©2005 – Flahive, Ogden & Latson SEPTEMBER 2005 VOLUME 10 ... · an old Burl Ives song: "They are...

F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N 1

©2005 – Flahive, Ogden & Latson SEPTEMBER 2 0 0 5 V O L U M E 10, N O . 9

A P R I V I L E G E D A T T O R N E Y - C L I E N T C O M M U N I C A T I O N B Y F L A H I V E , O G D E N & L A T S O N

continued on p. 24

FOLFOLFOLFOLFOLFOLIOREQUIEM FOR TWCC

It was not so long ago that the Legislature created TWCC. Now, only fifteen years later, the agency created by

that legislation has ceased to exist.

It was a remarkable run during which five executive directors served the TWCC. We are reminded of a line in

an old Burl Ives song: "They are tearing down buildings that I watched them build." Ironically, the most

experienced and therefore most informed, and arguably the most able of the five persons serving in the job was

Bob Shipe, the guy in charge at the time that the shades were drawn.

By the time that you read this newsletter, all employees of TWCC will have become employees of the Texas

Department of Insurance Division of Workers’ Compensation. Nomenclature will evolve for convenient

references. The TDI has released a Bulletin indicating that the new agency name of choice will be DWC, and that

references in past to the Commission should now refer to the Division. The new names just don’t seem to roll

off the tongue quite as easily.

A law that came in with a bang is leaving with a whimper. Although the agency is “abolished” there will be

many familiar names, faces and processes. Unlike 1989, these changes are evolutionary, and not revolutionary.

We will change a lot of forms and templates. We will have a lot of new rules. But the fundamental process in

claims will look a great deal like it looks now.

We look forward to working with you as we begin assimilating the new and exciting opportunities under HB 7.

The 2005 TWCC Annual Conference began with an

introduction by Executive Director Bob Shipe. He

quickly introduced Mike Hachtman, the current

Commissioner whose term will expire on August 31,

2005. Mr. Hachtman was very active in the drafting of

TWCC ANNUAL CONFERENCESenate Bill 1, the 1989 Reform Legislation. Referring to

that bill, the 2001 Medical Reform attempted in House

Bill 2600, and the more recent HB 7, he acknowledged

the great number of changes, and pointed out that

further changes will almost certainly occur.

The new TDI Commissioner, Mike Geeslin,

conveyed his enthusiasm about implementing the

changes proposed in HB 7. Commissioner Geeslin

clearly communicated that he will remain involved in

workers’ compensation as well as all of his other

Bills Affecting Workers' Comp ................

GQ Related to HB 7 ...............................

In This Issue . . .

p. 6

p. 10

F O L I O C L I E N T N E W S L E T T E R B Y F L A H I V E , O G D E N & L A T S O N2

Flahive, Ogden & Latson, a 26 lawyer firm,

defends contested workers’ compensation

cases statewide every day. The firm has

represented insurance companies and

employers before the Texas Workers’

Compensation agency for more than 50 years.

For general questions concerning the

newsletter call (512) 435-2234.

Flahive, Ogden & LatsonP.O. Box 13367

Austin Texas 78711

An electronic copy of FOLIO, our monthly client newsletter, is now

available for clients. If you are interested in receiving FOLIO by e-

mail, please let us know. FOLIO is prepared for the exclusive use of

Flahive, Ogden & Latson clients only. It contains privileged

communications and further sharing of this newsletter (in either hard

copy or electronic format) outside your company without the express

written consent of Flahive, Ogden & Latson is not permitted.

Our regular office hours are 8:15 a.m. to

4:45 p.m.. If you need to call after 4:45,

please call Patsy Shelton at (512) 435-2234.

She will be on duty until 6:00 p.m. daily.

FO&L OFFICE HOURS

Don't wait until the last hour

of the day for deadline filing.

Any faxes with information due

must be received by 3:30 p.m.

for any deadline handling for same day

delivery to the Commission, and faxed

according to the fax directory listed on the last

page of FOLIO.

Furthermore, if you have a last minute

deadline, call our office by 3:00 p.m. and

speak with Tillie Aguirre or Patsy Shelton to

advise that a last minute filing is necessary to

meet a deadline. We will be watching and

waiting for the fax. Otherwise, last minute

faxes could delay receipt. Our last daily run to

the Commission will be at 4:00 p.m., in order

to get across town to meet their 5:00 closing

time.

C&P DIRECTOR DISCUSSESAUDITS

At the TWCC Conference, Teresa Carney addressed groups in

separate breakout sessions about the audit process. Her remarks

were confined to the current process and did not address future

audits.

Ms. Carney reported that TWCC had conducted seven

preauthorization audits. They identified 86% overall compliance.

For peer reviews, TWCC has conducted fourteen audits and

Ms. Carney reported an 83% overall compliance rate. They

identified a 81% compliance rate for the use of out–of-state

doctors not supervised by Texas doctors. In 5% of the cases, the

peer review physician was not a member of the ADL. They also

identified a number of occasions in which the peer review reports

were not appropriately used. There was 74% compliance with the

appropriate denial of medical pursuant to peer reviews.

In SIBs, TWCC identified 94% compliance for disputes, 80%

compliance in timely payments, 86% compliance with proper

SIBs rate, 31% compliance with payment of interest when the

SIBs payment was late, and 67% compliance where the

applications to the injured worker were timely mailed. These

figures are certainly instructive to remind all claims handlers to

pay interest when the benefits are delayed. If any income

benefit is paid after the date it is due, in addition to the

benefit owed, carriers must pay interest with our without an

order from TWCC.

Ms. Carney emphasized that the timely processing of medical

bills is the Number 1 complaint identified by the auditors.

Twenty-four audits were conducted and overall, they discovered

an 86% rate of timely payment! The ECS transmission was

timely 68% of the time and the Data Quality was accurate 34% of

the time.

These overall benchmarks can be used to compare the

performance of your company with the performance of the

industry in general. As we have mentioned in the many seminars

that we have delivered on HB 7, the Legislature has a high

interest in improving compliance, they have raised penalty

maximums, and DWC will issue a “report card” to carriers rating

each carrier as “good,” “average,” or “poor.” Carriers rated as

“good” will be identified on the TWCC website.


MIKE GEESLINTEXAS DEPARTMENT OF INSURANCE

Governor Rick Perry appointed Mike Geeslin as

Texas Insurance Commissioner effective June 7,

2005.

Prior to being appointed Commissioner, Geeslin

joined the Texas Department of Insurance (TDI) in

January 2003 as the

Deputy Commissioner

for Policy. In his role, he

assisted the TDI

Commissioner in the

development and

communication of

regulatory policy,

including

implementation of

reforms directed by the

Texas Legislature during

the 78th Regular Session

in 2003.

Before coming to the TDI, Geeslin served as

budget and policy advisor on insurance and

regulatory matters to Governor Perry at the

Governor’s Office and previously at the Lieutenant

Governor’s Office. He also worked as chief of staff

for the late state Senator Tom Haywood, as a

legislative aide to state Senator Florence Shapiro,

and as an assistant to U.S. Congressman Joe Barton.

Geeslin is a 1991 graduate of Texas A&M

University, where he received a bachelor’s degree in

communications with a minor in business

administration. While attending Texas A&M Geeslin

was a member of the Corps of Cadets and served as

a Ross Volunteer. He attended public schools in

Red Oak, Texas.

He and his wife, Danica Milios-Geeslin, live in

Austin and have three children.

Mike Geeslin

INTOXICATION CASE

We don’t often comment about case law from other

states. However, because the Supreme Court of Arizona

invalidated the WC intoxication defense and the drug

free workplace initiative in Arizona, there has been a

great deal of interest among our clients about this case.

See Grammatico v. The Industrial Commission.

This decision should not be applicable in Texas.

The Constitution of the State of Arizona is very unique

in that it requires that an employee receive workers’

compensation for “any accident arising out of and in the

course of employment.” An employee must only prove

legal causation – and once legal causation is proven, the

Legislature has no power to create a defense that would

preclude discovery for a job-related accident.

Thus, an employee with a .17% blood alcohol

whose benefits were denied by the Industrial

Commission was entitled to recover as a matter of

Arizona Constitutional Law.

In Arizona, an employee must prove that the

intoxication was part of the reason for the accident (a

fault concept). In Texas, there is no need to prove fault.

If an employee is intoxicated, he/she is barred from

recovery whether the intoxication caused the injury or

not. In Texas Workers’ Compensation, fault is

accordingly irrelevant.

As a result, we believe that the Grammatico Arizona

decision is irrelevant to Texas Workers’ Compensation

law.


TDI PUBLISHES PROPOSED NETWORK RULES

continued on pg. 26

According to Teresa Carney, during her presentation

at the TWCC conference, workers’ compensation

carriers are failing to identify late-filed SIBs applications.

The carrier must initiate benefits on the later of seven

days after the beginning date of the period, or ten days

after first receipt of the TWCC order for the 1st Quarter

or within ten days of the Application for SIBs for any

subsequent quarter. Rule 130.107.

If the employee delays in filing an application,

benefits are not owed for the period between the

beginning of the quarter and the date of the

application. According to Ms. Carney, if carriers

simply paid attention to this delay, it would save $1

million in SIBs payments annually.

The Texas Department of Insurance (TDI) has

published the soon to be proposed workers’ compensation

healthcare networks rules. A PDF formatted copy of the

rules is available at: www.tdi.state.tx.us/rules/pdf/0822-

059.pdf, and an HTML formatted copy of the rules is

available at: www.tdi.state.tx.us/rules/0822-059.html.

Public comment must be submitted no later than 5:00

p.m. (Central Standard Time) on October 3, 2005 with:

Gene C. Jarmon, General Counsel and Chief Clerk

Mail Code 113-2A

Texas Department of Insurance

P. O. Box 149104

Austin, Texas 78714-9104

An additional copy of the comments must be

simultaneously submitted to:

Margaret Lazaretti, Deputy Commissioner

HMO Division, Mail Code 103-6A

Texas Department of Insurance

P.O. Box 149104

Austin, Texas 78714-9104

The rules are divided into seven (7) separate

subchapters, identified as follows: general provisions and

definitions, certification standards, contracting

requirements, network requirements, network operations,

utilization and retrospective review, and complaints

processes.

General Provisions and DefinitionsSection 10.1 implements Chapter 1305 of the

Insurance Code, which is the new provision under

HB 7 that creates healthcare networks in workers’

compensation in Texas. The rule makes clear that

carriers, self-insured employers, groups of self-

insured employers, and governmental entities that

self-insure may establish or contract with

networks. The rule specifically excludes

employers who purchase deductible plans under

Insurance Code Art. 5.55C from contracting with

healthcare networks for workers’ compensation.

The rules become effective on January 1, 2006,

which coincides with the date that HB 7 mandates

the Division of Workers’ Compensation shall begin

accepting applications for certification of

healthcare networks.

Section 10.2 provides definitions for many of the terms

used in the rules. As HB 7 provides that a claimant may

treat out of network in an emergency situation, an

“emergency” is defined as “either a medical or mental

health emergency.” A medical emergency means “the

sudden onset of a medical condition manifested by acute

symptoms of sufficient severity, including severe pain, that

the absence of immediate medical attention could reasonably

be expected to result in: (A) placing the patient’s health or

bodily functions in serious jeopardy; or (B) serious

dysfunction of any body organ or part.” A mental health

emergency is “a condition that could reasonably be expected

to present danger to the person experiencing the mental

health condition or another person.”

HB 7 also provides that a claimant must treat

CARRIERS AREOVERPAYING SIBs


TX COMP BUSINESS IMPROVEMENT PROJECTS

The current commission has drafted several Business

Process Improvement Projects (BPI Projects), including

the following: the MMI TXCOMP Project, the e-SIBs

Project, and the Compensability and Lost Time Project.

These projects are going to complete the TXCOMP Claim

System, which, when completed will be a comprehensive

information and reporting system for the workers’

compensation customers of Texas.

It appears that the projects’ main goals are to streamline

the processes of reporting information, filing documents,

and notifying carriers and claimants of actions in the

claims process. This will be done by the eventual decrease

of paper documents and data entry. These projects will be

subject to continued analysis, but the entire project must

be completed by the end of fiscal year 2007. These

projects potentially change how carriers (and other system

participants) file and receive information with and from

the Division.

Specifically, the MMI TXCOMP Project will establish

methods for collection and reporting MMI/IR and will

allow TXCOMP to notify both carriers and claimants of

MMI certifications without multiple paper copies being

sent to each party. In other words, TXCOMP will allow

providers to file TWCC-69s electronically and will allow

for electronic notification of the results to the parties. The

impetus for this project is that currently, all TWCC-69

information is received as paper hard copies, which must

be manually entered into the system. There is no current

method of retrieving data such as the certifying doctor’s

license number, the ICD-9 codes, whether MMI is reached,

what IR was given, and other vital information. Also, if

there are errors in the TWCC-69, commission staff currently

send EES-60 correction letters to the certifying doctor.

This project’s vision is to eliminate all of this manual data

entry by using the optical or intelligent character recognition

(OCR/ICR) and eliminate the need for any corrections

process at the end of the process. There is no definite

timeline for this multiple-phase project, but it should be

in place by the end of FY2007.

The Division is responsible for determining first

quarter entitlement to SIBs. Currently that process involves

a great deal of data entry and staff involvement. The e-

Supplemental Income Benefits Project has an ultimate

goal of automating the entire SIBs process, from the first

quarter Division determination and notice of entitlement

and potentially to the filing of subsequent SIBs applications

electronically. This Project will likely affect how carriers

will monitor the first SIBs quarter determination. Initially,

the focus will be on the first quarter application and

determination as well as automated methods of determining

entitlement and quarter dates. The implementation of this

Project will be dependent on the MMI/IR Project, as it

expands on that phase of the improvements.

The Compensability and Lost Time Project will allow

carriers to submit their claim EDI transactions via SFTP

or by using the current VAN line and filing first and

subsequent reports online. Additionally, it will allow carrier

to file compensability and liability disputes at the “claim

level, body part level, or the diagnosis level.” TXCOMP

will then automatically generate Plain Language Notices to

claimants. TXCOMP will also track return to work data

from TWCC-6 and TWCC-73 paper forms and extend the

“claim profile” to have the most current information

regarding compensability, return to work and claim status

which should be viewable online. This will be completed

in phases, but it is one of the final phases of the completion

of Tier One of the TXCOMP claim system. Because its

launch is dependent on the completion of other projects,

there is no specific time line for completion. The likely

completion date appears to be FY2006/07.


SUMMARY OF BILLS ENACTED BY THE 79TH LEGISLATURERELATING TO WORKERS' COMPENSATION

continued on pg. 28

The following is a summary prepared by PDI/TWCC

of Bills enacted by the 79th Legislature. FO&L has

seperately summarized workers' comp related Bills in

subsequent pages of FOLIO.

HB 7 by Solomons and Staples

Relates to the continuation and operation of the

workers’ compensation system, the transfer of the

powers and duties of the Texas Workers’ Compensation

Commission to the Division of Workers’ Compensation

with the Texas Department of Insurance, the creation

and establishment of the Office of Injured Employee

Counsel, the provision of workers’ compensation

benefits to injured employees, the regulation of workers’

compensation insurers, and administrative and

criminal penalties. HB 7 is summarized in a separate

document that can be accessed through the following

website links: www.twcc.state.tx.us/commission/

TWCCHB7SummaryofChanges6-23.pdf or

www.tdi.state.tx.us/commish/hb7changes.html

HB 162 by McCall

Amends Section 81.048 and adds Section 81.0955,

Health and Safety Code. Changes are as follows:

n Amends Section 81.408 by adding a detention officer

and a county jailer to the list of persons who must be

notified of a positive test result for a reportable disease.

n Adds Section 81.0955, relating to testing for accidental

exposure (of certified emergency medical services

personnel, firefighters, peace officers or first

responders) to blood or other bodily fluids of a person

who dies at the scene of an emergency or during

transport to the hospital. Requires a hospital, certified

emergency medical services personnel, or a physician

on behalf of the person exposed (following a report of

the exposure) to take reasonable steps to test the

deceased person for communicable diseases.

HB 251 by Eissler

Amends the Labor Code, Section 402.084, Records

Check; Release of Information.

n Amends subsection (b)(8), relating to entities who may

obtain WC claim information – eliminates use of term

“sub-claimant” and instead provides that an insurance

carrier (who has adopted an anti-fraud plan under the

Insurance Code) may obtain specific workers’

comp claim information from the Commission, as

described under subsection (c-3).

n Amends Subsection (c-1) and defines, for purposes of

this Section only, “insurance carrier” to include certified

self insurers, health insurance company, HMOs, self-

funded health plans under ERISA, and certain

governmental plans. Amends Subsection (c-2) to

provide that the insurance carrier does not have to

demonstrate the existence of subclaims to access the

information.

n Amends Subsection (c-3) and provides that an

insurance carrier or a representative of the carrier may

submit requests for claim information (relating to a

person who is or has been insured under the carrier’s

coverage) to the commission on a monthly basis and

defines the specific claim information that the

commission must provide if it is available. The

claim information must be provided in an electronic

format.

n Amends Subsection (c-4) and provides that a potential

sub-claim identified by a carrier or representative

receiving claim information may form the basis for the

identification and prosecution of a sub-claim under this

title.

n Amends Subsection (c-5) and provides that

information received by an insurance carrier or its

representative, remains subject to the confidentiality

requirements of the statute.

n Amends Subsection (c-6) to provide that the

commission may not redact claims records under a

request made under this section.

n Amends Subsection (c-7) to provide that an insurance

carrier may request, and the Commission shall provide,

the records once a month.

n Amends Subsection (d) to provide that the

commission may establish, by rule, a

reasonable fee for all information requested by an

insurance carrier as described under


ALPHA TREATMENT CENTERSINDICTED FOR FRAUD

TDI BULLETINUNDERWRITING GUIDELINES

The United States District Court in Dallas

indicted Alpha Treatment Centers, dba Texas

Durable Medical Equipment, and a number of its

principals, for fraudulently billing a federal workers’

compensation program and state workers’

compensation insurers. A number of insurers

participated in the investigation.

According to the indictment, beginning in

January 1999 and continuing through December

2004, employees and agents of Alpha had obtained

blank prescription forms and created phony

prescriptions for various durable medical equipment.

They billed the insurers for treatment that had never

been prescribed, was not medically necessary and

was never furnished to the injured worker. The

indictment charges that Alpha bribed various

employees at physician’s offices to obtain the name

of patients and blank DME prescription forms.

Former employees of Alpha have pleaded guilty

to healthcare fraud. Two employees in particular,

Andrew Hillman and Jason White, face up to 265

years of prison because of their participation in the

fraudulent scheme.

According to newspaper accounts, the

investigation is continuing.

TWCC has been migrating to a different electronic

format for reporting medical billing information. There

have been several announced effective dates. TWCC

currently has established a more flexible series of dates

over which carriers will be tested and begin on line

reporting in the new format.

Carriers/trading partners who received their SFTP

file by August 15, 2005 are in Group 1. Group 1

carriers will be approved for transmission no later than

October and will be expected to file all historic data and

current data by December 31, 2005.

Carriers/trading Partners who did not receive an

SFTP test file by August 15, 2005 are considered to be

in Group 2. This group will not be tested until after the

Group 1 testing is complete.

TWCC/DWC expects that all trading partners in

both Group 1 and 2 will achieve 98% accuracy by

January 1, 2006.

On July 22, 2005, the Texas Department of

Insurance issued a bulletin requiring workers’

compensation insurance carriers to file underwriting

guidelines with TDI by September 15, 2005.

The bulletin directed carriers to the TDI website for

a transmittal form to be used when submitting the

guidelines. See FOLAGRAM 119 for details and copy

of form if you are unable to access it on the TDI

website.

These requirements apply only to insurers and not

to certified self-insurers or to governmental self-

insureds.

Questions about this process may be directed to

Phyllis Devine at [email protected], or may be directed to

Gary Gola at the Texas Department of Insurance: (512)

475-3026.

PROGRESS UPDATE ONMEDICAL BILLING DATA/

ELECTRONIC TRANSMISSIONS


FO&L SUMMARY OF LEGISLATIVE BILLS AFFECTING WC CASES

In addition to HB 7, a number of other bills may affect

workers’ compensation claim handling in certain cases.

HB 162 by McCall amends the Health & Safety

Code and adds detention officers and county jailers to the

list of persons who must be notified of a positive test for

reportable diseases. It also requires the testing of persons

dying at the scene of an emergency or during transport to

a hospital. In the event of a communicable disease,

emergency responders are to be notified of the disease.

HB 251 by Eissler provides for a very expansive

right to claim data for any employee insured by the

carrier. For the purposes of receiving such information,

an insurance carrier is defined to include self-insurers,

health carriers, workers’ compensation carriers, group

medical plans, HMOs and others.

The insurance carrier may submit a written request

for claims information identifying the names of persons

insured under the “carrier’s insurance program.” Upon

providing the list, the Commission “shall” examine the

Commission records to identify all claims related to each

listed person. If a claims record exists, the Commission

shall promptly provide the information on each workers’

compensation claim filed by that person to the carrier in

an electronic format (this information will not include

medical reports – if there is a claim, those may be

separately accessed through requesting the specific claim

file). . The bill specifies the scope of the information to

be provided. Note that one of the items of data to be

provided is the name of the adjuster handling the claim.

The information received from the Division is

subject to confidentiality requirements as will be

prescribed by Division Rule. The Division will be able to

charge up to $.05 per each “claimant listed in an

information request.”

The bill separately requires an autopsy report to be

provided within fifteen days of the request. If the report

has not been prepared, the coroner’s office must identify

the date that the report will become available.

HB 1428 by Isett amends the Government Code

and provides for injury leave without a deduction in

salary for up to one year for an injury resulting from an

assaultive offense under the Penal Code. A police officer

may simultaneously be on injury leave and receive

workers’ compensation medical benefits, but is not

eligible for disability retirement benefits while on injury

leave. The officer would be entitled to workers’

compensation indemnity after the discontinuation or

exhaustion of injury leave allowed under the statute.

HB 3288 by Thompson requires reports to TDI of

any reasonable suspicion or knowledge of fraudulent acts

within thirty days of the knowledge of the potential fraud.

The fraud must be reported in the format prescribed by

the National Association of Insurance Commissioners.

Notice to TDI constitutes notice to other authorized

governmental agencies. An insurance carrier should

report the suspected fraud even if its investigation is not

complete.

The bill also repeals an Insurance Code provision

subjecting an insurance carrier to a civil action if it acted

with “malice, fraudulent intent or bad faith.” The

intention is to relieve complainants from potential liability

for filing a suspected fraud report pursuant to the statute.

Senate Bill 310 by Deuell establishes a rebuttable

presumption of causation of certain diseases, “discovered

during employment as a firefighter or emergency medical

technician.”

The rebuttable presumption establishes medical

causation for diseases of smallpox, “tuberculosis or other

respiratory illness” and heart attack or stroke. For each

listed disease, certain qualifiers apply. The presumption

does not apply to a disease known to be related to

tobacco if the firefighter or EMT, or his/her spouse, has

been a smoker.

The presumption may be rebutted through a

showing by a “preponderance of the evidence that a risk

factor, accident, hazard or other cause not associated with

the individual services of a firefighter or EMT caused the

individual’s disease or illness.”

Accordingly, in the defense of cases in which this

statute applies, the preponderance of the evidence

burden of proof will now be shifted to the carrier or self-

insured.


TEXAS WORKERS' COMPENSATION CLAIM PROCESS(effective 9/1/05)

Injury

Injured Worker Notifies

Employer, Files Claim with

Division of Workers’

Compensation (DWC)

Employer Reports

to Carrier

Carrier Reports

to DWC

Medical

Benefits*

Income

Benefits**

Network

Worker Chooses Treating

Doctor from list of

Network Providers

Return

to Work

Non-

Network

Worker Chooses Treating

Doctor from DWC’s

Approved Doctor List

Worker Receives

Treatment

Doctor Submits

Medical Bill to Carrier

Carrier Reviews Bill and

Pays or Denies

Temporary Income

Benefits (TIBs)Return to Work or

Exhaustion of Benefits

If permanent

impairment

Impairment Income

Benefits (IIBs)

Return to Work or


Impairment rating >15%; has not

returned to work or has returned

at <80% pre injury wage

Supplemental Income

Benefits (SIBs)

MEDICAL DISPUTES regarding a denial of preauthorization ordenial of care that’s already been rendered (retrospectivemedical necessity) are handled by an Independent ReviewOrganization (IRO). Medical disputes regarding fees for networkcare are handled through the network’s complaintprocess. Medical fee disputes for non-network care are handledthrough an administrative dispute process at the DWC.

INCOME BENEFIT DISPUTES can be initiated at any pointduring the claim. These disputes are handled through an

administrative dispute resolution process at the DWC.

* Medical benefits initiated immediately after injury. Certain medical treatments require preapprovalfrom the insurance carrier or network before they can be rendered (“preauthorization”).**Income benefits generally initiated when there have been eight days of lost time. Income benefitspaid for first week of lost time if injured worker is not able to work for two weeks. Maximum of allbenefits is 401 weeks from date of injury. In addition to income benefits shown, Lifetime IncomeBenefits (LIBs) are available for injured workers who meet specified eligibility requirements, andDeath Benefits are paid to dependents in the event of a fatality.

Return to Work or



What if the treating doctor refers the claimant to achiropractor for physical therapy?

There is nothing that precludes a treating doctorfrom referring the claimant to a chiropractor forphysical therapy. Note, however, that for non-

network care, physical and occupational therapy must bepreauthorized effective September 1, 2005. For networkcare, the preauthorization requirements will be dictated bycontract. A network will be required to establish asufficient number of doctors who can perform chiropracticcare and physical therapy, and a treating doctor will have torefer the claimant to a network provider. The carrier willhave a choice of networks and will be able to select anetwork with only good doctors.

Are Texas employers currently required to obtaina post-accident drug screen when an injury occurson the job, and if not, after September 1, 2005,

will they be required to do so?

Employers are neither currently nor will they afterSeptember 1, 2005 be required to request a post-accident drug screen.

If a network plan is in effect, who designates thetreating doctor?

The claimant is entitled to chose the initial treatingdoctor. If he does not do so within 14 days ofbeing provided notice of the network, the network

may assign the treating doctor. The claimant will beentitled to one “free” change of treating doctor. Anysubsequent changes will have to be approved by thenetwork pursuant to the network established procedures.

When does Section 408.027, regarding thechanges in the payment deadlines for a healthcareprovider and submission of the healthcare

providers bills, go into effect?

September 1, 2005.

Can employers form their own networks asopposed to participating in carrier networks?

An employer may establish a network. As part ofthe contract of insurance between the employerand the carrier, the employer may insist that the

carrier contract with the employer’s network for theprovision of medical services.

Will the network provisions apply retroactively todates of injury prior to January 1, 2006?

The network provisions will apply to all claimantswho have sustained an injury on or after January1, 1991. For those dates of injuries prior to

September 1, 2005, once the insurance carrier contractswith the network, all claimants who live in the network’sservicing area will be required to participate in the networkselected by the carrier, regardless of the employer’s choiceof networks. For dates of injury on or after September 1,2005, an employee will be required to participate in anetwork only if an employer chooses to participate.

Can a network contract stipulate a larger paymentfor services over the fee guidelines?

Absolutely. This may be offered as an incentive toproviders to participate in the network. Ofcourse, the network contract will also provide for

treatment guidelines as well as preauthorizationrequirements. Therefore, although the individual servicemay cost more, there would likely be fewer servicesrequested.

Do you believe that some of the doctors who haveopted out of workers’ compensation over the lastfew years will come back into the system through

the network provisions?

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QG General QuestionsRegarding House Bill 7


This is entirely possible. In order to participate ina network, the doctor does not have to be on theADL. The doctor does not have to go through

any of the requirements established by the Division ofWorkers’ Compensation. Participation is dictated solelythrough contract with the network. Many doctors haveexpressed excitement about the possibility about becominga member of a network.

If the Appeals Panel is only allowed to reversedecisions, how will the carrier get notice of thefact that a decision was affirmed for purposes of

appealing to judicial review?

This will be established by the Division ofWorkers’ Compensation. However, it is likely thata process similar to the current process will be

utilized. For the last several months, the Appeals Panelhas not issued decisions affirming Hearing Officers.Rather, a copy of the decision of the Hearing Officer, witha cover letter, has been provided to the parties. The datethat it is filed with the Division of Hearings is stamped onthe Hearing Officer’s decision, which starts the deadlinefor appeal.

Will a carrier still be required to attempt to obtainemployee agreement to attend a carrier RME withthe new changes?

This will depend upon the nature of theexamination. If the examination is prior to thedesignated doctor’s appointment for issues such as

the necessity of medical treatment, then the carrier will berequired to seek agreement from the claimant prior torequesting an order from the Division. The statutoryprovisions are somewhat ambiguous as to whether or notthe limitations on the RME apply only to the Division orthe carrier. In any case, to the extent that it is a pre-designated doctor’s appointment, the same procedures willapply. However, the majority of RME appointments willbe post-designated doctor RME appointments. There isno requirement under the statute to request agreementfrom the claimant. The current procedures, which alsoprovide for a post-designated doctor RME appointment,

do not require the carrier to seek agreement from theclaimant. Rather, the carrier has an absolute right to apost-designated doctor RME for any issue on which thedesignated doctor was assigned to issue an opinion. Forthat matter, nothing in the statute requires that the post-designated doctor RME doctor be the same as waspreviously used. Clearly, it is contemplated that you woulduse different doctors for different purposes.

With the expansion of the role of the designateddoctor, do you expect there to be a significantnumber of requests for a designated doctor?

Perhaps. Many of the issues that are currentlydecided by RMEs (whether selected by the carrieror the Commission) will now be selected by a

designated doctor. The new provisions will supercede thePRME provisions. At least to the extent that you currentlysee PRMEs on issues of extent of injury, you can expect tosee designated doctors. You will likely also see requests fordesignated doctors whenever the carrier disputes extent ofinjury or disability.

If the claimant is on a network, how does thisaffect the designated doctor and RME process?

If the claimant is on a network, neither the carriernor the Division has the right to request an RMEfor the purpose of determining medical necessity.

This means that the PRME process will not apply toclaimants who are on networks. However, designateddoctors will still be selected for claimants who are onnetworks, for all issues, including extent of injury anddisability. A designated doctor may not be on the network.Additionally, a post-designated doctor RME may not be adoctor who is on the network. Presumably, as the networkwill have the opportunity to choose the doctors who are onthe network, and the carrier will be able to contract withnetworks that have only decent doctors, this might limitextent of injury issues. Further, as networks will berequired to adopt disability guidelines, this will also affectthese disputes.

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Claimant was excused from work early to

attend a company required random drug screen.

The drug screen is administered off site and the

employee was driving his motorcycle. The employee

was involved in a one-vehicle accident on the way to the

drug screen. Would this be compensable?

The trip from work to the site of the drug test

was probably a special mission and,

consequently, the claimant was in the course

and scope of employment at the time of the accident. I

am assuming that the claimant was on a reasonably

direct route from his workplace to the drug test site at

the time of the accident, and that he had not deviated

from the route for any personal reason. I am also

assuming that the claimant was not intoxicated at the

time of the accident.

The claimant’s doctor charged us $26.00 to

send medical records to the designated doctor.

Do we have to pay?

See Rule 133.2(c). The carrier must reimburse

the treating doctor a “reasonable copying

charge” for records provided to the designated

doctor. I would suggest that a reasonable charge would

be the average per-page price charged by copying

services in the city in question.

I have a denied claim where the claimant

requested to attend a designated doctor’s exam

and the Commission allowed and scheduled

despite the claim being denied. The claimant has not

pursued the claim any further since the DD exam. Do I

have to pay the charges for the exam the claimant

requested on a denied claim?

Under Rule 130.5, the TWCC shall order a DD

exam at the request of the carrier, employee or

the TWCC itself. There is no requirement that the

claim have been found compensable prior to the request

for a DD exam. Therefore you must pay. In fact, we

often recommend requesting a designated doctor even

when compensability is in dispute so as to minimize

your exposure.

Is there a time limit when a medical provider

can submit a request for reconsideration?

There is nothing explicit, but as a medical bill, I

believe that it is limited by the 11-month

provision of Rule 134.801(c) and CPRC

146.003. This is supported by the 1-year provision

requesting medical dispute resolution. Since Rule

133.304(m)(2) provides the right to medical dispute

resolution only after 28 days from the request for

reconsideration being sent to the carrier (if there is no

response from the carrier), it appears that this

interpretation is consistent with TWCC’s intent.

It has been awhile since we did a complete

denial of continuing care on older claims and

need your guidance. I have 2 claims, DOA

1994 and DOA 1995, which have been receiving

chiropractic treatment for non-surgical soft tissue type

injuries. I have peer reviews on both that say nothing

else needed from a medical standpoint. I have faxed the

peer review to both different chiropractors and plan on

denying future billing past the date of the receipt of

their response.

1. I anticipate both chiropractors to object to ceasing

treatment and expect letters stating same. Does it

effect my plans on denying?

2. One claimant has called me wanting to discuss.

What do I tell her?

Note that under no circumstances my you file a

statement with anybody that all future medical

treatment is denied. If the language in Rule

124.2 wasn’t clear enough, the Legislature has now

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huge fine. Since chiropractic treatments are not subject

to preauthorization, you should only deny them

retrospectively. You have no obligation to provide the

peer review to the chiropractor until you actually deny

the bill.

That said, the chiropractor letters should be considered

and perhaps sent to your peer reviewer. If, however,

you believe that nothing has changed, you may maintain

your position. The chiropractor can then pursue

medical dispute resolution.

An RME could strengthen your position if the case is

likely to go to MRD and SOAH. The opinion of a

doctor who has examined the claimant is inherently less

subject to attack than that of a peer reviewer. I would

suggest telling the claimant only that it is up to her or

her doctors to pursue MDR review of disputed bills. I

would not suggest pushing to request a hearing. The

local field office will likely steer the claimant to

requesting a PRME doctor under Rule 134.650. That is

a bad process that can work only against your position.

Otherwise, just keep your peer review up to date and

obtain a new one with any documented change in the

claimant’s condition.

Are there any time guidelines to determining

whether an employee would qualify as a

seasonal worker? I have three claims involving

employees who worked for approximately ten months

of the year. The remaining two months, the workers

received unemployment. Since the rule requires wages

for the year to be divided by fifty, would I utilize all

wages for the entire ten months and divide by fifty to

determine the average weekly wage or do I have to

obtain unemployment benefits for the months it was

received and include those in the calculation?

No, there is no set time guideline as to what

qualifies as seasonal work except that you look

at the employee, not the job. If the employee

works a series of seasonal jobs, but is always employed,

he is not a seasonal employee. Unemployment is never

included in AWW. For TIBs, the AWW would be

adjusted to $0 for the two months of no work. The

claimant presumably is considered laid off for those

months and would apply for unemployment. For the

other ten months, the TIBs AWW would be calculated

by the thirteen weeks prior to the injury. IIBs and

SIBs would be calculated by the earnings for the past

year (not including unemployment) divided by 50. See

TWCC Advisory 93-09 for instructions on how to get

approval for a seasonal adjustment.

The claimant was released to work full duty by

his surgeon following surgery for a hernia. He

then went to his treating doctor and was placed on

modified duty, working only five hours per day at less

than pre-injury wages. Do I owe partial temporary

income benefits?

The modified duty release is evidence of

disability. If the claimant does in fact have

reduced wages based on those restrictions, he

will probably be able to establish disability and

entitlement to partial TIBs based on the difference in

his AWW and his PIE. Disability is, however, a

question of fact. A hearing officer could find the

modified release is not credible in light of the full duty

release and find that the claimant was not disabled.

Does a medical bill or TWCC-73 place us on

notice of a claim and, if so, how much time do

we have to dispute without having a TWCC-1?

Do we need to set up a claim utilizing the medical bill

or TWCC-73 or do we wait on the TWCC-1? If a

company is fully self-insured, does it make a

difference?

Yes. If you receive a medical bill, do not

ignore it. You should go ahead and set up the

claim if you have the employer’s name,

employee’s name, and date of injury. The submission

of the bill to you in itself is an assertion that the injury

or condition is work related.

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The Workers’ Compensation Research Institute

(WCRI) recently published an interesting study that

highlights a significant problem in Texas: “adverse

surprise cases.” Adverse surprise cases are those cases

where costs exceed reasonable expectations. The study

measured surprise by seeing how often the claims

adjusters’ expectations about the present and future

medical costs of a case were significantly exceeded.

More specifically, adverse surprise cases were defined

by (1) the amount of the incurred medical costs at the

12-month snapshot, and (2) the extent to which the

incurred medical costs increase from the 12-month

snapshot to the 36-month snapshot. For example, a case

with expected medical costs of $25,000 at 12 months

but actual total costs of three to five times that much

($75,000 to $125,000) at 36 months was considered a

case with a significant adverse surprise.

The study examined three dimensions of adverse

surprises: (1) how their frequency and costs vary from

state to state, (2) how this has changed over time, and

(3) what attributes of cases are associated with these

interstate variations and trends. Twelve large and

geographically diverse states were included in the

analysis: California, Connecticut, Florida, Illinois,

Indiana, Louisiana, Massachusetts, North Carolina,

Pennsylvania, Tennessee, Texas, and Wisconsin. These

states included examples of states that rank high,

medium, and low in terms of overall average cost per

claim. Table A from the study shows the frequency and

costs of adverse surprises. There was substantial

variation in the frequency of adverse surprises in the

states that were studied. It ranged from less than one

percent of cases with more than seven days of lost time

for significant adverse surprises in Indiana and

Wisconsin (less than four percent of cases for those

with moderate or significant adverse surprises) to nearly

six percent in California (nearly 18 percent of cases for

those with moderate or significant adverse surprises).

Unfortunately, adverse surprises were most

common in California and Texas.

What are the attributes of adverse surprise cases?

Generally, WCRI found that chronic conditions with

multiple surgeries represent a disproportionate number

of adverse surprise cases and that they were

disproportionately back pain cases. Adverse surprises

occurred somewhat more frequently for women and are

slightly more likely to involve older workers and those

who are married. Notice of injury in adverse surprise

cases was later in California and, to a lesser extent, in

Texas. They did not find a consistent relationship

between adverse surprise cases and wage level or

industry. Not surprisingly, such cases were more likely

to receive surgery, physical therapy and chiropractic

care, and radiology and mental health services, and

multiple surgeries occurred more often in adverse

surprise cases. Both the initial surgery and the initial

chiropractic visit were more likely to come later in the

adverse surprise cases than in cases that did not have

adverse surprises. This pattern was thought to suggest

that many adverse surprise cases were probably cases

where the first six to 18 months of medical care did not

resolve the worker’s medical problem, raising questions

about the appropriateness and effectiveness of this care.

WCRI suggested that some workers may have turned to

chiropractic care and surgery (even multiple surgeries)

after losing confidence in the care that had been

ADVERSE SURPRISE CASES COST TEXAS' INSURERS MONEY

Table ADistribution of Claims by State and Size of AdverseSurprise — 2000 Cases Evaluated in 2003

Significant Moderate Significant Moderate

Surprise (%) Surprise (%) Surprise (%) Surprise (%)

CA 6 12 31

TX 3.7 8 24 21

FL 2.8 7 22 21

LA 2.6 7 13 21

NC 2.4 5 23 18

PA 1.9 6 17 16

IL 1.7 4 15 14

CT 1.4 5 15 17

TN 1.3 5 12 14

MA 1.1 4 30 16

WI 0.8 3 12 13

Percent of ClaimsPercent of Incurred

Medical Costs

continued on pg.30


Subject to a different priority established by the

Department of Insurance, TWCC/DWC has adopted a

rule making priority.

The agency will first adopt rules relating to the

transition of TWCC to the new Division. Secondly, rules

required by statute, and for which a specific statutory

timeframe has been prescribed will be the second priority.

Rules that related to the provisions of medical care in and

outside of certified networks will be assigned a third tier

priority.

TWCC/DWC has invited further suggestions relating

to priorities of specific rules. Comments should be

emailed to TDI as soon as possible. They invite comment

by September 2, 2005 at: [email protected]. If you

have a priority request and you have not previously

commented, submit it anyway.

continued on pg. 31

TDI released six different bulletins addressing specific

questions relating to the implementation of HB 7.

Bulletin B-0033-05 – The Division acknowledges that it

will not be able to complete rulemaking until after the

statutory changes become effective. Accordingly, the

Workers’ Compensation Act, as amended, takes

precedence if there is a conflict between the statute and a

workers’ compensation rule.

Bulletin B-0035-05 – Acknowledges the change in appeal

from adverse Medical Review Division decisions.

n All cases not filed at SOAH by 5:00 p.m. on August 31,

2005 may not be appealed to SOAH.

n After August 31, 2005, the appeal must be made

directly to the Travis County District Court as provided

by Subchapter G, Chapter 2001, Government Code

within 30 days of the date of the decision appealed.

Bulletin B-0036-05 - Announces the Division’s first

priority will be to change all notices and letters to notify

the Division and not the Commission. The website will be

modified and there will be a new URL for the agency

website. The full name of the agency will be the Texas

RULE MAKING PRIORITY AT DWC

FREQUENTLY ASKED QUESTIONSFOR CARRIERS

TDI PUBLISHES BULLETINS

If a carrier wants to find a certified network tocontract with in order to offer a workers’

compensation network plan, how does it find one?

House Bill 7 stipulates that a person may notoperate a workers’ compensation health carenetwork unless the person holds a certificate

issued under Insurance Code Chapter 1305 and relatedrules. These rules are scheduled for adoption by December1, 2005, and TDI will begin accepting applications forcertification starting January 1, 2006. In anticipation offiling an application for certification, interested entities maybe forming their networks before January 2006.Information concerning applicants for networkcertification and certified networks is public informationthat is available upon request. In addition, we anticipatethat we will be posting the names of networks on the TDIweb site as they become certified.

If a carrier wants to establish its own network bycontracting directly with providers, how does thenetwork become certified?

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A carrier may apply for certification of its networkin the same manner as any other network.Application forms and instructions will be

available on the TDI website no later than December,2005.

Do medical bills have to be paid according to thesame prompt pay standards as for HMO and PPO

group health insurance claims?

No. HB 7 requires that bills be paid, denied oraudited according to the requirements in LaborCode §408.027 and any rules adopted under that

section.

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After Adoption of Networks in 2006

1) After your network is established, you must

immediately notify the network of contests of

compensability. You must pay all medical bills up to a

maximum of $7,000 incurred prior to the notice to the

network - even if you deny the claim within the first 15

days. 1305.153(e). (Not an issue until 2006, but will

be critical from that point forward.)

Effective as of September 1, 2005

2) All medical bills for treatment provided after Sept 1,

2005 should be reviewed in light of whether “evidence

based medicine standards” demonstrate that the medical

treatment is medically effective.

3) For injuries on or after 9/1/2005, change your

waiting period calculation so that it is triggered on the

15th day (instead of the 29th day) of disability, whether

lost time is consecutive or intermittent. There will be

more waiting period cases than before.

4) Deny all claims in which there is a positive drug

screen. There is no need to get a toxicological opinion

first. If the opinion is contested, obtain GC/MS

quantification and then retain a toxicologist to support

your defense.

5) For all SIBs cases, prepare to evaluate SIBs in light

of whether the claimant demonstrated an “active effort

to obtain employment,” and or “active participation” in

voc rehab. Use this language on TWCC 45s when

disputing what we previously called the “good faith”

standard. Do not use “good faith” language in your

filings at DWC.

6) Increase maximum comp rate by one dollar (from

$539 to $540) for injuries on or after 9/1/2005.

7) Remember to never state on a compensable claim:

“Carrier denies all future medical care.” There is no

reason to say that on a denied claim – it is implicit in

the fact that the entire claim is denied. It would

accordingly be best to never state that language or

anything substantively similar since it is either irrelevant

or superfluous. If you have received a persuasive peer

review that further medical care is not necessary, use it

to deny the pending bills, and continue to rely upon it

for future services if there is no change in the facts. But

review each bill individually to see if the service was

addressed by the peer reviewer, and evaluate

accordingly.

Effective after Rules Adopted

8) Suspend the RME process prior to a DDR unless

the issue to be reviewed is medical necessity. After a

DDR, use the RME process if you want to challenge

the DDR opinion.

9) Utilize DDRs for disputes of disability and extent of

injury. Prepare analysis letter to accompany request

setting for the arguments you are relying upon and

include statements, videos etc - everything that you

would provide to a peer review doctor or RME doctor.

10) Evaluate the effectiveness of the Compensability

Exam by the treating doctor. Establish an internal pilot

program to see if it helps control issues of extent of

injury. If the report of the treating doctor is adverse,

request a DDR, and dispute. You may rely upon peer

review opinions or, subsequent to the DDR evaluation,

an RME opinion.

FO&L’s Top Ten List of Important HB 7 ChangesFor the Handling of Claims


*Attorney's direct dial fax no. is directed to his/her paralegal. ** Alternative e-mail address: first initial+last [email protected] (Example: [email protected])

FLAHIVE, OGDEN & LATSON DIRECTORY

Bobby Stokes 435-2150 867-1705 RDS Anita Drake 435-2249

Carlos Acosta 435-2177 867-1712 CA1 Sally Stephens 435-2242

Chuck Finch 435-2158 867-1713 CCF Marcie Roberts 435-2223

Dana Gannon 435-2151 867-1710 DMG Margo Davis 435-2263

Greg Solcher 435-2175 867-1718 GDS Sally Stephens 435-2242

Jack Latson 435-2156 867-1724 JWL Patsy Shelton 435-2234

James Sheffield 435-2169 867-1703 JRS Sharissa Karol 435-2224

Jeremy Lord 435-2184 867-1711 JXL Anita Drake 435-2249

Katie Flahive 435-2168 867-1702 KMF Gina Mitschke 435-2229

Kevin MacEwan 435-2166 867-1706 KEM Cynthia Sherman 435-2274

Lynette Phillips 435-2165 867-1708 LLP Sharon Youso 435-2233

Nancy Ippolito 435-2181 867-1735 NHI Sharon Youso 435-2233

Pamela Peavy 435-2163 867-1736 PEP Kiran Hashmi 435-2225

Paul Stone 435-2157 867-1716 PBS Bronna Sanders 435-2269

Paul Warren 435-2159 867-1719 PDW Kiran Hashmi 435-2225

Rebecca Strandwitz 435-2160 867-1720 RMS Andrea Tuttle 435-2228

Rhett Robinson 435-2154 867-1709 SRR Marilyn Mueller 435-2236

Rob Dollars 435-2164 867-1707 RAD Karen VanLoo 435-2240

Ron Johnson 435-2178 867-1722 RMJ Marcie Roberts 435-2223

Roy Leatherberry 435-2179 867-1714 RJL Andrea Tuttle 435-2228

Scott Bouton 435-2153 867-1737 SDB Marilyn Mueller 435-2236

Steve Tipton 435-2162 867-1704 SMT1 Mary Casebier 435-2275

Susan Veltman 435-2152 867-1717 SRV Sharon Durr 435-2230

Tom Wilkins 435-2183 867-1727 TRW Gina Mitschke 435-2229

Tricia Blackshear 435-2180 867-1723 PHB Lisa Black 435-2260

Attorneys Direct Dial(512)

Direct Fax*(512)

E-Mail **[email protected]

Paralegal Paralegal(512)

Tillie Aguirre 435-2235 477-4996 TAA

Phyllis Devine 435-2267 867-1748 PAD

Admin. Violations Dianne Townsend 435-2289 867-1724 DLT

BRC Settings (Request for Evidence) Cindi Friedel 435-2244 477-4987 CAF

Disputed Claims (PLNs)Request for BRC (TWCC-45)

General Questions Receptionist 477-4405 867-1700 GQS

Insurance Coverage (TWCC-20)Records Request/Photostats

Medical Dispute Resolution Katie Foster 435-2266 867-1733 KTF

Client Consultant Trina DeCecco 435-2239 867-1700 TAD

PRME Service Brian Fitzgerald 435-2227 477-4987 [email protected]

Designated Doctor Filings Brandi Senters 435-2299 479-5319 BES

TWC Manual Sales Joel Ogden 435-2256 472-9160 JMO

Task Direct Dial(512)

Direct Fax(512)

[email protected]

Contact Person


Interest Rate Effective from 7/1/2005 through 9/30/2005: 6.88%

1 Determine number of weeks of continuous payment owed. Find corresponding “X” value on chart.

2 Multiply “X” by weekly compensation rate. This is the approximate amount of interest owed on the ending date of benefits.

3 Determine number of weeks between ending date of payments and date benefits are to be paid. Find corresponding “Y” value onchart.

4 Multiply “Y” by the total benefits owed (not including interest determined in steps 1 and 2 above). This is the approximate amount ofinterest owed from benefit ending date to payment date.

5 Determine total benefits plus interest owed by adding interest from steps 2 and 4, and adding total benefits to be paid.TIBs: Calculate interest from the 7th day after first day benefits began, or the 7th day after the first notice, whichever is

LATER.IIBs: Calculate interest from the 5th day after notice of the certification of MMI and impairment, or the date of a

CARRIER dispute of MMI or impairment, whichever is EARLIER.

NOTE: For partial weeks, round up to next week (8 2/7ths weeks = 9 weeks).

Weeks “X” Value Weeks “X” Value Weeks “Y” Value Weeks “Y” Value

1 0.0018 27 0.4993 1 0.0013 27 0.0357

2 0.0045 28 0.5362 2 0.0026 28 0.0370

3 0.0084 29 0.5745 3 0.0040 29 0.0384

4 0.0137 30 0.6140 4 0.0053 30 0.0397

5 0.0203 31 0.6549 5 0.0066 31 0.0410

6 0.0282 32 0.6972 6 0.0079 32 0.0423

7 0.0374 33 0.7407 7 0.0093 33 0.0437

8 0.0480 34 0.7856 8 0.0106 34 0.0450

9 0.0599 35 0.8318 9 0.0119 35 0.0463

10 0.0731 36 0.8793 10 0.0132 36 0.0476

11 0.0876 37 0.9281 11 0.0146 37 0.0490

12 0.1034 38 0.9782 12 0.0159 38 0.0503

13 0.1206 39 1.0297 13 0.0172 39 0.0516

14 0.1390 40 1.0825 14 0.0185 40 0.0529

15 0.1588 41 1.1365 15 0.0198 41 0.0542

16 0.1799 42 1.1920 16 0.0212 42 0.0556

17 0.2024 43 1.2487 17 0.0225 43 0.0569

18 0.2261 44 1.3068 18 0.0238 44 0.0582

19 0.2512 45 1.3661 19 0.0251 45 0.0595

20 0.2776 46 1.4268 20 0.0265 46 0.0609

21 0.3053 47 1.4888 21 0.0278 47 0.0622

22 0.3343 48 1.5522 22 0.0291 48 0.0635

23 0.3647 49 1.6168 23 0.0304 49 0.0648

24 0.3963 50 1.6828 24 0.0318 50 0.0662

25 0.4293 51 1.7501 25 0.0331 51 0.0675

26 0.4636 52 1.8187 26 0.0344 52 0.0688

INTEREST CALCULATORSECOND QUARTER

Accumulated Interest from Beginning toEnd of Continuous Payment

Accumulated Interest from End ofPayment Period to Date Paid


CASE DECISIONS TEXAS COURT OF APPEALSMorales v. Liberty Mutual Insurance Co., No. 08-04-00135-CV (2005 WL1791593 Tex.App.-El Paso,2005).

HOLDING:

FACTS:

In determining the appropriate forum for judicial review of a TWCC decision, the employee's status is an issue of coverage and notcompensability, thus jurisdiction is proper in Travis County.

Affirmed. The Texas Workers Compensation Act of 1989 Act replaced the old standard of judicial

review with two different standards, substantial evidence and modified de novo, to be determined

based on the nature of the dispute. Tex. Lab. Code Ann. §§ 410.252, 410.301, Texas Workers’Compensation Commission v. Garcia, 893 S.W.2d 504, 510 (Tex. 1995). Under the modified de novo

standard, a district court determined by the employee’s county of residence reviews the commission’s

appeals panel decisions concerning compensability or eligibility for or the amount of income or

death benefits. For all other disputes, a party must appeal the final decision to the district court in

Travis County under the Administrative Procedure Act for a substantial evidence review. Tex. Lab.

Code Ann § 410.255; see also Tex. Gov’t Code Ann. §§ 2001.171-.178 (Vernon 2000).

The court agreed with basis for the appeals panel’s affirmance of the hearing officer’s finding that

the decedent was not an employee of any of the companies, and therefore the claimant beneficiary

was not entitled to benefits. The court further agreed that “[t]he status of being an employee of an

insured for which a carrier is liable is an issue of ‘coverage’ not compensability.” And because the

issue was of coverage, jurisdiction is proper in Travis County and the trial court was correct in

granting Liberty Mutual’s plea to the jurisdiction.

Margarita Morales filed suit seeking judicial review of the decision of the Texas Workers’

Compensation Commission Appeals Panel, which denied her claim for benefits as a result of the

death of her husband Guadalupe Morales. Liberty Mutual Insurance Company (Liberty Mutual)

successfully showed the Appeals Panel that Morales should not be awarded death benefits as the

decedent was not an employee injured in the course and scope of his employment. Morales sought

judicial review; arguing that the status of being an employee or independent contractor is a fact issue

triable by a jury, and is an issue of compensability. Liberty Mutual filed a successful plea to

jurisdiction challenging the jurisdiction of the El Paso trial court.


NO. 051028-S

FACTS:

HOLDING:

APPEALS PANEL DECISIONS

A claimant does not waive an extent of injury contention by failing to raise and resolve that issue prior to the expiration of the firstquarter of supplemental income benefits.

The claimant eventually received a 21% impairment rating that included impairment for the cervical

spine, lumbar spine and left shoulder. At a time after the expiration of the first quarter of

supplemental income benefits, the claimant pursued an issue of whether or not his compensable

injury extended to and included bowel and bladder dysfunction and erectile dysfunction. The

hearing officer found for the claimant. The carrier appealed contending that under Appeals Panel

Decision No. 040150-s the claimant had waived the right to pursue a contention that his injury

included body parts and conditions that were not included in the impairment evaluation.

Affirmed. The Appeals Panel notes that Appeals Panel Decision No. 040150-s included the finding

that the carrier waived the contention that the compensable injury did not include conditions for

which the claimant was rated by failing to raise that contention prior to the expiration of the first

quarter of supplemental income benefits. However, the Appeals Panel notes that it specifically

indicated in that decision that “injuries can evolve over time and claimant’s may claim that additional

injuries or conditions are compensable even after the expiration of the first quarter of supplemental

income benefits.” The Appeals Panel was unwilling to hold that the claimant had waived his right to

pursue an extent of injury issue at least under the facts of this case.

NO. 050874-SThe claimant was in the course and scope of her employment during the course of travel from her home to her initial stop, where theevidence established that prior to leaving her home, she had logged on to her computer, received an assignment by email, confirmed theassignment by email and contacted a supervisor at the company to which she was traveling to perform her assignment.

FACTS:

HOLDING:

The evidence established that the claimant worked for a temporary staffing agency as an on-sight

trainer of office equipment. She worked from her home. On the morning of her motor vehicle

accident, she began her day by logging on to her computer. She received an assignment by email. She

confirmed that assignment by email and contacted the supervisor at the company at which she was

to work that day. Furthermore, there was testimony from the regional sales manager that the

employer began billing for the claimant’s time as soon as the claimant left her home. The claimant

was injured in an automobile accident on her way from her home to her first assignment of the day.

The hearing officer determined that the claimant was not in the course and scope of employment at

the time of the accident. The claimant appealed.

Reversed and rendered. The Appeals Panel determines that the claimant was in the course and

scope of employment at the time of the motor vehicle accident. They reference the facts that the

claimant had begun work by logging in and getting her assignment, by making contact with both the

employer and client company and was being paid at the time the accident occurred. Furthermore,

they rely upon the fact that the claimant’s primary work site was her “office/home.” There was no

other work site involved.


NO. 050729-S

FACTS:

HOLDING:

NO. 050747-S

FACTS:

HOLDING:

Receipt of a narrative report containing an MMI certification and impairment rating without a TWCC-69 is insufficient to begin the90-day period during which a dispute must occur.

The evidence established that the carrier received Dr. D’s narrative report containing an MMI

certification and impairment rating on August 17, 2004 and Dr. D’s TWCC-69 subsequently on

September 13, 2004. The carrier disputed the impairment rating within 90-days of its receipt of the

TWCC-69 but more than 90-days after its receipt of the narrative report. The hearing officer

concluded that the carrier did timely dispute the MMI certification and impairment rating from Dr.

D. The claimant appealed.

Relying upon the provisions of Rule 103.12(c), the Appeals Panel concluded that receipt of the

narrative report alone was insufficient to begin the running of the 90-day period during which the

carrier had to file its dispute.

It is error for a hearing officer to assemble an impairment rating from impairment ratings for different body parts from multiple doctors.

The claimant’s injuries included his neck, bilateral hands and right knee. The Commission appointed

Dr. K as the designated doctor. Dr. K eventually certified MMI. On his TWCC-69 he provided an

impairment rating of 19%. However, his narrative report indicated that the impairment rating was

28%.

The claimant was also seen by an RME doctor. The RME doctor certified MMI and provided

impairment rating of 5%.

A substantial difference between the two impairment ratings was based upon the existence or lack

thereof of cervical radiculopathy. The designated doctor relied upon a positive EMG for his

placement of the claimant in category DRE III. The RME doctor indicated that there was no sign of

radiculopathy and placed the claimant in category DRE II.

The hearing officer determined that the impairment rating was 20% by combining the impairment

awarded by the designated doctor for the bilateral hand and right knee injuries with the 5%

impairment rating award by the RME doctor for the neck injury. The carrier appealed contending

that the hearing officer’s only option in the event the hearing officer concluded that the great weight

of the other medical evidence was contrary to the designated doctor’s impairment rating was to

award impairment based upon the opinion of another doctor providing an impairment rating. As the

carrier’s RME doctor was the only other doctor that examined the claimant and provided an

impairment rating, the carrier argued that that doctor’s rating must be adopted by the hearing officer.

Reversed and remanded. The Appeals Panel does determine that the hearing officer committed error

in assembling an impairment rating from ratings from two different doctors. However, the Appeals

Panel indicates that as the impairment rating from the RME doctor did not include impairment for


NO. 050120-S

HOLDING:

FACTS:

A prior Contested Case Hearing determination that disability began on a certain date precludes relitigation of that issue for purposes ofdetermining the statutory maximum medical improvement date.

At a Contested Case Hearing held on June 15, 2004 the TWCC considered the following issue: “Did

the claimant have disability resulting from an injury sustained on ________, and if so, for what

periods?” In response to this issue the hearing officer determined that disability began on January

14, 2004 and continued to the date of the Contested Case Hearing. The carrier later discontinued

temporary income benefits on August 16, 2004 contending that the claimant reached MMI statutorily

on that date. That determination was based upon the fact that the claimant had missed time from

work during the period from August 21, 2002 through August 30, 2002. The claimant objected to

the discontinuance contending that the statutory MMI date was actually January 17, 2006 based upon

the hearing officer’s previous determination that disability began on January 14, 2004. The hearing

officer agreed with the carrier’s position. The claimant appealed.

Reversed and rendered that the statutory MMI date is January 17, 2006. The Appeals Panel indicates

that the principles of res judicata do apply to the issue requiring the determination of the eighth day

of disability. The issue as phrased at the June of 2004 hearing required the hearing officer to make a

determination as to the period of disability existing from the date of injury forward. The hearing

officer’s determination that disability began on January 14, 2004 precludes a relitigation of the issue

of disability prior to that date.

the bilateral wrists and right knee injuries, the hearing officer could not adopt that rating. The

Appeals Panel remands to the hearing officer for the appointment of a second designated doctor for

the purpose of evaluating the impairment rating only.

NO. 050523-S

FACTS:

While the provisions of Rule 128.1 do not apply to an overpayment resulting from a delayed determination of entitlement to contribution,the provisions of that rule are instructive with respect to the amount of contribution to be allowed in such circumstance.

The Contested Case Hearing concerned the issues of the claimant’s entitlement to supplemental

income benefits for the first two quarters and the amount of credit the carrier was entitled to take in

order to recoup overpayments resulting from a prior determination of entitlement to contribution.

The initial TWCC-33 was submitted by the carrier on May 16, 2003 and denied by the TWCC on

May 20, 2003. A second TWCC-33 was filed with the Commission on September 18, 2003 and

resulted in a determination that the carrier was entitled to a 28% reduction based upon contribution

from a prior injury. By the time of the Commission’s determination, the case had proceeded past the

IIB stage and into the SIB stage. The carrier argued that it should be able to take 100% credit against

future benefits for the overpayment of impairment income benefits. The carrier argued that the

overpayment should be calculated based upon a 28% reduction beginning with the initial IIB

payment. The hearing officer’s decision was in line with the carrier’s argument. The claimant

appealed.


NO. 050677-S

HOLDING:

HOLDING:

FACTS:

Reversed and rendered in part; and reversed and remanded in part. The Appeals Panel initially

indicates that a contribution finding takes effect only as of the date that the TWCC-33 was filed by

the carrier. In the case at hand the initial TWCC-33 was denied. The carrier did not pursue dispute

resolution proceedings concerning that denial. Instead, the carrier waited approximately four months

to file a second TWCC-33 resulting in the Commission’s eventual order allowing a reduction. The

Appeals Panel determines that the carrier is entitled to reduce benefits only as of the date of the

filing of the second TWCC-33.

Additionally, the Appeals Panel reverses the determination that the carrier is entitled to completely

discontinue future benefits, until such time as the overpayment is recouped. The Appeals Panel

acknowledges that Rule 128.1 applies only to an overpayment resulting from a recalculation of the

average weekly wage; however, the Appeals Panel indicates that the terms of that rule “can be

looked to for guidance as to the factors to be considered in determining a reasonable rate of

recoupment.”

Those factors are the amount of the overpayment, the claimant’s monthly IIB and SIB rate after

contribution, and the claimant’s financial resources. The Appeals Panel remands to the hearing

officer to make a determination as to the amount of credit the carrier is entitled to take based upon

these factors.

For purposes of determining a school district employee’s entitlement to supplemental income benefits, Rule 128.7(C)(1)(B), can be lookedto for guidance.

The claimant is a school teacher. The hearing concerned her entitlement to supplemental income

benefits for the eighth quarter. The qualifying period began July 4th and ended October 2, 2004. The

parties stipulated that 80% of the pre-injury average weekly wage was $675.94.

The claimant worked under a contract for the 2004-2005 school year that paid her $51,065 over a

ten-month contract period. The beginning date of the contract was August 9, 2004 and the ending

date was May 26, 2005.

During the qualifying period for the eighth quarter the claimant received two checks under the

contract totaling $8,427.50. The hearing officer determined that the claimant did not earn 80% of

her pre-injury average weekly wage during the qualifying period by simply multiplying $675.94 by 13

and comparing the total to the total earned by the claimant during the qualifying period. Based upon

these calculations, the hearing officer found the claimant entitled to supplemental income benefits

for the eighth quarter. The carrier appealed.

Reversed and rendered. The Appeals Panel notes that Labor Code Section 401.011(43) defines

wages in terms of that “payable” not paid. Although acknowledging that Rule 128.7 applied only to

injuries occurring on or after December 1, 2001, the panel indicates that the provisions can be

looked to for guidance. Using those provisions the claimant’s salary would be divided by the ten-

month contract period to arrive at a monthly figure. The monthly figure is then divided by 4.34821

to arrive at a weekly wage. Using that method the Appeals Panel determines that the claimant’s

earnings during the qualifying period exceeded 80% of the pre-injury average weekly wage.


NO. 050897-S

FACTS:

The deemed receipt date controls over the actual acknowledged receipt date for purposes of determining whether or not a claimant’s appealis timely.

At issue was whether or not the claimant had timely filed a request for review to appeal a hearing

officer’s decision. The evidence established that the claimant’s appeal was filed one day after the

date due based upon the acknowledged receipt date by the claimant but was timely filed based upon

the date on which the claimant was deemed to have received the hearing officer’s decision under

Rule 143.3(d).

Accordingly, the Appeals Panel renders a decision that the claimant is not entitled to supplemental

income benefits.

HOLDING: The Appeals Panel determines that under the rules discussed, the Appeals Panel opinions applicable

and the Court of Appeals decisions addressing the issue, the “deemed date of receipt” controls over

the actual acknowledged date of receipt by the claimant. Accordingly, the appeal was timely filed.

The Commission receives hundreds of violation

referrals a week. Violation referrals that do not contain

an allegation of fraud are processed by the

Commission’s Audits & Enforcement section within the

Division of Compliance & Practice. Administrative

Violations may include allegations of late payment of

benefits or late filing of required reports. Administrative

Violations are only pursued through administrative

remedies (Warning Letters, Penalties). The numbers

below do not include any fraud cases.

Highlights of Recent Administrative EnforcementActions Following are examples of penalties issued during

the current fiscal year and are based on seriousness of

the violation, history of previous violations,

demonstrated good faith of the violator, economic

benefit from the prohibited act, penalty necessary to

deter future violations, and other matters that justice

may require. The Compliance and Practices Division

calculates penalties using the penalty calculator pursuant

to §415.021(c). The differences in the penalty amounts

for seemingly similar violations are due to the factors

listed above. For instance, if a system participant has

history of committing a similar violation, the penalty

amount may be higher than for a second offense.

Failure to timely pay income benefits:

· The carrier failed to timely pay

temporary income benefits

· 7 days late

· Fined $313

· The carrier failed to initiate impairment

income benefits:

· 23 days late

· Fined $1,425

AdministrativeEnforcement


responsibilities. He did mention that both Commis-sioners

for TDI and DWC would be “on an equal footing.”

Mike Geeslin is a man of great energy and resolve. He

has been working at TDI for the past two years and

previously worked at the Governor’s office. It is clear that

he is familiar with government administration and will be an

effective leader in the TDI Commissioner role.

In other sessions, TWCC demonstrated its Online

Performance Data site that will be available in late September

or early October. Although the data is not designed as a

predicate for a “report card” as required by HB 7, many of

the data elements will be relevant.

In the Online Data for insurance carriers, one will be

able to identify metrics for timely payment of claims,

percent of claims denied, outcomes of dispute resolution,

timely processing of medical bills and administrative

violation information. This will be carrier specific. For each

healthcare provider, TWCC will provide overall billing

information for medical treatments, rehabilitation services,

manipulations and mobilizations, FCEs, symptoms and

administrative violations. This data is not available at this time, but

should be online within the next two to three months.

TWCC/DWC was charged with developing an informal

dispute resolution process. Before a BRC is granted, it may

be necessary to exchange all relevant information presently

required to be exchanged fourteen days prior to the BRC.

DWC will also develop “proof” requirements to show

attempts to resolve issues. It may be copies of letters; it may

be phone calls documenting claims notes, etc. This will be

defined by Division rule.

As of September 1, 2005, all BROs must be certified

mediators. They are undergoing training at this time.

TDI and TWCC have released a survey form for

interested system participants to indicate the order of priority

for rule development. From the “sold out” attendance, and

the questions asked, there appeared to be a great deal of

interest regarding this implementation of the new law.

TWCC reviewed the statutory changes that we have known

about since the first of June, but speakers were unable to

address the many specific questions that will be later

determined by the rulemaking process.

continued from page 1

· The carrier failed to pay supplemental

income benefits:

· 5 days late

· Fined $1,141

Failure to timely process a medical bill:

· The carrier failed to timely process a

medical bill

· 21 days late

· Fined $5,479

· The carrier failed to timely process a

medical bill

· 7 days late

· Fined $1,836

Failure to timely pay according to an order:

· The carrier failed to timely comply with

a Medical Review Order

· 968 days late

· Fined $10,000


a Medical Review Order

· 95 days late

· Fined $1,523


an Interlocutory Order

· 5 days late

· Fined $2,854

Failure to pay for preauthorized services:

· The carrier failed to timely pay

for services that were

preauthorized

· 198 days late

· Fined $1,098

Failure to timely file a medical report:

· The medical provider failed to timely

file the TWCC-69

· 29 days late

· Fined $250

· The medical provider failed to timely

complete the TWCC-69

· 57 days late

· Fined $125


within a network if there are treating doctors in

that service area. The rule therefore addresses how

a claimant’s residence is defined and what

constitutes the network service area. “Live” is

defined as “where a employee lives”, including his

or her principal residence for legal purposes, a

temporary residence necessitated by employment,

or a temporary residence taken by the employee

primarily for the purpose of receiving necessary

assistance with routine daily activities because of a

compensable injury. A network’s “service area”

means a “geographic area within which health care

services from network providers are available and

accessible to employees who live within that

geographic area.”

Most other terms that are defined in this section are

ascribed meanings consistent with the definitions provided

them in the Workers’ Compensation Act and/or through

common usage.

Certification StandardsThe application for certification of a network must

include a non-refundable fee of $5,000.00 under Section

10.21(a). Application forms are available through the TDI

website at www.tdi.state.tx.us, or by mail addressed to

TDI.

The required contents of the application are many, and

are set out in Sec. 10.22. They include a description of the

proposed network organizational structure, a biographical

affidavit of each person who would govern or manage the

network, a copy of the network contract and any

management or third-party contracts, a financial statement,

a description and a map of the proposed network service

area(s), a description of programs and procedures to be

utilized (including a complaint system, credentialing policies

and procedures, utilization and retrospective review, and

procedures for changing treating doctors within the

network), and a host of other requirements.

Section 10.24 mandates that each network shall prepare

financial statements annually, and provide them to each

carrier with whom the network contracts and to TDI.

continued from page 4 Any proposed changes to network management

contracts, to the network configuration, and to the network

service area must first be filed with TDI for approval under

Sec. 10.25. Section 10.26 enumerates the specific

requirements for modifying the network service area, and

Sec. 10.27 lists the requirements for modifying the network

configuration (i.e. the identity of providers, medical

specialties, and medical facilities within the network).

Contracting RequirementsThe rules under this subchapter regulate three (3)

different types of network contracts:

(1) Network management contracts;

(2) Contacts between the network and the carrier; and

(3) Contracts between the network and the providers

within the network.

All contracts must be filed with TDI.

Sec. 10.40 governs management contracts. A

network may contract with another entity for management

services within the network, to include control and decision-

making.

Sec. 10.41 concerns network-carrier contracts.

The network must agree to perform all functions consistent

with the requirements of the Insurance Code and HB 7.

The carrier must retain ultimate responsibility to ensure

that all functions are performed in accordance with the

statutes and rules. Contingency plans must also be

articulated in the event of a termination of the contract or

a failure of one party to perform its agreed functions under

the contract.

Sec. 10.42 governs network contracts with

providers. Such contracts must include provisions that

govern events such as a provider voluntarily leaving the

network, a provider being terminated from the network,

and an appeals process by which a provider may petition

to reenter the network. Most importantly, and consistent

with Sec. 1305.152 of the new Act, this section provides

that “a network is not required to accept an application for

participation in the network from a…provider that

otherwise meets the requirements…if the network

determines that the network has contracted with a sufficient

number of qualified health care providers, including health

care providers of the same license type or specialty.”


Network RequirementsThe network requirements shall be provided to the

employees of every employer that opts in to the network

via plain language notices from the carrier and employer.

The employees shall complete acknowledgement forms

that confirm receipt of the network requirement information

consistent with Sec. 1305 of the new Act. That form must

include statements that reflect that the employee was

notified of what he or she must do to receive health care

within the network if he or she lives within the network

service area. The rule goes on to list various requirements

of the notice provided to the employees, including

information about how to contact the network, what

happens if the employee seeks treatment outside of the

network, and how the employee can seek emergency care

outside of the network.

Sec. 10.61 mandates that an employee living within the

service area must treat within network, except in the event

of emergency treatment or if he or she is referred out of

network by a network physician. An employee is presumed

to live at the address that he or she provided to the

employer or, if he or she no longer works for the employer,

the address on file with the carrier. An employee who

asserts that he or she does not live in the network service

area may request dispute resolution through TDI (see

below). An employee living outside the service area may

treat within network by mutual agreement. An employee

who makes a material misrepresentation regarding his or

her living status in order to treat out of network may be

liable for payment for that health care.

Under Sec. 10.62, an employee who asserts he or she

does not live within the network service area may request

review from the carrier of its assertion that he or she does,

and provide documentation. Upon review, if the carrier

determines the employee does not live within the service

area, but does live within the service area of any other

network established by the carrier (called an “alternate

network”), the carrier shall provide the employee with the

opportunity to treat within that alternate network. If the

employee disagrees with the carrier’s determination he or

she may file a complaint with TDI and request dispute

resolution.

Network OperationsSec. 10.80 provides a list of mandatory network

requirements, including but not limited to: an adequate

number of doctors and specialists available 24 hours per

day and seven days per week within the service area; a

sufficient number and variety of providers to ensure

“choice, access, and quality of care;” and an adequate

number of physicians with admitting privileges at one or

more network hospitals. Such requirements also include

providing access to general, special, and psychiatric hospitals

as applicable, and “physical and occupational therapy

services and chiropractic services that are available and

accessible within the network’s service area.” If the

network or TDI determines that the network cannot

provide certain types of care because of lack of availability

of that care within the service area, the network must file

an “access plan” that includes a plan for providing that care

in the future. The network may make arrangements with

providers outside the service area to enable employees to

receive a skill or specialty not available within the network

service area. The network is not required, however, to

expand services outside its service area to accommodate

employees who live outside the service area.

Section 10.82 governs the credentialing process for

network doctors. Credentialing is defined in Sec. 10.2 as

the “review, under nationally recognized standards to the

extent that those standards do not conflict with other laws

of this state, of qualifications and other relevant information

relating to a health care provider who seeks a contract with

a network.” The credentialing section mandates that the

network shall implement a documented process for selection

and retention of contracted doctors and health care

practitioners, and lists the elements of that process that are

required. As part of the initial process, the network shall

perform a site visit to the offices of each treating doctor.

The section also discusses re-credentialing, which is required

every three (3) years in order to update information

obtained in the initial credentialing process.

Section 10.83 mandates that each network adopt

treatment and return-to-work guidelines that are “evidence-

based, scientifically valid, outcome-focused, and designed

to reduce inappropriate or unnecessary health care while


safeguarding access to necessary care.” Sections 10.84 and

10.85 discuss the duties and requirements of the treating

doctor, and the processes of selecting and changing treating

doctors within the network.

Utilization Review and Retrospective ReviewSection 10.101 mandates that screening criteria used

for utilization and retrospective review related to a network

must be consistent with the network’s treatment and

return-to-work guidelines. Further, the carrier’s utilization

review program must include a process requiring a network

provider to request approval from the network for any

deviation from the treatment guidelines, screening criteria

and individual treatment protocols where same are required

by the particular circumstances of an employee’s injury.

Finally, if a carrier or network uses a preauthorization

process within a network, the requirements of Chapter

1305 (under HB 7) and the proposed TDI rules will apply.

The rule prescribes the requirements for notice of

both the performance of utilization or retrospective review

and of any adverse determinations, and covers various

clerical matters dealing with transmission of the

determination and reconsideration of any adverse

determination. Section 10.104 provides for independent

review of any adverse determination by an independent

review organization (IRO) assigned in accordance with

Insurance Code Art. 21.58C and commissioner rules. TDI

shall assign the review request to an IRO, and the carrier

must pay for the independent review. After the IRO issues

a decision, any party disputing the decision may seek

judicial review of it. Any decision related to a request for

preauthorization or concurrent review is binding during

the pendency of the appeal.

ComplaintsSection 10.120 provides that each network shall

implement and maintain a complaint system that complies

with Chapter 1305 of HB 7 and the proposed TDI rules,

and that provides “reasonable procedures” for resolving

an oral or written complaint. Section 10.121 then

enumerates the various requirements of the complaint

process to be set up by the networks, and includes deadlines

for response and resolution of any complaints.

Any person who has attempted to resolve a complaint

through a network’s complaint system process, who is

dissatisfied with resolution of the complaint, may submit

a complaint to TDI, either via its website: www.tdi.state.tx.us

or by mail, under Sec. 10.122.

subsection (b)(8) and caps the fee at 5 cents per

individual claimant information

requested. Amended Subsection (d) also requires the

Commission to adopt rules

regarding security parameters for transfers of

information requested, and the maintenance

of electronic data in the possession of an insurance

carrier described in (c-1) or an

authorized representative.

Amends the Health & Safety Code, Section 671.013,

relating to autopsy reports.

n Amendments to subsection (d) provide that an autopsy

report relating to a workers’

compensation claim must be released no later than the

15th day after the request for such

report is received.

n New subsection (e) provides that if an autopsy report

has not been filed, the office

designated by the autopsy order must (no later than the

10th day after a request for the

report) notify the requestor that the report has not been

received and when the report is

anticipated to be received.

HB 1353 by Cook

Adds Subchapter J to Chapter 407A of the Labor Code,

establishing a guaranty fund for certain

groups certified to self-insure for workers’

compensation coverage.

HB 1428 by Isett

Amends Subchapter Z, Chapter 661, Government

Code, by adding Section 661.918. Injury

Leave for Certain Peace Officers.

n Provides that a peace officer is entitled to injury leave,

without a deduction in salary,



without being required to use compensatory time or any

other type of leave, for up to one

year, for an injury resulting from an assaultive offense

under Chapter 22, Penal Code, that

occurs during the course of the person’s performance of

duty.

• Also, a person may simultaneously be on injury leave

and receive workers’ comp medical

benefits, but is not eligible for disability retirement

benefits while on injury leave.

• A person is entitled to workers’ compensation

indemnity benefits which accrue pursuant to

Title 5, Labor Code, after the discontinuation or

exhaustion of injury leave allowed under

this section.

HB 2017 and HB 2018 by Swinford

Re-codification of Insurance Code - non-substantive

revisions of statutes relating to the Texas

Department of Insurance, the business of insurance

including workers’ compensation insurance,

and certain related businesses, including conforming

amendments, repeals, and penalties.

HB 2157 by Smithee

Revisions to Insurance Code relating to receivership of

carriers and penalties. May impact WC

carriers.

HB 2388 by Thompson

Amends Insurance Code, Chapter 701, to require

reports to TDI (of any reasonable suspicion or

knowledge of fraudulent acts being committed or about

to be committed in this state) within 30

days of the determination.

• Provides that a person who is a member of an

organization (primarily dedicated to the

detection, investigation, and prosecution of insurance

fraud) fully complies with the

person’s obligations by authorizing the organization to

report (on the person’s behalf)

information required to be reported. The person retains

any liability resulting from the

failure of the organization to report in a manner that

complies with these requirements.

• Language added also requires the report to be made in

the format prescribed by the fraud

unit or by the National Association of Insurance

Commissioners.

• Provides that a report made to the insurance fraud

unit at TDI constitutes notice to each

other authorized governmental agency.

• Provides that if an insurance carrier is conducting their

own investigation, the carrier does

not have to complete the investigation before making

the report to TDI.

• Removes the provision that allowed an authorized

governmental agency or an insurer to

request any relevant information or material relating to a

matter under investigation.

• Repeals §701.052(f) of the Insurance Code which

required an insurer to exercise

reasonable care concerning the accuracy of information

conveyed to an authorized

governmental agency, the fraud unit, or another insurer,

person, or entity.

SB 310 by Deuell

Modifies Subchapter B, Chapter 607, Government

Code.

• Establishes a rebuttable presumption for certain

diseases and illnesses (small pox,

tuberculosis/ respiratory illness, cancer, acute MI &

stroke) suffered by emergency

medical technicians employed by political subdivisions,

and firefighters, including

certain volunteers, that were contracted during the

course and scope of employment, if

certain conditions, which vary depending on the disease

or illness, are met (no evidence

of disease on a physical during employment, employed

at least 5 yrs, disease discovered

while employed).

• There will be no payment to the Subsequent Injury

Fund for deaths resulting from illness

and diseases addressed by this bill.

SB 665 by Barrientos

Amends Subsection (b), Section 81.050, Health and

Safety Code, to add: an employee,

contractor or volunteer (other than a correctional

officer) who performs a service in a

correctional facility, to the list of persons who may

request the department or a health authority

to order testing of another person who may have


exposed the person to a reportable disease,

including HIV infection. Applies only to a person

exposed on or after September 1, 2005.

SB 742 by Duncan

Amends Labor Code, Section 406.095 (c), by adding the

Central Hockey League to the list of

professional athletic franchises included in that

subsection.

• The inclusion of the Central Hockey League to the list

of professional athletic franchises

applies only to a workers’ compensation injury that

occurs on or after September 1, 2005.

• This will provide Central Hockey League professional

athletes (hired under a contract or

a collective bargaining agreement) an option of coverage

if injured within the course and

scope of employment. These professional athletes may

either receive benefits in

accordance with this subtitle or benefits as outlined in

the contract or agreement.

continued from page 14 Table BTrend in Percent of Claims with Significant Adverse Surprises (percent of claims with more than 7 days of lost time)

Percent 1996 1997 1998 1999 2000 Percentage

of Point

Claims Change

1996-2000

CA 2.2 2.7 4 4.7 6 3.8

CT 0.6 0.8 0.7 0.8 1.4 0.8

FL 2.2 2.3 2.9 2.8 2.8 0.6

IL 0.9 1.1 1.1 1.3 1.7 0.7

IN 0.3 0.4 0.4 0.5 0.6 0.2

LA 1.9 1.5 1.9 2.1 2.6 0.7

MA 0.6 0.7 0.9 1.1 1.1 0.5

NC 0.9 1 1.5 1.8 2.4 1.5

PA 1.3 1.3 1.3 1.7 1.9 0.6

TN 0.6 0.8 1 1 4.3 0.7

TX 2 2.2 2.7 3.2 3.7 1.7

WI 0.4 0.6 0.5 0.7 0.8 0.4

provided up to that point.

As can be seen in Table B, adverse surprise cases

are increasing.The study did not address specific ways

to address this problem, however, a few common sense

proposals come immediately to mind:

(1) Obtain reliable medical information about the claim

as soon as possible, e.g., through use of RMEs;

(2) Define the accepted injury clearly, especially to any

third-party administrator who is handling the

medical side of the claim, and file your dispute with

the Division;

(3) have the case manager regularly review the medical

information in high risk cases to identify treatment

protocols that fail to result in significant

improvement and fix the problem, especially if

there has been little to no improvement in the first

six months of care;

(4) Carefully review all proposed chronic pain

management and/or work hardening programs to

insure that they are adequately documenting a

multidisciplinary, individualized program whose

satisfactory performance is demonstrated through

objective means. Think about the problem and see

what procedures you can develop to help keep

difficult cases from surprising you.



Department of Insurance, Division of Workers’

Compensation. TWCC will become DWC. References

to the Commission should refer to the Division.

References to the “The Agency” should refer to the

Division.

Bulletin B–0037-5 - Announces specific statutory

changes that will take precedence over any conflicting

provisions in workers’ compensation rules:

n Medical bills [presumably for services rendered on

or after September 1, 2005] must be submitted to

the insurance carrier within 95 days or the HCP

forfeits the right to reimbursement.

n An insurance carrier may request additional

documentation necessary to clarify a healthcare

provider’s charges at any time within the 45-day bill

review period. The healthcare provider must supply

the documentation within 15 days of receipt of the

request.

n Timeframes to conduct audits [presumably on-site]

as specified by rule. It must be requested within 45

days and completed within 160 days of receipt of

the bill.

n Healthcare providers must pay or appeal an

insurance carrier’s request for refund within 45 days

after the receipt of the request. The insurance

carrier “must act on the appeal” within 45 days of

the healthcare provider’s appeal.

Bulletin B-0038-05 – The Field Safety Representative,

Hazardous Employer, and Drug Free Workplace

Programs are eliminated.

n Employee Field Safety Representatives no longer

be required to have specific qualifications. Carriers

will no longer be required to report annually the

number and qualifications of these representatives.

n Carriers must continue to provide Accident

Prevention Services to its policyholders and these

services may be reviewed by the Division.

n The various functions relating to Safety at TWCC

will be transferred to the Division. The Division

will provide OSHCON consultations, etc.


Flahive, Ogden & Latson

P.O. Box 13367

Austin, Texas 78711

FOL FAX DIRECTORYTo help expedite your faxed information to the correct area within FO&L and get it to the responsible person at the earliest

time, use the following fax directory. Please remember the 3:30 p.m. receipt deadline for material required to be date

stamped at the Commission. Material received after 4:00 p.m. does not permit time to deliver it across town prior to the

Commission close.

(512) 477-4996 or Tillie Aguirre PLNs 1 & 11(512) 472-4936 BRC Requests (TWCC-45)

(512) 867-1700 Trina DeCecco Client Consultant

(512) 867-1748 Phyllis Devine Insurance Coverage (TWCC-20)Record Checks

Photostats

(512) 867-1733 Katie Foster Medical Review Disputes (TWCC-60)SOAH/Medical Review

(512) 867-1701 Patsy Shelton Advisory InformationClient Seminars, TWCC Audits

(512) 867-1724 Dianne Townsend Compliance & Practices

(512) 479- 5319 Brandi Senters Designated Doctor Filings (TWCC-32)Suspension of TIBs (TWCC-34)

(512) 477-4987 Cindi Friedel BRC & PHC HearingsRFEs, Set Notices, Hearings,

Files, Cancellations

(512) 867-1700 Paralegals All CCH-Related Info.

(512) 867-1700 FOL All materials not listed above

(512) 472-9160 Joel Ogden TWC Manual Orders & Information

Fax Number Attention To Subject Matter

©2005 – Flahive, Ogden & Latson SEPTEMBER 2005 VOLUME 10 ... · an old Burl Ives song: "They are...

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