The Texas Workers' Compensation Commission (the commission) proposes an amendment to §133.308, concerning Medical Dispute Resolution By Independent Review Organizations. The amendment is proposed to direct medical disputes regarding retrospective medical necessity of medical services costing less than the cost of a review by an Independent Review Organization (IRO) to proposed new §133.309, Alternate Medical Necessity Dispute Resolution by Case Review Doctor (AMDR).

Proposed new §133.309 is concurrently being proposed pursuant to the statutory provisions in Texas Labor Code §413.031. House Bill 3168, adopted during the 2003 Texas Legislative Session, amended §413.031 to add a new subsection (m) regarding new authority for commission medical dispute resolution. This new statutory provision states the commission by rule may prescribe an alternate dispute resolution process to resolve disputes regarding medical services costing less than the cost of a review of the medical necessity of a health care service by an independent review organization.

Rule 133.308, regarding Medical Dispute Resolution By Independent Review Organizations, has been amended in order to direct a party to the proposed new process, §133.309, regarding AMDR, which is the exclusive process for retrospective review of medical necessity disputes where the sum of disputed billed charges is less than the tier one IRO fee. Rule 133.308 will continue to be the process for retrospective review of medical necessity disputes where the sum of disputed billed charges is equal to or greater than the tier one IRO fee. The amendment to §133.308 also establishes August 1, 2004 as the effective date for dispute requests filed in accordance with the proposed new rule and the amended rule.

The Texas Register published text shows words proposed to be added to or deleted from the current text, and should be read to determine all proposed changes.

Amended subsection (a) establishes applicability. The amendment states that when applicable, retrospective medical necessity disputes shall be governed by the provisions of §133.309 of this title (relating to Alternate Medical Necessity Dispute Resolution by Case Review Doctor), effective for dispute resolution requests filed on or after August 1, 2004.

Mr. Robert L. Shipe, Director of Medical Review, has determined that for the first five-year period the proposed amended rule is in effect there will be no fiscal implications for other state or local governments as a result of enforcing or administering the rule. The commission does not anticipate any fiscal impact as a result of enforcing or administering the proposed amended rule.

Local government and state government, as covered regulated entities, will be impacted in the same manner as described later in this preamble for persons required to comply with the rule as proposed.

Mr. Shipe has also determined that for each year of the first five years the rule as proposed is in effect, the public benefits anticipated as a result of enforcing the rule will be reduced costs in the system.

Health care providers that substitute the AMDR process for the IRO process will experience less costs due to the lower AMDR case review fee. Health care providers and injured employees should also benefit from the opportunity to resolve disputes over lower cost services.

Insurance carriers should experience a reduction in costs associated with low dollar disputes filed by injured employees that were previously resolved through the IRO process at the carrier's expense. This has the potential to reduce costs for insurance carriers participating in the medical dispute resolution process.

The proposed AMDR process, as provided by proposed new §133.309, is the exclusive process to resolve low dollar medical necessity disputes instead of resolution by the IRO process. Consequently, fewer disputes may be assigned to IROs, which could result in a decrease in revenue. During the two year period of January 2002 through December 2003, there were approximately 1,100 of the 5,900 retrospective medical dispute resolution filings involving disputes of care with charges totaling less than the tier one IRO fee. It is anticipated that, at a minimum, the same number of requests will be submitted for review through the AMDR process, with a proportionate decrease in IRO assignments.

Economic costs will not be incurred by injured employees as a result of the proposed amendment.

No increased costs are anticipated to be incurred by health care providers or insurance carriers who are required to comply with the proposed amended rule.

There will be proportionate costs of compliance for small businesses or micro-businesses to the extent of their participation in the new AMDR process referenced by the proposed amended rule. However, there will be no adverse economic impact on small businesses or micro-businesses that must comply with the proposed amended rule.

Comments on the proposal must be received by 5:00 p.m., April 5, 2004. You may comment via the Internet by accessing the commission's website at www.twcc.state.tx.us and then clicking on "Laws, Rules & Forms" and then clicking on "Proposed Rules." 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 Velasquez, Legal Services, Mailstop #4-D, Texas Workers' Compensation Commission, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744.

Commenters are requested to clearly identify by number the specific rule and paragraph 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. Persons in support of the rule as proposed, in whole or in part, may wish to comment to that effect.

A public hearing on this proposal will be held on April 14, 2004, at the Austin central office of the commission (7551 Metro Center Drive, Suite 100, Austin, Texas 78744). 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 amended rule is proposed under the following statutes: Texas Labor Code §402.061, which authorizes the commission to adopt rules necessary to administer the Act; Texas Labor Code §401.011, which provides general definitions used under the Act; Texas Labor Code §401.024, which provides the commission with authority to require use of facsimile or other electronic means to transmit information in the system; Texas Labor Code §402.042, which authorizes the executive director to enter orders as authorized by the statute as well as to prescribe the form, manner, and procedure for transmission of information to the commission; Texas Labor Code §406.010, which authorizes the commission to adopt rules regarding claims service; Texas Labor Code §406.011, which allows the commission to require insurance carriers to designate an Austin representative to act as an agent for the insurance carrier and accept service on behalf of the carrier; Texas Labor Code §406.031, which holds an insurance carrier liable for compensation for an eligible employee's injury arising out of and in the course and scope of employment; Texas Labor Code §408.021, which provides that the injured employee is entitled to all health care reasonably required by the nature of the injury as and when needed; Texas Labor Code §408.023, which authorizes the commission to develop a list of approved doctors; Texas Labor Code §408.025, which authorizes the commission to adopt requirements for reports and records that are required to be filed with the commission by health care providers; Texas Labor Code §408.027, which provides for insurance carrier payment of health care providers; Texas Labor Code §409.003, which allows an employee or their representative to file a claim for compensation within one year from the date of injury; Texas Labor Code §409.009, which allows a person to become a sub-claimant to a workers' compensation claim; Texas Labor Code §409.021, which governs an insurance carrier's obligation regarding initiation of benefits; Texas Labor Code §409.041, which establishes the commission's Ombudsman program; Texas Labor Code §413.013, which authorizes the commission to establish programs for the retrospective review and resolution of disputes regarding health care treatments and services; Texas Labor Code §413.015, which directs insurance carrier payments to and audits of health care providers; Texas Labor Code §413.031 which directs medical dispute resolution; Texas Labor Code §413.042 which prohibits private claims; and Texas Civil Practice and Remedies Code, Chapter 146, which directs that health care providers submit bills no later than the 11th month in which the service was provided.

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