The Commissioner of Workers' Compensation (Commissioner), Texas Department of Insurance (Department), Division of Workers' Compensation (Division), adopts amendments to §§133.305, 133.307, and 133.308, concerning medical dispute resolution (MDR). The amendments are adopted with changes to the proposed text published in the December 14, 2007, issue of the Texas Register (32 TexReg 9257).

In addition to the publication of the proposal on December 14, 2007, a correction of error notice was published in the December 28, 2007, issue of the Texas Register (32 TexReg 10110) to correct a typographical error in the preamble of the proposed rule; the correction of error did not pertain to any proposed amendments to the rule text.

The amendments are necessary to implement statutory provisions of House Bill (HB) 724, HB 1003, and HB 2004 enacted by the 80th Legislature, Regular Session, effective September 1, 2007; and to clarify provisions of and ensure compliance with fee payment to independent review organizations (IROs). The 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 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 amended Labor Code §413.031(k) and added 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 SOAH for any dispute that remains unresolved after MDR or IRO review. A party aggrieved by a final decision of SOAH may seek judicial review conducted in the manner provided for judicial review of a contested case under Subchapter G, Chapter 2001 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 Subchapter D, Chapter 410 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 - 408.0045 to the Labor Code. Labor Code §408.0043 provides that a doctor, other than a dentist or chiropractor, who reviews a specific workers' compensation case regarding a health care service provided to an injured employee must hold a professional certification in a health care specialty appropriate to the type of health care that the injured employee is receiving. Labor Code §408.0044 provides that a dentist who reviews a dental service provided in conjunction with a specific workers' compensation case must be licensed to practice dentistry. Labor Code §408.0045 provides that a chiropractor who reviews a chiropractic service provided in conjunction with a specific workers' compensation case must be licensed to engage in the practice of chiropractic.

Non-substantive changes based on comments were made to the proposed rule text at §133.307(a), (c)(2)(A), (c)(3)(C), (d)(2)(A)(i), (d)(2)(A)(ii), (d)(3)(A), (e)(3)(J), (f)(2)(A), (f)(2)(C), and (f)(2)(D); and §133.308(a), (d), (g)(1), (i), (l)(2), (l)(3), (t), (t)(1)(B)(i), (t)(1)(B)(ii), and (t)(1)(B)(v) - (vii).

In regard to proposed §133.307(a) and §133.308(a) (both subsections relating to Applicability), some commenters expressed concern that the proposed sections would be inappropriately made applicable to situations not covered by the controlling statutes on which the rules are based. The Division agrees in part and disagrees in part with the comments. In response to the comments, the Division has clarified that the purpose of the proposed applicability provisions was to make the proposed sections applicable only to disputes expressly addressed in the applicability provisions of HB 724. The Division recognizes that not all the amendments in the proposed sections were based on HB 724; some proposed amendments were based on provisions of Labor Code §413.031 that were not amended by HB 724, and some proposed amendments were based on HB 1003 or HB 2004. In response to the concerns voiced in comments, the Division adopts language in §133.307(a) that makes the section generally applicable to requests for medical fee dispute resolution for non-network or certain authorized out-of-network health care not subject to a contract, that is remanded to the Division or filed on or after May 25, 2008, and the Division adopts language in §133.308(a) that makes the section generally applicable to the independent review of network and non-network preauthorization, concurrent, or retrospective medical necessity disputes that is remanded to the Division or filed on or after May 25, 2008. However, Labor Code §413.031 as amended by HB 724 and Labor Code §413.0311 as added by HB 724 address situations in which there was no controlling law prior to HB 724, because the previous controlling statutory provision, Labor Code §413.031(k), was struck down as unconstitutional. HB 724, Section 9, contains explicit provisions concerning applicability of Labor Code §413.031 and Labor Code §413.0311, and the Division adopts in §133.307(a)(2) and §133.308(a)(2) those applicability provisions. In regard to applicability of §133.307(f) and §133.308(t)(1), the provisions in the rule that are based on Labor Code §413.031 as amended by HB 724 and Labor Code §413.0311 as added by HB 724.

In regard to proposed §133.307(c)(2)(A), a commenter expressed support for the provision, but recommended that the provision specify that electronic billing data be submitted in a format prescribed by the Division to avoid the data being filed using multiple formats. The Division agrees with this suggestion, and in response to the comment adopts language in §133.307(c)(2)(A) that states a request for medical fee dispute resolution shall include, "a copy of all medical bill(s), in a paper billing format using an appropriate DWC approved paper billing format . . . ."

In regard to proposed §133.307(c)(3)(C), some commenters objected to the amendment that would change the word "proof" to "documentation," and asked that this proposed amendment not be adopted. The commenters expressed concern that this amendment would reduce the burden of proof for a injured employee who requests dispute resolution. Additionally, some commenters suggested that additional items be added to the list in the parentheses at the end of the subparagraph, and one commenter suggested that the phrase "like documents" be changed to "similar documents." In response to the concern regarding the proposed change of "proof" to "documentation," the Division clarifies that §133.307(c)(3)(C) does not establish the burden of proof an injured employee must meet, but only lists the types of evidence an injured employee should provide to the Division in support of his or her claim. As such, changing the word "proof" to "documentation" would not weaken an injured employee's burden. However, in response to the comments, the Division agrees. In regard to the suggested additional items, the Division clarifies that the list in §133.307(c)(3)(C) is not intended to be exhaustive, and explains that the suggested items might be relevant to a fee dispute proceeding. However, rather than adopting an extensive list, in response to the comment the Division has added the word "including" to the start of the list to clarify that the list is not exhaustive and that additional items might be provided to the Division as proof of injured employee payment. The Division agrees to adopt the phrase "similar documents" in lieu of the proposed phrase "like documents," to clarify that the list is not exhaustive.

In regard to proposed §133.307(d)(2)(A)(i) and (ii), a commenter requested clarification regarding the requirement for the carrier to provide copies of EOBs and medical bills "in a paper format;" the commenter asked whether the provision would allow a carrier to submit e-billing and payment data in a paper format of its choice. In response to the comment, the Division clarifies that paper formats used should be in a Division approved paper billing format. The Division also specifies in §133.307(d)(2)(A)(i) that initial and reconsideration EOBs should be submitted "in a paper explanation of benefits format using an appropriate DWC approved paper billing format," and similarly specifies in §133.307(d)(2)(A)(ii) that specifies that copies of medical bills should be submitted "in a paper billing format using an appropriate DWC approved paper billing format."

In regard to proposed §133.307(d)(3)(A), a commenter noted that the proposed provision would require a health care provider responding to a request for medical fee dispute resolution to include with its response copies of relevant medical bills in a paper billing format. The commenter suggested that the provision additionally specify that the paper billing format used be a format prescribed by the Division, in order to avoid confusion that could arise if the format were not specified. The Division agrees with the suggestion, and specifies in §133.307(d)(3)(A) that medical bills submitted under the paragraph should be submitted "in a paper billing format using an appropriate DWC approved billing format."

In regard to proposed §133.307(e)(3)(J), commenters expressed concern that the rule does not provide the Division authority to dismiss a request for medical fee dispute resolution upon finding that the disputed health care treatment is not related to the compensable injury or finding that there is no compensable workers' compensation claim. The Division agrees that fee dispute resolution would not be appropriate when service has been found not to be related to a compensable injury. However, the Division has amended §133.307(e)(3)(J) to clarify that a dismissal may occur if "the Division determines that good cause exists to dismiss the request; including a party's failure to comply with the provisions of this section," but, the Division disagrees that the rule does not provide authority to dismiss because "good cause" could address these situations. If issues of medical necessity or compensability have already been raised and conclusively adjudicated, no medical necessity exists, or, the service is not related to a compensable claim, then good cause would exist to dismiss the request for fee dispute resolution.

In regard to proposed §133.307(f)(2)(A), a commenter expressed concern that a party may not be able to meet the time frames proposed in the subparagraph when a medical review decision has been decided prior to the effective date of these adopted sections. The Division agrees that questions might exist in regard to the time frame for a party to file a request for an appeal to a Division contested case hearing when a medical dispute decision was issued between September 1, 2007, and the effective date of the rule, and that this concern is applicable to appeals to Division contested case hearings under both §133.307(f)(2)(A) and §133.308(t)(1)(B)(i). In response to the comment, the Division has adopted §133.307(f)(2)(A) with a minor change indicating that a written request for a contested case hearing must be filed "no later than the later of the 20th day after the effective date of this section or the 20th day after the date on which the decision is received by the appealing party," and the Division has adopted §133.308(t)(1)(B)(i) with a minor change indicating that a written request for a contested case hearing must be filed "no later than the later of the 20th day after the effective date of this section or 20 days after the date the IRO decision is sent to the appealing party."

A commenter recommended grammatical revisions to proposed §133.307(f)(2)(C). The Division agreed that the suggested edits provided clarity and revised §133.307(f)(2)(C) to state "Prior to a Division contested case hearing, either party may request a correction of a clerical error in a decision" and that "A request for a correction of a clerical error does not alter the deadlines for appeal."

In regard to §133.307(f)(2)(D) and §133.308(t)(1)(B)(v) (both provisions relating to the admission of evidence and witness testimony in Division contested case hearings), several commenters expressed concern that limiting admissible evidence to information presented during the MDR or IRO process goes against public policy in that it prevents parties from presenting complete claims and defenses. The commenters also indicated a concern that due process issues may arise if parties have insufficient time to investigate and respond to allegations which arise during a supplemental evidence exchange. The Division agrees that in order to eliminate due process challenges to the Division hearing process, the proposed sections should be revised and the first sentence of §133.307(f)(2)(D) and the entirety of §133.308(t)(1)(B)(v) as proposed were removed. In addition, limitations on documentary evidence admissible at a contested case hearing or limitations on witnesses who had not been disclosed during the MDR or IRO processes were not included in the adopted sections. As a result of not adopting proposed §133.308(t)(1)(B)(v), proposed §133.308(t)(1)(B)(vi) and (vii) have been renumbered in the adopted text as §133.308(t)(1)(B)(v) and (vi).

A commenter suggested that an IRO should be required to appear and testify at an appeal of the IRO's decision at no cost to the parties. In response, the Division explains that pursuant to Insurance Code §4202.009 "Information that reveals the identity of a physician or other individual health care provider who makes a review determination for an independent review organization is confidential." To further clarify this in the rule text, the provision "The IRO is not required to participate in the SOAH hearing or any appeal" has been incorporated into and adopted in §133.308(t)(1)(A).

Several commenters made various suggestions regarding the language in §133.308(d). One commenter asked that the subsection be revised to provide additional clarification to parties. Two commenters suggested changing the word "all" to "the," because it is not necessary that a reviewer have the qualifications to provide all the care that might be required by an injury, only the qualifications related to the specific service being reviewed. Two commenters suggested adding the sentence, "Nothing in this subsection shall be construed to limit the clear statutory obligation to continually provide care that is necessary to cure or relieve the condition," to the end of the subsection, as a reference back to the governing statues which could help to eliminate potential disagreements related to the interpretation of the phrase "material recovery from or lasting improvement," and would better ensure that an injured worker receives necessary care by having an appropriate initial review rather. Additionally, one commenter requested that the medical specialty of spinal surgery be expressly addressed in subsection (d), and another commenter requested that the medical specialty of orthopedic surgery be expressly addressed in subsection (d). The Division does not believe these specialties need to be addressed because no distinction is made regarding them in HB 2004. However, the Legislature did make distinctions regarding dentistry and the practice of chiropractic in HB 2004 and the Division does believe it is appropriate to address these fields of practice in subsection (d). In response to these comments, the Division has revised the language that was proposed in §133.308(d), and adopted the following text: "Professional specialty requirements. Notwithstanding Insurance Code Chapter 4202, an IRO doctor, other than a dentist or a chiropractor, performing a review under this section shall be a doctor who would typically manage the medical or dental condition, procedure, or treatment under consideration for review, and who is qualified by education, training and experience to provide the 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. A dentist meeting the requirements of subsection (c) of this section may perform a review of a dental service under this section, and a chiropractor meeting the requirements of subsection (c) of this section may perform a review of a chiropractic service under this section. Nothing in this subsection can be construed to limit an injured employee's Cont'd...