The Texas Workers' Compensation Commission (the commission) proposes new §§133.305, 133.307 and 133.308 (concerning Medical Dispute Resolution--Definitions, Medical Dispute Resolution of a Medical Fee Dispute, and Medical Dispute Resolution by Independent Review Organization) and the simultaneous repeal of existing §133.305 (concerning Medical Dispute Resolution). The new rules and repeal are proposed to comply with statutory revisions regarding medical dispute resolution in the workers' compensation system. The commission's medical advisor has been involved in the development of these proposed new rules.

House Bill 2600 (HB-2600), adopted during the 2001 Texas Legislative Session, amended §413.031 of the Texas Labor Code concerning medical dispute resolution. With respect to medical dispute resolution, HB-2600 addresses the following:

* the items for which medical dispute resolution is available;

* an injured employee's right to request review of a medical service for which preauthorization is sought by the health care provider and denied by the insurance carrier;

* disputes over the amount of payment due for services determined to be medically necessary and appropriate for treatment of a compensable injury;

* review of the medical necessity of a health care service requiring preauthorization under §413.014 of the Texas Labor Code;

* review of the medical necessity of a health care service provided under Chapter 408 or Chapter 413 of the Texas Labor Code;

* the dispute resolution process for a dispute in which the injured employee has paid for health care and been denied reimbursement by the carrier;

* billing for commission or independent review organization (IRO) review; and

* the appeal of a commission decision or an IRO decision.

The issues for which medical dispute resolution is available include disputes as to fees and disputes regarding medical necessity of health care. Some of the medical necessity reviews are prospective (prior to providing the health care), and some are retrospective (after the health care has been provided). The manner in which the reviews are to be conducted is established by the statute. Fee disputes will continue to be resolved by the commission, as they are currently. Prospective and retrospective medical necessity reviews shall be conducted by an IRO under Article 21.58C, Insurance Code, in the same manner as reviews of utilization review decisions by health maintenance organizations. The statute also establishes the party that pays for commission review or the independent review, depending on the circumstances of the review and the decision reached by the commission or the IRO.

Existing §133.305 addresses medical dispute resolution pursuant to the statute in effect prior to the effective date of HB-2600. Because of the substantial statutory revisions, the commission is proposing repeal of existing §133.305, and adoption of a new §133.305. In addition, because the manner of review differs dependent on the type of dispute, the commission has separated the medical dispute resolution provisions into three rules.

Proposed §133.305 gives an overview of the medical dispute resolution processes, by defining the types of disputes and stating the requirement to file two separate dispute requests if the health care in dispute has issues as to fees and issues as to medical necessity.

Proposed §133.307 addresses medical dispute resolution for medical fee disputes. Proposed subsection (a) of this rule states that the rule applies to a request for resolution of a medical fee dispute for which the initial dispute resolution request was filed on or after January 1, 2002. This is in keeping with the HB-2600 provisions regarding the effectiveness of the statutory changes to Texas Labor Code §413.031. Dispute resolution requests filed prior to that date will be resolved in accordance with the rules in effect at the time the request was filed. Medical necessity is not an issue in a medical fee dispute.

Proposed subsection (b) states who may be a party to the various types of fee disputes.

Proposed subsections (c) - (e) set out the required content of a request and the time frames in which the various types of fee dispute requests must be filed. A request must be complete and timely filed to be accepted for filing by the commission.

The current rule restricts medical dispute resolution to 1 year after the date of service. However, by law, health care providers have nearly 1 year to bill for medical care in the workers' compensation system. This has meant that although providers can bill 11 months following the date of service, the 45-day timeframe that carriers have to process the bill (not to mention the requirement to request reconsideration on a denied/reduced bill) meant that the provider would not be able to access medical dispute resolution. In addition, the current rule does not provide for an extension of the 1 year limit if the carrier fails to timely process the bill. This meant that it was the provider who was punished for noncompliance by the carrier (because the carrier could delay processing until after the 1 year limit to request dispute resolution).

The proposed rules address these problems by tying the deadline to the carrier's action. The clock doesn't start until the carrier issues its final response to the request for reconsideration. In addition, the rule allows the provider to get into medical dispute resolution if the carrier fails to respond to the request for reconsideration. This helps ensure that noncompliance by the carrier doesn't further affect the provider. However, disputes need to be timely resolved and part of timely resolution of a dispute requires the dispute to be pursued with due diligence. Therefore, the time limits are not 1 year after the final denial but rather are 60 days which should be sufficient to identify and pursue a legitimate dispute while ensuring that the commission is not receiving disputes that are nine months old by the time they are received.

Proposed subsection (f) addresses a dispute in which an injured employee who has paid for health care is requesting reimbursement which the carrier has denied to the employee.

Proposed subsection (g) addresses where to file a request, how many copies must be filed, and how the commission will forward the request to the parties.

Proposed subsections (h) - (k) set out the required content, filing deadlines, and filing requirements for responses to requests for medical fee dispute resolution.

Proposed subsections (l) and (m) address requests from the commission for additional information, and commission dismissal of a request.

Proposed subsections (n) and (o) address the decision issued by the commission, commission assessment of fees in accordance with Texas Labor Code §413.020, and the requirement that the commission post the decision on the commission website after confidential information has been redacted from the decision.

Requirements for filing an appeal to the State Office of Administrative Hearings (SOAH) are addressed in proposed subsections (p) and (q).

Proposed new §133.308 applies to the independent review of prospective or retrospective medical necessity disputes for which the initial dispute resolution request was filed on or after January 1, 2002. This is in keeping with the HB-2600 provisions regarding the effectiveness of the statutory changes to Texas Labor Code §413.031. Dispute resolution requests filed prior to January 1, 2002 shall be resolved in accordance with the rules in effect at the time the request was filed.

HB-2600 requires that a review of the medical necessity of a health care service requiring preauthorization under Texas Labor Code §413.014 or commission rules be conducted by an IRO under Article 21.58C, Insurance Code, in the same manner as reviews of utilization review decisions by health maintenance organizations. HB-2600 also requires that a retrospective review of the medical necessity of a health care service provided under Texas Labor Code Chapter 408 or Chapter 413 be conducted by an IRO under Article 21.58C, Insurance Code, in the same manner as reviews of utilization review decisions by health maintenance organizations. These requirements are stated in proposed subsection (a).

Proposed subsection (b) states that an IRO performing independent review of health care provided in the workers' compensation system must be certified by the Texas Department of Insurance (TDI) pursuant to Article 21.58C of the Insurance Code. The IRO also must comply with the TDI rules regarding certification of IROs. In addition, subsection (b) states which other TDI rules apply to independent reviews in the workers' compensation system, and what modifications or exceptions to those rules apply to workers' compensation cases. In general, the modifications and exceptions are due to substantive differences in the Insurance Code and the Labor Code, and to terminology differences in the statutes and rules.

The remainder of the layout of proposed new §133.308 is similar to that of proposed new §133.307. Proposed subsection (c) states who may be a party to the various types of medical necessity disputes.

Proposed subsections (d) - (h) set out the required contents of a request, the time frames in which the various types of medical necessity dispute requests must be filed, and the requirements for filing with the carrier and the commission. A request must be complete and must be timely filed with the carrier to be accepted for filing by the commission. Parts of the request form must be filled in by the person requesting independent review, and part must be filled in by the carrier. As with IRO reviews under TDI rules, the request must be filed with the carrier, who completes the required information and files the request with the commission. In addition, however, when the requestor files a copy of the request with the carrier, the requestor must also file a copy with the commission. This will enable the commission to monitor the timeliness of carrier filings with the commission.

Proposed subsections (i) and (j) address commission assignment of an IRO and notification of that assignment to the parties by the commission and the IRO.

Proposed subsections (k) and (l) address confidentiality requirements and requests from the IRO for additional information. Proposed subsection (m) addresses the statutory provision that allows an IRO performing a review of medical necessity to request that the commission order an examination by a designated doctor under Texas Labor Code Chapter 408.

Proposed subsections (n) and (o) state the time deadlines for an IRO to issue a decision, and the requirements for an IRO to notify the parties and the commission of the IRO decision.

Proposed subsection (p) states the requirement that the commission post the IRO decision on the commission's Internet website after confidential information has been redacted from the decision.

Proposed subsection (q) addresses which party pays for the independent review; in accordance with the statute, this varies, dependent on whether the review is prospective or retrospective, and who prevails in the IRO decision.

Proposed subsection (r) reiterates the statutory provision that it is a defense for the carrier if the carrier timely complies with the IRO decision with respect to the medical necessity or appropriateness of health care for an injured employee. If an unresolved fee dispute issue exists at the time the IRO issues a decision of medical necessity, this subsection also clarifies that the carrier is not required to pay for the health care until the commission has resolved the medical fee dispute.

If an unresolved fee dispute issue exists at the time the commission receives an IRO decision finding medical necessity, proposed subsection (s) states that the commission shall proceed to resolve the medical fee dispute in accord with commission rules, after receipt of the IRO decision.

Proposed subsections (t) - (v) address appeals from an IRO decision. In accordance with HB-2600, an IRO decision in a prospective or a retrospective medical necessity dispute, with one exception, may be appealed by filing a written request for a SOAH hearing. The appeal must be filed with the commission; the commission then files the request for hearing with SOAH. The parties to the dispute must represent themselves before SOAH, and the IRO is not required to participate in the SOAH hearing. HB-2600 requires the commission to also post SOAH decisions on the commission's Internet website after confidential information has been redacted. Prospective necessity disputes regarding spinal surgery may appeal an IRO decision by requesting a Contested Case Hearing (CCH). This CCH and further appeals will be conducted in accordance with Chapters 140, 142, and 143 of the commission rules.

By statute, a party who has exhausted the party's administrative remedies and who is aggrieved by a final decision of SOAH may seek judicial review of the decision, which shall be conducted in the manner provided for judicial review of contested cases under Subchapter G, Chapter 2001 of the Government Code.

Tom Hardy, Director of the Medical Review Division, has determined that for the first five-year period the proposed repeal and new rules are in effect the fiscal implications for state or local governments as a result of enforcing or administering the rule are as follows.

The commission is currently handling all types of medical dispute requests, so there should be no additional cost to the state as a result of enforcing or administering the rules as proposed. The commission is currently receiving, reviewing, forwarding, monitoring, evaluating, and issuing decisions on requests for medical dispute resolution, as well as receiving requests for appeals to SOAH. The incorporation of the IRO review process, the need to screen and assign an IRO, and to notify the IRO and the parties should not substantially increase the cost to the commission. The need to order additional designated doctor examinations also should not substantially increase costs to the commission, as that process is already in place at the commission. The commission is also already involved in assessing costs to the parties for some types of disputes. The requirement to redact and post decisions on the commission website should not cause substantial additional cost, as the commission has had experience in posting other redacted decisions on its website. There will be no reduction or increase in revenue to the commission as a result of enforcing or administering these proposed new rules.

No local government will be involved in enforcing or administering the rules as proposed. 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 repeal and new rules as proposed.

Mr. Hardy has also determined that for each year of the first five years the proposed repeal and new rules are in effect the public benefits anticipated as a result of enforcing the rule will be an improved system for prospective and concurrent review of health care and payment for health care, that should provide positive benefits to all participants in the system: injured employees, employers, carriers, and health care providers.

The intent of the proposed repeal and new rules is to comply with statutory mandates in the Texas Labor Code as amended by HB-2600. The proposed new rules should benefit all participants in the system by clarifying and implementing the statutorily mandated processes for review of medical fees and medical necessity issues.

The proposed new rules contain language to clarify the steps required by requestors and respondents with respect to medical dispute resolution, and should improve the quality of requests and decisions.

Posting the decisions on the commission website and monitoring IRO decisions should promote consistency and familiarity with decisions, which may eventually result in fewer disputes as to fees and medical necessity. This should also benefit all participants in the system. It should additionally help the commission monitor health care providers filing disputes, carriers denying health care or payment for health care, and IRO's issuing decisions. The rules address a requestor's ability to timely request resolution to disputes over the denials of health care or payment for health care, which should work toward improving access to and payment for reasonable and necessary care and thus, reduction in costs to the system.

The injured employee and health care providers should also benefit from independent review by medically trained and experienced personnel. This may ultimately reduce the number of disputes, saving time for and expense to health care providers and employers, and facilitating the delivery of health care to injured employees, as and when needed. It should also benefit employers by ensuring that their injured employees receive appropriate and medically necessary treatment in a timely manner for their compensable injury in anticipation of a timely return-to-work. The proposed rules should also assist in the prevention of unnecessary costly treatment. Savings that may result should be reflected in the cost for employers to provide workers' compensation coverage to employees.

There will be some anticipated economic costs to persons who are required to comply with the new rules as proposed. No economic costs are anticipated for injured employees to comply with the requirements of the proposed new rules, as the employee will not be charged for the costs of any review. The process should help the employee to receive reasonably necessary health care and to receive fair and reasonable reimbursement for reasonably necessary health care paid for by the employee.

Health care providers and carriers may experience increased economic costs as a result of the proposed new rules. The financial impact may result from an increase in the number of requests for independent review by IRO's and payment of the IRO review fee. Whether the provider or the carrier pays the review fee varies, dependent on whether the review is prospective or retrospective, and who prevails in the IRO decision. However, providers and carriers should already be familiar with the IRO process and use of the process itself should not increase costs other than paying for the review fee. However, system participants may become more familiar with IRO decisions on similar issues (because decisions will be posted on the commission's Internet website) and make more discriminate choices for disputes that are filed.