The Texas Workers' Compensation Commission (the commission) proposes amendments to §§133.305, 133.307, and 133.308 concerning Medical Dispute Resolution - General, Medical Dispute Resolution of a Medical Fee Dispute, and Medical Dispute Resolution by Independent Review Organizations. The proposed amendments restructure the overall process for requesting and obtaining medical dispute resolution by routing all such requests for medical dispute resolution through the Medical Dispute Resolution section of the commission's Medical Review Division. The proposed amendments also allow more time for system participants to work within timeframes for the dispute process. This should improve the process flow and allow the commission to better monitor requests and responses.

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 addressed 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 organizational (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 statute establishes the manner in which the reviews are to be conducted. Fee disputes have always been resolved by the commission, and will continue in that manner.

Prospective and retrospective medical necessity reviews shall be conducted by an IRO under Article 21.58C, Texas Administrative 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; the identity of the party depends on the circumstances of the review and the decision reached by the commission or the IRO.

The amended §413.031 necessitated changes to §133.305, which provides an overview of the medical dispute resolution processes, defining types of disputes and clarifying the first steps in the process if the health care in dispute has issues as to fees and issues as to medical necessity; and creation of §133.307 which addresses medical dispute resolution for medical fee disputes; and §133.308 which applies to an independent review of prospective or retrospective medical necessity disputes. These three rules were adopted by the commission at the December 13, 2001 public meeting and became effective January 1, 2002.

These amendments to the rules are proposed after an eight-month review and monitoring effort by the commission, with some additional suggestions provided by numerous workers' compensation system participants. Commission staff observed that medical dispute resolution coordination and oversight is difficult under the recently adopted rules and implementation efforts. Therefore, at this time, only the most critical changes to the rules and punctuation corrections are proposed so that the system processes for medical dispute resolution can operate more efficiently and within more reasonable timeframes, while still maintaining the overall integrity of the rules as adopted and implemented January 1, 2002.

The commission's medical dispute resolution process and timeframes can be improved, as well as the monitoring aspects of the rules. The proposed amendments re-route all requests for medical dispute resolution to the Medical Dispute Resolution section of the commission's Medical Review Division.

Rule 133.305 is an overview of the medical dispute resolution process and defines the types of disputes and requirements for filing them. Subsection (a)(5) is proposed to be amended by removing the words "an initial" and "and the carrier or respondent". Therefore, the amended definition for Requestor is "the party that timely files a request for medical dispute resolution with the division; the party seeking relief in medical dispute resolution".

Proposed amendments to subsection (a)(7) redefines Request so that disputes are now filed with the commission only, and not simultaneously filed with the respondent. All requests are proposed to be filed with the commission and there no longer is a distinction for "initial" requests. The amended definition for Request is "the request for medical dispute resolution initiated by the requestor identifying unresolved medical fee or medical necessity issues. A request for medical dispute resolution is filed with the commission's Division of Medical Review (division)."

Proposed amendments to subsection (b) remove the necessity of filing a request simultaneously with the carrier and the need for monitoring carrier compliance for the previous dual filing. All requests are now proposed to be filed only with the division. Subsection (b) still provides that if there is a medical necessity dispute for which there are medical fee components, the medical necessity dispute will be resolved pursuant to §133.308 of this title prior to deciding the medical fee dispute pursuant to §133.307 of this title.

Section 133.307 addresses medical dispute resolution for medical fee disputes. The proposed rule amends subsection (c) regarding requests for medical dispute resolution of a medical fee dispute so that disputes are now filed only with the division, and not simultaneously filed with the carrier.

Proposed subsection (d) removes the word "initial" from Request and proposed subsection (d)(1) amends that a request for medical dispute resolution on a carrier denial or reduction is timely filed if the request is filed with the division, and removes the filing of the request with the carrier.

Subsection (e) provides general information regarding the form and format for filing a request for medical dispute resolution. Incorporation of the amended process for routing requests for medical dispute resolution through the Medical Dispute Resolution section of the commission's Medical Review Division caused subsection (e) to be rearranged and rewritten, although without substantial change as to the content and manner of filing. Proposed subsection (e) removes the words "Initial" from Requests for medical dispute resolution. Proposed subsection (e)(1) - (4) amends language directing the requesting party to file two copies of the request with the division; the division's process for distributing the request if the respondent is an insurance carrier or if the respondent is a health care provider; the required content of the request; and respondent's duties upon receipt of the request. Proposed subsection (e)(3)(C) changes the deadline for a response from three (3) working days to 14 calendar days.

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. Subsection (f) is proposed to be amended by deleting the word "initial" since all requests are filed with the division and there is no longer a distinction for "initial" requests. Proposed new language in (f)(4) clarifies that the request must now include two copies of the request and that the division will forward one copy of the request to the insurance carrier via their Austin representative, and the representative shall sign for the request.

Subsection (m) addresses the commission dismissal of a request and this subsection is proposed to be amended in (m)(3) by adding that the medical bills in dispute were not properly submitted to the carrier "for reconsideration" pursuant to §133.304. Subsection (m)(5) is proposed to be amended by adding another reason for dismissal of a request: "the request for dispute resolution is untimely."

Subsection (p) addresses appeals in a medical fee decision. A new (p)(3) was added and corresponding numbers are renumbered. The proposed language in subsection (p)(3) clarifies that notwithstanding other provisions or rules, it is the responsibility of the requestor and respondent in a SOAH hearing to present documentary evidence of the case for which they are seeking relief or which they are defending. The language recognizes that certain hearings before the State Office of Administrative Hearings are not reviews of the agency record, but rather de novo proceedings. (In a de novo proceeding, SOAH makes a decision based upon evidence admitted at the SOAH hearing.) The language further recognizes that although the State Office of Administrative Hearings may apply the referring agency's policy, by virtue of Government Code Section 2003.050 the State Office of Administrative Hearings' procedural rules at 1 Tex. Admin. Code (TAC) chapter 155 govern the offering and admitting of relevant documents, and place the responsibility on the sponsoring party.

Section 133.308 addresses Medical Dispute Resolution by Independent Review Organizations. Subsection (d) is proposed to be amended by deleting the word "initial" before the word "request" and also deletes the words "simultaneously with the carrier or the respondent and", which provides clarification that the requestor files a request only with the division.

Subsection (e) is proposed to be amended by deleting the word "initial" before the word "request." Subsections (e), (e)(1) and (2) additionally delete the words "and the carrier", which clarifies that a request is deemed to be timely filed on the date the division receives the request, removing the requirement to file with the carrier.

Subsection (f) is proposed to be amended by deleting the word "initial" before the word "request". Proposed new language in subsection (f) clarifies that the requesting party submit two copies of the request to the division and that the division will forward one copy of the request to the insurance carrier via their Austin representative and the representative shall sign for the request. Subsection (f)(4) is proposed to be amended by clarifying that denial code T is only applicable for dates of service before January 1, 2002.

Subsection (h) is proposed to be amended by changing the title from "Filing" to "Response", which is a more accurate descriptor of the action taking place. The time for a carrier to respond to the request is proposed to change from "three working" days to "seven calendar" days of receipt of the request for review by the IRO, clarifying that it is for prospective preauthorization disputes. The amendment to this subsection further provides a timeframe of 14 calendar days for retrospective medical necessity disputes.

New language is proposed to be added to the new subsection (i), which necessitated the re-lettering of the subsections that followed. Proposed language in (i)(1) - (7) outlines the criteria that the commission may use to dismiss a request for medical necessity dispute resolution, as was done in the adopted §133.307.

Subsection (u) includes language that previously was contained in subsection (t), which addresses an appeal of an IRO decision. New language is proposed to be added to subsection (u)(5) to clarify that notwithstanding other provisions or rules, it is the responsibility of the requestor and respondent in a SOAH hearing to present documentary evidence of the case for which they are seeking relief or which they are defending. The language recognizes that certain hearings before the State Office of Administrative Hearings are not reviews of the agency record, but rather de novo proceedings. (In a de novo proceeding, SOAH makes a decision based upon evidence admitted at the SOAH hearing.) The language further recognizes that although the State Office of Administrative Hearings may apply the referring agency's policy, by virtue of Government Code Section 2003.050 the State Office of Administrative Hearings' procedural rules at 1 Tex. Admin. Code (TAC) chapter 155 govern the offering and admitting of relevant documents, and place the responsibility on the sponsoring party.

Judy Bruce, Director of the Medical Review Division, has determined that for the first five-year period the proposed amended rules are in effect the fiscal implication for state or local government as a result of enforcing or administering the rules are as follows.

The commission, through the incorporation of the IRO review process, screens and assigns an IRO, and notifies the IRO and the parties, which has not substantially increased the costs to the commission. However, the commission will be undertaking considerable process and coordination work under the proposed amendments compared to the rules as adopted in December, 2001. The commission therefore will likely experience increased costs for hiring additional medical dispute resolution staff so that the system processes for medical dispute resolution can operate more efficiently and within more reasonable time frames, while still maintaining the overall integrity of the rules as adopted and implemented January 1, 2002. There may be a savings to the commission as a result of proposed language that eliminates any requirement for the division to copy and certify the document evidence for a SOAH hearing. 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 amended rules.

Ms. Bruce has also determined that for each year of the first five years the proposed amendments to the rules are in effect the public benefits anticipated as a result of enforcing the amended changes 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, employer, carriers, and health care providers.

The injured employee and the health care providers should continue to benefit from independent review by medically trained and experienced personnel. The workers' compensation system and its participants should benefit from increased and improved commission processing and monitoring of dispute resolution. The increased time allowed for a respondent to complete and return the request form to the commission should likewise benefit system participants. It is still anticipated that this newly adopted and implemented process 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 continue to 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 rules should continue to assist in the prevention of unnecessary costly treatment. Savings that may result should be reflected in the costs for employers to provide workers' compensation coverage to employees.

There may be a slight increase anticipated in economic costs to persons who are required to comply with the amended requirement to file additional copies of a medical dispute resolution request with the commission. No economic costs are anticipated for injured employees to comply with the requirements of the proposed amended rules, as the injured employee will not be charged for the costs of any review. The process should continue to help the injured employee to receive reasonably necessary health care, and the health care provider to receive fair and reasonable reimbursement for reasonably necessary health care.

Health care providers and carriers should not experience increased economic costs as a result of the proposed amendment to the rules because the rule does not increase the number of filings or copies required from any party. The restructured process should reduce economic costs to health care providers and carriers; the commission will be more involved in the early phases of the process; and respondents will not have to expend resources dealing with requests that may be incomplete or inappropriate. There may be a slight increase in filing costs because of the requirement to mail two copies, although this cost replaces the cost of faxing the request to two different locations, as required in the current rule. Health care providers and carriers should already be familiar with the IRO process and use of the process itself should not increase costs.

For these same reasons, there will be no adverse economic impact on small businesses or on micro-businesses as a result of the proposed amendments to the rules.

Comments on the proposal must be received by 5:00 p.m., October 16, 2002. You may comment via the Internet by accessing the commission's website at www.twcc.state.tx.us and then clicking on "Proposed Rules." This medium for commenting will help organize your comments by rule chapter. You may also comment by emailing your comments to RuleComments@twcc.state.tx.us by mailing or delivering your comments to Nell Cheslock, Legal Services, Mailstop #4-D, Texas Workers' Compensation Commission, Southfield Building, 4000 South IH-35, Austin, Texas 78704-7491.

Commenters are requested to clearly identify by number the specific rule and paragraph commented upon. The commission may not be able to respond to comments that cannot be linked to a particular proposed rule. Along with your comment, it is suggested that you include the reasoning for the comment in order for commission staff to fully evaluate your recommendations.

Based upon various considerations, including comments received and the staff's or commissioners' review of those comments, or based upon the commissioners' action at the public meeting, the rules as adopted may be revised from the rules as proposed in whole or in part. Persons in support of the rules as proposed, in whole or in part, may wish to comment to that effect.

A public hearing on this proposal will be held on October 16, 2002, at the Austin central office of the commission (Southfield Building, 4000 South IH-35, Austin, Texas). Those persons interested in attending the public hearing should contact the commission's Office of Executive Communication at (512) 440-5690 to confirm the date, time, and location of the public hearing for this proposal. The public hearing schedule will also be available on the commission's website at www.twcc.state.tx.us.

The amended rules are proposed under following statutes: Texas Labor Code, §402.061, which gives the commission the authority to adopt rules as necessary to implement and enforce the Act; Texas Labor Code, §401.024, which provides the commission 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 §408.027, which provides for insurance carrier payment of health care providers; Texas Labor Code §409.009, which allows a person to become a sub-claimant to a workers' compensation claim; Texas Labor Code §413.007, which directs the Medical Review Division to maintain a statewide database of medical billing information, 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 HB-213, which directs that health care providers submit bills no later than the 11th month in which the service was provided.

No other statutes, codes or articles are affected by this proposal.