The Commissioner of Workers' Compensation (Commissioner), Texas Department of Insurance (Department), Division of Workers' Compensation (Division) adopts amendments to §133.307 and §133.308 (relating to MDR of Fee Disputes and MDR of Medical Necessity Disputes, respectively). The amendments to §133.307 and §133.308 are adopted with changes to the proposed text as published in the March 23, 2012, issue of the Texas Register (37 TexReg 1980). These changes are more fully discussed below. These changes do not materially alter issues raised in the proposal, introduce new subject matter, or affect persons other than those previously on notice.

In accordance with Government Code §2001.033(a)(1), the Division's reasoned justification for these rules is set out in this order, which includes the preamble. The preamble contains a summary of the factual basis of the rules, a summary of comments received from interested parties, the names of entities who commented and whether they were in support of or in opposition to the adoption of the rule, and the reasons why the Division agrees or disagrees with the comments and recommendations.

The Division published an informal draft of the proposed amendments on the Division's website for informal comment on December 6, 2011. There were five informal comments received. Following formal proposal of the amendments, the Division conducted a public hearing on April 13, 2012. The public comment period closed on April 23, 2012. The Division received nine formal public comments.

The Division also published the following drafts of TDI-DWC forms for informal comment simultaneously with the rules proposed for formal comments. These informal draft forms pertain to medical dispute resolution and arbitration: Medical Fee Dispute Resolution Request, DWC Form-060; Election to Engage in Arbitration, DWC Form-044; Request to Schedule, Reschedule, or Cancel a Benefit Review Conference for Appeal of a Medical Fee Dispute Decision (BRC-MFD), DWC-Form 45M; and Request to Schedule Medical Contested Case Hearing (MCCH), DWC Form-49.

These adopted amendments implement statutory changes in House Bill 2605 and Senate Bill 809, enacted by the 82nd Legislature, Regular Session, effective September 1, 2011 (HB 2605 and SB 809) that concern the appeals process for medical fee disputes and medical necessity disputes, as well as the expedited provision of medical benefits for certain injuries sustained by first responders. These adopted rules also clarify and update Division rules in accordance with the provisions of other Division rules and Labor Code, Title 5 when performing medical dispute resolution activities under the Act.

HB 2605 made several legislative amendments that impact the resolution of medical fee dispute cases adjudicated by the Division. This bill enacted Labor Code §413.0312, which alters the appeals process applicable to medical fee disputes after the Division's review under Labor Code §413.031. Newly added Labor Code §413.0312 provides one appeal process for medical fee disputes regardless of the amount of reimbursement sought. Prior to the enactment of HB 2605, appeals of medical fee disputes were handled by a Division contested case hearing (CCH) if the amount of reimbursement sought by the requestor in an individual fee dispute was $2,000 or less or a contested case hearing conducted by the State Office of Administrative Hearings (SOAH) if the amount of reimbursement sought exceeded $2,000. Parties who had exhausted all administrative remedies and who were aggrieved by the final decision of SOAH could seek judicial review of the decision in the manner provided for judicial review of a contested case under Chapter 2001, Subchapter G Government Code.

Pursuant to Labor Code §413.0312, the appealing party is now required to mediate the medical fee dispute at a benefit review conference (BRC) under Labor Code Chapter 410, Subchapter B. If the dispute remains unresolved after a BRC, the parties may elect to engage in binding arbitration as provided by Labor Code §413.0312(d) and under Chapter 410, Subchapter C. However, if arbitration is not elected, the party is entitled to a contested case hearing at SOAH to resolve the dispute in the manner provided for a contested case under Chapter 2001, Government Code. A party who has exhausted all administrative remedies and who is aggrieved by a final decision of SOAH may seek judicial review of the decision in the manner provided for judicial review of a contested case under Chapter 2001, Subchapter G Government Code and Labor Code §413.031(k-1).

In addition to altering the appellate process applicable to medical fee disputes, Labor Code §413.0312 also requires reimbursement to the Division for the costs for services provided by SOAH in a contested case hearing involving a medical fee dispute. Except in cases where the injured employee is the nonprevailing party, Labor Code §413.0312(g) requires the nonprevailing party in the contested case hearing to reimburse the Division for the costs of a SOAH proceeding. If an injured employee is a nonprevailing party, Labor Code §413.0312(g) requires the insurance carrier to reimburse the Division for the SOAH costs unless otherwise agreed by the parties. Reimbursement must be remitted to the Division not later than the 30th day after the date of receiving a bill or statement from the Division. Labor Code §413.0312(k) requires the Commissioner of Workers' Compensation to adopt rules that establish a procedure that will enable the Division to charge a party to a medical fee dispute, other than an injured employee, for the costs of services provided by SOAH in medical fee dispute cases.

In accordance with §44 of HB 2605, the above described legislative amendments affecting medical fee disputes apply only to the appeal of a medical fee dispute that is based on a review conducted by the Division on or after June 1, 2012. An appeal of a medical fee dispute that is based on a review conducted by the Division before that date is governed by the prior law.

HB 2605 also enacted legislative changes that affect the manner in which a person appeals a decision by an independent review organization (IRO). Specifically, this bill (1) amended Insurance Code §1305.355 and added §1305.356 which concerns the appeal of an IRO decision involving health care in a certified workers' compensation network; (2) amended Labor Code §413.031(k) and (k-1) which concerns the appeal of an IRO decision involving health care provided outside of a certified network; and (3) enacted Labor Code §504.054 which concerns the appeal of an IRO decision involving health care provided by a political subdivision in accordance with Labor Code §504.053(b)(2). These statutory amendments provide that a party to a medical necessity dispute that remains unresolved after review by an IRO is entitled to a contested case hearing conducted by a Division hearing officer in accordance with Labor Code §413.0311. Additionally, the new provisions require that in cases involving health care in a certified network, the hearing officer conducting the hearing shall consider evidence-based treatment guidelines adopted by the certified network. In a similar manner, the new statutory provisions in the Labor Code require that in cases involving health care provided by a political subdivision under Labor Code §504.053(b)(2), the hearing officer conducting the hearing shall consider any treatment guidelines adopted by the political subdivision or pool if those guidelines meet the standards provided by Labor Code §413.011(e). A party who has exhausted all administrative remedies and who is aggrieved by a final decision of the Division's hearing officer may seek judicial review of the decision in the manner provided for judicial review of a contested case under Chapter 2001, Subchapter G Government Code.

As stated above, this adoption is also designed to implement provisions in SB 809 which concern a party's right to seek judicial review after exhausting the applicable administrative remedies in the medical fee dispute or review of the IRO decision as described above. HB 2605 provides for judicial review for network appeals. SB 809 amended Labor Code §413.031(k-1) and specifies the time frames for a party seeking judicial review. In a medical fee dispute, SB 809 provides in Labor Code §413.031(k-1) that the party seeking judicial review of a SOAH decision must file suit not later than the 45th day after the date on which SOAH mailed the party the notification of the decision. For purposes of Labor Code §413.031(k-1), the mailing date is considered to be the fifth day after the date the decision was issued by SOAH. In an appeal of an IRO decision, SB 809 provides in Labor Code §413.0311(d) that a party seeking judicial review of a decision of a Division hearing officer must file suit not later than the 45th day after the date on which the Division mailed the party the decision of the hearings officer. The mailing date is considered to be the fifth day after the date the decision of the hearings officer was filed with the Division.

Finally, this adoption implements provisions in HB 2605 that concern a first responder's claim for medical benefits. HB 2605 enacted Labor Code §504.055 and §504.056 which apply to a first responder as defined in Labor Code §504.055 who sustains a serious bodily injury in the course and scope of employment. These statutes require the political subdivision, Division, and insurance carrier to accelerate and give priority to a first responder's claim for medical benefits, including all health care required to cure or relieve the effects naturally resulting from a compensable injury. These statutes further require the Division to accelerate, under rules adopted by the Commissioner, a contested case hearing requested by or an appeal submitted by a first responder regarding the denial of a claim for medical benefits. A first responder is required to provide notice to the Division and IRO that the contested case or appeal involves a first responder.

These adopted amendments are necessary in order to implement and incorporate the above described amendments and new provisions into existing Division rules that govern medical dispute resolution. The adopted amendments conform §133.307 to the appeal process provisions in HB 2605 for medical fee disputes, including provisions that require reimbursement to the Division for the costs of SOAH in a medical fee dispute. The adopted amendments to §133.308 conform that rule to legislative changes in HB 2605 that govern the appeal of an IRO decision in a medical necessity dispute. These adopted amendments also incorporate into §133.307 and §133.308 provisions that will provide for the accelerated review of a covered first responder's claim for medical benefits in medical fee and medical necessity disputes.

These adopted amendments also include changes that are intended to provide system participants with a clearer understanding of the appeals process for the appeal of Medical Fee Dispute Resolution (MFDR) Section decisions and IRO decisions. These changes will also provide the Division with greater flexibility in performing the appeals processes. Finally, to conform to current nomenclature this adoption also makes non-substantive changes in terminology throughout §133.307 and §133.308 such as adding the language "in the form and manner required by the division" to text and changing the terms "Department" to "department", "Department's" to "department's", "Division of Workers' Compensation" or "Division" to "division", "Division's" to "division's", and adding the words "health care" to "provider", "injured" to "employee", and "insurance" to "carrier." The terms "provider" and "MDR" have been deleted from these adopted rules and replaced with the terms "health care provider" and "medical fee dispute resolution", respectively. In some instances, the acronym "MDR" has been deleted and changed to "MFDR." The term "MDR" has meant medical dispute resolution. The proposed term "MFDR" means medical fee dispute resolution and the process for the resolution of medical fee disputes is the focus of adopted §133.307.

The Division has changed some of the proposed language in the text of the rule as adopted in response to public comments received. The Division received a comment recommending that the Division clarify the information that subclaimant requestors are required to submit to the Division when seeking MFDR. In response to this comment, the Division removed the word "subclaimant" from §133.307(c)(2) and adopted new §133.307(c)(3) which contains requirements for subclaimant dispute requests. Adopted §133.307(c)(3) provides that the requestor shall provide the appropriate information with the request that is consistent with the provisions of 28 TAC §140.6 or §140.8 of this title (relating to Subclaimant Status: Establishment, Rights, and Procedures and Procedures for Health Care Insurers to Pursue Reimbursement of Medical Benefits under Labor Code §409.0091). A request made by a subclaimant under Labor Code §409.009 shall comply with 28 TAC §140.6. A request made by a subclaimant under Labor Code §409.0091 shall comply with the document requirements of 28 TAC §140.8.

The Division received comments that disagreed with language in proposed §133.307(g). The commenters believed the proposed text could be misconstrued to prohibit the parties from raising at a BRC or at SOAH defenses relating to disputes over compensability, extent of injury, liability, or medical necessity that have not yet been finally adjudicated, and that the proposed text would prohibit parties from abating the case until the issues are resolved. Since the Division's proposed language was intended to prevent litigation of the issues affecting the injured employee without their presence, in response to suggested language the Division changed §133.307(g) to state that "if a party provides the benefit review officer or administrative law judge with documentation listed in subsection (d)(2)(H) or (I) of this section that shows unresolved issues regarding compensability, extent of injury, liability, or medical necessity for the same service subject to the fee dispute, then the benefit review officer or administrative law judge shall abate the proceedings until those issues have been resolved." This adopted rule is necessary to prevent the injured employee who may not be a party to the fee dispute from being bound by the ruling. Furthermore, it prevents a carrier from being ordered to pay for a bill in which it has no underlying legal obligation. Finally, it prevents conflicting or duplicative decisions. The requirement to present evidence is so the benefit review officer or administrative law judge can verify the existence of a dispute before abating the proceedings.

The Division received a comment that requested text in §133.307(g) that would allow a party to a medical fee dispute to appear at a benefit review conference via telephone. In response, the Division adopted text in §133.307(g)(1) that provides that a party may appear at a benefit review conference via telephone.

The Division received comments that disagreed with proposed text that would require an insurance carrier or the insurance carrier's utilization review agent to provide to the IRO a list of the health care providers known by the insurance carrier to have provided care to the injured employee who have medical records relevant to the review. In response to this comment, the Division did not adopt this requirement.

The Division has also made changes to some of the proposed text that are not in response to comment that are non-substantive and necessary to clarify and correct as proposed. First, the Division throughout §133.307 and §133.308 has replaced the term "reconsideration" with "appeal." This nonsubstantive change is being made due to ongoing standardization of this terminology across the health care industry and in Division and Department rules. This change occurs in §133.307(c)(2)(J), (d)(2)(B), (f)(3)(A); and §133.308(h), (i)(3), (k)(5) and (s)(2)(D). The Division clarifies that the usage of the term "appeal" in §133.307(c)(2)(J), (d)(2)(B), and (f)(3)(A) refers to appeals submitted to the insurance carrier in accordance with §133.250 of this title regarding medical bill processing/audit by insurance carrier. The Division also clarifies that the usage of the term "appeal" in §133.308(h), (i)(3), (k)(5) and (s)(2)(D) refers to appeals submitted to the insurance carrier or the insurance carrier's utilization review agent in accordance with §133.250 of this title or §134.600 of this title regarding prospective and concurrent review of health care, as applicable. Second, the Division in §133.308(g)(2) has corrected the name of the area within the Department from which a person may obtain an IRO request form. The Division has corrected this name to read the "Managed Care Quality Assurance Office."

Description of adopted amendments to §133.307

Section 133.307 governs non-certified network medical fee dispute resolution. The adopted amendments to subsection (a) make this rule applicable to a request for MFDR as authorized by the Act that is filed on or after June 1, 2012. Fee disputes filed with the Division prior to June 1, 2012 will be governed by the statutes and rules in effect immediately before the effective date of HB 2605. The Division has adopted the date of June 1, 2012 in §133.307 to be consistent with §44 of HB 2605. This adopted amendment is necessary because under §44 of HB 2605, the new appellate process applies only to the appeal of a medical fee dispute that is based on a review conducted by the Division on or after June 1, 2012. Additionally, since HB 2605 now places the financial liability of SOAH costs on the non-prevailing party in a medical fee dispute, this adopted applicability date is necessary because it will ensure that parties requesting appeals of medical fee disputes at SOAH will have clear notification of their potential liability in the cases.

Adopted §133.307(a)(3) requires that a request for medical fee dispute resolution that involves a first responder's request for reimbursement of medical expenses paid by the first responder be accelerated by the Division and given priority in accordance with the provisions of Labor Code §504.055. This adopted amendment is necessary in order to implement Labor Code §504.055(e) which requires the Division to accelerate, under rules adopted by the Commissioner, an appeal submitted by a first responder regarding the denial of a claim for medical benefits.

The adopted amendments to §133.307(b) update the persons who may be requestors under the rule by adding subclaimants to the list of persons who may be requestors. Subclaimants are added in accordance with §§140.6, 140.7, and 140.8 of this title (relating to Subclaimant Status: Establishment, Rights, and Procedures; Health Care Insurer Reimbursement under Labor Code §409.0091; and Procedures for Health Care Insurers to Pursue Reimbursement of Medical Benefits under Labor Code §409.0091, respectively), which provide rules allowing subclaimants to participate in medical fee dispute resolution before the Division. This adopted amendment is necessary to conform §133.307 with those Chapter 140 rules.