The Texas Department of Insurance, Division of Workers' Compensation proposes new §§133.1 - 133.3, 133.10, 133.20, 133.200, 133.210, 133.230, 133.240, 133.250, 133.260, 133.270, and 133.280, concerning medical billing and processing, including new medical billing timeframes. The proposed new rules are necessary to implement, on a permanent basis, portions of House Bill (HB) 7, enacted during the 79th Legislature, Regular Session, effective September 1, 2005. The proposed rules will permit compliance with statutory changes to the Labor Code §408.027 and new §408.0271, and also provide billing and processing direction for participants in a workers' compensation health care network established under Insurance Code Chapter 1305. The primary focus of the proposed rules is to include the statutorily revised medical billing timeframes. These proposed rules do not apply to political subdivisions with contractual relationships under Labor Code §504.053(b)(2). If adopted the proposed rules will replace the emergency rules adopted by the Commissioner of Workers' Compensation on November 3, 2005, and published in the November 18, 2005, issue of the Texas Register (30 TexReg 7621).

The proposed rules are designed to minimize micro-management of the system, utilize existing Medicare reimbursement structures, and incorporate concepts from Texas Department of Insurance (TDI) managed care rules for consistency and standardization. The proposed rules also accommodate eBill initiatives by identifying forms and processes compatible in both paper and electronic processes. Additionally, the Division is proposing an extensive reorganization of Chapter 133, in conjunction with the revision of Chapter 134, to eliminate redundancies in existing rules and clarify billing and processing procedures. This reorganization includes the proposed repeal of several current billing, processing and reimbursement rules in Chapters 133 and 134, published elsewhere in this issue of the Texas Register .

In conformity with changes by HB 7 to Labor Code §408.027 and §408.0271, the proposed rules provide the following: for reimbursement, a health care provider must submit a medical bill to the insurance carrier on or before the 95th day after the date of service; insurance carriers must pay, reduce, deny or determine to audit a health care provider's medical bill not later than the 45th day after receipt of the medical bill; an insurance carrier may request additional documentation necessary to clarify the health care provider's charges at any time during the 45-day review period and the health care provider must provide the requested documentation not later than the 15th day after the date of receipt of the insurance carrier's request; procedures and time frames for audits performed by an insurance carrier; and procedures and time frames for insurance carriers to request refunds from health care providers.

This proposal also organizes the rules regarding medical billing and processing to clarify and streamline the process. This will enable system participants to easily access specific portions of the medical billing rules, which are now logically organized following the billing and reimbursement process.

The proposed rules also minimize micro-management of the process by providing guidance and direction rather than specific, detailed instructions. This will allow system participants more flexibility in developing their medical billing and bill review processes. In addition, the proposal relies on the statutorily required Medicare reimbursement structures, and incorporates concepts from TDI managed care rules, and eliminates many of the duplicative Division instructions thus providing consistency and standardization for workers' compensation system benefits with other health care delivery systems. The proposed rules also contemplate the adoption of statutorily required treatment guidelines and incorporate this concept into the bill review process. The proposed rules also establish standards for reconsideration of medical bills and refunds of overpayments to health care providers.

Proposed Subchapter A, §§133.1 - 133.3, provides general provisions for medical billing and processing, including applicability of the chapter, definitions, and communications between health care providers and carriers. Proposed Subchapter B sets out the billing procedures for health care providers by addressing the billing format, and submission of the medical bill. Proposed Subchapter C addresses medical bill processing and audits by insurance carriers. Proposed §133.200 sets out the procedures a carrier should follow upon receipt of a medical bill from a provider. Proposed §133.210 addresses medical documentation. Proposed §133.230 provides procedures when an audit is conducted. Proposed §133.240 addresses medical payments and denials. Proposed §133.250 describes the procedures for reconsideration of payment of medical bills. Proposed §133.260 addresses refunds. Proposed §133.270 addresses when an injured employee may request reimbursement for health care for which the injured employee has paid. Proposed §133.280 describes the procedures for an employer to follow for reimbursement of health care paid.

Insurance Code Chapter 1305 establishes that a medical bill for services provided through a workers' compensation health care network shall be paid, reduced, denied or audited in accordance with Labor Code §408.027. The proposed rules clarify that the medical billing and bill reviewing processes, including coding and reporting requirements, apply to services provided to an injured employee subject to a workers compensation health care network as established under Insurance Code Chapter 1305, with any exceptions noted.

Allen McDonald, Director, Medical Review, has determined that for each year of the first five years the proposed sections will be in effect, there will be no fiscal impact to state and local governments as a result of the enforcement or administration of the rule. There will be no measurable effect on local employment or the local economy as a result of the proposal.

Mr. McDonald has also determined that for each year of the first five years the sections are in effect, the public benefits anticipated as a result of the proposed sections will be a more efficient medical billing and reimbursement process. All system participants will benefit from the clarification and simplification of these rules. Additionally, the rules support the Division's efforts to establish electronic medical billing as the standard in the Texas Workers' Compensation System.

Insurance carriers may realize a positive financial impact as a result of a standardized and streamlined process, which include specific requirements for submission of medical bills and documentation, communication between insurance carriers and health care providers and timelines for payment or denial decisions.

Injured employees will benefit from the additional information provided by receiving Explanation of Benefits (EOB). This additional information will allow injured employees to understand the reimbursement status of medical bills associated with their care and become aware early on of any possible liabilities. Injured employees will benefit from an established reimbursement process when paying out of pocket for health care.

Health care providers benefit through an improved billing and reimbursement system that aligns more closely with other health care systems, increasing standardization and reducing the administrative complexity of the system. Reduced timeframes encourage quicker resolution of medical bills and increased interim reimbursement amounts for medical claims under audit decrease financial burdens for health care providers. Future application of provisions related to treatment guidelines and retrospective review of medical bills should increase surety of payment for health care providers that provide services that fall within the treatment guidelines.

It is anticipated that carriers, providers and pharmacies will incur programming costs as a result of the proposed rules. In proposed §133.10, pharmacists are required to submit bills using the National Council for Prescription Drug Programs Claim Form rather than the TWCC 66. Many pharmacists are already using this form in other medical billing systems but will need to conform the workers' compensation billing system to this new form. Health care providers will need to make programming changes to accommodate the changes to the billing process. Carriers will need to make programming changes as a result of a change in timeframes and procedures. It is anticipated that the programming changes will be a one-time cost and will vary depending on the complexity of the system utilized and on the carrier. According to statewide data collected by the Texas Workforce Commission from November 2003 through November 2005, the mean hourly wage rate for a computer programmer is $30.78. It is estimated that the time required for making the various programming changes could be less than an hour to as much as four hours.

It is also anticipated that carriers will incur an incremental additional cost of providing an EOB to injured employees for all medical bills. An estimated mailing cost of 25 cents per EOB will be the major expense as a result of this requirement since carriers are already required to provide injured employees EOBs in certain instances. If current bill processing costs range from $8 - $10 per bill, an increase of 2.5% to 3.1% in cost per bill would result. If carriers elect to provide EOB information online, as offered by many managed care organizations, postage costs would not be incurred. The costs will vary by carrier depending on the number of medical bills processed and method elected by the carrier to provide the EOB. The Division anticipates only minimal reprogramming costs will be incurred by carriers to produce EOBs for each bill. As previously stated, the mean hourly wage rate for a computer programmer is $30.78. These reprogramming costs will be proportional to the complexity of the specific system employed by the carriers.

It is not anticipated that there will be any other costs associated with the proposal since the processes are based on similar processes that the system participants are using in other health care systems.

Any additional economic costs currently exist under existing rules or result from the enactment of HB 7 and are not a result of the adoption, enforcement, or administration of the proposed sections. There will be no difference in the cost of compliance between a large and small business as a result of the proposed sections. Based upon the cost of labor per hour, there is no disproportionate economic impact on small or micro-businesses. Even if the proposed sections would have an adverse effect on small or micro-businesses, it is neither legal nor feasible to waive the provisions of the proposed sections for small or micro-businesses because the Labor Code requires equal application of these provisions to all affected individuals.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on March 13, 2006, to Norma Garcia, General Counsel, MS 4D, Division of Workers' Compensation, Texas Department of Insurance, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744. An additional copy of the comment must be simultaneously submitted to Allen McDonald, Director of Medical Review, MS 40, Division of Workers' Compensation, Texas Department of Insurance, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744. A request for a public hearing should be submitted separately to the General Counsel.

Subchapter A. GENERAL RULES FOR MEDICAL BILLING AND PROCESSING

The Texas Department of Insurance, Division of Workers' Compensation proposes the repeal of §§134.1, 134.5, 134.6, 134.800, 134.801, and 134.803, concerning medical policies and provider billing procedures. The repeal of these sections is necessary for the Division to propose an extensive reorganization of Chapter 134, in conjunction with the revision of Chapter 133, to eliminate redundancies in existing rules and clarify medical billing, processing and reimbursement procedures. This reorganization includes the proposed repeal of current medical policy and provider billing rules in Chapter 134 and replacement with clarified and reorganized new rules that incorporate requirements of House Bill (HB) 7, enacted during the 79th Legislature, Regular Session, effective September 1, 2005.

The Division simultaneously proposes new §§134.1, 134.100, 134.110, 134.120, and 134.130, published elsewhere in this issue of the Texas Register , concerning medical and miscellaneous reimbursement policies. The proposed new rules are necessary to implement, on a permanent basis, portions of HB 7. The proposed rules will permit compliance with statutory changes to the Labor Code §408.027, and also provide billing, processing and reimbursement direction for participants in a workers' compensation health care network established under Insurance Code Chapter 1305. This proposal also organizes the rules regarding medical billing, processing, and reimbursement to clarify and streamline the process. This will enable system participants to easily access specific portions of the medical billing and reimbursement rules, which are logically organized and follow the billing and reimbursement process. The proposed rules also minimize micro-management of the process by providing guidance and direction rather than specific, detailed instructions that required adherence. This will allow system participants more flexibility in developing their medical billing and bill review processes. In addition, the proposal relies on the statutorily required Medicare reimbursement structures, incorporates concepts from Texas Department of Insurance's managed care rules, and eliminates many of the duplicative Division instructions thus providing consistency and standardization for workers' compensation system benefits with other health care delivery systems.

Allen McDonald, Director, Medical Review, has determined that for each year of the first five years the proposed repeal will be in effect, there will be no fiscal impact to state and local governments as a result of the repeal. There will be no measurable effect on local employment or the local economy as a result of the proposed repeal.

Mr. McDonald has also determined that for each year of the first five years the proposed repeal is in effect the public benefits anticipated as a result of the repeal, in conjunction with adoption of proposed new Chapter 134 rules, will be a more efficient medical billing and reimbursement process. All system participants will benefit from the clarification and simplification of the proposed new Chapter 133 and 134 rules.

There are no anticipated costs to system participants as a result of the proposed repeal. There is no difference in the cost of compliance between a large and small business as a result of the proposed repeal. Based on the cost of labor per hour, there is no disproportionate economic impact on small or micro-businesses.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on March 13, 2006 to Norma Garcia, General Counsel, MS 4D, Division of Workers' Compensation, Texas Department of Insurance, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744. An additional copy of the comments must be simultaneously submitted to Allen McDonald, MS 40, Director of Medical Review, Division of Workers' Compensation, Texas Department of Insurance, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744. A request for a public hearing should be submitted separately to the General Counsel.

Subchapter A. MEDICAL POLICIES

The Texas Department of Insurance, Division of Workers' Compensation proposes new §§134.1, 134.100, 134.110, 134.120, and 134.130, and amendments to §134.802, concerning medical billing reimbursements. These proposed sections are necessary to implement, on a permanent basis, portions of House Bill (HB) 7, enacted during the 79th Legislature, Regular Session, effective September 1, 2005. The proposed sections will permit compliance with statutory changes to the Labor Code §408.027 and also provide medical reimbursement direction for participants in a workers' compensation health care network established under Insurance Code Chapter 1305. The primary focus of these proposed sections is to address the statutorily revised medical billing timeframe. These proposed rules do not apply to political subdivisions with contractual relationships under Labor Code §504.053(b)(2). If adopted, the proposed rules will replace the emergency rules adopted by the Commissioner of Workers' Compensation on November 3, 2005, and published in the November 18, 2005, issue of the Texas Register (30 TexReg 7621).

The proposed sections are designed to minimize micro-management of the system, utilize existing Medicare reimbursement structures, and incorporate concepts from the Texas Department of Insurance (TDI) managed care rules for consistency and standardization. The proposed rules also accommodate eBill initiatives by identifying forms and processes compatible in both paper and electronic processes. Additionally, the proposed sections involve an extensive reorganization of Chapter 134, in conjunction with the revision of Chapter 133, to eliminate redundancies in existing rules and clarify billing and reimbursement procedures. This initiative also includes the proposed repeal of several current billing, processing and reimbursement rules in Chapters 133 and 134, as published elsewhere in this issue of the Texas Register . The various proposals result in the consolidation of reimbursement methodologies and miscellaneous reimbursement amounts previously located in both Chapters 133 and 134 to Chapter 134.

This proposal also organizes the rules regarding medical billing, processing, and reimbursement to clarify and streamline the process. This will enable system participants to easily access specific portions of the medical billing rules, which are now logically organized to track the billing and reimbursement process.

The proposed rules also minimize micro-management of the process by reducing specific, detailed instructions. This will allow system participants more flexibility in developing their medical billing and bill review processes. In addition, by eliminating many of the duplicative Division instructions and relying on the statutorily required Medicare reimbursement structures, and incorporating concepts from TDI managed care rules, the proposed rules provide consistency and standardization of workers' compensation system benefits with other health care delivery systems. The proposed sections clarify medical reimbursement and other miscellaneous reimbursement. The proposed sections also address insurance carrier medical bill reporting to the Division.

Proposed §134.1 clarifies that the Division medical fee guidelines do not apply to medical services provided through a workers' compensation health care network established under Insurance Code Chapter 1305, except for examinations conducted pursuant to Labor Code §§408.004, 408.0041, and 408.151 which are reimbursed in accordance with §134.202. The proposed section also clarifies reimbursement for health care not provided through a workers' compensation health care network by specifically adding a reference to negotiated contracts and establishes the framework for fair and reasonable reimbursement.

Proposed §134.100 (existing §134.5) establishes the reimbursement criteria for the treating doctor attendance at a required medical examination. Proposed §134.110 (existing §134.6) establishes criteria to determine reimbursement of the injured employee for travel expenses. The distance at which reimbursement will occur is 30 miles rather than 20 miles in the existing rule to be consistent with the service area of workers' compensation networks since the proposed rules apply to networks also. Proposed §134.120 (existing §133.106) establishes reimbursement for medical documentation. The amount for reimbursement of medical narratives has been increased from the existing rule for the first two pages of a narrative report from $50 to $100 and each subsequent page from $20 to $40 per page. The amount of reimbursement for the narrative report has been stationary for several years and the amount in the existing rule did not seem to be a reasonable reimbursement for the time it takes a health care provider to prepare a narrative report. Proposed §134.130 (existing §134.803) establishes interest for late payment on medical bills and refunds. The proposed amendments to §134.802 make the language for insurance carrier medical bill reporting to the Division consistent with HB 7.

Allen McDonald, Director, Medical Review, has determined that for each year of the first five years the proposed sections will be in effect, there will be no fiscal impact to state and local governments as a result of the enforcement or administration of the rule. There will be no measurable effect on local employment or the local economy as a result of the proposal.

Mr. McDonald has also determined that for each year of the first five years the sections are in effect, the public benefits anticipated as a result of the proposed sections will be a more efficient medical billing and reimbursement process. All system participants will benefit from the clarification and simplification of these rules. Additionally, the rules support the Division's initiatives to establish electronic medical billing as the standard in the Texas Workers' Compensation System.

Insurance carriers may realize a positive financial impact as a result of a clarifications and standardization of the fair and reasonable reimbursement concept. Additionally, insurance carriers will benefit from the administrative consistency of processing network and non-network travel reimbursement using the same criteria for each.

Injured employees will benefit indirectly from an improved system as reimbursement processes reduce uncertainty and increase consistency in the reimbursement process for health care providers. In addition, the proposed sections establish that examinations conducted pursuant to Labor Code §§408.004, 408.0041, and 408.151 shall be reimbursed using the same standards for network or non-network claims. This benefits the injured employee by eliminating the potential perception of monetary influence on decisions relating to these examinations.

Health care providers benefit from an improved system as reimbursement processes reduce uncertainty and increase consistency in the reimbursement process for health care services. Health care providers also benefit through an improved billing and reimbursement system that aligns more closely with other health care systems, increasing standardization and reducing the administrative complexity of the system. An additional benefit will be realized by health care providers through increased reimbursement for preparation of requested narrative reports.

Insurance carriers or injured employees will incur an increase in costs associated with requesting narrative reports from health care providers. Proposed §134.120 increases the reimbursement amount for the first two pages of a narrative report from $50 to $100 and each subsequent page from $20 to $40 per page. The increase in costs incurred will be proportional to the number and size of narrative reports the insurance carrier or injured employee request.

Injured employees will also incur an increase in costs related to the change in the travel reimbursement from 20 miles to 30 miles. In an effort to maintain uniformity in the system, the Division decided to use 30 miles as the distance for travel reimbursement to be consistent with the service area of the networks and not have a different standard for non-networks and networks. The cost to the injured employee will vary depending on what type of transportation the employee uses. Based on estimated average fuel costs of $2.40 per gallon and a distance of 20 miles, if a personal vehicle is utilized the cost will depend on the mileage the vehicle gets. If the vehicle averages 20 or more miles per gallon, the estimated cost would be $2.40 or less and if it averages 10 miles per gallon, the estimated cost would be $4.80. Utilizing the maximum state mileage reimbursement rate for travel from January 1, 2006 to August 31, 2006, issued by the State Comptroller, reimbursement for the additional 20 miles would be $8.90.

There are no other anticipated costs for the proposed sections since it is a reorganization and standardization of existing rules using a similar process model. Any additional economic costs currently exist under existing rules or result from the enactment of HB 7 and are not a result of the adoption, enforcement, or administration of the proposed sections. There will be no difference in the cost of compliance between a large and small business as a result of the proposed sections. Based upon the cost of labor per hour, there is no disproportionate economic impact on small or micro-businesses. Even if the proposed sections would have an adverse effect on small or micro-businesses, it is neither legal nor feasible to waive the provisions of the proposed sections for small or micro-businesses because the Labor Code requires equal application of these provisions to all affected individuals.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on March 13, 2006, to Norma Garcia, General Counsel, MS 4D, Division of Workers' Compensation, Texas Department of Insurance, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744. An additional copy of the comments must be simultaneously submitted to Allen McDonald, Director of Medical Review, MS 40, Division of Workers' Compensation, Texas Department of Insurance, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744. A request for a public hearing should be submitted separately to the General Counsel.

Subchapter A. MEDICAL REIMBURSEMENT POLICIES

Subchapter G. PROSPECTIVE AND CONCURRENT REVIEW OF HEALTH CARE