The Texas Workers' Compensation Commission (the commission) adopts amended §133.308 with one change to the proposed text published in the March 5, 2004, issue of the Texas Register (29 TexReg 2186).

As required by the Government Code §2001.033(l), 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 or opposition to adoption of the rule, and the reasons why the commission disagrees with some of the comments and proposals.

No changes were made to the proposed rule amendment in response to public comment received in writing and at a public hearing held on April 14, 2004. However, a change was made to the effective date of the proposed rule amendment in response to commission staff recommendations. This change is described in the Description of the Adopted Amendment.

The adopted amendment to §133.308, Medical Dispute Resolution By Independent Review Organizations, directs medical disputes regarding retrospective medical necessity of medical services costing less than the cost of a review by an Independent Review Organization (IRO) to newly adopted §133.309, Alternate Medical Necessity Dispute Resolution by Case Review Doctor (AMDR).

More specifically, new §133.309 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.

New §133.309 is concurrently being adopted 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 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 adopted amendment to §133.308 establishes October 1, 2004 as the effective date for dispute requests filed in accordance with the adopted new rule and this amended rule.

There is a change to amended subsection (a) of the rule as proposed. Amended subsection (a) establishes applicability. The adopted 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 October 1, 2004. This effective date was changed from August 1, 2004 in the proposal to allow for development of necessary infrastructure and training to implement newly adopted §133.309 of this title.

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

Comment generally supporting amended §133.308 as proposed was received from PMSI.

Comment generally opposing amended §133.308 as proposed was received from the Insurance Council of Texas.

Comment neither generally supporting nor opposing amended §133.308 as proposed, but suggesting a change was received from the Texas Association of School Boards.

Summaries of the comments and commission responses are as follows:

COMMENT: Commenter recommended the following language be added to subsection (e), "TWCC Compliance & Practices will not process intake of medical disputes where the health care provider has not met criteria for (1) and (2) in subsection (c) above."

RESPONSE: The commission disagrees with the recommendation to add the suggested language to subsection (e). The recommendation lies outside the scope and purpose of the proposed amendment as it pertains to provisions of this section related to reviews by independent review organizations and not the AMDR process. This subsection of the rule is not currently under consideration for amendment.

COMMENT: Commenter recommended to amend the preauthorization rule to expand the list to include therapy services that are commonly disputed.

RESPONSE: The commission disagrees as this recommendation is beyond the scope and purpose of the proposed amendment to §133.308.

COMMENT: Commenter recommended that language be added explaining that the Medical Dispute Resolution (MDR) process is not intended to be used to retrospectively review for medical necessity services that were previously preauthorized or voluntarily certified. Commenter recommended the withdrawal of the proposed amendment and further recommended the rule be amended to add a new tier for Independent Review Organization (IRO) reviews of retrospective medical necessity disputes where the amount in dispute is less than the tier one fee for an IRO review. Commenter included recommended language for corresponding amendments to subsections (f), (h), and (r) that addresses limits on medical documentation submissions, prohibits consideration of bills from multiple providers, consolidates multiple disputes from the same time period, and prohibits injured employees from filing disputes on behalf of providers.

RESPONSE: The commission disagrees that language needs to be added to explain that the MDR process is not intended for the review of services that are retrospectively denied for medical necessity after previously being preauthorized or voluntarily certified. The commission clarifies that if health care services have been preauthorized or voluntarily certified, and a carrier denies the services as not medically necessary, the carrier is in violation of §133.301(a) of this title, regarding Retrospective Review of Medical Bills. The commission disagrees with the recommendations to withdraw the proposed amendment and to add a new tier for IRO reviews. HB-3168, allows the commission to develop by rule an alternate medical dispute resolution process for retrospective medical necessity disputes costing less than the cost of an IRO review. The intent of the newly adopted §133.309, regarding Alternate Medical Necessity Dispute Resolution by Case Review Doctor, is to create an expedited low dollar dispute process for a nominal fee. In evaluating the use of IROs for the AMDR process, the commission determined that utilizing doctors on the commission's Approved Doctor List (ADL) would be more cost effective and would result in a pool of case reviewers willing to perform a review for the nominal fee.

COMMENT: Commenter stated that the proposed amendment will benefit not only the treating doctors but also other health care providers who will now be able to seek resolution on billing matters that are of a smaller monetary amount. Commenter stated that a lower IRO fee is a good idea but questioned who will police outcomes so that monies due are received.

RESPONSE: The commission agrees that the newly adopted AMDR rule and process will benefit system participants, especially for services with low dollar disputed amounts. The commission clarifies that an AMDR case review fee is not an IRO fee, as AMDR disputes will be reviewed by doctors selected from the commission's ADL. The outcomes, including monetary reimbursement in the newly adopted AMDR rule and process, are subject to enforcement by the commission's Compliance and Practices Division.

The amended rule is adopted 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 rule action. No other code or statute is affected by this rule action.