The Texas Department of Insurance, Division of Workers' Compensation (Division) proposes amendments to §§133.305, 133.307, and 133.308, concerning medical dispute resolution (MDR). These amendments are necessary to: implement statutory provisions of House Bill (HB) 724, HB 1003, and HB 2004 enacted by the 80th Legislature, Regular Session, and effective September 1, 2007; and clarify provisions of fee payment to independent review organizations (IROs) to ensure compliance with the Labor Code.

The proposed amendments incorporate administrative-level hearings into the Division's MDR process as a step between MDR or IRO review and judicial review in resolution of medical fee and medical necessity disputes. The proposed amendments also address licensing and professional specialty requirements for doctors performing reviews for IROs.

Changes to the Labor Code by HB 724 introduce the State Office of Administrative Hearings (SOAH) and the Division's contested case hearing process into the MDR process as a level of appeal that occurs after MDR or IRO review and prior to judicial review. Changes to the Labor Code by HB 1003 require IROs that use doctors to perform reviews of health care services provided under the Texas Workers' Compensation Act to only use doctors licensed to practice in Texas to perform the reviews. Changes to the Labor Code by HB 2004 require a doctor performing an independent review of a health care service provided to an injured employee, including a retrospective review, who reviews a specific workers' compensation case to hold a professional certification in a health care specialty appropriate to the type of health care that the injured employee is receiving.

Prior to September 1, 2005, the Division's MDR process allowed a party to appeal a decision to SOAH prior to judicial review. In order to shorten the appeal process, HB 7, enacted by the 79th Legislature, Regular Session, amended Labor Code §413.031 to remove appeals to SOAH from the MDR process. In compliance with the revision to the code, the Division revised its rules to reflect the change. On November 1, 2006, a Travis County District Court determined in HCA Healthcare Corp. v. Texas Dept. Insurance and Division of Workers' Compensation, Cause No. D-1-GN-06-000176, that the MDR process as revised by HB 7 did not provide due process to parties and found subsection (k) of Labor Code §413.031 to be facially unconstitutional. The District Court judgment remains pending upon appeal to the Third Court of Appeals in Austin under Docket No. 03-07-0007-CV. During the 80th Legislative Session, the Texas Legislature enacted HB 724, which amends Labor Code §413.031(k) and adds Labor Code §413.031(k-1) - (k-2) and §413.0311.

Labor Code §413.031(k), (k-1), and (k-2) is applicable to a party to a medical dispute that is not subject to Labor Code §413.0311 or party to a dispute regarding spinal surgery subject to Labor Code §413.031(l). Under Labor Code §413.031(k), (k-1) and (k-2), a party is entitled to a hearing before the SOAH for any dispute that remains unresolved after MDR or IRO review. A party aggrieved by a final decision of the SOAH may seek judicial review conducted in the manner provided for judicial review of a contested case under Chapter 2001, Subchapter G of the Texas Government Code.

Labor Code §413.0311 is applicable to a party to a medical fee dispute in which the amount sought in reimbursement does not exceed $2,000, a party appealing an IRO decision regarding determination of the retrospective medical necessity for a health care service for which the amount billed does not exceed $3,000, and a party appealing an IRO decision regarding determination of the concurrent or prospective medical necessity for a health care service. Under Labor Code §413.0311, a party is entitled to a contested case hearing for any dispute that remains unresolved after medical fee or medical necessity review. Hearings under Labor Code §413.0311 are to be conducted by a hearings officer in the manner provided for contested case hearings under Chapter 410, Subchapter D of the Labor Code; however, a benefit review conference is not a prerequisite for a contested case hearing under Labor Code §413.0311.

HB 1003 amends Labor Code §413.031 by adding subsection (e-2), which provides that an IRO that uses doctors to perform reviews of health care services provided under this title may only use doctors licensed to practice in this state.

HB 2004 adds Labor Code §408.0043, which provides that a doctor performing an independent review of a health care service provided to an injured employee, including a retrospective review, who reviews a specific workers' compensation case to hold a professional certification in a health care specialty appropriate to the type of health care that the injured employee is receiving.

Proposed amendments to §133.305(a) add definitions for "requestor," "respondent" and "retrospective medical necessity dispute." Additional proposed amendments renumber the paragraphs in the subsection accordingly. Additionally, a proposed amendment to subsection (a)(7) expands the definition of "non-network health care" as used in Texas Administrative Code, Title 28, Part 2, Chapter 133, Subchapter D to include health care delivered pursuant to Labor Code §413.011(d-1) and §413.0115. This amendment clarifies that health care provided through a voluntary or informal network is non-network health care.

Proposed §133.307(a) specifies that the section is applicable to a request for medical fee dispute resolution for non-network or certain out-of-network health care: pending on September 1, 2007; remanded to the Division on or after September 1, 2007; or filed on or after September 1, 2007.

Proposed amendments to §133.307(c)(2)(A) and (B) and to subsection (d)(2)(A) and (3)(A) clarify that medical bills and explanation of benefits must be in a paper format rather than the format used for electronic submission of these documents. A proposed amendment to subsection (c)(3)(C) replaced the word "proof" with the word "documentation" and clarifies that documentation of employment payment may include provider billing statements or like documents, in addition to copies of receipts.

An amendment to §133.307(d) adds language to specify that the response to a request for MDR must be submitted to the Division and to the requestor.

Proposed amendments to §133.307(e)(1) specify that when additional information is requested by the Division, the party providing the additional information must also send a copy of the information to all other parties at the time it is submitted to the Division.

Proposed new §133.307(f) introduces another level of administrative hearings into the MDR process that allow a hearing either before the SOAH or through the Division's contested case hearing process. Language changes are proposed to reflect the new appeal process, to update statutory citations, and to be consistent with language in §133.308.

Under proposed §133.307(f)(1), parties to fee disputes in which the amount of reimbursement sought by the requestor in its request is greater than $2,000 may request a hearing before the SOAH. Proposed §133.307(f)(1)(A) says that to request a contested case hearing before SOAH, a party shall file a written request for a SOAH hearing with the Division's Chief Clerk of Proceedings in accordance with 28 TAC §148.3. Proposed §133.307(f)(1)(B) requires the party seeking review of the MDR decision to deliver a copy of its written request for a hearing to all other parties involved in the dispute at the same time the request for hearing is filed with the Division.

Under proposed §133.307(f)(2), parties to fee disputes in which the amount of reimbursement sought by the requestor in its request is less than or equal to $2,000 dollars may appeal the MDR decision by requesting a contested case hearing held by the Division. Proposed §133.307(f)(2)(A) says that to request a Division contested case hearing, a written request for a Division contested case hearing must be filed with the Division's Chief Clerk no later than the 20th day after the date on which the decision is received by the appealing party; that the request must be filed in compliance with Division rules; and that the party appealing the decision shall deliver a copy of its written request for a hearing to all other parties involved in the dispute at the same time the request for a hearing is filed with the Division. Proposed §133.307(f)(2)(B) notes that requests that are timely submitted to a Division location other than the Division's Chief Clerk, such as a local field office of the Division, will be considered timely filed and forwarded to the Chief Clerk for processing; however this may result in a delay in the processing of the request; and that any decision that is not timely appealed becomes final. To avoid overlap with 28 TAC Chapter 148, the current §133.307(h) is proposed to be moved to §133.307(f)(2)(C), and is made applicable only to Division contested case hearings. Proposed §133.307(f)(2)(D) says that at a Division contested case hearing under this paragraph, the parties shall be limited to documentary evidence exchanged and to witnesses reasonably disclosed in said documentary evidence during the medical fee dispute under this subchapter except upon a showing of good cause, and that parties may not raise issues regarding liability, compensability, or medical necessity at a contested case hearing for a medical fee dispute. Proposed §133.307(f)(2)(E) says that except as otherwise provided in the section, a Division contested case hearing shall be conducted in accordance with Chapters 140 and 142 of Title 28. Proposed §133.307(f)(2)(F) reflect the new appeal process. Proposed §133.307(f)(2)(G) clarify that the costs of preparing a certified record of hearing shall be the responsibility of the party seeking judicial review, and that upon request, the Division shall consider the financial ability of the party to pay the costs, or any other factor that is relevant to a just and reasonable assessment of costs. The specific list of items included in the record for appeal pursuant to the current rule is proposed to be removed. This list was useful in ensuring that records of medical dispute resolution decisions appealed directly to court were consistently prepared. Such a list is not necessary for records of contested case hearings.

Proposed amendments make §133.308 applicable to independent review of disputes: pending on September 1, 2007; remanded to the Division on or after September 1, 2007; or filed on or after September 1, 2007.

A proposed amendment to §133.308 creates a new subsection (c), which establishes that an IRO that uses doctors to perform reviews of health care services provided under §133.308 may only use doctors licensed to practice in Texas.

A proposed amendment to §133.308 creates a new subsection (d), which specifies that an IRO doctor performing a review under §133.308 shall be a doctor who is qualified by education, training and experience to provide all health care reasonably required by the nature of the injury to treat the condition until further material recovery from or lasting improvement to the injury can no longer reasonably be anticipated. Proposed amendments reletter the subsections which follow accordingly.

Proposed amendments to relettered §133.308(i) clarify that a requestor shall file a request for independent review with the insurance carrier that actually issued the adverse determination or the carrier's utilization review agent that actually issued the adverse determination no later than the 45th calendar day after receipt of the denial of reconsideration, and clarify that a carrier shall notify the Texas Department of Insurance (Department) of a request for independent review on the same day the request is received by the carrier or its URA.

Proposed amendments to §133.308 in relettered subsections (k) and (p)(1)(F) remove references to Insurance Code Articles 21.58C and 21.58A, which have been recodified as Texas Insurance Code Chapters 4202 and 4201.

A proposed amendment to relettered §133.308(h)(2) corrects a punctuation error.

A proposed amendment to relettered §133.308(j)(2) changes the phrase "individual or entity requesting medical necessity dispute resolution" to "requestor," and a proposed amendment to paragraph (5) in relettered subsection (j) reflects the fact that subsection (g) is relettered as subsection (i).

In regard to non-network retrospective medical necessity dispute resolution when reimbursement was denied for health care paid by the employee, a proposed amendment in relettered §133.308(r) clarifies that IRO fees are to be remitted to the assigned IRO by the carrier. A proposed amendment in relettered subsection (r)(9) states that §133.308 shall not be deemed to require an employee to pay for any part of a review, and that if application of a provision of the section would require an employee to pay for part of the cost of a review, that the cost shall instead be paid by the carrier.

A proposed amendment to relettered §133.308(t) specifies that in a contested case hearing, a decision issued by an IRO carries presumptive weight that may only be overcome by a preponderance of evidence-based medical evidence to the contrary. Proposed amendments to relettered §133.308(t)(1)(A) and (B), introduce another level of administrative hearings into the MDR process that allow a hearing either before the SOAH or through the Division's contested case hearing process. Under the proposed amendments, parties to retrospective medical necessity disputes in which the amount billed is greater than $3,000 may request a hearing before the SOAH by filing a written request for a SOAH hearing in accordance with 28 TAC §148.3 (relating to Requesting a Hearing); and parties to retrospective medical necessity disputes in which the amount billed is less than or equal to $3,000 dollars or who are appealing an IRO decision regarding determination of the concurrent or prospective medical necessity for a health service may appeal the IRO decision by requesting a Division contested case hearing.

Proposed §133.308(t)(1)(A) specifies that a party to a retrospective medical necessity dispute in which the amount billed is greater than $3,000 may request a hearing before the SOAH by filing a written request for a SOAH hearing with the Division's Chief Clerk of Proceedings in accordance with §148.3 of this title (relating to Requesting a Hearing), and that the party appealing the IRO decision shall deliver a copy of its written request for a hearing to all other parties involved in the dispute.

Proposed §133.308(t)(1)(B) specifies that a party to a retrospective medical necessity dispute in which the amount billed is less than or equal to $3,000 or an appeal of an IRO decision regarding determination of the concurrent or prospective medical necessity for a health care service may appeal the IRO decision by requesting a Division contested case hearing conducted by a Division hearing officer, and that a benefit review conference is not a prerequisite to a Division contested case hearing under the subparagraph. Proposed subsection (t)(1)(B)(i) states that a party is required to file an appeal with the Division's Chief Clerk no later than 20 days from the date the IRO decision is sent to the appealing party, and that the appeal must be filed in compliance with Division rules. Proposed subsection (t)(1)(B)(ii) requires the appealing party to deliver a copy of its written request for a hearing to all other parties in the dispute, and says that the IRO is not required to participate in the Division contested case hearing or any appeal. Proposed subsection (t)(1)(B)(iii) says that except as otherwise provided in the section, the hearing will be conducted in accordance with Chapters 140 and 142 of Title 28 of the Texas Administrative Code. Proposed subsection (t)(1)(B)(iv) provides that prior to a Division contested case hearing, a party may submit a request for a letter of clarification by the IRO to the Division's Chief Clerk; that a copy of the request for a letter of clarification must be provided to all parties involved in the dispute at the time it is submitted to the Division, but the request may not ask the IRO to reconsider its decision or issue a new decision. Proposed subsection (t)(1)(B)(iv)(I) specifies that a party's request for a letter of clarification must be submitted to the Division no later than 10 days before the date set for hearing, and that the request must include a cover letter that contains the names of the parties and all identification numbers assigned to the hearing or the independent review by the Division, the Department, or the IRO. Proposed subsection (t)(1)(B)(iv)(II) specifies that the Department will forward a party's request for a letter of clarification by the IRO to the IRO that conducted the independent review. Proposed subsection (t)(1)(B)(iv) and (v)(III) specifies that the IRO shall send a response to the request for a letter of clarification to the Department and to all parties that received a copy of the IRO's decision within 5 days of receipt of the party's request for a letter of clarification, and that the IRO's response is limited to clarifying statements in its original decision; the IRO shall not reconsider its decision and shall not issue a new decision in response to a request for a letter of clarification. Proposed subsection (t)(1)(B)(iv)(IV) specifies that a request for a letter of clarification does not alter the deadlines for appeal. Proposed subsection (t)(1)(B)(v)(I) - (VII) lists what evidence is admissible in a Division contested case hearing: the request for preauthorization, concurrent, or retrospective review; the request denial; the request for reconsideration and the reconsideration denial; the request for independent review filed with the carrier or the carrier's URA; the documents submitted to the IRO by the carrier or the carrier's URA; all additional information obtained and considered by the IRO; any letter of clarification prepared by the IRO that conducted the independent review; and testimony from witnesses whose identity is reasonably disclosed in the documentation submitted for review pursuant to the clause. Proposed subsection (t)(1)(B)(v)(VIII) says that other evidence may be admitted for good cause, and that good cause evidence includes evidence considered by the IRO that had not been exchanged by one party to the other; proposed subsection (t)(1)(B)(vi) provides that a decision becomes final and appealable when issued by a Division hearing officer, and that a party who has exhausted all of its administrative remedies, and who is still aggrieved by a final decision may seek judicial review of the decision in the manner provided for judicial review of contested cases under Chapter 2001, Subchapter G of the Government Code. Proposed subsection (t)(1)(B)(vii) provides that upon receipt of a court petition seeking judicial review of a contested case hearing, the Division shall prepare and submit to the District Court a certified record of the contested case hearing. Proposed subsection (t)(1)(B)(vii)(I)(-a-) - (-e-) lists what must be included in notice to the Division concerning an appeal for judicial review. Proposed subsection (t)(1)(B)(viii)(II)(-a-) - (-f-) lists what is included in a certified record. Proposed subsection Cont'd...