Part 2. TEXAS WORKERS' COMPENSATION COMMISSION

Chapter 134. GUIDELINES FOR MEDICAL SERVICES, CHARGES, AND PAYMENTS

Subchapter G. TREATMENTS AND SERVICES REQUIRING PRE-AUTHORIZATION

28 TAC §§134.601-134.606

The Texas Workers' Compensation Commission (the Commission) proposes new §§134.601-134.606, concerning listed health care that requires preauthorization. These new rules are proposed to comply with a statutory mandate in the Texas Labor Code §413.014 that requires the Commission to specify by rule which health care treatments and services require express preauthorization by the insurance carrier (carrier), except for treatments and services for a medical emergency. This statute also states that the insurance carrier is not liable for those specified treatments and services unless preauthorization is sought by the claimant or health care provider and either obtained from the carrier or ordered by the Commission.

These proposed new rules address a number of issues encountered under the current rule by providing clarification of the preauthorization process for all parties and incorporating the required usage of a standardized preauthorization form. The new rules are proposed to separate components of the current rule into six individual rules, any one or any part of which may be amended at a later time without subjecting the entire set of rules to change as specified in the severability rule. The proposed new rules: clarify areas through incorporation of definitions; describe carrier liability; establish applicability; efficiently organize the preauthorization process through use of the preauthorization form; establish accountability for requestor and respondent; and provide a process for the reconsideration of a denial. Further, the proposed new rules include a revision of the listed health care for which preauthorization is required, and establish the severability of the proposed new rules. In addition, the proposed new rules are drafted to work in conjunction with the workers' compensation utilization review rules adopted by the Texas Department of Insurance (TDI) (28 TAC, §§19.2001-19.2021), to provide consistency for utilization review processes within the workers' compensation system.

At various times in the drafting of the proposed new rules §§134.601-134.606, the Commission has received input from a wide variety of sources including employees, health care providers, insurance carriers and third party administrators, the Commission's Claims Services Task Force, the Commission's Medical Advisory Committee (MAC), Guideline Standardization Subcommittee of the MAC, Spine Treatment Guideline Revision Workgroup (STGRW), Research & Oversight Council on Workers' Compensation, other states' workers' compensation systems, and other payor systems including Medicare, Medicaid, group health and managed care organizations. The input from these entities was crucial in ensuring the development of a set of rules that will achieve the joint statutory purposes of timely delivery of appropriate medical care and effective cost containment.

The Texas Register published text shows the proposed new language and should be read to determine all proposed changes and additions.

§134.601. Definitions.

Proposed new §134.601 defines terms used in the preauthorization rules. The current rule does not include the definitions of terms, which allows a wide latitude in interpretation, that often leads to disputes and results in the delay of treatment. Under the proposed new rules, definitions of 11 terms provide clarity to terminology otherwise open to interpretation.

The proposed new rule includes a definition which clarifies that an approval of a request for preauthorization is a determination that the listed health care requested to be preauthorized is medically reasonable and necessary treatment for the reported injury, regardless of unresolved issues of compensability, extent of or relatedness to the injury, or the carrier's liability for the injury. The current rule does not explicitly address this issue, and this provision is included in the proposed new rule to avoid a delay of treatment to an injured employee pending resolution of such disputes. Further, the current rule does not specify what constitutes a complete request, which makes it difficult for requestors to know when the processing timeframes begin, as the receipt of a complete request starts the time clock. The lack of definition has caused confusion, resulting in denials of preauthorization based on incomplete information, thereby delaying treatment to the injured employee. The proposed new §134.601 establishes specific data elements required to be included in a complete request and in a response, and requires that a Commission-prescribed form be used for requests and responses, and requests for reconsideration and responses.

The term respondent is defined to clarify who the appropriate party is to process and respond to a preauthorization request. Definitions of respondent, Appropriate Medical Reviewer, denial, denial rationale and screening criteria have been incorporated to further explain the current language in the TDI utilization review rules for workers' compensation. The definition for emergency coincides with the definition adopted in Chapter 133 of this title (relating to General Medical Provisions).

§134.602. Carrier Liability.

Proposed new §134.602 describes when the carrier is liable for reimbursement to the health care provider for the listed health care requiring preauthorization. The proposed new subsection (a) establishes the following four situations that result in carrier liability: (1) the respondent approves the preauthorization request; (2) the respondent fails to timely respond to an initial request for preauthorization within three working days from the date the complete request is received; (3) the respondent fails to timely respond to a request for reconsideration within five working days from the date the request is received; or (4) the respondent is ordered by the Commission to preauthorize the request. The current rule does not address a respondent's failure to respond to a request, thereby delaying the timely delivery of listed health care to injured employees. The proposed new §134.602 governs a non-response or an untimely response by the respondent, resulting in carrier liability for an initial request or for a request for reconsideration. This will ensure greater accountability on the part of the respondent, as well as reduce delays in obtaining treatment for the injured employee.

Some system participants have voiced disagreement with the idea that failure to timely respond to a request for preauthorization or reconsideration should result in carrier liability. They argue that failure to timely respond to a request is a compliance issue and should not be a liability issue. Although failure to timely respond to a request is an administrative violation, as is any failure to comply with a rule or the statute, in this case, the Commission believes that the failure should also result in carrier liability for the requested listed services. Failure to timely respond to a request delays treatment to the injured employee. This delay can possibly cause harm to the injured employee through additional discomfort, a worsening of the medical condition, or a delayed return to work (which can affect the employee's long term earning potential). One of the main purposes of preauthorization is to provide cost control; however, it is also designed to ensure appropriate medical benefits. Failure to timely respond to a request interrupts the employee's access to treatment and therefore represents more than an administrative violation.

The proposed new subsection (b) further stipulates that a carrier cannot retrospectively dispute the reasonableness and medical necessity of the requested listed health care if the carrier becomes liable. Since the preauthorization process is the carrier's opportunity to review the reasonableness and medical necessity of listed health care, it would be inappropriate to allow carriers to retrospectively deny health care for which the carrier has already become liable. It should be noted that this subsection does not limit the carrier's right to dispute a Commission order if it became liable due to such an order. It also allows retrospective review of the amount of the fee.

Proposed new subsection (c) provides that if the requestor does not initiate listed health care within 45 days from the date the carrier became liable for the care, the carrier will no longer be liable for the care. The current rule does not address timely initiation of health care by the requestor which can result in the untimely delivery of treatment to an injured employee. In other cases, after 45 days, the employee's condition may change and the previously requested health care may no longer be appropriate.

The current rule regulates carrier liability pursuant to a Commission order; however, it does not explicitly address a carrier's right to deny liability for a claim, compensability of an injury, or dispute either the extent of or relatedness to the compensable injury. In addition, the current rule does not explicitly provide that if a carrier prevails in its denial/dispute, the carrier is not required to reimburse the provider for preauthorized care. Proposed new subsection (d) addresses these issues.

The current rule does not provide any exclusion of reasons for a denial of a preauthorization request. Proposed new rule subsection (e) identifies four situations in which a respondent may not totally or partially deny requests for preauthorization. The reasons include: the claimant has reached MMI; no further entitlement to medical benefits; compensability or liability being denied; extent of injury or relatedness to reported injury being disputed. Each of these is currently being used by system participants to inappropriately deny preauthorization requests and interrupt treatment for injured employees. The proposed new §§134.601-134.606 focus the preauthorization decision on medical necessity of the listed health care and, therefore, these four denial reasons would be inappropriate as they do not relate to medical necessity.

§134.603. Applicability.

Proposed new §134.603 establishes when the proposed new rules apply to a preauthorization request. Proposed new subsection (a) states that requests for preauthorization will be determined by the rules in effect on the date the request is transmitted by a requestor.

The current rule addresses three exclusions to applicability; however, proposed new subsection (b) identifies four instances in which preauthorization is not required. Under the proposed new rules, preauthorization does not apply to (1) emergency care; (2) second opinions for spinal surgery; (3) health care required by the appropriate edition of the AMA Guides to the Evaluation of Permanent Impairment (AMA Guides) being used by a doctor to assign an impairment rating; or (4) health care requested by the treating doctor to establish compensability, extent or relatedness, in response to a carrier's filing a denial of a claim or dispute of extent of injury under §124.2 and §124.3 of this title. In addition, health care provided to an employee injured prior to January 1, 1991, under Old Law, does not require preauthorization.

There are a number of reasons for these exceptions. The statute provides that treatments and services for a medical emergency do not require express preauthorization. In addition, the Commission has adopted a different process to address prospective review of spinal surgery recommendations, as required by the statute. Regarding the exception for care required by the AMA Guides, since the statute requires an impairment rating to be assigned in accordance with the AMA Guides, there is no reason to require preauthorization for testing required to do so. Finally, exclusion of health care needed to establish compensability or extent of or relatedness to the compensable injury, is to ensure that the injured employee has access to the testing necessary to successfully establish their claim.

Proposed new subsection (c) prohibits health care providers from unnecessarily requesting preauthorization for health care which does not require preauthorization under these rules. Currently, carrier costs are driven up by responding to requests for preauthorization for services which do not require preauthorization.

§134.604. The Process.

Proposed new §134.604 delineates specific process steps required of requestors and respondents. The proposed new process reduces confusion and enhances accountability by requiring that all requests and responses be submitted in writing by facsimile (fax) or electronic transmission (email) on a Commission-prescribed form (form). Requiring the use of a standardized form provides documentation of each action taken and ensures that both the requestor and respondent are aware of the status of the preauthorization request. In addition, the process establishes time frames required of both requestors and respondents. The established time frames determine deadlines for respondents to submit responses to requests, for requestors to submit requests for reconsideration, for requestors to initiate preauthorized treatment, and points at which carriers may become liable for payment. The processing timeframe begins only with the receipt of a complete request, and the fax or email confirmation serves as documentation of the request date, addressee, and number of pages submitted with the request. The current rule requires a request to be submitted either by telephone or transmission of a facsimile, allowing for confusion and little or no accountability in the start of the three-day time clock for responses.

Proposed new subsection (a) outlines the request process for preauthorization. All requests for preauthorization are required to be submitted on a Commission-prescribed form with all required data fields completed. Supporting medical documentation must accompany the form. The form provides a standardized format and assures that the information required by carriers is uniform. In addition, the use of this standardized form for responses will ensure that carriers are providing required information to health care providers in response to requests. It is anticipated that the use of a standardized form will reduce the amount of paper work, time spent and costs to both carriers and health care providers. The form will replace the 30+ individual carrier and third party administrator forms that carriers currently require health care providers to use in requesting preauthorization. Further, the form will replace carrier notification letters with a clear and understandable response. Although the current rule requires carriers to provide written responses to request for preauthorization, many carriers include inappropriate statements in their response letters. For example, carriers will state that health care providers are required to appeal denials within 30 days even though the current rule provides no such limit on appeals. Other letters indicate that an approval does not create liability for payment, when, in fact, in most cases it does create liability. The implementation of a standard form is expected to enhance communication among participants, reduce the number of disagreements regarding completeness of requests and increase the overall efficiency of the process.

The current rule does not explicitly address withdrawal of a request for preauthorization, whereas new proposed subsection (b) establishes that a request for preauthorization may only be withdrawn by the requestor. The subsection leaves the mechanism of withdrawal to the discretion of the requestor with a record of the withdrawal to be maintained.

The current rule does not differentiate between complete and incomplete requests or requests for preauthorization of health care which does not require preauthorization. Proposed new subsection (c) addresses these issues and outlines the respondents' responsibilities in reviewing the preauthorization request. If the request is not complete or the requested health care does not require preauthorization pursuant to The List, subsection (c)(1) instructs the respondent to return the form to the requestor within one working day, stating the reason for the return. The return of such a request ends the respondent's obligations regarding the request. This subsection further states that the requestor may complete the form, upon discretion, and resubmit it as a new request without the requirement of time parameters.

Subsection (c)(2) provides that if the request is complete, the respondent is required to determine medical necessity of the listed health care, regardless of any pending dispute(s) regarding compensability, liability for the claim, extent of or relatedness to the reported injury, as outlined in §134.601. The current rule is not clear on this issue.

Respondents are required to apply screening criteria, which are developed by persons with medical training, as required by TDI rules for utilization review agents, and should provide consistency in evaluating requests. Screening criteria may determine medical reasonableness or necessity for an approval if the request meets the screening criteria. If the screening criteria are not met, subsection (c)(2) further requires the respondent to refer possible denials to an Appropriate Medical Reviewer for further review and the decision prior to issuance of a preliminary denial. In the event of a denial of a request, the current rule requires only that the respondent provide documentation identifying the reasons for the denial. The proposed rule defines a response and incorporates denial rationale, identification and title of the reviewer, and name of reviewing company that must be provided to the requestor in the event of a denial. Denial rationale is defined to prevent inappropriate bases for a denial, e.g., "Not medically necessary" or "Does not meet screening criteria".

New proposed subsection (d) establishes the response mechanism and time frames for the response by the respondent to the requestor. A response is to be written on the lower portion of the initial request form and submitted by fax or email within three working days after the date that the request was received. In the event that the response is a denial to an initial request, this response is identified as a preliminary denial. The current rule requires the insurance carrier's delegated agent to notify the treating doctor by telephone or fax of the decision, to be followed up with a written notification within 24 hours after the notification of denial or approval. This can result in problems with accountability and accuracy of the response. In addition, the subsection explains that if the carrier does not believe the requested health care is reasonable or necessary, the response is to indicate that the carrier is issuing a "preliminary" denial. In essence this response puts the requestor on notice that in the absence of additional information, the carrier intends to deny all or part of the request and the reasons why.

Proposed new subsection (e) addresses a requestor's opportunity to request reconsideration in response to a preliminary denial. The requestor is allowed five working days after the response is received to submit a request for reconsideration, on the initial form. The current rule directs the appeal of a denial of preauthorization to Medical Dispute Resolution. Proposed new subsection (e) requires a requestor to seek carrier reconsideration of a preliminary denial prior to allowing the requestor to submit a request for Medical Dispute Resolution by the Commission. A request for reconsideration must include new and/or additional documentation to the respondent and an explanation refuting the respondent's denial rationale.

Proposed new subsection (f) deals with the requestor's filing of, or lack thereof, a request for reconsideration. Subsection (f)(1) provides that if the requestor fails to request reconsideration then the respondent's preliminary denial is considered final and the requestor may not resubmit the request for the same health care unless the requestor provides objective documentation that there is a substantial change in the medical condition of the employee. The reason that requestors are prohibited from resubmitting preauthorization requests for the same listed health care, in the absence of a substantial change in condition, is that the reconsideration process affords the requestor a reasonable opportunity to discuss the health care but the requestor chose not to take the opportunity. Processing requests that have previously been denied when the employee's condition is unchanged adds unnecessary costs to the system.

Subsection (f)(2) addresses the situation in which the requestor has submitted a request for reconsideration but failed to do so in a timely manner. An untimely request for reconsideration by the requestor results in the preliminary denial becoming a final denial. The respondent is then required to return the request for reconsideration indicating that the request was untimely and then has no further obligation to the request. It is anticipated that the five working day deadline to submit a request for reconsideration will enforce accountability on the health care provider just as the response times enforce carrier liability on the respondent. In addition, as in the case where no request for reconsideration is filed, the requestor is again prohibited from resubmitting the request in the absence of a documented substantial change in the employee's condition.

The respondent's action to a timely request for reconsideration is addressed in new proposed subsection (f)(3). The proposed new rule requires that the review of a timely received request for reconsideration be performed by an Appropriate Medical Reviewer who is qualified and permitted by licensure to prescribe or provide the requested treatment. This process will ensure the review of preliminary denials for preauthorization by an appropriate health care provider, qualified and permitted by licensure to provide the listed health care being reviewed. The respondent must afford the requestor the opportunity to discuss the request with the Appropriate Medical Reviewer performing the review. The reconsideration process is designed to be consistent with TDI's rules governing utilization review agents for workers' compensation. Further, the proposed reconsideration process will ensure that injured employees receive the health care reasonably required by the nature of their injury as and when needed. This proposed new process is expected to reduce the number of disputes resulting from denial of preauthorization and thereby decrease the cost of the preauthorization process to the system. In addition, to the extent that the reconsideration process allows carriers and health care providers to come to agreement on treatment without going to the Commission for dispute resolution, employees should have less disruption in their treatment. This is important because the continuity of care tends to enhance return to work. The requirement for review of the denial of preauthorization by an Appropriate Medical Reviewer should simplify dispute resolution also by requiring this health care professional to provide a detailed explanation and reasons for denial as part of the denial rationale.

Proposed new subsection (f)(3) instructs the respondent to submit the final determination on the form within five working days, or failure to timely respond results in carrier liability for the listed health care as requested. As noted, the inclusion of this requirement again enforces accountability and enhances communication among system participants.

Proposed new subsection (g) allows the requestor to access Medical Dispute Resolution only after the completion of the reconsideration process. This requirement will greatly reduce the number of requests for dispute resolution that are forwarded to the Commission. In addition, dispute resolution should only be utilized when parties to a dispute have made a good faith effort to resolve their differences. The requirement to utilize the reconsideration process ensures that this effort is made.

Proposed new subsection (h) addresses the requestor's submission of a subsequent request for preauthorization for the same listed health care following the completion of the reconsideration process. Any subsequent request for the same listed health care requires documentation of a substantial change in the injured employee's medical condition and is submitted on a new request form. The current rule does not address the submission of a subsequent request, and as a result, health care providers often submit a second or subsequent request for preauthorization for the identical services thereby overloading the system. Proposed new subsection (h) is expected to reduce unnecessary processing of identical requests for preauthorization, while still affording medically reasonable and necessary care to injured employees.

Proposed new subsection (i) addresses record keeping and requires both the requestor and respondent to maintain records for a period of two years from the date of each preauthorization request. The current rule does not clearly require participants in the preauthorization process to maintain sufficient documentation to allow the Commission to readily determine compliance with the rule and especially with the three-day response requirement. The proposed new subsection directs specific record-keeping requirements and will encourage compliance with preauthorization requirements and simplify dispute resolution. The intent of the new record- keeping requirements is to ensure accountability of both health care providers and carriers and to track essential information on preauthorization requests that would otherwise be unavailable to the Commission. Accurate records are needed for the future review and revision of these rules to determine the cost effectiveness and system costs associated with preauthorization. The proposed new record-keeping requirements also will provide the Commission with the information necessary to monitor participants involved in the preauthorization process.

§134.605. The List.

The current §134.600 lists 16 categories of treatments and services that require preauthorization. Proposed new §134.605 identifies the listed health care that requires preauthorization as mandated by the Texas Labor Code §413.014. Proposed new subsection (a) requires that specific reimbursement levels, referenced as maximum allowable reimbursement (MAR) or documentation of procedure (DOP), are those established in the current Commission fee guidelines.

Proposed new subsection (b) identifies ten categories of treatments and services that require preauthorization. Although the proposed list is organized into 10 categories rather than the current rule's 16, these 10 categories incorporate more services. Many of the current categories have been combined in the proposed new subsection (b) for consistency of treatment or service type. The proposed new rules identify those treatments that require preauthorization, independent of the provider type.

Items that are a part of the current rule that are not listed in the proposed new rules include: video fluoroscopy, chemotherapy, pain clinics or weight loss clinics (unless classified as interdisciplinary under proposed new item 7), and dental services. These items were low volume items, with low to moderate dollars paid, and will be monitored for the next 18-24 months for increased utilization. System participants did not recommend inclusion of these items, and staff determined the retention of these services was not cost effective.

The specific categories requiring preauthorization in the new proposed subsection (b) were developed based on analyses of Commission data, services requiring preauthorization under other payor systems, review of literature, input from system participants, and Commission adopted fee and treatment guidelines. The other payor systems included information received from Medicare, Medicaid, group health/HMO, and other states' workers' compensation systems. The Commission data was derived from the Commission's medical billing database. A compilation of the top 100 AMA Current Procedural Terminology (CPT) codes billed in the workers' compensation system in calendar year 1997 and from April 1,1998 to March 31, 1999 were reviewed. An analysis of the top 100 CPT codes was performed regarding the total amounts billed, total amounts reimbursed, and the frequency of services. In addition, the 1997 data was evaluated to determine the volume of treatments and services, and the amounts billed and reimbursed for treatment(s) and/or service(s) which under the current rule require preauthorization. Staff also incorporated information from the Texas Workers' Compensation Medical Trend Analysis, 1995-1997 , (medical trend analysis) developed by the Commission. The cost driver study analyzed the changes in medical costs from 1995 to 1997.

Proposed new subsection (b) identifies the following listed health care proposed for inclusion on the list for preauthorization, except as provided by §134.603 of this title:

(1) Inpatient hospital admissions/Outpatient surgeries

(A) Inpatient hospital admissions include:

(i) primary treatment and/or service to be performed; and

(ii) length of stay, to be further negotiated if an extension is required;

(B) Outpatient surgeries, wherever performed, with total charges expected to be greater than $500.

Based on the analysis of the medical trend analysis, there has been a net increase in the per claim medical payment between 1995 and 1997 of $860 per claim and 65% of the increase is due to hospital inpatient and hospital outpatient costs. The current rule requires preauthorization for all non-emergency hospitalizations, ambulatory surgical center care, and transfers between facilities. The proposed new rule eliminates the requirement for preauthorization of transfers between facilities due to the noted low frequency of this service, and includes the requirement for preauthorization of all outpatient surgeries. Outpatient surgeries have been added to the list due to a continuous increase in the amounts paid per claim from 1995 to 1997 for outpatient services as portrayed in the medical trend analysis. Anecdotal information and a review of surgical costs not associated with hospital admissions indicate that health care providers are often performing surgeries in an office setting, which avoids the need for preauthorization currently required for inpatient admissions or ambulatory surgical center care. As a result, a $500 preauthorization threshold on outpatient surgeries is proposed as a cost containment feature. The reason that threshold for surgeries was incorporated was to distinguish minor surgeries, such as wound closures, from more serious surgeries.

Additionally, proposed new §134.605(b)(1) clarifies that the inpatient admission request must include notification by the requestor of the primary treatment and/or service to be performed during the admission. The proposed subsection further specifies that approval of the admission by the respondent shall include the length of stay, which the requestor may further negotiate if an extension of stay is warranted. The current preauthorization rule does not address these issues, and the proposed clarifications are expected to reduce unnecessary disputes regarding primary treatment or service and length of stay extensions.

(2) All psychiatric or psychological testing, therapy, repeat evaluations and biofeedback, except as part of preauthorized interdisciplinary programs.

Proposed new subsection (b)(2) combines two of the current list items: current (2) psychiatric or psychological therapy or testing, except as a part of work hardening, and current (9) biofeedback except as part of work hardening. System participants recommended inclusion of these items for preauthorization, including combining the two. The added requirement of preauthorization for repeat evaluations serves as a cost containment feature. The initial psychiatric or psychological evaluation, a diagnostic interview, is considered an essential assessment tool. However, if repeat evaluations are deemed necessary for the ongoing therapy and treatment, and if billed separately, they will require preauthorization.

(3) Trigger point injections and all spinal injections as identified in the Spine Treatment Guideline (epidural steroid (ESI), facet, sacroiliac joint (SI), and spinal nerve block injections) and intra discal thermal therapy (IDET).

Proposed new subsection (b)(3) incorporates current rule item: (4) all chemonucleolysis, facet, or trigger point injections and adds additional treatments. The incorporation of preauthorization for the additional injections was recommended by system participants, particularly of the Spine Treatment Guideline Revision Workgroup (STGRW). The STGRW indicated that there is a need for close monitoring of injections, and that trigger point injections were both overutilized and ill defined. The recently convened STGRW further concluded that the procedure, IDET, is a fairly new form of therapy and there are insufficient scientific studies and trials to warrant inclusion in the Spine Treatment Guideline (STG). In addition, an increased number of requests for medical dispute resolution regarding the use of IDET therapy warrants its inclusion in proposed new subsection (b)(3) for close monitoring.

(4) Electro-diagnostic testing except for usage as identified in §134.603 of this title, (relating to Applicability.) This includes all sensory, motor and reflex studies, including but not limited to, electromyogram (EMG), surface electromyogram (SEMG), evoked potentials (SSEP, DSEP), nerve conduction studies (nerve conduction velocity (NCV), current perception threshold (CPT)), and H and F reflex studies.

The current preauthorization rule includes non-emergency SEMG studies in the list of services requiring preauthorization (item 5). In the development of the proposed new subsection (b)(4), the analysis of information compiled from the medical billing database and dispute resolution information for electro diagnostic testing codes, revealed high frequency of usage and billing, as well as a high incidence of requests for dispute resolution of denials of payment for these diagnostic services. One of the purposes of the preauthorization mandate is to prevent injured employees from subjection to overutilization of treatment(s) and/or service(s) and at the same time to promote provision of appropriate diagnostics and treatment. To ensure that injured employees don't find themselves in a situation where diagnostic testing that is necessary to establish compensability or extent of injury cannot be obtained due to lack of preauthorization for those tests, proposed new §134.603 provides that preauthorization is not required for diagnostic testing by the treating doctor in response to certain disputes. Proposed subsection (b)(4) is included as a cost containment feature.

(5) Individual radiology or nuclear medicine procedures except for usage as identified in §134.603 of this title:

(A) with a whole procedure MAR greater than $350; or

(B) with listed reimbursement as DOP and charged at greater than $350.

The current rule requires preauthorization for all repeat individual diagnostic studies with an established reimbursement in the Medical Fee Guideline of greater than $350 or Documentation of the Procedure (DOP). Analysis of the billing data showed a high volume of usage of the initial diagnostics; the proposed new subsection (b)(5) changes the requirement for preauthorization from repeat diagnostic studies to all procedures in the areas of radiology/nuclear medicine with a whole procedure MAR greater than $350, or with listed reimbursement as DOP and charged at greater than $350. System participants strongly supported the inclusion of initial as well as repeat procedures. This stipulation will require preauthorization for the both initial and repeat magnetic resonance imaging and computerized axial tomography procedures as a cost containment feature. Again, to ensure that injured employees don't find themselves in a situation where diagnostic testing necessary to establish compensability or extent of injury cannot be obtained due to lack of preauthorization for those tests, proposed new §134.603 provides that preauthorization is not required for diagnostic testing by the treating doctor in response to an insurance carrier's dispute of compensability or extent of injury.

(6) All physical medicine and rehabilitation treatment(s) and/or service(s) (excluding tests and measurements):

(A) after 18 sessions or six weeks from the date of injury, whichever occurs first, and/or

(B) after 18 sessions following surgery

The current rule (item 10) requires preauthorization for physical or occupational therapy beyond eight weeks of treatment. Proposed new subsection (b)(6)(A) allows the provision of 18 sessions within six weeks from the date of injury without the necessity of obtaining preauthorization. The Texas Workers' Compensation Medical Trend Analysis and supporting literature identifies that back injuries comprise the largest group of injuries which make up the most costly category of health care in the workers' compensation system. Approximately one third of back injury cost is for medical care, the greatest portion of which is physical medicine. There are 7000+ CPT codes which represent procedures that may be implemented for treatment; approximately 40 of these codes designate physical medicine and rehabilitation treatments. Approximately 30 of these physical medicine and rehabilitation codes account for one third of all medical reimbursement in workers' compensation. Therefore, as a cost containment initiative, the preauthorization of physical medicine and rehabilitation are indicated.

Literature supports that the normal recovery period for most injuries is 4-6 weeks, and approximately 90% of employees with back injuries return to work within six weeks. Documented standards of care relate to treatment three times a week for six weeks, equating to 18 sessions. Studies indicate that employees who continue to receive medical treatment after six weeks from the date of injury would benefit from claims management for the review of treatment. Therefore, as supported by the literature, proposed new subsection (b)(6)(A) requires that all physical medicine and rehabilitation treatments and/or services, excluding tests and measurements, must be preauthorized after 18 sessions or six weeks from the date of injury, whichever occurs first, allowing for carrier review.

During the revision of the Spine Treatment Guideline (STG), the Guideline Standardization Subcommittee of the Medical Advisory Committee (MAC) established a maximum duration of time for each of the three phases of care. Although the time parameters for the initial phase of care were determined to be 0-8 weeks from the date of injury, there is no correlation between phase of care and the medical necessity for treatment. In other words, just because the initial phase of care can last eight weeks, this does not mean that the injured employee has a corresponding medical necessity for eight weeks of care.

Treatment is measured from the date of injury as opposed to the date of initiation of treatment because it is more easily tracked by all system participants. The implementation of the date of injury will clarify when preauthorization begins, as it is easier to track the number of sessions or weeks from the date of injury rather than the date of initiation of treatment. As explained previously, literature and documented standards of care support the use of the date of injury as the starting point for determining when these treatments normally occur. Because physical medicine comprises the second highest group of charges for services (second to hospital and attendant professional charges), this service is included as an item for time calculation from the date of injury as a cost containment feature.

System participants have consistently supported that physical medicine and rehabilitation treatment is necessary following a surgical procedure. Again, as supported by the literature, the normal recovery period for most injuries is 4-6 weeks. Staff agrees with affording the opportunity for physical medicine and/or rehabilitation following surgery, but makes no time stipulation as to the initiation of treatment. Therefore, proposed new subsection (b)(6)(B) entitles a post surgical patient to 18 sessions of physical medicine/rehabilitation treatment without the requirement for preauthorization.

The exclusion of tests and measurement from the requirement for preauthorization is warranted, as the implementation of these evaluation tools are addressed in the Medical Fee Guideline . In proposed new subsection (b)(6), the references to physical medicine and rehabilitation do not include vocational rehabilitation pursuant to §401.011(19).

(7) All single and interdisciplinary programs, to include but not limited to: work conditioning, work hardening, outpatient medical rehabilitation, chronic pain management, and any interdisciplinary programs designed to enhance return to work.

The current rule (items 11 and 12) requires preauthorization for work hardening in excess of six weeks and work conditioning in excess of four weeks with both programs limited to a one- time two week extension. Proposed new subsection (b)(7) requires preauthorization for the entirety of all single and interdisciplinary programs. In the current Medical Fee Guideline, programs such as work conditioning, work hardening, outpatient medical rehabilitation and chronic pain management are identified under the subtitle, "Single and Interdisciplinary Programs"; for language consistency this subsection will address the programs under the same terminology. Further, analysis indicates that in very few cases are more than six weeks of work hardening and/or four weeks of work conditioning provided (frequently, this was in addition to already having received eight weeks of physical therapy). Since the current rule requires preauthorization only after six weeks of treatment, it may be that the current rule fosters overutilization of these programs; in the majority of cases, treatment is not continued after it reaches the point where preauthorization is required.

Chronic pain management and outpatient medical rehabilitation are also included as interdisciplinary programs pursuant to language in the Medical Fee Guideline. System participants recommended the inclusion of these programs under preauthorization. Any additional programs designed to operate as interdisciplinary, that enhance return to work, will also require preauthorization per this subsection. From an economic standpoint, the preauthorization of all single and interdisciplinary programs will operate as an initiative to cost containment.

(8) Durable medical equipment charged in excess of $500 per item (either purchased or expected cumulative rental), all electrical nerve stimulator devices (purchase or rental), and all external and implantable bone growth stimulators.

The current rule includes the preauthorization of all durable medical equipment (DME) in excess of $500 per item and all transcutaneous electrical nerve stimulator (TENS) units. System participants recommended the incorporation of language to require preauthorization if the expected cumulative rental exceeds the $500 threshold. As a result, proposed new subsection (b)(8) clarifies that the $500 reimbursement threshold applies to both the purchase or expected cumulative rental of DME. The DME Ground Rules contained in the current Medical Fee Guideline state that rental fees are generally applicable for short-term utilization up to 60 days, unless the doctor provides medical justification for an extension beyond that 60 days. In most instances, the $500 figure should be at a point beyond 60 days. If the rental for an item is anticipated to exceed the $500 threshold, the requestor is required to seek preauthorization.

Additionally, proposed new subsection (b)(8) is expanded to include all electrical nerve stimulation devices (including TENS and/or neuromuscular electrical nerve stimulators (NENS)), as the Health Care Financing Administration Common Procedure Coding System (HCPCS) codes in the current Medical Fee Guideline incorporate these devices under one heading. Further, an analysis of the costs within the system indicates that reimbursement for NENS units comprises a significant volume of DME costs. The preauthorization requirement extends to both the purchase and rental of all TENS and NENS. In addition, this broader terminology is intended to ensure that new electrical nerve stimulation devices that are developed after adoption of this rule are covered by the requirements of the rule.

Proposed new subsection (b)(8) incorporates current item #3, external and implantable bone growth stimulators, as these devices are considered DME, and are high dollar items.

(9) Nursing facility services, domiciliary, rest or boarding home, custodial care services, and home services.

Proposed new subsection (b)(9) incorporates current item #14, and has been modified to be consistent with the CPT language used in the Medical Fee Guideline. System participants recommended that these services be retained in the preauthorization rules because they warrant monitoring for possible overutilization.

(10) Manipulative treatments or manipulations after 18 visits (if visit includes either manipulative treatments or manipulations), or six weeks from the date of injury, whichever occurs first.

Under the current rule manipulative treatments and manipulations do no require preauthorization. System participants recommended the inclusion of manipulative treatments and manipulations for preauthorization. Analysis of the Commission's medical billing database revealed that the top 100 CPT codes (by amount paid) fall into 18 treatment or service categories. Of these 18 categories, 11 currently require preauthorization, six represent services that are not categorized as treatment (office visits, reports, physical tests and measurements, general supplies, pathology and unclassified drugs). The one category represented in the top 100 CPT codes, not currently requiring preauthorization is manipulations. Therefore, this highly utilized service type has been included in the proposed new preauthorization rule. Although manipulations are a component of physical medicine and rehabilitation treatment, manipulative treatments and manipulations are being addressed separately in the listed health care requiring preauthorization because manipulative treatment and manipulations are included in categories in addition to physical medicine and rehabilitation.

A review of the literature supported that for patients with acute low back symptoms without radiculopathy, the scientific evidence suggests spinal manipulation is effective in reducing pain and perhaps speeding recovery within the first month of symptoms. Scientific evidence was inconclusive for the effectiveness of manipulation for patients whose low back problems persist beyond one month. Literature further supported that the normal recovery period for most injuries is 4-6 weeks, and approximately 90% of employees with back injuries return to work within six weeks. Studies indicate that employees who continue to receive medical treatment after six weeks from the date of injury would benefit from claims management for the review of treatment. Three areas of data (standards of HMOs, standards of other states and literary review) defined the parameters of 6 weeks or 18 visits for manipulative treatment. Again, documented standards of care relate to treatment three times a week for six weeks, equating to 18 visits.

During the revision of the Spine Treatment Guideline (STG), the Guideline Standardization Subcommittee of the Medical Advisory Committee (MAC) established a maximum duration of time for each of the three phases of care. Although the time parameters for the initial phase of care were determined to be 0-8 weeks from the date of injury, there is no correlation between phase of care and the medical necessity for treatment. In other words, just because the initial phase of care can last eight weeks, this does not mean that the injured employee has a corresponding medical necessity for eight weeks of care.

Independent of the provider type, it is the service that requires preauthorization. As a result, proposed new subsection (b)(10) includes manipulative treatments or manipulations performed by any type of health care practitioner after 18 visits or within six weeks from the date of injury.

134.606. Severability.

Proposed new §134.606 incorporates the issue of severability of the individual rules. The effect of severability is to ensure that should any one or more rules be found inconsistent with any applicable law, the remaining rules, terms and provisions of the subchapter will remain in effect.

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Victor Rodriguez, Chief Financial Officer, has determined that for the first five-year period the proposed new rules are in effect, there will be fiscal implications for state or local governments as a result of enforcing or administering the rules. The added clarification provided by these rules incorporates: definitions that establish time frames for a complete request, use of the Commission prescribed form that identifies required information, and the requirement for the health care provider to request reconsideration from the insurance carrier prior to accessing Medical Dispute Resolution. Because the proposed rule better informs all parties of their respective responsibilities, these examples and others are anticipated to result in a reduction of disputes, thereby decreasing the cost of enforcement or administration. Although a reduction in costs to the Commission cannot be quantified, a request for reconsideration made by the health care provider prior to filing for Medical Dispute Resolution is likely to reduce the number of requests for dispute resolution by the Commission. The use of a required form for requests for preauthorization, responses, and for reconsideration will simplify the collection and review of documentation necessary for dispute resolution and possibly reduce the time the Commission must spend on each dispute resolution proceeding.

Local government and state government, as covered regulated entities, will be impacted in the same manner for persons required to comply with the rule as proposed.

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

Preauthorization is prospective utilization review. The intent of the list is to effect cost containment and to prevent the injured employee from being subjected to unnecessary care by assuring the appropriate utilization of services and treatments included on the list. The list has identified high cost/high volume services that in some cases are reflective of potential overutilization. Any savings accrued as a result of eliminating unnecessary services or treatments has a positive financial impact for carriers, and for employers who ultimately pay insurance premiums.

The proposed new rules is to outline the responsibilities of all parties in the preauthorization process. Injured employees will benefit from the clarification of the responsibilities of both their treating doctors and the insurance carriers or respondents for the carriers. The use of a Commission-prescribed form that identifies the required information and informs parties of time frames will ensure timely processing and delivery of the needed treatment to the injured employee. These changes will result in timely response to a request for preauthorization. The provision of a default consequence to the carrier for failure to respond or timely respond will facilitate a timely response and the delivery of appropriate health care. The injured employee will also benefit from the requirement in the new rules for an Appropriate Medical Reviewer to review a request prior to the point of a preliminary denial, and from the requirement that the requestor will be afforded the opportunity to discuss the preliminary denial of requested treatments with that medical reviewer. This allows the injured employee's medical needs to be discussed by appropriate medical professionals. In addition, the requirement that the reconsideration of a preliminary denial of preauthorization be performed by an Appropriate Medical Reviewer benefits the injured employee by providing a second professional opinion prior to a final denial. The injured employee will further benefit by the new requirement for the health care provider to initiate the approved health care within specific time parameters or the approval will expire.

The benefits of the proposed new rules to health care providers in the workers' compensation system include the usage of a Commission-prescribed standardized form, a determination of insurance carrier liability for the listed health care that is preauthorized, clarification and streamlining of the preauthorization request and response processes, the addition of a clearly defined reconsideration process, and the provision of a default consequence to the carrier for failure to respond or timely respond to a request for the preauthorization of listed health care. One standard form will replace the folder containing 30+ forms, currently maintained in most medical offices, to request preauthorization from individual insurance carriers and third party administrators. The use of a single form for the request, the response, the request for reconsideration and the response to that request reduces paper usage and simplifies the compilation of documentation should dispute resolution be necessary. The one form will simplify a complete request, and reduce confusion regarding the start of the time frames for response(s) to initial and reconsideration requests. It is of benefit to the health care provider that the record-keeping requirement in the process establishes that a confirmation sheet produced when a fax is transmitted or the electronic record of transmission will serve as proof of the transmission of the request to the carrier. The opportunity to discuss the request with an Appropriate Medical Reviewer prior to a final denial will enhance communication between requestors and the respondents in the preauthorization process. The increased communication and time deadlines should reduce the number of disputes, saving time for and expense to health care providers, and facilitate the delivery of care to injured employees, as and when needed.

The benefits of the proposed new rules to insurance carriers and their utilization review agents include the opportunity for prospective review of specifically identified health care prior to the delivery of the treatment. The use of a single form for the request, the response, the request for reconsideration and the response to that request reduces paper usage and simplifies the compilation of documentation should dispute resolution be necessary. The form identifies specific required information to be submitted by the health care providers, including a notation of the number of pages of documentation submitted, allowing the respondent to more efficiently review a request for completeness. In addition, the proposed new rules allow the respondent to return the form if not complete or if the request is for services which are not included on the list, and know that their obligations are ended for that request. The rule establishes the processing timeframes for initial and reconsideration requests and defines when the clock starts for processing a request for preauthorization. It is of benefit to the insurance carriers that at the point of a preliminary denial made by an Appropriate Medical Reviewer, a default consequence is imposed on the requestor to timely request reconsideration or the preliminary denial is considered final, ending any obligation on the part of the respondent to that request. The rules clarify that preauthorization is not to be used for services which are not contained in the list. This provision should reduce the number of unnecessary requests that currently are received by respondent. The requirement of a clearly defined reconsideration process may result in a decrease of disputes filed with the Commission, thereby saving the insurance carrier the time and expense associated with defending those decisions. Any additional costs to respondent that may result from the requirements of the reconsideration process, (e.g., screening process, costs for medical reviewer) are already required by the TDI utilization review rules (28 TAC §§19.2001-19.2021). It is of additional benefit to the insurance carrier that the record-keeping requirement in the process establishes that a confirmation sheet produced when a fax is transmitted or the electronic record of transmission will serve as proof of the transmission of the response to the requestor. Any additional costs that may be incurred by the respondent to receive and review incoming fax or email requests are expected to be offset by savings resulting from a reduction in paperwork, a more efficient preauthorization process, and anticipated reduction in disputes.

The benefits of the proposed new rules to employers is the assurance that their injured employees are receiving appropriate and medically necessary treatment in a timely manner for their compensable injury in anticipation of an early return-to-work. Conversely, the proposed new rules will assist in the prevention of unnecessary, costly treatment. In addition, savings that may result from a more efficient preauthorization process should ultimately be reflected in the cost to provide workers' compensation coverage to employees.

There will be some anticipated economic costs to persons who are required to comply with the rules as proposed. No economic costs are anticipated for injured employees to comply with the requirements of these proposed new rules.

Health care providers may experience minimal financial impact as a result of these proposed new rules. Financial impact could come from two sources. First, providers requesting preauthorization will be required to do so by facsimile or email. Health care providers who do not currently have the capability of facsimile or electronic transmission will be required to obtain equipment that can perform such transmissions or arrange for the use of such equipment. Due to the prevalence of facsimile transmission in the health care business, the vast majority of health care providers currently have facsimile capability and those that do not will be required by the nature of the industry to obtain such capability regardless of these proposed new rules. This cost of doing business should be minimal. Under the current rule, health care providers were able to request preauthorization by telephone. However, as noted above, making requests by telephone often resulted in poor documentation of the request and would cause re-requests. In addition, many carriers would request providers to submit supporting documentation by facsimile. The use of a standard facsimile form may also reduce costs by allowing providers to standardize their processes based on one form rather than having to support multiple forms. Thus the potential increase in costs as a result of having to make requests by facsimile or email is expected to be offset by cost reductions. The ability to document the transmission of requests may also reduce the number of disputes and reduce costs.

Secondly, health care provider impact as a result of these new rules relates to the list of items that will require preauthorization. Although the proposed list is organized into 10 categories rather than the current rule's 16, these 10 categories incorporate more services. This will mean that health care providers that regularly prescribe or provide health care that is listed in the rule will be required to request preauthorization more often than is currently required. While administrative management of additional requests may increase costs, the costs are expected to be offset by a more efficient process and the statutory guarantee of payment for approvals.

Insurance carriers may also experience increased costs as a result of these rules. However, these increases are expected to be offset by other savings. Insurance carriers who do not currently have the capability of facsimile or electronic transmission will be required to obtain equipment that can perform such transmissions or arrange for the use of such equipment. Due to the prevalence of facsimile transmission in the insurance environment, the vast majority of insurance carriers currently have facsimile capability and those that do not will be required by the nature of the insurance industry to obtain such capability regardless of these proposed new rules. This cost of doing business should be minimal.

The increase in costs to insurance carriers will further result from failure to meet deadlines to respond to initial requests or requests for reconsideration resulting in carrier liability for the listed health care as requested. Additional costs may result from: the requirement to develop screening criteria; the need to contract with medical reviewers for preliminary denials and to assess requests in the reconsideration process; as well as possible increased staffing necessary to meet the deadlines imposed by the process. Because of the streamlining of the preauthorization process in the new proposed rules there may be no need for insurance carriers to increase staff and some carriers have indicated that the simplification of the proposed system may cause them to reduce staff.

The expense for development of screening criteria and obtaining services of appropriate reviewers for carriers and third party administrators should pose no new economic impart because these requirements are currently in effect under TDI's adopted rules governing utilization review agents.

Carrier costs may increase because, as described, the new list will likely result in more requests for preauthorization. However, the broader list of items may help carriers prospectively prevent unnecessary medical care from being provided thus reducing medical costs. Many of the additional administrative costs to insurance carriers should be offset by the insurance carrier's ability to control costs in the monitoring of health care utilization. In addition, with more common treatments requiring preauthorization at earlier points in claims, it will be easier for carriers to perform case management on claims and work with providers and employers to arrange modified duty opportunities for injured employees which could reduce indemnity costs in the system.

There is an anticipated economic impact to employers. The cost savings effected by a more efficient process and the proposed new list is expected to reduce the medical cost per claim to the carrier, resulting in premium reductions to the employers and an overall savings to the system. In addition, savings that may result from a more efficient preauthorization process should ultimately be reflected in the cost to provide workers' compensation coverage to employees.

There will be no adverse economic impact on small businesses or on micro-businesses as a result of the proposed new rules. Facsimile machines or computers with electronic mail capabilities will be required for the submission of requests and receipt of responses. The same parameters hold for reviewing companies or entities that may qualify as small or micro- businesses and will be receiving requests and submitting responses. Any health care provider or insurance carrier, requestor or respondent, currently engaged in the provision of or review of medical care for group health, must already comply with the majority of the requirements imposed by compliance with these proposed rules. The cost savings explained previously will offset increased costs. In addition, the TDI utilization review rules for workers' compensation also already require of insurance carriers much of what is required in these proposed new rules. Therefore, it is not anticipated that the requirements of these proposed rules will have an adverse impact on the small or micro-businesses of either health care providers or insurance carriers.

There will be only a proportionate difference in the cost of compliance for small businesses and micro-businesses as compared to the largest businesses, including state and local government entities. The same basic processes and procedures apply, regardless of the size or volume of the business. The business size cost difference will be in direct proportion to the volume of business that falls under the purview of these proposed rules. Input from some system participants indicated that use of the form and the streamlined process would reduce paperwork and costs, as well as reduce the number of employees needed for the preauthorization process. Any increases in costs is expected to be offset by cost savings and time savings through the use of a standardized form and streamlined process, resulting in no adverse economic impact.

Comments on the proposal must be received by 5:00 p.m., June 20, 2000. You may comment via the Internet by accessing the Commission's website at http://www.twcc.state.tx.us and then clicking on "Proposed Rules." This medium for commenting will help you organize your comments by rule chapter. You may also comment by emailing your comments to RuleComments@twcc.state.tx.us or by mailing or delivering your comments to Sue Cutler at the Office of the General Counsel, Mailstop #4-D, Texas Workers' Compensation Commission, Southfield Building, 4000 South IH-35, Austin, Texas, 78704-7491.

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

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

A public hearing on this proposal will be held on June 20, 2000, at the Austin central office of the Commission (Southfield Building, 4000 South IH-35, Austin, Texas). Those persons interested in attending the public hearing should contact the Commission's Office of Executive Communication at (512) 804-4287 to confirm the date, time, and location of the public hearing for this proposal. The public hearing schedule will also be available on the Commission's website at http://www.twcc.state.tx.us.

The new rules are proposed under the following statutes: Texas Labor Code: §401.024, that provides the Commission the authority to require use of facsimile or other electronic means to transmit information in the system; §402.042, that authorizes the Executive Director to enter orders as authorized by the statute as well as to prescribe the form and manner and procedure for transmission of information to the Commission; §402.061, which authorizes the Commission to adopt rules necessary to administer the Act, the Texas Labor Code; §406.010 that authorizes the Commission to adopt rules regarding claims service; §408.021(a) that states an employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed; §408.025 that requires the Commission to specify by rule what reports a health care provider is required to file; §408.026 that establishes when a carrier is liable for costs relating to spinal surgery and mandates the Commission to adopt rules necessary to effectuate the statute; §409.021, that requires insurance carriers to timely initiate or dispute compensation; §409.022, that requires a notice of refusal to specify the insurance carrier's grounds for disputing a claim and requires the reason to be reasonable; §413.002 that requires the Commission to monitor health care providers and insurance carriers to ensure compliance with Commission rules relating to health care including medical policies and fee guidelines; §413.011 that requires the Commission by rule to establish medical policies relating to necessary treatments for injuries and designed to ensure the quality of medical care and to achieve effective medical cost control; §413.012 that requires the Commission to review and revise medical policies and fee guidelines at least every two years to reflect current medical treatment and fees that are reasonable and necessary; §413.013 (1) (2) and (3) that require the Commission by rule to establish a program for prospective, concurrent, and retrospective review and resolution of a dispute regarding health care treatments and services; a program for the systematic monitoring of the necessity of the treatments administered and fees charged and paid for medical treatments or services including the authorization of prospective, concurrent or retrospective review under the medical policies of the Commission to ensure the medical policies and guidelines are not exceeded; and a program to detect practices and patterns by insurance carriers in unreasonably denying authorization of payment for medical services requested or performed if authorization is required by the medical policies of the Commission; §413.014 that requires the Commission to specify by rule which health care treatments and services require express preauthorization by the insurance carrier, except for treatments and services for a medical emergency. This statute also states the insurance carrier is not liable for the cost of the specified treatments and services unless preauthorization is sought by the claimant or health care provider and either obtained or ordered by the Commission; §413.017 that establishes medical services to be presumed reasonable when provided subject to prospective, concurrent review and are authorized by the insurance carrier; §413.031 that entitles a party, including a health care provider, to a review of a medical service for which authorization for payment has been denied; §415.002 that establishes an administrative violation for an insurance carrier to: unreasonably dispute the reasonableness and necessity of health care, to violate a Commission rule or to fail to comply with the Act; §415.003 that establishes an administrative violation for a health care provider to: administer improper, unreasonable, or medically unnecessary treatment or services, to violate a Commission rule, or to fail to comply with the act; and the Texas Labor Code §415.0035 that establishes an administrative violation for an insurance carrier to deny preauthorization in a manner that is not in accordance with Commission rules.

The proposed new rules affect the following statutes: Texas Labor Code: §401.024, that provides the Commission the authority to require use of facsimile or other electronic means to transmit information in the system; §402.042, that authorizes the Executive Director to enter orders as authorized by the statute as well as to prescribe the form and manner and procedure for transmission of information to the Commission; §402.061, which authorizes the Commission to adopt rules necessary to administer the Act, the Texas Labor Code; §406.010 that authorizes the Commission to adopt rules regarding claims service; §408.021(a) that states an employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed; §408.025 that requires the Commission to specify by rule what reports a health care provider is required to file; §408.026 that establishes when a carrier is liable for costs relating to spinal surgery and mandates the Commission to adopt rules necessary to effectuate the statute; §409.021, that requires insurance carriers to timely initiate or dispute compensation; §409.022, that requires a notice of refusal to specify the insurance carrier's grounds for disputing a claim and requires the reason to be reasonable; §413.002 that requires the Commission to monitor health care providers and insurance carriers to ensure compliance with Commission rules relating to health care including medical policies and fee guidelines; §413.011 that requires the Commission by rule to establish medical policies relating to necessary treatments for injuries and designed to ensure the quality of medical care and to achieve effective medical cost control; §413.012 that requires the Commission to review and revise medical policies and fee guidelines at least every two years to reflect current medical treatment and fees that are reasonable and necessary; §413.013 (1) (2) and (3) that require the Commission by rule to establish a program for prospective, concurrent, and retrospective review and resolution of a dispute regarding health care treatments and services; a program for the systematic monitoring of the necessity of the treatments administered and fees charged and paid for medical treatments or services including the authorization of prospective, concurrent or retrospective review under the medical policies of the Commission to ensure the medical policies and guidelines are not exceeded; and a program to detect practices and patterns by insurance carriers in unreasonably denying authorization of payment for medical services requested or performed if authorization is required by the medical policies of the Commission; §413.014 that requires the Commission to specify by rule which health care treatments and services require express preauthorization by the insurance carrier, except for treatments and services for a medical emergency. This statute also states the insurance carrier is not liable for the cost of the specified treatments and services unless preauthorization is sought by the claimant or health care provider and either obtained or ordered by the Commission; §413.017 that establishes medical services to be presumed reasonable when provided subject to prospective, concurrent review and are authorized by the insurance carrier; §413.031 that entitles a party, including a health care provider, to a review of a medical service for which authorization for payment has been denied; §415.002 that establishes an administrative violation for an insurance carrier to: unreasonably dispute the reasonableness and necessity of health care, to violate a Commission rule or to fail to comply with the Act; §415.003 that establishes an administrative violation for a health care provider to: administer improper, unreasonable, or medically unnecessary treatment or services, to violate a Commission rule, or to fail to comply with the act; and the Texas Labor Code §415.0035 that establishes an administrative violation for an insurance carrier to deny preauthorization in a manner that is not in accordance with Commission rules.

The new rules are proposed pursuant to the following statutes: Texas Labor Code §§401.024, 402.042, 402.061, 406.010, 408.021, 408.025, 408.026, 409.021, 409.022, 413.002, 413.011, 413.012, 413.013, 413.014, 413.017, 413.031, 415.002, 415.003, 415.0035.

§134.601.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise.

(1)

Approval--A determination by the respondent that the listed health care requested to be preauthorized is medically reasonable and necessary treatment for the reported injury, regardless of unresolved issues of compensability, extent of or relatedness to the compensable injury, or the insurance carrier's (carrier) liability for the injury.

(2)

Appropriate Medical Reviewer--A health care provider who is qualified, and permitted by licensure to prescribe or provide the listed health care. A doctor who has been removed from and not reinstated to the Commission's Approved Doctor List cannot serve as an Appropriate Medical Reviewer.

(3)

Complete Request--Request for preauthorization for listed health care, submitted on the Commission-prescribed form (form), including the following data elements:

(A)

transmission information;

(B)

patient information;

(C)

requestor information;

(D)

request information for specific listed health care; and

(E)

medical documentation.

(4)

Denial--A determination by the respondent that all or part of the listed health care requested to be preauthorized is not medically reasonable and necessary treatment for the reported injury. To deny a portion of the request for preauthorization is a partial denial.

(5)

Denial Rationale--The respondent's reason(s) and clinical basis(es) for the denial or partial denial of listed health care as not medically reasonable and necessary treatment for the reported injury. Generic statements do not constitute denial rationale (e.g. "Not medically necessary" or "Does not meet screening criteria"). The response shall be submitted on the form, and shall include:

(A)

principal reason(s) for the decision;

(B)

clinical basis for the decision; and

(C)

identification of the screening criteria used in making the determination to forward the request to an Appropriate Medical Reviewer.

(6)

Emergency--Either a medical or mental health emergency as described below:

(A)

a medical emergency consists of the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, that the absence of immediate medical attention could reasonably be expected to result in placing the patient's health and/or bodily functions in serious jeopardy, and/or serious dysfunction of any body organ or part.

(B)

a mental health emergency is a condition that could reasonably be expected to present danger to self or others.

(7)

Listed health care--Health care that requires preauthorization pursuant to §134.605 of this title (relating to The List).

(8)

Requestor--The treating doctor or the doctor's designated representative, including office staff or a referred health care provider/health care facility, who requests preauthorization. An injured employee may only serve as requestor through the treating doctor.

(9)

Respondent--An insurance carrier or a utilization review agent certified by Texas Department of Insurance (TDI) and acting on behalf of a carrier, performing review of preauthorization requests for workers' compensation claims.

(10)

Response--A reply to a preauthorization request provided by the respondent to the requestor, submitted on the initial request form, including the following data elements:

(A)

transmission information;

(B)

date of receipt;

(C)

name of reviewing company, including phone number, name and title of reviewer;

(D)

decision information, including an assigned preauthorization number;

(E)

rationale for denial or partial denial (preliminary or final); and

(F)

notice to the requestor that the carrier has/has not filed a denial/dispute related to compensability, liability, or extent of or relatedness to the compensable injury.

(11)

Screening criteria--The written reference material applied by the respondent to determine if the health care requested is medically reasonable and necessary. The materials include: the written policies, decision rules, medical protocols, Commission fee and treatment guidelines, and Commission rules and advisories (e.g., appropriateness evaluation protocol (AEP), and intensity of service, severity of illness, discharge, and appropriateness screens (ISD-A)), filed with Texas Department of Insurance (TDI) as part of the required utilization review plan.

§134.602.Carrier Liability.

(a)

Except as provided by subsection (c) and (d) of this section, the insurance carrier (carrier) is liable for the fair and reasonable reimbursement for the listed health care in accordance with the Commission fee guidelines, if the respondent:

(1)

approves the listed health care pursuant to this subchapter;

(2)

fails to respond to an initial request for preauthorization within three working days of receipt of a complete request;

(3)

fails to respond to a request for reconsideration within five working days of receipt of the request; or

(4)

is ordered by the Commission to preauthorize the request.

(b)

A carrier that becomes liable for listed health care shall not retrospectively dispute its medical reasonableness and necessity. This subsection does not prohibit a carrier from appealing a Commission order in accordance with Chapter 133, Subchapter C of this title.

(c)

If the requestor does not initiate the listed health care within 45 days from the date the carrier becomes liable, the liability expires and the carrier is no longer responsible for the listed health care.

(d)

An approval of all or part of the listed health care requested does not limit a carrier's right to deny liability for a claim, or compensability of an injury, or to dispute either the extent of or relatedness of the listed health care to the compensable injury in accordance with §124.2 and §124.3 of this title (relating to Carrier Reporting and Notification Requirements; and Investigation of an Injury and Notices of Denial/Dispute). If the carrier ultimately prevails in a denial or dispute of this kind, the carrier shall not be held liable for the preauthorized listed health care.

(e)

A respondent shall not deny preauthorization for any of the following reasons:

(1)

the injured employee (employee) has reached maximum medical improvement (MMI);

(2)

the employee has no further entitlement to medical benefits;

(3)

the carrier is denying compensability of or liability for the injury; or

(4)

the carrier is disputing the extent of or relatedness to the compensable injury.

§134.603.Applicability.

(a)

The preauthorization of listed health care shall be determined in accordance with the rules in effect on the date that a request is submitted by the requestor. Sections 134.601-134.606 are applicable to requests for preauthorization submitted on or after the effective date of this rule. Section 134.600 is applicable to requests for preauthorization submitted prior to the effective date of this rule and shall remain in effect for that purpose. If a section of this subchapter is declared invalid in a final judgment that is not subject to appeal, or is suspended by order of the court which is given immediate effect, §134.600 shall remain in effect for all requests for preauthorization to the extent necessary.

(b)

Preauthorization is not required for health care:

(1)

provided for emergency care;

(2)

related to Spinal Surgery Second Opinion Process pursuant to Chapter 133, Subchapter C of this title;

(3)

requested by a doctor performing an impairment rating evaluation, when the testing is required by the Commission-authorized edition of the AMA Guides to the Evaluation of Permanent Impairment; or

(4)

performed or requested by the treating doctor as necessary to establish the compensability of the injury or extent of or relatedness to the compensable injury, in response to an insurance carrier's denial or dispute filed pursuant to §124.2 and §124.3 of this title (relating to Carrier Reporting and Notification Requirements; and Investigation of an Injury and Notices of Denial/Dispute); or

(c)

A health care provider shall not request preauthorization for health care not specifically identified in §134.605 of this title (relating to The List).

§134.604.The Process.

(a)

The requestor shall submit a complete request for preauthorization to the respondent on the Commission-prescribed form (form) by facsimile (fax) or electronic transmission (email).

(b)

Only the requestor may withdraw a request for preauthorization.

(c)

Upon receipt of the request, under subsection (a) of this section, the respondent shall conduct a review of the request. If the request is:

(1)

incomplete or the requested health care does not require preauthorization pursuant to §134.605 (relating to The List),:

(A)

the respondent shall return the form to the requestor by fax or email within one (1) working day, identifying the reason for the return;

(B)

the respondent shall have no further obligation with regard to the request after the request is returned; and

(C)

the requestor may complete the form and resubmit as a new request.

(2)

complete, the respondent shall apply screening criteria to evaluate the request. Neither a denial nor a partial denial may be based solely on screening criteria.

(A)

If the request meets the screening criteria, the respondent shall approve the request.

(B)

If the request fails to meet the screening criteria, the request shall be referred to an Appropriate Medical Reviewer to determine whether all or part of the listed health care is medically reasonable and necessary.

(d)

The respondent shall submit the response on the form by fax or email to the requestor within three working days after the date the request is received, or the carrier becomes liable for the listed health care as requested. The response shall be either an approval or a preliminary denial. A preliminary denial is the respondent's intent to deny or partially deny an initial request.

(e)

If the response is a preliminary denial, the requestor may submit a request for reconsideration within five working days after the date the preliminary denial is received. A request for reconsideration shall be submitted on the initial form, by fax or email, and the requestor shall:

(1)

indicate that the request is for reconsideration, including the date and number of pages submitted;

(2)

include additional medical documentation, not previously submitted with the initial request; and

(3)

attach an explanation to:

(A)

support the medical reasonableness and necessity of the requested listed health care; and

(B)

refute the respondent's denial rationale. A generic statement, without clinical basis for the requestor's position, does not constitute an explanation of medical reasonableness and necessity for the listed health care.

(f)

If a request for reconsideration is:

(1)

not received, the preliminary denial is considered final and no further action is required by the respondent. The requestor may only submit a new request for the same listed health care if the requestor provides objective documentation that there is a substantial change in the injured employee's medical condition.

(2)

not timely received, the preliminary denial shall be considered final, and:

(A)

the respondent shall return the form to the requestor by fax or email within one working day, identifying the reason for the return;

(B)

the respondent shall have no further obligation with regard to the request for reconsideration after the request is returned; and

(C)

the requestor may only submit a new request for the same listed health care if the requestor provides objective documentation that there is a substantial change in the injured employee's medical condition.

(3)

timely received, the respondent shall, within five working days:

(A)

forward the request for reconsideration to an Appropriate Medical Reviewer for review;

(B)

afford the requestor a reasonable opportunity to discuss the request with the Appropriate Medical Reviewer performing the review; and

(C)

submit the response with a final determination on the form by fax or email to the requestor. If the respondent fails to timely respond, the carrier becomes liable for the listed health care as requested, pursuant to §134.602 (a)(3) of this section (relating to Carrier Liability).

(g)

The requestor may request medical dispute resolution as provided in the Texas Labor Code §413.031 and §133.305 of this title (relating to Request for Medical Dispute Resolution) only after the completion of the reconsideration process as provided in subsections (e) and (f) of this section.

(h)

Following reconsideration, the requestor may only submit a new request for preauthorization for the same listed health care if the requestor provides objective documentation that there is a substantial change in the injured employee's medical condition.

(i)

The requestor and the respondent shall maintain records for each preauthorization request for a period of two years from the date of the initial request. Documentation shall include electronic or paper records of:

(1)

the complete request and response;

(2)

the request for reconsideration and response, as provided in subsections (e) and (f) of this section;

(3)

notification of an incomplete request, as provided in subsection (c) of this section;

(4)

withdrawn requests; and

(5)

all confirmation receipts of fax or email transmissions.

§134.605.The List.

(a)

Specific reimbursement identified in subsection (b) of this section, where applicable, references the maximum allowable reimbursement (MAR) or documentation of procedure (DOP) as established in the current Commission fee guidelines.

(b)

The following listed health care requires preauthorization except as provided by §134.603 of this title (relating to Applicability):

(1)

Inpatient hospital admissions/Outpatient surgeries

(A)

Inpatient hospital admissions including:

(i)

primary treatment and/or service to be performed; and

(ii)

length of stay, to be further negotiated if an extension is required;

(B)

Outpatient surgeries, wherever performed, with total charges expected to be greater than $500.

(2)

All psychiatric or psychological testing, therapy, repeat evaluations, and biofeedback, except as part of preauthorized interdisciplinary programs.

(3)

Trigger point injections and all spinal injections as defined in the Spine Treatment Guideline (epidural steroid (ESI), facet, sacroiliac joint (SI), and spinal nerve block injections) and Intradiscal Electrothermal Therapy (IDET).

(4)

Electrodiagnostic testing except for usage as identified in §134.603 of this title. This includes all sensory, motor and reflex studies, including but not limited to, electromyogram (EMG), surface electromyogram (SEMG), evoked potentials (SSEP, DSEP), nerve conduction studies (nerve conduction velocity (NCV), current perception threshold (CPT)), and H and F reflex studies.

(5)

Individual radiology or nuclear medicine procedures, except for usage as identified in §134.603 of this title:

(A)

with a whole procedure MAR greater than $350; or

(B)

with listed reimbursement as DOP and charged at greater than $350.

(6)

All physical medicine and rehabilitation treatment(s) and/or service(s) (excluding tests and measurements):

(A)

after 18 sessions or six weeks from the date of injury, which ever occurs first, and/or

(B)

after 18 sessions following surgery.

(7)

All single and interdisciplinary programs, including but not limited to: work conditioning, work hardening, outpatient medical rehabilitation, chronic pain management, and any interdisciplinary program designed to enhance return to work.

(8)

Durable medical equipment with charges in excess of $500 per item (either purchased or expected cumulative rental), all electrical nerve stimulator devices (purchase or rental), and all external and implantable bone growth stimulators.

(9)

Nursing facility services, domiciliary, rest or boarding home, custodial care services, and home services.

(10)

Manipulative treatments or manipulations after 18 visits (if visit includes either manipulative treatments or manipulations), or six weeks from the date of injury, whichever occurs first.

§134.606.Severability.

Where any terms or sections of this subchapter are determined by a court of competent jurisdiction to be invalid, the remaining terms and provisions of this subchapter shall remain in effect.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on April 28, 2000.

TRD-200003024

Susan Cory

General Counsel

Texas Workers' Compensation Commission

Earliest possible date of adoption: June 11, 2000

For further information, please call: (512) 804-4287