The Texas Department of Insurance (Department), Division of Workers' Compensation (Division) proposes the repeal of existing §134.401, concerning Acute Care Inpatient Hospital Fee Guideline.

Section 134.401 was adopted in 1997. It provided for per diem reimbursement and a "stop-loss" provision. The stop-loss provision was intended to compensate for unusually costly services. Instead of per diem reimbursement, the stop-loss provision of §134.401(c)(6) provided for a reimbursement of 75% of total audited charges if those charges exceeded $40,000. At the time the rule was adopted, only 4% of hospital bills exceeded $40,000. By 2006, however, 32% of hospital bills exceeded $40,000.

In 2001, the Legislature passed House Bill 2600, which amended Labor Code §413.011 by directing the Texas Workers' Compensation Commission to adopt a reimbursement structure modeled along the lines of the Medicare system.

In accordance with that directive, the Division recently adopted §134.403, concerning Hospital Fee Guideline--Outpatient and §134.404, concerning Hospital Facility Fee Guideline--Inpatient, which will supersede the provisions of §134.401 on and after March 1, 2008. Section 134.403 and §134.404 implemented Labor Code §413.011 by adopting a standardized reimbursement structure using in part the most current methodologies, models, values and weights used by the Centers for Medicare and Medicaid Services (CMS).

Section 134.401 no longer meets the needs of the workers compensation system. Since §134.401 will no longer be needed after March 1, 2008, the Division proposes the repeal of §134.401.

Matt Zurek, Director of Health Care Policy, has determined that, for the first five years after the repeal of the section, there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal, and there will be no effect on local employment or the local economy as result of the proposed repeal.

Mr. Zurek has also determined that, for each year of the first five years after the repeal of the section, the public benefit anticipated as a result of the repeal will be the elimination of unnecessary regulations. There will be no economic cost to any individuals, or insurers or other Division regulated entities, regardless of size, as a result of the proposed repeal.

In accordance with the Government Code §2006.002(c), a Division analysis has determined that this proposed repeal will not have an adverse economic effect on small or micro business carriers because it is simply a repeal of an unnecessary rule. Therefore, in accordance with the Government Code §2006.002(c), the Division is not required to prepare a regulatory flexibility analysis.

The Division has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code §2007.043.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on March 24, 2008. Comments may be submitted via the Internet through the Division's Internet website at http://www.tdi.state.tx.us/rules/proposedrules/toc.html or by mailing or delivering your comments to Victoria Ortega, Legal Services, MS-4D, Division of Workers' Compensation, Texas Department of Insurance, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744.

Any request for a public hearing should be submitted separately to the Office of the General Counsel, MS-1, 7551 Metro Center Drive, Austin, Texas 78744 before the close of the public comment period. If a hearing is held, written and oral comments presented at the hearing will be considered.

The repeal is proposed under the Labor Code §402.00111 and §402.061. Section 402.00111 provides that the Commissioner of Workers' Compensation shall exercise all executive authority, including rulemaking authority, under the Labor Code and other laws of this state. Section 402.061 provides the Commissioner the authority to adopt rules as necessary to implement and enforce the Texas Workers' Compensation Act.

No other codes, statutes or articles are affected by this proposal.