The Texas Workers' Compensation Commission (the commission) adopts 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 with changes to the proposed text published in the September 13, 2002 issue of the Texas Register (27 TexReg 8721).

As required by the Government Code §2001.33(l), the commission's reasoned justification for these rules are set out in this order which includes the preamble, which in turn includes the rules. This preamble contains a summary of the factual basis of the rules, a summary of comments received from interested parties, names of those groups and associations who commented and whether they were for or against adoption of this rule, and the reasons why the commission disagrees with some of the comments and proposals.

Changes made to the proposed rules are in response to public comment received in writing and at a public hearing held on October 16, 2002, and are described in the summary of comments and responses section of this preamble. Other changes were made based upon further review by staff, including the Medical Advisor, to simplify and clarify the rules, ensure consistency, or to correct typographical or grammatical errors. Changes to the text as proposed are found in: Rule 133.307 (a), (e)(1), (e)(4), (f), (g)(5), (j), (p)(3); Rule 133.308 (a)(1), (f), (f)(4), (i)(7)-(8), (j) and (u)(5).

The amendments restructure the overall process for requesting and obtaining medical dispute resolution (MDR) by routing all such requests for MDR through the commission's Medical Review Division. The amended rules 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 Insurance Code, in the same manner as reviews of utilization review decisions by health maintenance organizations. The statute also establishes which party pays for the 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 amendments to §413.031 of the Texas Labor Code 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. It also necessitated the 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.

The current amendments to §§133.305, 133.307, and 133.308 were 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 and some system participants observed that medical dispute resolution coordination and oversight was difficult under the rules as were implementation efforts. Therefore, at this time, only the most necessary changes to the rules have been proposed and adopted so that the system processes for medical dispute resolution can operate more efficiently and within more reasonable timeframes. Other possible changes will be considered after the commission and system participants have had an opportunity to review the experience under the revisions made with these amendments. The adopted rules maintain the overall integrity of the rules as adopted and implemented beginning January 1, 2002 within the framework of the relevant statutes and other applicable rules as referenced in the preamble.

The amendments provide improvements to the commission's medical dispute resolution process and timeframes, as well as the monitoring aspects of the rules. The amendments re-route all requests for medical dispute resolution to the commission's Medical Review Division. The amendments will minimize requests being sent to various carrier locations throughout the state. The commission will be able to quickly provide a valid request to the carrier via its representative who maintains a carrier's representative box at the commission and who must check that box on a daily basis at commission headquarters.

The requirement for two copies was added to §§133.305 (b), 133.307 (e)(1), (f), and 133.308(f) in lieu of the simultaneous filings, which was deleted from §133.307(c) and §133.308(d).

The word "initial" was removed from the phrase "initial request" so that disputes are now filed with the division only and not simultaneously filed with the respondent. All requests are to be filed with the division and there is no longer a distinction for "initial" request(s). This change is reflected in the following subsections: §§133.305(a)(5), (a)(7), 133.307(a), (d), (e), (j), and 133.308(a), (d), (e), (f).

The time frame of three-days for responses for the respondent was removed in §133.307(e)(3)(C) and §133.308(h). The previous three-day requirement for responses in all dispute types was problematic for most parties due to requests being sent and received in various locations throughout the carrier's business locations. Requiring the request to come directly to the division will ensure that the request is provided to the carrier by commission staff via the Austin carrier representative boxes. The commission recognizes the need to have a shorter timeframe for responses in prospective medical necessity issues to avoid further delay of health care to the injured employee. Therefore, the response time for prospective medical necessity disputes, although increased from three days, is now set at seven calendar days. In retrospective disputes, which include fee disputes, care has already been rendered to the injured employee; the urgency, for medical care purposes, is not as great as in a prospective medical necessity dispute. Therefore, the response time for fee and retrospective medical necessity disputes is 14 calendar days. In many of these retrospective disputes, dates of service often span several months. For this reason, the 14 calendar days may be necessary for carriers to have sufficient time to respond to the volume of issues these larger disputes may contain. Therefore, the commission allows the 14-day response time.

Changes to the certified record process regarding decisions of medical dispute resolution that have been appealed to the State Office of Administrative Hearings (SOAH) are found in §§133.307(p)(3) and 133.308(u)(5). It is the responsibility of the requestor and respondent in a SOAH hearing conducted on or after March 1, 2003 (regardless of the date the original dispute was filed) to present documentary evidence of the case for which they are seeking relief or which they are defending. The commission will no longer file a copy of the record of the medical fee or service review by the division with SOAH or any party for a hearing scheduled to be held by SOAH (or continued to a date) after March 1, 2003. Unlike the provisions of §§133.307(a) and 133.308(a) which are tied to the date of the request for medical dispute resolution, 133.307(p)(3) and 133.308(u)(5) are tied to the date the hearing is conducted by SOAH, regardless of the date the request for medical dispute resolution was filed.

This change takes into consideration the position of SOAH, that hearings before SOAH are not reviews of the agency record, but rather de novo proceedings. SOAH's Comments to its Adopted Rules, 22 TexReg 12719, 12721 (December 26, 1997). (In a de novo proceeding, SOAH makes a decision based upon evidence admitted at the SOAH hearing.) The language further recognizes that although SOAH may adopt the referring agency's procedural rules, by virtue of Texas Government Code §2003.050, this has not been done and therefore SOAH's procedural rules at Title 1, Texas Administrative Code (TAC), Chapter 155 govern the offering and admitting of relevant documents. These SOAH rules place the responsibility for documentary evidence on the sponsoring party. These SOAH rules also specifically rejected adoption of the commission's rule at §148.18(a) (prohibiting the admission of new evidence, except upon a good cause showing, not considered at the initial review) and that portion of §148.21(j) concerning the admission into evidence of the record of the initial review by the commission.

The requirement for use of U.S. mail was changed in §§133.307 (e)(1), (e)(1)(B), (f), (g)(5), 133.308 (f), and (j) in order to not limit the means of delivery of requests and responses in the medical dispute resolution process. The language has been added to reflect that any service that can provide verifiable means of delivery is acceptable.

Section §133.305 is an overview of the medical dispute resolution process and defines the types of disputes and requirements for filing them. The definition of Requestor in subsection (a)(5) has been amended to read "the party that timely files a request for medical dispute resolution with the division; the party seeking relief in medical dispute resolution." This amendment was revised to remove the requestor's obligation to file an initial request with the carrier or respondent as well as the division.

Subsection (a)(7) was likewise amended as described previously in this preamble.

Amendments to subsection (b) remove the necessity of filing a request simultaneously with the carrier and the need for monitoring carrier compliance for the dual filing as described previously in this preamble. 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. Subsection (a) regarding applicability is amended to provide that dispute resolution requests filed prior to January 1, 2003 shall be resolved in accordance with the rules in effect at the time the request was filed. The amended date is necessary to inform participants of the date for beginning the new process and for noting when the applicability of the former process ends. Subsection (p)(3) is effective for SOAH hearings conducted on or after March 1, 2003 (regardless of the date the original dispute was filed) and is being implemented as of that date in order to offer system participants time to prepare for the new process.

Subsections (c) and (d) are amended as previously described in this preamble.

Subsection (e) provides general information regarding the form and format for filing a request for medical dispute resolution. Subsections (e), (e)(1), (e)(1)(B), and (e)(3)(C) have been amended as previously described in this preamble. The amended subsection (e)(1)-(4) revised 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. Subsection (e)(4) amends the language from proposal to include the provision, "If dispute has not been resolved and involves compensability/extent of injury, the respondent shall attach any related TWCC-21 completed forms in accordance with §124.2 of this title." This addition clarifies the procedure for disputes that involve compensability and extent of injury issues. Providers are not usually on the receiving end of the TWCC-21 regarding compensability and extent of injury disputes. This section amendment will require the respondent to provide any TWCC-21s that have been filed and are relevant to the medical dispute.

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) has been amended to require submission of two copies of the request to the division by any mail service or personal delivery.

Subsection (g) is amended as previously described in this preamble.

In subsection (j) the word "initial" was removed from the phrase "initial request" as discussed previously.

Subsection (m) addresses the commission dismissal of a request. Subsection (m) has been amended to clarify that the commission may dismiss a request for medical fee dispute resolution if the medical bills in dispute were not properly submitted to the carrier for reconsideration pursuant to §133.304 or if the request for dispute resolution is untimely. If a provider has not billed properly in accordance with §133.304, which includes the requirement for requesting reconsideration of denied medical bills, then access to medical dispute resolution is premature.

Subsection (p) addresses appeals in a medical fee decision. Subsection (p) is amended as previously described in this preamble.

Section 133.308 addresses medical dispute resolution by independent review organizations.

Subsection (a) regarding applicability is amended to provide that dispute resolution requests filed prior to January 1, 2003 shall be resolved in accordance with the rules in effect at the time the request was filed. The amended date is necessary to inform participants of the date for beginning the new process and for noting when the applicability of the former process ends. Subsection (u)(5) is effective for SOAH hearings conducted on or after March 1, 2003 (regardless of the date the original dispute was filed) and is being implemented as of that date in order to offer system participants time to prepare for the new process.

Subsections (d), (e), and (f) of this section are amended as previously described in this preamble.

Subsection (f)(4) has been amended from proposal by removing reference to denial codes T, U, or V as suggested by public comments. If medical necessity denial reasons are not supported, as required by §133.304 and §408.027 of the Texas Labor Code, then the commission will determine the validity of the denials and the appropriate dispute track. The commission has experienced unnecessary and inappropriate use of these codes that are not consistent with the auditing requirements and have resulted in unnecessary IRO assignments.

The title of subsection (h) has been changed from "Filing" to "Response," because this is a more accurate descriptor of the subject of the subsection. Subsection (h) regarding timeframes for responses is amended as previously described in this preamble.

Subsection (i) contains new language and all subsequent subsections were renumbered accordingly. New subsection (i) outlines the criteria that the commission may use to dismiss a request for medical necessity dispute resolution. The new subsection language has been added to be consistent with §133.307. Additional language from proposal was added to include dismissal for failure of the request to include all required components and to allow the requestor to resubmit and amend the request with missing components, and without having it dismissed, so long as it is timely and not related to payment of IRO fees.

Subsection (j) addresses the commission's process and notice to parties in assignment of the IRO. This subsection has been amended to allow for the possible verifiable means of delivery of the notice of IRO assignment, thus removing limiting language. This allows flexibility in the choice of the most efficient delivery method.

Subsection (u)(5) has been amended as previously described in this preamble.

Comments expressing general support of §133.305, §133.307 and §133.308 were received from the following groups or associations: Employers Claims Adjustment Services; Insurance Council of Texas; Texas Association of Business; Texas Department of Insurance; Texas Medical Foundation; and Graves, Dougherty, Hearon & Moody.

Comments generally opposing the proposed amended rules were received from the following groups: Accupro Services Ltd.; Employers Claims Adjustment Services; EZRX Pharmacy Services; Insurance Council of Texas, MedWay Health Inc.; State Office of Administrative Hearings, Texas Association of Business; and Texas Chiropractic Association.

Comments seeking clarification and/or asking questions related to §133.305, §133.307 and §133.308 were received from the following groups or associations: Employers Claims Adjustment Services; EZRX Pharmacy Services; Forte; HNC Software Inc.; Insurance Council of Texas; Texas Association of Business; Texas Chiropractic Association; Texas Department of Insurance; and Texas Medical Foundation.

Comments expressing general concerns to §133.305, §133.307 and §133.308 were received from the following groups or associations: Accupro Services Ltd.; EZRX Pharmacy Services; Forte; Insurance Council of Texas; MedWay Health Inc.; State Office of Administrative Hearings; Texas Association of Business; Texas Chiropractic Association; and Texas Department of Insurance.