The new §134.2 provides a listing of the ZIP Codes that are designated as workers' compensation underserved areas, which are determined by the ZIP Code where the service is provided. The section provides that when required by Division rule, an incentive payment shall be added to the MAR for services performed in a designated workers' compensation underserved area.

New §134.203 and §134.204 are based on and address the same subject matter as the current §134.202 medical fee guidelines; however, the new sections apply to medical services provided on or after March 1, 2008, and contain changes that provide for fair and reasonable reimbursement in the current health care market.

New §134.203 is applicable to professional services provided on or after March 1, 2008. It does not apply to facility, pharmaceutical, dental, and other services and it is not applicable to services provided through a workers' compensation health care network certified pursuant to Insurance Code Chapter 1305, except as provided in Insurance Code Chapter 1305.

In place of the single conversion factor currently provided by §134.202, new §134.203 adopts two conversion factors. The conversion factor of $52.83 for calendar year 2008 is to be used for all professional service categories, with the exception of surgical procedures performed in a facility setting, such as a hospital or ambulatory surgical center (ASC). The conversion factor of $66.32 for calendar year 2008 is to be used for surgical procedures performed in a facility setting. Both adopted conversion factors are to be updated each subsequent calendar year to reflect the annualized MEI percentage adjustment published in the Federal Register each November.

Adopted §134.203 maintains reimbursement of Healthcare Common Procedure Coding System (HCPCS) Level II codes at the level specified in §134.202, 125 percent of fees listed in the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) fee schedule, or 125 percent of the published Texas Medicaid fee schedule for durable medical equipment if the code has no published Medicare DMEPOS rate. The reimbursement for these services was not developed as part of the Medicare Physicians Fee Schedule and has not been subject to the SGR provisions that are required by the Medicare budget neutrality provisions. In addition, Medicare updates the DMEPOS fee schedule on a quarterly basis and the Division adopts those updates as they occur. For those reasons, the reimbursement for these items will not be subject to the MEI adjustment.

Adopted §134.203(a) describes the applicability of the section. Section 134.203(a)(1) states that the section does not apply to workers' compensation specific codes, services, and programs described in §134.204; prescription drugs or medicine; dental services; facility services of a hospital or other health care facility; or medical services provided through a workers compensation health care network certified pursuant to Insurance Code Chapter 1305, except as provided in Insurance Code Chapter 1305. Section 134.203(a)(2) notes that the section only applies to professional medical services provided on or after March 1, 2008, the applicability date of adopted new §134.203. Section 134.203(a)(3) provides that §134.202 is to be applied to professional medical services provided between August 1, 2003 and March 1, 2008.

Adopted §134.203(a)(4) states that for professional medical services provided before August 1, 2003, §134.201 (relating to Medical Fee Guideline for Medical Treatments and Services Provided under the Texas Workers' Compensation Act) and §134.302 (relating to Dental Fee Guideline) apply. Adopted §134.203(a)(5) defines the term "Medicare payment policies" to mean reimbursement methodologies, models, and values or weights, including its coding, billing, and reporting payment policies as set forth in the CMS payment policies specific to Medicare, when used in this section. As with current §134.202, this section allows for the basic Medicare program provisions to be applied with any additions or exceptions necessary for adaptation to the Texas workers' compensation system. The Medicare program is not a static system. Medicare policies change frequently. To achieve standardization it is necessary to use the Medicare billing and reimbursement policies as they are modified by CMS.

As in §134.202(a)(3), adopted §134.203(a)(6) clarifies that, notwithstanding Medicare payment policies, chiropractors may be reimbursed for services provided within the scope of their practice act, since, in accordance with the Labor Code §401.011(17), they are included in the definition of "doctor" in the Texas workers' compensation system.

Adopted §134.203(a)(7) states that specific provisions contained in the Labor Code or the Division rules, including Chapter 134, take precedence over any conflicting provision adopted or utilized by CMS in administering the Medicare program and that Independent Review Organization (IRO) decisions regarding medical necessity made in accordance with Labor Code §413.031 and §133.308 (relating to MDR by Independent Review Organizations), which are made on a case-by-case basis, take precedence in that case only, over any Division rules and Medicare payment policies. Adopted §134.203(a)(8) establishes that whenever a component of the Medicare program is revised, use of the revised component shall be required for compliance with Division rules, decisions, and orders for professional services rendered on or after the effective date, or after the effective date or the adoption date of the revised component, whichever is later.

Adopted §134.203(b)(1) requires that for coding, billing, reporting, and reimbursement of professional medical services, Texas workers' compensation system participants shall apply the Medicare payment policies, including its coding; billing; correct coding initiatives (CCI) edits; modifiers; bonus payments for HPSAs, and physician scarcity areas (PSAs); and other applicable payment policies in effect on the date a service is provided with any additions or exceptions in the rules.

Adopted §134.203(b)(2) provides that a 10 percent incentive payment shall be added to the MAR for services outlined in subsections (c) - (f) and (h) of the section that are performed in designated workers' compensation underserved areas in accordance with §134.2.

Adopted §134.203(c) requires system participants to apply the Medicare payment policies with minimal modifications to determine the MAR. Adopted §134.203(c)(1) provides the annual conversion factors for use in various service categories beginning in calendar year 2008. Adopted §134.203(c)(2) indicates that the conversion factors in paragraph (1) of that subsection are for calendar year 2008 and that the subsequent year's conversion factors will be determined by applying the annual percentage adjustment of the MEI to the previous year's conversion factors and the new conversion factors shall be effective January 1 of the new calendar year. Paragraph (2) also provides an example of the calculation methodology used early in rule development in calendar year 2007 to describe the 2007 workers' compensation conversion factor based on the Medicare 2006 conversion factor with the annual increase of 2.1 percent of the MEI. This calculation methodology is to be applied each subsequent calendar year based on the annualized MEI percentage adjustment published each November in the Federal Register for the following calendar year.

As in §134.202(c)(2), adopted §134.203(d) provides that the MAR for HCPCS Level II codes A, E, J, K, and L shall be 125 percent of the Medicare DMEPOS fee schedule, or 125 percent of the published Medicaid fee schedule, or, if neither applies, according to subsection (f) of this section.

As in §134.202(c)(3), adopted §134.203(e) provides that the MAR for pathology and laboratory services not addressed in (c)(1) of this section or in other Division rules shall be 125 percent of the fee listed for the code in the Medicare Clinical Fee Schedule for the technical component, and 45 percent of the Division established MAR for the technical component shall be the professional component.

Adopted §134.203(f) contains a clarification change from proposal and establishes that where no relative value unit or payment has been assigned by Medicare, Texas Medicaid as set forth in §134.203(d) or §134.204(f), or the Division, reimbursement shall be provided in accordance with §134.1.

Adopted §134.203(g) establishes that where there is a negotiated or contracted amount that complies with Labor Code §413.011, that amount shall be the reimbursement amount that applies to the billed services.

Adopted §134.203(h) establishes that where there is no negotiated or contracted amount that complies with Labor Code §413.011, the reimbursement shall be the lesser of the MAR amount; the HCP's usual and customary charge, unless a Division rule specifies a specific bill amount; or the fair and reasonable amount consistent with the standards of §134.1.

Adopted §134.203(i) requires HCPs to bill their usual and customary charges using the most current HCPCS Level I and Level II codes and to submit medical bills in accordance with the Labor Code and Division rules.

Adopted §134.203(j) describes that appropriate modifiers, including more than one modifier if necessary, shall follow the appropriate Level I and Level II HCPCS codes on the bill to identify modifying circumstances. Division-specific modifiers are identified in proposed new §134.204(n) along with instructions for application.

Adopted new §134.204 provides for reimbursement of workers' compensation specific services, and provision of a separate section from new proposed §134.203 is required for ease in future amendments by the Division and for ease of implementation by system participants. Section 134.204 applies to workers' compensation specific codes, services, and programs provided on or after March 1, 2008. The adopted section is not applicable to professional medical services described in adopted new §134.203; prescription drugs or medicines; dental services; facility services of a hospital or other health care facility; or medical services provided through a workers' compensation health care network certified pursuant to Insurance Code Chapter 1305, except as provided in §134.1 of this title and Insurance Code Chapter 1305.

Adopted §134.204(a)(3) provides that §134.202 (relating to Medical Fee Guideline) applies to workers' compensation specific codes, services and programs provided between August 1, 2003 and March 1, 2008, the applicability date of adopted §134.204. Adopted §134.204(a)(4) provides that for workers' compensation specific codes, services, and programs provided before August 1, 2003, §134.201 (relating to Medical Fee Guideline for Medical Treatments and Services Provided under the Texas Workers' Compensation Act) and §134.302 (relating to Dental Fee Guideline) apply. Adopted §134.204(a)(5) sets forth that specific provisions contained in the Labor Code or the Division rules, including this chapter, take precedence over any conflicting provision adopted or utilized by CMS in administering the Medicare program and that IRO decisions regarding medical necessity made in accordance with Labor Code §413.031 and §133.308 (relating to MDR by Independent Review Organizations), which are made on a case-by-case basis, take precedence in that case only, over any Division rules and Medicare payment policies.

Adopted §134.204(b)(1) requires HCPs to bill their usual and customary charges using the most current HCPCS Level I and Level II codes and to submit medical bills in accordance with the Labor Code and Division rules.

Adopted §134.204(b)(2) states that appropriate modifiers, including more than one modifier if necessary, shall follow the appropriate Level I and Level II HCPCS codes on the bill to identify modifying circumstances. Division-specific modifiers are identified in subsection (n) of this section along with instructions for their application.

Adopted §134.204(b)(3) provides that a 10 percent incentive payment shall be added to the MAR for services outlined in subsections (d), (e), (g), (i), (j), and (k) of the section that are performed in designated workers' compensation underserved areas in accordance with §134.2.

Adopted §134.204(c) establishes that when there is a negotiated or contracted amount that complies with Labor Code §413.011, that amount shall be the reimbursement amount for the billed services.

Adopted §134.204(d) establishes that when there is no negotiated or contracted amount that complies with Labor Code §413.011, the reimbursement shall be the least of the MAR amount; the HCP's usual and customary charge, unless Division rule specifies a specific bill amount; or the fair and reasonable amount consistent with the standards of §134.1.

Adopted §134.204(e) sets forth the case management responsibilities for the treating doctor, establishes set fees for treating doctor case management services, directs the treating doctor to use a specific modifier when billing for these services that will distinguish treating doctors from other health care providers, and allows treating doctors a payment commensurate with case management responsibilities and workers' compensation administrative tasks. Adopted §134.204(e) also establishes set fees, which are 25 percent of the total provided to treating doctors, when a referral health care provider contributes to the case management activity. These established fees are derived from the 2007 Ingenix publication of The Essential RBRVS for determining the gap-filled, non-facility value, and then multiplied by the Division's 2007 conversion factor used during the early 2007 calendar year rule development stage. In developing these rules, the Division considered Labor Code §413.011(b) that indicates the Commissioner may also provide for reasonable fees for the evaluation and management of care as required by Section 408.025(c) and Division rules.

Adopted §134.204(f) is changed from the proposed rule text as a result of a comment. It establishes that to determine the MAR for home health services provided by a licensed home health agency, the MAR shall be 125 percent of the published Texas Medicaid fee schedule for home health agencies.

As in §134.202(e)(4), adopted §134.204(g) sets forth the requirements and limitations on functional capacity evaluations (FCEs), including limits on the number of FCEs allowed, the maximum number of hours to be reimbursed, the required billing code and modifier, and the required elements of a physical examination and neurological evaluation.

As in §134.202(e)(5), adopted §134.204(h) sets forth the billing and reimbursement requirements for Return to Work Rehabilitation Programs including appropriate coding, modifiers, and reimbursement rates. The section includes details of comparable Commission on Accreditation of Rehabilitation Facilities (CARF) accredited programs.

Adopted §134.204(i) addresses the examinations and reimbursements with new modifiers that are associated with the expanded duties of designated doctors. This subsection is established for whichever examination is appropriate, and sets forth an established cap with a prorated payment method for the four examinations not associated with MMI and IR.

As in §134.202(e)(6), adopted §134.204(j) sets forth the billing, coding, and reimbursement requirements, including modifiers, for MMI and IR examinations. The subsection specifies what shall be included in the examinations; any limitations on the number of examinations allowed; billing and reimbursement for testing not outlined in the AMA Guides; and that the doctor performing the examinations be an authorized doctor under the Act, Division rules, and Chapter 130 relating to Certification of Maximum Medical Improvement and Evaluation of Permanent Impairment. The subsection further sets out different billing, coding, including modifiers and reimbursement rates, depending on whether the examining HCP is the treating doctor, a referral doctor, or a referral specialist. A new clarifying provision has been added for the billing and reimbursement of an IR evaluation in circumstances when there is no test to determine an IR for a non-musculoskeletal condition.

Adopted §134.204(k) sets forth the billing, coding, including modifiers, and reimbursements rates for Return to Work and Evaluation of Medicare Care examinations (RTW/EMC), that are not done for the purpose of certifying MMI or assigning IR. As proposed, the adopted subsection addresses the newer designated doctor responsibilities and raises the overall reimbursement rate from $350 to $500 for whichever examination is appropriate as outlined in subsection (i) of this section. Additionally, any required testing is to be billed using appropriate codes and modifiers in addition to the examination fee.

Adopted §134.204(l) refers a HCP to §129.5 (relating to Work Status Reports) when billing for a Work Status Report that is not conducted as part of the examination outlined in subsections (i) and (j) of this section.

Adopted §134.204(m) refers a treating doctor to §126.14 (relating to Treating Doctor Examination to Define Compensable Injury) when billing for an examination to define the compensable injury.

Adopted §134.204(n) sets forth Division modifiers to be used by HCPs in conjunction with procedure codes to ensure correct coding, reporting, billing, and reimbursement. The adopted subsection includes six new modifiers associated with treating doctor case management functions and requested designated doctor examinations.

Comment: Commenters support and endorse the proposed fee schedule rules with expressions that it is long over-due, it is an improvement from the current fee schedule, and that it hopefully will attract more doctors to the system, thus improving treatment and access to quality medical care of employees sustaining on the job injuries.

Agency Response: The Division appreciates the supportive comments.

Comment: Commenter opposes adoption of these rules as it will result in drastic increase in cost of medical care in the Government Employees Workers' Compensation Program. While it appears the goal is to improve access, there is no substantive fiscal analysis on the actual impact of the rules on the system.