned for services involving similar work and resource commitments.

There is a change from the text of subsection (d) as proposed regarding the reduced MAR for multiple procedures performed during the same operative session. Proposed subsection (d) provided for reimbursement of the procedure with the highest MAR value at 100% of its MAR, and reimbursement for each subsequent procedure at 50% of its MAR value. Based on public comment received suggesting that such a reduction provision defeats the goal of continued access to dental care, serving to limit the participation of dental professionals in the Texas workers' compensation system, subsection (d) as proposed is deleted. Subsequent subsections have been renumbered accordingly.

Subsection (d), proposed as subsection (e), provides that reimbursement for dental laboratory procedures is bundled with the maximum fees for the associated dental procedures. No additional reimbursement shall be due. With the exception of the renumbering, there are no changes to the text of this subsection as proposed.

Subsection (e), proposed as subsection (f), provides that in all cases as established by this rule, reimbursement for dental treatment and services is the lesser of the MAR amount; the health care provider's usual and customary charge; or the workers' compensation negotiated and/or contracted amount that applies to the billed service(s). With the exception of the renumbering, there are no changes to the text of this subsection as proposed.

The commission's Medical Advisor reviewed and made recommendations regarding this adopted rule.