Subchapter A. GENERAL RULE FOR REQUIRED REPORTS

Subchapter B. DISCLOSURE BY HEALTH CARE PROVIDER OF FINANCIAL INTEREST IN REFERRED PROVIDER

The Texas Workers' Compensation Commission (the commission) adopts amendments to §180.1 and §180.7 and new §180.2 and §§180.20 - 180.27 with changes to the proposed text published in the August 31, 2001 issue of the Texas Register (26 TexReg 6589).

The adoption includes changing the title of chapter 180 to "Monitoring & Enforcement" to reflect the broader nature of the subject matter and because monitoring and enforcement activities are shared among different parts of the agency and are not only concentrated in the Compliance and Practices Division.

As required by the Government Code §2001.033(1), the commission's reasoned justification for this rule is set out in this order which includes the preamble, which in turn includes the rule. This preamble contains a summary of the factual basis of the rule, a summary of comments received from interested parties, names of those groups and associations who commented and whether they were for or against adoption of the rule, and the reasons why the commission disagrees with some of the comments and proposals.

The Texas Register published text shows the adopted language and should be read to determine all revisions. Changes made to the proposed rules are in response to public comment received in writing and at a public hearing held on October 1, 2001, and are described herein, including those based upon further review by staff, including the Medical Advisor, and in the summary of comments and responses section of this preamble. Other changes were made to better line up the effective date of some of provisions with the next legislative session, to clarify intent, to better match statutory provisions, to improve consistency and to correct typographical or grammatical errors. Changes in the proposed text are found in every rule and are described in the overview of the rules and the responses to the public comments.

House Bill 2600 (HB-2600), passed by the 77th Texas Legislature in its 2001 session, made numerous amendments to the Texas Labor Code. Many of these changes related to regulating medical benefit delivery by: changing the commission's approved doctor list (ADL) and application process (including mandated training); changing the grounds under which the commission can issue sanctions (as well as expanding the sanctions); adding a Medical Advisor to the commission staff and a Medical Quality Review Panel (MQRP), and providing for expanded financial disclosure and prohibiting inappropriate referral fees, kickbacks, or other financial incentives.

To implement these changes, the commission examined its existing rules and found that most of the provisions relating to general regulation of doctors and health care are spread out among several chapters (126, 133, and 134 in particular). Given the scope of changes to be made and to simplify usage, the commission has moved these provisions to chapter 180.

In doing this, though many of the rules in chapter 180 are technically "new rules," most of them relocate provisions that the commission had in place in other chapters. This preamble identifies the previous rules that have been replaced and discusses the way the adopted rules differ from them.

The amendments and additions to chapter 180 are based upon legislative changes made in Articles 1 and 6 of HB-2600 and the commission's Medical Advisor provided recommendations on them. Chief among the changes is that admission to the ADL now requires a doctor to apply and meet specified criteria. Prior to this change, admission to the ADL was automatic upon receiving a license. Now doctors will be required to take training and register to be on the list. In addition, the commission has been given the authority to deny or restrict admission based upon factors such as practice restrictions. Approved doctors will be issued certificates of registration that expire if re-training requirements are not met.

HB-2600 mandates that doctors serving any role in the Texas workers' compensation system be on the ADL. In the past, only treating doctors were required to be on the ADL. Doctors who are not on the ADL will be prohibited from performing services or receiving reimbursement in the Texas workers' compensation system (unless the commission grants an exception on a per claim basis, or in an emergency or for immediate post-injury medical care).

HB-2600 also mandates that the commission set up modified training and registration requirements for certain types of doctors such as those who infrequently provide care in the Texas workers' compensation system or those who only perform peer reviews and utilization review (UR). Doctors from other states are permitted to be on the ADL. However, out of state doctors who review health care services (such as through utilization review or peer reviews) are required to be supervised by a doctor licensed in Texas.

HB-2600 requires that the commission collect information about treating doctors regarding return to work outcomes, patient satisfaction, and cost and utilization of health care in order to promote quality of care and best practices. The commission previously collected information on cost and utilization of care but this was based upon the person providing the care and who was not necessarily the treating doctor for the claim. This information will be important over time because HB-2600 made major changes to the way the commission regulates doctors on the ADL.

As a simplification, HB-2600 mandates that the Executive Director remove doctors from the list who fail to meet registration requirements (including training), who are deceased, whose license to practice has been revoked, suspended, or not renewed by the appropriate licensing authority, or who request removal. Previously, removal under these circumstances required commissioner approval.

The commission's authority to address activities not in full compliance with the law or not representative of quality care has been greatly expanded. Both the grounds for taking action and the actions the commission is authorized to take are broader than under the previous statute.

To help evaluate behavior by doctors and carriers (as relates to medical benefit delivery), HB-2600 created an official Medical Advisor position that is imbued with specific authority and responsibilities. Also created was the MQRP which functions to assist the Medical Advisor in reviewing the conduct of doctors and carriers relating to medical benefit delivery. This preamble and these rules sometimes reference the MQRP. These references are not always to the entire membership of the MQRP. The role of the MQRP is to assist and make recommendations to the Medical Advisor as directed by the Medical Advisor. This may mean that the Medical Advisor may choose to use only some members of the MQRP on a given issue.

As another measure to control costs, HB-2600 requires the commission to adopt a definition of financial interest consistent with analogous federal regulations and to adopt the federal standards that prohibit the payment or acceptance of payment in exchange for referrals.

HB-2600 clarifies the commission's enforcement authority with regard to violations of the statute and commission rules that don't carry a specific violation class. For example, Texas Labor Code §408.027 requires carriers to pay or dispute medical bills within 45 days but doesn't specify what class administrative violation it is if a carrier fails to meet this requirement. The language in Article 6 of HB-2600 clarifies that actions such as this constitute administrative violations and that they are subject to enforcement action by the commission.

It is these mandates that are the primary motivation for the changes adopted in chapter 180. The commission has placed the existing rules in chapter 180 under the general subchapter heading "General Rules For Enforcement." The changes to this newly labeled subchapter include: amendments to §180.1 (relating to Definitions); addition of §180.2 (relating to Referrals); and amendments to §180.7 (relating to Date Administrative Violation Deemed to Have Occurred; Establishing Willful Violations).

Subchapter B entitled "Medical Benefits Regulation" has been added. Within this subchapter the commission has relocated concepts previously contained in rules in chapters 126, 133, and 134 relating to the ADL, the Designated Doctor List (DDL), financial disclosure, and the responsibilities of treating, referral, and consulting doctors. Specifically, the commission has adopted eight new rules in this subchapter: §180.20 relating to Commission Approved Doctor List; §180.21 relating to Commission Designated Doctor List; §180.22 relating to Health Care Provider Roles and Responsibilities; §180.23 relating to Commission Required Training for Doctors/Certification Levels; §180.24 relating to Financial Disclosure; §180.25 relating to Improper Inducements, Influence and Threats; §180.26 relating to Doctor and Insurance Carrier Sanctions; and §180.27 relating to Sanctions Process/Appeals/Restoration/Reinstatement.

These rules replace all or parts of previous §126.8 (relating to Commission Approved Doctor List), §126.10 (relating to Commission Approved List of Designated Doctors), §133.3 (relating to Responsibilities of Treating Doctor), §133.4 (relating to Consulting and Referral Doctors), §134.100 (relating to Provider Disclosure of Financial Interest, Submission to the Commission), and §134.101 (relating to Provider Disclosure of Financial Interest, Submission to the Carrier). Amendment and repeal of those rules are included in separate preambles.

Taken together these amendments and newly adopted rules provide a number of benefits. One of the key intents of HB-2600, and thus, these rules, is to ensure that employees have access to doctors who will provide timely quality care that is designed to cure or relieve the effects naturally resulting from the compensable injury, promote recovery, and/or enhance the ability of the employee to return to or retain employment. The commission expects that employees will see improvements in these areas as a result of the new rules. The exceptions provided for some out-of-state and low-volume doctors should help ensure employee access to quality health care.

The training relating to MMI and impairment should provide a number of benefits to the system as a whole. Employees should receive more accurate impairment ratings and this will ensure that they get the benefits they are entitled to. More accurate impairment ratings should also reduce disputes and this should reduce the number of employee exams required and reduce delays in employees receiving their benefits. Disputes relating to MMI date should also be reduced because doctors will be better educated on how to certify MMI. Reducing disputes and extra examinations will reduce costs to the system.

Studies have shown that employees who remain off of work longer are less likely to ever return to work at wages approaching those they were earning while injured. The emphasis on timely return to work in the training that doctors will receive should result in fewer employees remaining off of work longer than medically appropriate. As a result, the long-term impact of injuries on employees should be lessened.

Currently carriers utilizing the medical opinions of doctors who are not fully trained in Texas workers' compensation law often interrupt employees' medical care. By educating peer review and utilization review doctors, disputes that affect benefit delivery may be avoided. Reductions in disputes should improve medical benefit delivery, lower frustration, and speed recovery. Education and training of doctors should result in faster resolution of disputes.

Doctors will similarly benefit from these rules in a number of ways. As noted, carrier-selected doctors will be better trained in the requirements of the Texas workers' compensation system than they were in the past. This should reduce unnecessary disputes (both prospective and retrospective). With costs currently very high and rising, action by some carriers designed to address noncompliant doctors may be affecting some doctors who are compliant. To the extent that the commission is able to reduce the number of noncompliant doctors (e.g. by getting them to change their behavior or by removing the doctors who won't change), the remaining doctors should experience increased efficiencies in the handling of their claims. In addition, these doctors are likely to see an increase in their workers' compensation business.

Currently some doctors offer improper inducements to employees in order to get the employees to change doctors. Often the doctors who are doing this are the doctors who keep employees off work longer than medically necessary and otherwise add to system costs by overutilizing care. The prohibition of improper inducements and the efforts to remove noncompliant doctors should also increase workers' compensation business for those who comply with system rules and regulations.

Another benefit to providers is that the commission's ability to sanction carriers for quality of care issues is expanded by these rules. The increased ability to hold carriers responsible for their actions and inactions should result in improved compliance and, as a result, payments of medical bills may be more timely and accurate while disputes may be reduced.

One of the other key intents of HB-2600 was to control costs and these rules will help further that end. Insurance carriers and employers will benefit from the lower costs that will come as the system transitions from using an open list of approved doctors to using a controlled list of doctors specially trained in Texas workers' compensation. Prior to HB-2600, the commission's ability to exclude or otherwise limit doctors from participation in the system was limited. The system has seen workers' compensation costs (both indemnity and medical costs) rise significantly, especially when compared to costs in other states. To the extent that the commission is able to change utilization and return to work patterns (e.g. by changing behavior or by removing doctors who won't change behavior), costs shall be reduced and this may enable carriers to reduce premiums. This will both benefit employers already in the system and may attract more employers to the system, thus increasing customers for the carriers.

Costs may be controlled in a number of other ways. With full financial disclosure, carriers will be able to give extra scrutiny to medical services provided through a self-referral by the doctor. Though these services may be reasonable and necessary, doctors who self-refer have an additional incentive to make the referral and thus additional scrutiny may be appropriate. Similarly, prohibitions against improper inducements should ensure that only those benefits that the employee is truly entitled to are delivered.

In addition, the commission's expanded ability to remove doctors from the system should help increase compliance with the statute and rules. This should reduce claim costs by reducing overpayments of income benefits sometimes caused by late reports by doctors.

The new rules should promote earlier returns to work which provide benefits to carriers and employers through reducing indemnity benefit costs. However employers should also benefit from earlier returns to work because they should reduce the loss of productivity that an injury can cause.

Amendment to §180.1 - Definitions

Amendments to §180.1 add new definitions and amend previous definitions.

A broad definition of "conviction" or "convicted" is adopted to ensure that a relevant conviction (including those resulting from procedures such as plea agreements) can be used as grounds for sanction of a doctor. The intent is that the conduct for which a person is convicted serves as the grounds for the sanction not the fact that there was a conviction. Regardless of whether or not there is a conviction by jury or judge, if it is determined that the conduct occurred and is relevant, it can be used by the commission to issue sanctions.

This definition was clarified to show that any type of conviction is still a conviction until and unless overturned on appeal. Again, it is the relevant conduct that the commission intends to make the basis of action not the conviction itself. The conviction is merely evidence of the conduct. If the conviction is overturned, then that means that it can not be relied upon to prove that the conduct occurred. But until and unless it is overturned, it can be used.

"Emergency" is defined by reference to the definition in §133.1 of this title (relating to Definitions for chapter 133) to maintain consistency with other commission rules.

The terms "willful," "intentional," and "knowingly" are defined in the rule rather than referencing the Texas Penal Code as in the previous rule. There is no definition of "willful" in the penal code. Therefore, one has been added to make that term effective. "Willfully" is defined as "knowingly or intentionally". An act is willful even if it was originally accidental, if it continues after the person was made aware of the noncompliance. The definitions of intentional and knowingly remain consistent to their definitions in the penal code but are set out in this rule for easier reference (though the definition of "intentionally" needed a slight change because it referred to a "subsection" which was accidentally copied over from the Texas Penal Code but not applicable here). In addition, the commission added a note to the rule that explains that different spellings of the terms "willful" and "willfully" have the same meaning. The proposed definition did not specify who provides the notice under "willfully." Therefore the definition was modified to say that it comes from the commission or other regulatory authority. The commission intends to be able to use the term to characterize conduct outside of the workers' compensation system as well as within it.

The definition of "Significant Violation" differentiates between violations that require recommending deletion from the ADL and violations that the commission can address through other sanctions.

The definition of "Uncorrected Pattern of Practice" has been added as one of the ways a violation can be deemed to be a "Significant Violation." The definition was modified slightly based upon a comment to state that the notice from the commission has to be in writing.

The definition of "Continued noncompliance" helps differentiate between a violation where the act was tied to a specific period and a violation that is continuing (thus requiring some action or change in behavior to bring conduct out of continued noncompliance or into compliance). The definition was simplified slightly based upon comment.

Based on comments, definitions were added for "Frivolous" (used in §180.26), and "Immediate post-injury medical care" (used in a number of the rules).

Other definitions include: "Abusive Practice," "Administrative Law Judge" (which was clarified to explain that for the purpose of these rules the term includes commission hearing officers and appeals panel judges), "Agent," "Charged Person," "Compliance," "Controlled Substances," "Noncompliance or Noncompliant Act," "Pattern of Practice," "Rules," "Remuneration," "SOAH," "System Participant," "Violation," and "Violator."

New §180.2 - Referrals

New §180.2 provides that any person may make a referral to the commission for fraudulent acts or omissions, for issues relating to quality of care by health care providers and insurance carriers, and for other violations of the Texas Workers' Compensation Act or commission rules. The rule was clarified slightly to better differentiate between carrier and provider referrals relating to quality of care. For insurance carriers the provisions now apply to carriers paying for or approving health care that is not reasonable and necessary and also apply to carriers failing to approve and pay for reasonable and necessary health care. The language used is "all and only reasonable and necessary health care" as it is meant to ensure that ONLY reasonable and necessary care is paid for or approved (meaning that which is not reasonable and necessary is denied) and that ALL reasonable and necessary care is approved and paid for.

Amendment to §180.7 - Date Violation Deemed to Have Occurred; Establishing Willful Violations

HB-2600 clarifies that the commission can enforce statutory requirements where no specific administrative violation class is listed, therefore, amended §180.7 changes "administrative violation" to "violation."

Language has been added to §180.7 that helps the commission establish the existence of a willful violation. This language is consistent with the definition in §180.1.

Based upon public comment, the rule was modified to clarify that commission notification of noncompliance may establish willfulness in two ways. As proposed, if a violator remains in noncompliance 7 or more days after being notified by the commission of the noncompliance the continued noncompliance may be deemed willful. However the rule now also allows repeated conduct after being previously notified of noncompliance to be deemed willful. The proposed definition of willful covered this situation but neither the definition nor §180.7 were clear enough on this point. This situation is important because the prior notification establishes that the violator knows that behaving in a given way is a violation and therefore the commission has an expectation that the violator will take steps to prevent such violations from occurring in the future. If subsequent violations are committed the commission can assume that the violator failed to take steps to ensure that the violations were not repeated and therefore acted with willful negligence.

New §180.20 - Application for Registration/Commission Approved Doctor List

HB-2600 mandates that the commission develop a list of doctors who are licensed in this state and approved to provide health care under the Statute. HB-2600 also provides that the commission establish by rule requirements regarding application and registration, training, and impairment rating testing. The requirements apply to doctors who provide health care services as treating doctors, referral doctors, consulting doctors, required medical exam doctors, peer review doctors, utilization review doctors, designated doctors, and doctors on the MQRP.

Previously, the only requirement to be included on the ADL was that the doctor be licensed in this state or licensed in another jurisdiction and request inclusion. ADL inclusion was automatic. Now, as a result of HB-2600, ADL inclusion is clearly a privilege and the commission has discretion regarding approving doctors for inclusion and has the option of placing restrictions on a doctor as a condition of inclusion on the ADL.

HB-2600 requires the commission to set a date (not to exceed 18 months from the date of adoption) after which doctors must have complied with the new registration and training requirements imposed by the rules. This date has been set as September 1, 2003. The rule originally proposed making this date August 1, 2003 but this date was changed for two reasons. First, the adoption date of the rules was delayed by one month and second, because September 1, 2003 is the beginning of a state biennium and the commission realized that the Legislature might make additional changes that could affect the ADL. Lining these rules up with September 1, 2003 will make it easier to coordinate implementation should the statute be revised.

When originally proposed, the commission planned to use the rule to spell out the new requirements that go into effect approximately eighteen months after the rule was adopted. Prior to the effective date, the commission intended to use the remaining provisions of §126.8 to govern the ADL. However, based upon review of comments the commission realized that this was less user-friendly - requiring review of two different rules that are many chapters apart to understand the ADL. Therefore, the commission modified the proposed rule to copy provisions from §126.8 into it. Therefore, §180.20 now addresses ADL membership both before and after September 1, 2003. The commission does not believe there are conflicts between §126.8 and the provisions from §126.8 that were copied into §180.20. However, should such a conflict appear to exist, the commission intends §180.20 to be the ruling rule as it is better integrated with the rest of the rules implementing HB-2600.

Subsection (a) provides that a doctor providing medical treatment to an employee be on the ADL except in the case of an emergency or for immediate post-injury medical care. This is effective immediately. A more significant change is that on or after September 1, 2003 all doctors (not just treating doctors) are required to be on the ADL if they want to participate in the system (other than with an exception granted by the commission).

As provided in the definition, immediate post-injury care is care that is provided on the date the employee first seeks medical attention for the workers' compensation injury or illness. The intent is not that this care be tied to a specific time-frame because the employee might not realize they need medical attention immediately following the injury or might not realize they have a work-related illness. However, once the employee has initially sought medical attention, the employee must receive all future care from a doctor on the ADL. The definition is different than the language initially proposed because, as proposed, the rule would have allowed a patient to get all their care from a doctor not on the list as long as it was the same doctor who the employee first saw for the injury and this was not the intent.

Subsection (b) explains the transition from the Pre-September 1, 2003 ADL to the Post-September 1, 2003 ADL. For the sake of simplicity some people have come to refer to the Pre-September 1, 2003 ADL as the "old ADL" and the Post-September 1, 2003 ADL as the "new ADL". This is not true. There is but one ADL. September 1, 2003 is merely the date on which the requirements for inclusion to the ADL change. It also explains that doctors licensed in other jurisdictions may apply to be included on the ADL in the same manner that doctors licensed in Texas are required to.

Subsection (c) specifies the information required in an application for inclusion on the ADL. Much of this is information was previously required in an ADL application, but was not addressed by rule. With the additional discretion that HB-2600 provides the commission, additional information is needed for evaluation and tracking on and after September 1, 2003. These additional items include: the certificate of training indicating the level of training completed (necessary to establish the doctor's certification level under §180.23), impairment rating test score (if applicable), verification of licensure, disciplinary actions or practice restrictions (which can serve as grounds for denial of a request to be put on the ADL or for a restricted approval), and a signed affidavit of sponsorship by a doctor on the ADL agreeing to supervise a doctor licensed in another jurisdiction, performing peer review or utilization review of medical services for Texas workers' compensation (HB-2600 requires doctors licensed out of state and who wish to perform work for a utilization review agent (URA) to do so under the supervision of a doctor licensed in this state).

The commission needs the ability to quickly contact doctors on the ADL to provide important information on a timely basis. Therefore, subsection (c) provides that doctors are required to provide the commission with an email address through which the commission can contact them. As part of the commission's 2000 Customer Satisfaction Survey (published May 26, 2000), the commission asked respondents to indicate whether they had internet access. 68.3% of the health care providers responded that they did have such access. Given that the date that doctors would be required to meet the new ADL requirements is September 1, 2003 (more than 3 years after the original survey was conducted) and that Internet access is becoming more and more common throughout business and society, it is reasonable to assume that an even greater proportion of doctors participating in the system on a regular basis will already have Internet access. Further 18 months should be sufficient time for those providers who are not already using email to set up internet access.

The commission modified the subsection to ensure that it is clear that the application described under the subsection is the one required to remain on the ADL on or after September 1, 2003. A doctor can be added to the ADL using the old process prior to September 1, 2003 but must file the application required by this subsection prior to September 1, 2003 or the doctor will be deleted from the ADL. This change was made for clarification when provisions from §126.8 were included in §180.20.

The commission also modified the subsection to specify that the application to the ADL shall require the doctor to agree to comply with the statute and rules, including but not limited to, cooperating with commission monitoring and review efforts such as audits by the commission and paying audit bills when required by statute or rule. Willful failure to comply with an agreement is grounds for recommendation for deletion under §180.26.

One of the goals of HB-2600 is to ensure that doctors on the ADL comply with the statute and rules and provide quality care at reasonable cost. To meet these goals, HB-2600 gave the commission additional authority to review the compliance and performance of doctors (particularly using the Medical Advisor and members of the MQRP). Therefore, it is reasonable that doctors be required to agree to cooperate with monitoring and review efforts such as audits. HB-2600 clearly intends the commission to review the practices of doctors who may be operating outside of acceptable standards. To allow doctors to be on the ADL who refuse to cooperate with monitoring efforts (thus making it difficult or impossible for the commission to verify that the doctor is or is not providing quality care and generally acting in compliance with the statute and rules) would defeat the purpose of the law.

Regarding paying for audit bills, Texas Labor Code §413.020 requires the commission to establish procedures to enable the commission to charge a health care provider who exceeds a fee or utilization guideline adopted by the commission. Rule 134.900 (relating to Medical Benefit Review and Audit) requires the commission to charge for an audit or review of a health care provider. Thus, doctors are expected to pay audit fees in some situations and it is not unreasonable to require them to agree to do so as a condition of being on the ADL.

Subsection (d) states that the commission may utilize the MQRP set-up by HB-2600 for evaluating ADL applications and making recommendations to the Medical Advisor regarding approval, approval with restrictions, or denial of admission to the ADL. The language regarding recommendations to approve with restrictions is a clarification to the proposal. The original reference to recommendations "to approve" was intended to cover approval with restrictions but was modified to be more explicit.

Subsection (e) gives the reasons a doctor shall be denied admission to the ADL or admitted with conditions or restrictions, as provided by HB-2600. The proposed rule specified that the commission "may" take such action. However, this language was intended to say that the commission was authorized to take such action. It was not meant to be discretionary in as much as many of the reasons for taking the action were automatic disqualifiers for inclusion on the list. Therefore the commission clarified the subsection by changing it from "may" to "shall."

The reasons that a doctor shall be denied admission or shall be admitted with restrictions include failing to submit a complete application or complete the required training, having relevant practice restrictions or other activities which warrant denial or restriction such as grounds that would require a recommendation of deletion or sanction of the doctor under §180.26. The clear intent of much of the language in Article 1 of HB-2600 is for the commission to better regulate the ADL and prevent it from being populated with doctors whose patterns of practice are outside of professionally recognized standards of care. Therefore, the proposed rule was changed from "may" to "shall." In addition, the language in the rule was modified to mirror §180.26 more closely. Section 180.26 requires the Medical Advisor to recommend deletion or sanction under some conditions. The language in subsection (e) was changed to match this.

Subsection (f) states that the commission shall notify a doctor of approval or denial of the doctor's application to the ADL and reasons for denial or admission with restrictions. The notification of a denial and admissions with restrictions shall be by verifiable means. The subsection gives the doctor 14 days after receiving a denial from the commission to respond to the reasons for denial/restricted admission. As in other rules, the term "verifiable means" is used to allow the commission the flexibility to use new and less expensive means of sending notices in such a way the can confirm delivery other than using certified mail.

When proposed, the rule only provided for a response to a denial and not an admission with restrictions. The commission modified this to ensure that the doctor has the opportunity to respond to the reasons that the commission had for the action in case the commission was mistaken or did not have complete information. It might be that, after initially deciding that a doctor should be admitted with restrictions, the commission decides that it is appropriate to allow an unrestricted or less restricted admission.

In addition, the commission provided additional detail regarding the process for reviewing and responding to ADL denials or restrictions. The proposed rule did not clearly indicate that the commission would review the doctor's response and might change its mind. The subsection is now much clearer in this regard and also specifies that if the final decision is still not an unrestricted approval, the commission shall explain its reason(s) to the doctor so that the doctor will know why his rebuttal did not convince the commission that it was appropriate to allow an unrestricted admission (or possibly even a restricted admission) to the ADL.

Another change from the proposal was the addition of language that made it clear that if the commission inadvertently admits a doctor to the ADL that should have been denied admission or should have only been approved with restrictions, the commission can review or further review the doctor and take action at a later date. Admission to the ADL does not forgive past transgressions. Given that the commission may be reviewing tens of thousands of ADL applications in a short period of time (since the statute did not provide for a means to space the applications equally over a period of time), it is likely that doctors may be inappropriately added to the ADL.

As noted, the requirements relating to the new ADL are effective September 1, 2003. Therefore, subsection (g) provides for the deletion from the ADL of all doctors previously on the ADL upon the earlier of either the date the doctor applies for and is denied approval or September 1, 2003 (if the doctor failed to register and be approved prior to that date).

Subsection (h) was changed from the proposal. As proposed, subsection (h) was intended to ensure that doctors who are not regular participants in the system (whether in-state doctors or out-of-state doctors) do not lose their right to reimbursement without having the opportunity to be admitted to the ADL (since these doctors may not be aware of the ADL requirements). However, based upon comments, the commission realized that there was a potential for abuse if carriers are not allowed to withhold payment on bills of doctors who are not on the ADL and the subsection has been rewritten.

Subsection (h) now requires carriers to withhold reimbursement to doctors not on the ADL except when the health care provided was emergency or immediate post-injury medical care or the doctor receives exception from the commission. If the doctor has not been deleted or suspended from the ADL and has not had his application for admission to the ADL rejected, the carrier will be required to process the medical bills in accordance with chapter 133 and determine whether or not the medical bills will be paid once the doctor is added to the ADL. The carrier's explanation of benefits (EOB) will include an explanation that the payment will be made if the commission grants the doctor an ADL exception for that claim. This will allow the carrier the full 45 days to review the medical bill for reasonableness and medical necessity and at the same time, not require a doctor to have to go through the 45-day delay twice. Carriers will have 14 days from receiving documentation of the approved exception to pay all bills previously processed on the approved claim but not paid due to the ADL status question.

In some cases, doctors will be able to get payment for services that were provided prior to being admitted to the ADL. However, because the delay in payment will be caused by the doctor's failure to register for the ADL and not any fault of the carrier, the carrier will not be required to pay interest on the payment unless the carrier took more than the allowable time to initially review the bills or failed to timely pay the benefits when finally notified that the doctor was eligible for payment due to timely ADL approval or ADL exception.

After September 1, 2003, these exceptions are not likely to be granted to a doctor more than once as the intent of them is to allow a doctor who was not aware of the ADL requirements to receive reimbursement when they provide health care in good faith. The commission intends to track these exceptions and deny them when it appears that a doctor was already granted an exception and had a reasonable opportunity to be added to the ADL.

Doctors who were not entitled to payment because they were deleted or suspended from the list or had their application to be on the ADL rejected by the commission will not be eligible for retroactive payment. They will only be eligible for payment for services provided on or after the date the doctor was reinstated/added to the ADL.

Doctors who are on the ADL at the time they provide health care shall not be required to provide such documentation to the carrier in order to secure payment. Carriers shall have access to the ADL online and will be expected to use that information. Requiring doctors to submit documentation of ADL status with each medical bill or even an initial bill is unnecessary paperwork that runs contrary to the intent of HB2511 passed by the 76th Texas Legislature.

The commission has traditionally made information relating to actions it has taken regarding the ADL available to the public. Previous §126.8(c) required the commission to provide the names of doctors deleted, reinstated or added to the ADL from other jurisdictions. Subsection (i) requires the commission to provide similar information via its website. This will help ensure ready access to the ADL and to information of the commission's activities regarding the list. The subsection was modified from the proposed language slightly for clarification and to also require the commission to provide information on doctors whose applications to the ADL were denied and doctors who were suspended from the ADL. This information is necessary for carriers to have to ensure they know how to process medical bills under subsection (h) when the doctor was not on the ADL at the time care was provided.

Subsection (j) requires a doctor on the ADL to provide the commission with any change in information provided in the doctor's application, within 30 days of the change in information. This is necessary for the maintenance of an accurate ADL database. The commission previously had great difficulty contacting doctors on the ADL because there was no requirement for doctors to provide the commission with accurate contact information. This often resulted in mail being returned to the commission and necessitated that staff manually attempt to verify information. Further, the commission envisions eventually providing a system whereby injured employees looking for a doctor in their area will be able to get a list of doctors within a given radius of their home or work and who are on the ADL. Such a system will require accurate information to be effective.

New §180.21 - Commission Designated Doctor List

Section 180.21 sets out requirements for a doctor applying to become a designated doctor for the commission and replaces §126.10. These requirements are general to all designated doctors regardless of the purpose of the examination. Requirements for specific designated doctor examinations will be addressed in individual rules addressing the specific purpose of the exam.

Subsection (a) maintains the requirement that in order to serve as a designated doctor the doctor must be on the Designated Doctor List (DDL).

Subsection (b) includes the requirements for being admitted to the DDL prior to September 1, 2003. These requirements are essentially the same as those previously in §126.10 with the clarification by definition that an "active practice" is at least 20 hours per week of treating patients. This definition was not previously in §126.10 but was taken from the Texas Insurance Code and is the standard that the commission has used previously.

Subsection (c) addresses the same requirements in subsection (b) for being approved to be on and remain on the DDL after September 1, 2003, but changes the three years of active practice to one year, and adds that the doctor must have an ADL Level 2 Certification under §180.23. The reason for the change from 3 years of active practice to 1 year is based upon the fact that 1 year of active practice is generally enough to allow for board certification. In addition, based upon public comment, the subsection provides for an alternative to having an active practice that lets the doctor take supplemental training instead of maintaining an active practice. The other main change from the proposal language was to incorporate the concept of "full authorization" to evaluate maximum medical improvement (MMI) and permanent whole body impairment) from §180.23. The concept of "full authorization" was added to §180.23 based upon public comment and basically makes MMI/impairment evaluation optional (since it requires training and testing). Doctors can opt not to take the training/testing but then they are not fully authorized. Since designated doctors are used to evaluate MMI and impairment more often than they are used for anything else, designated doctors will be required to have full authorization. The concept is explained more fully in the section of this preamble focusing on §180.23 and in the responses to comments.

Subsection (d) explains that a doctor who is on the current DDL and fails to apply in accordance with this section, or applies but is not approved under subsections (f) through (h) of this section, shall be deleted from the DDL on the earlier of the date of the denial, or September 1, 2003. This is largely the same as the requirement in §180.20(i).

Subsection (e) lists the information required in an application to the DDL, which is general contact information, training certificate, Impairment Rating Skills Examination score, license verification, information on the doctor's training and experience in various types of health care and injury areas, and any disciplinary actions or practice restrictions. The requirements under this subsection are similar to those in §180.20(c). The requirement to provide information on the doctor's training and experience was added to the rule based upon development of the commission's method for selecting designated doctors. HB-2600 made significant changes to the way a designated doctor is selected when one is needed to evaluate MMI and/or permanent impairment. These changes were implemented in rule §130.5. The change in this subsection supports the implementation of that rule.

Subsection (f) states that the commission may utilize the Medical Quality Review Panel to evaluate the DDL applications and make recommendations to the Medical Advisor regarding approval or denial of an application. This basically matches the provisions in §180.20(d).

Subsection (g) lists the reasons a doctor shall be denied admission to the DDL. These reasons are nearly identical to those in §180.20 with a few exceptions. For example, a doctor could be denied for not being on the ADL or for having ADL restrictions. Another example is that a doctor could be denied for having failed to pass the required examination. As was the case in the corresponding section of §180.20, the proposed rule specified that the commission "may" take such action. However, this language was intended to say that the commission was authorized to take such action. It was not meant to be discretionary in as much as many of the reasons for taking the action were automatic disqualifiers for inclusion on the list. Therefore, subsection was clarified by changing it from "may" to "shall" as it did in §180.20. In addition, the language in the rule was modified to mirror §180.26 more closely. Section 180.26 requires the Medical Advisor to recommend deletion or sanction under some conditions. The language in subsection (g) was changed to match this.

Subsection (h) requires the commission to notify a doctor of the approval or denial of the application to the DDL and reasons for denial and that the commission will notify the doctor by verifiable means of a denial and gives the doctor 14 days to respond to the reasons for denial. This offers the doctor the opportunity to respond to the commission's reasons for not approving the doctor. The response will be reviewed and, if it appears that the commission's initial recommendation to deny the application was in error, the commission will notify the doctor of the approval. Otherwise, the commission will provide a response to the doctor's rebuttal and explain why the denial is being upheld. The commission changed the subsection to provide additional detail regarding this process. The proposed rule did not clearly indicate that the commission would review the doctor's response and might change its mind. The subsection is now much clearer in this regard and also specifies that if the final decision is still a denial not an unrestricted approval, the commission shall explain its reason(s) to the doctor so that the doctor will know why his rebuttal did not convince the commission that it was appropriate admit the doctor to the DDL.

Like §180.21(g), §180.21(h) has a corresponding subsection in §180.20 (subsection (f) in this case); and as it did in §180.20(f), the commission has modified the language in §180.21(h) to make it clear that if the commission inadvertently admits a doctor to the DDL that should have been denied admission, the commission can later review or further review the doctor and take action at a later date. Admission to the DDL does not forgive past transgressions.

Subsection (i) allows the commission to waive any of the requirements stated in this section for an out-of-state doctor to serve as a designated doctor in order to facilitate the timely resolution of a dispute. This concept is taken from previous §126.10 and is supported by HB-2600, which allows the commission to waive requirements to ensure access to care and evaluations (particularly for out-of-state cases).

Subsection (j) requires a doctor on the DDL to provide the commission with any change in information provided in the doctor's application, within 30 days of the change in information. This is necessary for the maintenance of an accurate DDL database and for many of the same reasons that it is required of doctors on the ADL. The statute requires the commission to schedule designated doctor examinations in a very tight time frame. In addition, the commission schedules designated doctor appointments, in part, based upon geographic location. Therefore it is critical that the commission have updated information on the doctor's examination locations and the means of contacting the doctor.

Subsection (k) lays out grounds that will result in the commission suspending or deleting a doctor from the DDL. Previously these requirements were contained in §126.10(l). Section 180.26 lays out the grounds for deletion from the ADL or imposing other sanctions on a doctor. Rather than repeating those grounds in this rule, the grounds in §180.26 are referenced here in this rule and added to the list of DDL-specific grounds. The additional grounds are largely similar to the grounds previously listed in §126.10(l).

The proposed rule specified that the commission "may" take such action. Based upon public comment the commission changed this from "may" to "shall". When proposed the list of items included several more minor offences. This was why the commission proposed the rule using the "may" standard. The intent was that the commission would evaluate the behavior and determine whether it warranted suspension or deletion. In changing the standard from "may" to "shall" the subsection was also tightened up to focus only on the more serious conduct so that if the commission was going to be required to delete or suspend the doctor it would only be for conduct that the commission believes would always be serious enough to warrant such action. For example, the commission has modified the subsection to focus more on significant violations such as those that are either willful or parts of patterns of practice.

Subsection (l) explains that notification and appeal of a sanction is governed by §180.27 of this title (relating to Sanctions Process/Appeals/Restoration/Reinstatement). This represents a change from the previous process which did not provide for an appeal to the State Office of Administrative Hearings (SOAH). The reason for the change is that HB-2600 lists deletion from the DDL as a sanction that the commission can impose after the opportunity for a hearing is given. This is a statutory change and thus an opportunity to appeal to SOAH is now provided to designated doctors being suspended or removed from the list.

Subsection (l) also provides that suspension, deletion, or other sanction relating to the DDL shall be in effect during the pendency of any appeal. Given the critical nature of the designated doctor's role and the fact that the doctor's opinion generally has presumptive weight on the matter that the doctor was requested to review, the commission believes that it is not appropriate for a doctor to serve as a designated doctor while questions exist regarding the doctor's eligibility to be on the list.

Subsection (m) states that the commission shall make available on its website information regarding the names of doctors on the DDL, and the names of doctors deleted, suspended, or readmitted, and added from other jurisdictions. This will help ensure ready access to the DDL and to information of the commission's activities regarding the list.

Subsection (n) was added to the rule because the proposed rule did not specify where a newly added or restored doctor is placed on the DDL for selection purposes. This subsection provides that when a doctor is added to the DDL for the first time or readmitted to the DDL after a suspension or deletion, the doctor shall be placed at the bottom of the list for rotation purposes.

Subsection (o) was added to the rule because the proposed rule did not include definitions for three key terms used in the rule. These definitions were contained in rule §126.10 which §180.21 replaces but when §180.21 was proposed, the definitions were inadvertently omitted. These definitions were for "disqualifying association," "party," and "self-refer." The definitions added are nearly identical to those previously contained in §126.10. The main change was to clarify the definition of "disqualifying association" to include situations where the doctor has a financial arrangement that would require disclosure under §180.24. In addition, the commission added a definition for "active practice" to simplify the structure of the rule, however, this definition matches the description of active practice in the proposed rule.

New §180.22 - Health Care Provider Roles and Responsibilities

HB-2600 requires that all doctors participating in the Texas workers' compensation system be on the ADL, with but a few exceptions. Section 180.22 describes different roles of doctors participating in the system and the responsibilities of those roles. Previously the commission has the responsibilities of several doctor roles explicitly described by rule (treating doctors in §133.3 and consulting and referral doctors in §133.4). Other doctors, however, are described more via process rules that describe how they are utilized. Although these other rules are important, the commission believes that having one rule which lays out all the roles and responsibilities will help ensure understanding of them. In addition, HB-2600 formally recognizes peer review and utilization review doctors and Medical Quality Review Panel doctors. The rule also applies to ancillary health care providers not licensed as doctors.

Subsection (a) of this section states the primary responsibility of all health care providers (HCPs) in the system is to provide reasonable and necessary health care that cures or relieves the effects naturally resulting from the compensable injury, promotes recovery and/or enhances the employee's ability to return to work. These responsibilities match many of the original goals of the Texas Workers' Compensation Act and subsequent legislation. The proposed language specified that health care was to meet any of the three items, however it was changed from "or" to "and/or" to emphasize the care should meet more than one of the three items to the extent possible.

Subsection (b) expresses that HCPs must comply with all applicable statutes and rules, including the reporting of information, disclosure of financial interests, evaluating impartially, and billing correctly. Though several responsibilities are listed, the list is far from inclusive. The statutes and rules contain other individual requirements and prohibitions relating to HCPs with which they are expected to comply.

Subsection (c) explains that the treating doctor is the doctor primarily responsible for the management of the employee's health care related to the compensable injury. These responsibilities were previously found in §133.3, with the additions of communicating with the employee, employer, and carrier about the employee's ability to return to work with or without restrictions, and reporting work release data, cost and utilization data, and patient satisfaction data required by HB-2600 to be captured by the commission. Not included in this subsection is the requirement of the treating doctor to certify maximum medical improvement (MMI) and assign an impairment rating. This requirement is addressed in chapter 130 (relating to Benefits-Impairment and Supplemental Income Benefits), which regulates the impairment rating process. The subsection is largely as it was proposed with minor clarifications and the addition of the requirement that doctors discuss ability to return to work and work restrictions with the employee and the carrier.

Subsection (d) incorporates the description of the consulting doctor responsibilities from §133.4 (relating to Consulting and Referral Doctors) and clarifies them. Although peer review, utilization review, and required medical examination (RME) doctors provide evaluations that are similar to consulting doctors, their responsibilities are listed separately because their roles are slightly different. The subsection was changed from the proposal to reference the narrative report required by §133.104 (relating to Consultant Medical Reports) and specify who to file it with; to require that if the consulting doctor makes a referral with the treating doctor's approval, the doctor to whom the referral is made must be aware of the treating doctor's name and contact information to ensure that the treating doctor is able to continue to coordinate care on the claim as required by statute; and to clarify the subsection.

Subsection (e) incorporates the description of the referral doctor's responsibilities from §133.4. The subsection was changed from the proposal to require that if the referral doctor makes a referral with the treating doctor's approval, the doctor to whom this referral must be made is aware of the treating doctor's name and contact information to ensure that the treating doctor is able to continue to coordinate care on the claim as required by statute.

Subsection (f) addresses the responsibilities of the RME doctor. Previously, these were not addressed by rule, but were generally recognized by the commission and other system participants. The responsibilities for the RME doctor are the same as the responsibilities for the consulting doctor addressed in subsection (e) of this section but RME doctors perform examinations at the request of the carrier or the commission. In addition, employees are required to attend RMEs whether by order of the commission or agreement with the carrier made in accordance with commission rule.

The subsection has two changes from the proposal. The first is the same as the change made to subsections (d) and (e) relating to referrals and communicating the treating doctor's name and contact information. The other was a simple clarification to show that RME doctors are supposed to provide unbiased evaluations of MMI and permanent impairment.

Subsection (g) addresses doctors serving in a peer or utilization review capacity for carriers. The proposed rule provided for separate subsections for each role but based upon comment, the two were combined into subsection (g) and proposed subsection (h) was deleted. The role of the peer review doctor is to evaluate health care services and patient care, including the qualifications of professional health care practitioners providing those services and care. The utilization review doctor reviews medical care either prospectively, concurrently, or retrospectively for medical necessity. Providing these descriptions by rule is consistent with the provisions in HB-2600. Peer and utilization reviews are generally conducted without benefit of an examination of the employee but rather are reviews of medical reports, other chart information and other medical documentation submitted with a medical bill or with a request for preauthorization, concurrent review, or voluntary certification of health care.

Subsection (h) (proposed as subsection (i)) describes the role and responsibilities of the designated doctor. The section incorporates the basic responsibilities in previous §126.10 and applies to a designated doctor regardless of the purpose of the examination being performed. In addition to these general responsibilities, a designated doctor may have additional responsibilities associated with the specific examination being performed. These responsibilities are addressed in the specific rules associated with the various types of examinations. The subsection as originally proposed included the qualifications to serve as a designated doctor but this language was replaced with a reference to §180.21 and other rules relating to designated doctors as §180.22 was not the appropriate place to present them and they were duplicative of these other rules.

Subsection (i) (proposed as subsection (j)) provides an overview regarding members of the MQRP, which is a new role provided by HB-2600. As was the case when proposed, the subsection explains that eligibilities, terms, responsibilities, prohibitions, and terms relating to MQRP membership are prescribed by commission contract. The adopted subsection is broader than the proposed section in that it opens membership up to all types of providers rather than just doctors. This change was made based upon public comment that pointed out that the statute provides that the MQRP can include all kinds of providers. The subsection still states that the MQRP members are chosen by the commission's Medical Advisor and must meet the performance standards specified by contract to be eligible for selection. The rule no longer specifies the certification level required for membership but does require that a member who is a doctor must be on the ADL.

New §180.23 - Commission Required Training for Doctors/Certification Levels

HB-2600 mandates that the commission establish training requirements for doctors and health care providers providing services under this title. With HB-2600, the commission's authority is expanded and, through §180.23, training is being mandated for all doctors.

However, the commission recognizes, and HB-2600 requires, that not all doctors need to have the same level of training. For example, there are doctors who are involved in a few cases per year and for whom the requirement to complete the normal workers' compensation doctor training (designed to educate doctors who participate in the system on a regular basis) would be burdensome when compared to their actual involvement. HB-2600 required the commission to modify its training and registration requirements for doctors who infrequently provide care to injured employees, doctors who wish to primarily serve in a peer or utilization review capacity for carriers, and doctors participating in a regional network established under Texas Labor Code §408.0221.

Subsection (a) is basically an overview for the rule. It was simplified from the proposed language because the various certification levels were greatly simplified in subsection (c) and the proposed language from subsection (a) was no longer needed.

Subsection (b) allows the commission to grant exceptions to let a doctor either avoid some training and registration requirements or to perform functions not normally permitted by the doctor's certification level. The reason for this is language in HB-2600 that authorizes such exceptions in order to ensure access to health care and evaluations of the employee's health care and income benefits eligibility. The proposed rule did not make it clear that the commission could grant exceptions to training and registration requirements though the statute did. Therefore this was clarified in the rule. In addition, the rule now provides that if the commission approves such an exception, the commission shall provide a copy of the approval to the carrier.

Subsection (c) was rewritten. The proposed subsection set up three main levels of certification (Levels 1 to 3) and one auxiliary certification level (Level X - for eXception). Based upon public comments the commission revisited the proposed structure and replaced it with one that was more simple and streamlined including only 2 certification levels.

Level 1 Certification allows a doctor to: infrequently provide health care to injured employees (providing care, other than emergency or immediate post-injury medical care, to 18 Texas workers' compensation claimants or fewer per calendar year); perform utilization review or peer review functions for a carrier; and/or participate in a regional network established under Texas Labor Code §408.0221.

Level 2 Certification allows a doctor to serve in any role authorized in the Texas workers' compensation system with the exception of serving as a designated doctor unless the doctor is also on the designated doctor list which is governed by §180.21 of this title (relating to the Commission Designated Doctor List).

Full authorization to evaluate MMI/impairment is now separate from the doctor's certification level and optional. Doctors who do not choose to seek full authorization will not be permitted to certify MMI or assign an impairment rating in the case where the employee has permanent impairment as a result of the compensability. When faced with such a situation, an unauthorized doctor will either have to receive permission by exception from the commission (which will be reserved primarily for cases where the employee is living well out of state) or refer the employee to a doctor who is fully authorized to perform such evaluations in the workers' compensation system. These provisions are consistent with recent amendments to rules in chapter 130 (relating to Benefits - Impairment and Supplemental Income Benefits).

Given the importance that impairment ratings play in the system and the fact that they generally do not occur throughout the claim, the rule requires doctors seeking full authorization to evaluate MMI/impairment to successfully complete commission-prescribed training and testing. This training/testing is the same that designated doctors are required to complete. Training all doctors who evaluate MMI/impairment to the same level of competence is expected to result in more accurate certifications and ratings which should reduce disputes and costs.

Among the advantages these changes offer are a simplified structure and more flexibility for doctors regarding the training they need to obtain. The proposed rule required doctors who wished to be treating doctors to take impairment rating training even though they might not have wanted to be responsible for assigning impairment ratings. Under the adopted rule, these doctors can concentrate their practices on the employee's clinical recovery and return to work and make referrals to another doctor for assignment of an impairment rating should the injury result in permanent impairment.

Some of the training requirements for designated doctors (other than the MMI/IR training) were moved §180.20 (where they were proposed) to §180.21 which regulates the DDL. This places designated doctor training requirements with requirements for supplemental training for doctors who do not have active practices. However, §180.21 refers back to the §180.23(i) which describes how doctors obtain full authorization to evaluate MMI and impairment as a part of the training requirements to be a designated doctor on or after September 1, 2003.

Subsection (d) requires that doctors must receive training from the commission or a commission-approved sponsor (vendor). The proposed rule did not provide for such training to be obtainable from the commission (except for the now defunct Level X Certification). Now standard ADL training will be obtainable from the commission through various self-study methods, while training for full authorization relating to MMI/impairment evaluation will have to be obtained from a commission-approved trainer.

Subsection (e) requires a person or organization that seeks to be approved to provide training under this rule to apply for commission approval in the form and manner prescribed by the commission.

Subsection (f) explains that the commission-approved trainer shall file or provide registration and training information for each doctor trained by the vendor in the form and manner prescribed by the commission. The commission's original intent was that a doctor would attend the training and provide the commission-approved trainer with their application for registration and financial disclosure information. This information would then be recorded in an electronic file that is transmitted to the commission for processing along with the paper copies for commission records. The arrangement was expected to be a time-saving measure in processing thousands of ADL applications by September 1, 2003. However, the commission has modified its implementation plans as a result of the changes in the training to allow basic training to be provided in a self-study format.

Now the commission is planning to develop an interactive web-form as part of the tier one implementation of the Business Process Improvement project. Doctors will be able to provide information directly to the commission through this system and be able to revisit it over time to provide updates. The current timeline has implementation of this system planned for January of 2003. Doctors will be able to provide the commission with basic information and obtain their training as early as summer 2002 even though the new online ADL application system will not be ready yet. The commission will then track the training and notify doctors by email when the new online system is available and doctors will then complete the registration process. By obtaining the information directly from the doctors, the commission will be able to concentrate its efforts on reviewing the applications rather than data-entering them.

Subsection (g)(1) prohibits a doctor not licensed in this state from performing utilization review and/or peer review for an carrier or its agent, unless directed by a doctor who: is licensed in this state, is on the ADL, has a Level 2 Certification, and agrees to direct the doctor's reviews. This requirement comes from HB-2600. The proposed rule required the supervising doctor to have Level 3 Certification (which was the highest level possible). However commenters pointed out this level was not appropriate because it would have required the supervising doctor to receive training in evaluating MMI and impairment which was not really relevant to peer review and utilization review functions. Therefore the commission modified the requirement. The reason that the commission required Level 2 Certification is that supervising doctors will be responsible for the actions of multiple doctors and thus should be more thoroughly trained than the doctors they are supervising (who have to have Level 1 Certification).

Subsection (g)(2) states that the commission may restrict or reduce a doctor's privileges or authorizations as provided by the statute or commission rules. Section 180.26 sets out the various types of sanctions the commission may impose on a doctor. This subsection is designed to ensure that the two rules are not read in such a way as to limit the commission's ability to impose sanctions that reduce a doctor's certification level or authorization.

Subsection (h) was added to the rule when subsection (c) was replaced. This subsection outlines the type of training that each level of certification requires and how often it must be repeated. The subsection provides that doctors seeking Level 2 Certification are to complete the "Doctor Training Module" prior to being added to the ADL and then once every four years thereafter. Doctors seeking Level 1 Certification are required to complete the "Limited Participation Doctor Training Module" prior to being added to the ADL and then once every two years thereafter.

Training will cover basic requirements of the Texas workers' compensation system and focus on return to work, efficient utilization of care, entitlement to benefits, maximum medical improvement (MMI), and the determination of the existence of permanent impairment. The key difference between the "Doctor Training Module" and the "Limited Participation Doctor Training Module" is the intensity and depth of material, not the content itself.

Level 1 Certification is intended to be for doctors who do not fully participate in the system on a regular basis. These doctors are likely to need refresher courses in Texas workers' compensation issues on a more frequent basis than doctors with Level 2 Certification. Refresher courses for both levels of certification will be designed to focus on key issues and changes that have occurred in the system since the doctor previously completed the training.

Subsection (i) relates to authorization to evaluate MMI and permanent impairment. As previously discussed, doctors will not be required to seek full authorization under this section. However, unless they obtain such authorization (through training/testing or by exception granted by the commission) they will not be permitted to certify MMI or assign an impairment rating in those cases where the employee has permanent impairment. As noted, on or after September 1, 2003, full authorization under this subsection is one of the minimal requirements to be on the DDL.

New §180.24 - Financial Disclosure

This new rule is adopted to comply with statutory mandates in the Texas Labor Code. Prior to the 77th Texas Legislative Session, 2001, §413.041 of the Texas Labor Code required the commission to adopt rules mandating an annual disclosure requirement by a health care provider who refers an employee to another health care provider in which the referring provider has more than a five percent financial interest. Disclosure to the commission and insurance carriers was required. Previously, this financial disclosure was governed by §134.100 and §134.101 of this title (relating to Provider Disclosure of Financial Interest, Submission to the Commission and Provider Disclosure of Financial Interest, Submission to the Carrier, respectively).

HB-2600 amended §413.041. The revised statute requires each health care practitioner to disclose to the commission the identity of any health care provider in which the health care practitioner, or the health care provider that employs the doctor, has a financial interest. It further requires the health care practitioner to make the disclosure in the manner provided by commission rule. The revised statute also provides that the commission, by rule, require that a doctor disclose financial interests in other health care providers as a condition of registration for the approved doctor list established under §408.023, and to define "financial interest" for purposes of the subsection as provided by analogous federal regulations. The section also provides an administrative penalty for failure to disclose the interest and includes forfeiture of the right to reimbursement for services rendered during the period of noncompliance.

Section 180.24 replaces §§134.100 and §134.101 with a single rule.

Subsection (a) sets forth the definitions relevant to the section. The subsection defines "financial interest" to include both "ownership interest" and "compensation arrangement" and is consistent with the definition of "financial relationship" found in Title 42, United States Code §1395nn. The interest may be either a direct or indirect ownership or direct or indirect compensation arrangement of the health care practitioner, the health care provider who employs the health care practitioner, or an interest of an immediate family member. The term "immediate family member" is based on the definition found in 42 CFR 411.351 (relating to physician referrals for Medicare services).

This subsection was changed from the proposal in that the proposed rule included a number of exceptions to the financial disclosure requirements. However, in reviewing comments and the rule, the commission realized that the proposal would have resulted in the commission not being aware of many relevant financial interests that practitioners might have. In addition, it would have created many questions as to whether a given arrangement required disclosure. As a result, the commission modified the rule so that it requires disclosure of all financial interests as defined by rule. This will eliminate questions that could otherwise necessitate obtaining professional advice from an attorney familiar with federal standards. This will also allow the commission to better monitor referral patterns. The federal exceptions may exist because federal regulators had not established that such financial arrangements did not lead to abuse in the Medicare system but that may not be the case in the workers' compensation system. Therefore, not allowing exceptions to reporting requirements will ensure that the commission can better monitor referrals to look for patterns of abuse.

Subsection (b) sets out requirements for financial disclosure reporting to the commission.

Subsection (b)(1) requires that a health care practitioner report any financial interest to the commission when the health care practitioner makes a referral to another health care provider in which the practitioner has a financial interest unless the practitioner has previously made the disclosure. The disclosure is required within 30 days of making the referral. The proposed rule required annual disclosure but was changed as being redundant. If the practitioner has already made the disclosure, then there is no need for redisclosure.

Subsection (b)(2) requires that a doctor, as a condition for a certificate of registration for the ADL, report all financial interest to the commission at the time of application for a certificate of registration for the approved doctor list in the form and the manner prescribed by the commission. Taken with the requirements of §180.20, to be in compliance with the subsection, the doctor must disclose newly acquired interests not later than 30 days from the date the interest is acquired. This is different from other practitioners. Practitioners other than doctors merely have to report when they make a referral for the first time. However, the statute requires doctors to disclose as a condition of registration and as such the reporting requirement is broader.

Subsection (b)(3) explains what must be contained in the disclosure. At a minimum, the disclosure must contain: the disclosing health care practitioner's name, business address, federal tax identification number, professional license number and any other unique identification number, the name(s), business address(es), federal tax identification number(s), professional license number(s), and any other unique identification number of the health care provider(s) in which the disclosing health care practitioner has a financial interest; the nature of the financial interest, including, but not limited to: percentage of ownership, type of ownership (e.g., direct or indirect, equity, mortgage), type of compensation arrangement (e.g, salary, contractual arrangement, stock as part of a salary payment) and the entity with the ownership (disclosing health care practitioner, the health care provider who employs the health care practitioner, or an immediate family member of the health care practitioner). The only change to this subsection from the proposed language was to correct a reference to another portion of the rule.

Proposed subsection (c) would have required practitioners to make financial disclosure directly to carriers when they made referrals. Based upon comment, this requirement was deleted as unnecessary since the commission shall make financial disclosure information reported under this rule available for review or download on its website. Therefore the requirement was not included in the adopted rule.

Section 180.24(c) (proposed as (d)) addresses the consequences of a failure to disclose. Failure to disclose a financial interest has a number of consequences. First, as with any failure to comply with the statute and commission rules, subsection (c) provides that the commission may take enforcement action as otherwise authorized. In addition, a health care practitioner, including a doctor, who fails to comply with any provisions of the section may be subject to a forfeiture of payments for all services, treatments or health care provided on a specific claim that is provided during a period of noncompliance even if the services themselves did not implicate any disclosure requirements.

Specific enforcement citations and violation language are not contained in the rule because they would be redundant to the statute. Failure to include enforcement language does not limit the commission's authority to take enforcement action for violations of this or any other rule. The commission's authority to enforce the statute and rules is granted in multiple provisions of the statute and duplicate language in rules is redundant and unnecessary.

Subsection (c)(1) (proposed as (d)(1)) prohibits a health care practitioner who rendered services on a claim during a period in which the practitioner did not comply with the disclosure requirements of the section, regardless of whether the circumstances of the services themselves were subject to disclosure, and regardless of whether the services were medically necessary, from presenting or causing to be presented a claim or bill to any individual, third party payer, or other entity for those services. Services include any treatments or health care provided.

Subsection (c)(2) (proposed as (d)(2)) makes clear that a health care practitioner who collects any amounts that were billed for services on a claim during a period in which the practitioner did not comply with the disclosure requirements under the section, regardless of whether the circumstances of the services themselves were subject to disclosure, and regardless of whether the services were medically necessary shall be liable to the individual or entity for, is responsible for timely refunding any amounts collected, regardless of whether the services were medically necessary. Services include any treatments or health care provided. Refunds shall be deemed to have been timely paid if they are paid within 45 days of the date the request for refund is received by the practitioner (as provided in §133.304 relating to Medical Payments and Denials).

Subsection (c)(3) (proposed as (d)(3)) provides that a referral for services to a health care provider by a health care practitioner under circumstances that required a disclosure under the section, but was not disclosed as required, creates a rebuttable presumption that the services were not medically necessary. Services include any treatments or health care provided. The presumption is justified by both the absence of disclosure and a number of studies that consistently found that physicians who had ownership or investment interests in entities to which they referred ordered more services than physicians without those financial relationships (some of these studies involved compensation as well). Increased utilization occurred whether the physician owned shares in a separate company that provided ancillary services or owned the equipment and provided the services as part of his or her medical practice. This correlation between financial ties and increased utilization was the impetus for Congressional action resulting in section 1877 of the Social Security Act. See 66 Federal Register 856, 859 (January 4, 2001).

The proposed rule provided that failure to disclose an interest as required created a rebuttable presumption that the care provided as a result of the referral was not reasonable and necessary. The adopted rule still provides for this but on a more limited basis. As noted, the federal regulations that this rule is analogous to contain exceptions where the federal regulators had not established that a significant risk of abuse exists. Therefore the adopted rule incorporates this concept and limits the rebuttable presumption to those cases where federal exceptions do not apply.

New §180.25 - Improper Inducements, Influence, and Threats

HB-2600 requires the commission to adopt federal standards relating to fraud, abuse, and antikickbacks that prohibit the payment or acceptance of payment in exchange for health care referrals. An employee is entitled to reasonable and necessary medical care. Providing fees for referrals creates an incentive to over-prescribe care and unnecessarily add costs to the workers' compensation system. In addition, the commission has noted that there are other attempts to improperly induce system participants (sometimes including threats) as relates to medical benefits. Section 180.25 addresses these improper inducements.

Subsection (a) provides an overview of the intent of the rule and makes it clear that the rule applies to all system participants and their agents. The subsection generally prohibits offering, paying, soliciting, or receiving an improper inducement relating to medical benefit delivery and any improper attempts to influence medical benefit delivery, including through the making of improper threats.

Subsection (b) sets out the specific conduct that will be deemed to be an improper inducement, influence or threat. Conduct that violates subsection (a) is prohibited regardless of whether it is specifically listed in subsection (b).

Subsections (b)(1) and (b)(2) relate to the federal standards. They cover soliciting, receiving, offering, or paying any remuneration for referrals and generally adopt the federal provisions in Title 42, United States Code §1320a-7b (Antikickback Statute). Section 180.25(c) provides that the exceptions found in the federal statute apply to these two subsections. The language is constructed in such a way that a third party is not permitted to engage in these activities either. The subsections were changed from proposal to clarify that the rule is focusing on medical benefits.

Subsections (b)(3) and (b)(4) prohibit attempts to influence where an employee seeks medical care by offering financial or other incentives such as favorable medical opinions that could impact the employee's benefits or offering to keep the employee off of work. The subsection also prohibits providing such incentives to attempt to influence the employee to comply with the provider's treatment plans. Based upon public comment, Subsection (b)(3) was broadened to apply to actions both favorable to the employee or the carrier. It is just as improper to attempt to be selected as an RME doctor by promising reports that are favorable to the carrier. In addition the subsection was broadened to prohibit threatening adverse actions as well. For example, doctors can not threaten the employee with a low impairment rating if the employee refuses to comply with treatment.

Although the offering of the inducement under subsection (b)(4) requires a level of knowledge, the knowledge requirement does not extend to knowing that the inducement may cause a particular provider to be selected, if a reasonable person could conclude that such would be the result. The inducement is improper whether it is offered directly or indirectly, overtly or covertly, in cash or in kind. For example, this provision would prohibit the offering of a store gift certificate to provide supplemental food and clothing support while an injured employee participated in a single or multidisciplinary program, such as work conditioning or work hardening.

Offering an employee the income benefit enhancements provided by §408.0222 in exchange for treating within a regional network established under that subsection is an exception under the prohibition. Another exception is for providing conveniences such as transportation, translation services, and claim filing information, etc., that make it easier to obtain reasonable and necessary medical care if the conveniences are generally available to all patients, including non-workers' compensation patients. The conveniences that are permitted under subsection (b)(4) were clarified based upon public comment.

Subsection (b)(5) prohibits attempting to influence the opinion of a provider or carrier by threatening to file a complaint or embroil them in other legal action. Medical benefit delivery is to be based solely upon reasonableness and medical necessity. This subsection prevents a chilling effect on the professional opinion of system participants performing duties arising under the Statute or Rules that may result from the threat of harassment through frivolous allegations. Frivolous assertions may result from a lack of facts to support the claim, a lack of legal basis for the claim, or a lack of legal authority of the body with whom the assertion is filed to act on the claim by sanctions, disciplinary action and the like. Like the other inducements described in subsection (b), attempting to influence benefit delivery with threats is improper and prohibited.

Based upon public comment, subsection (b)(6) was added which prohibits attempting to influence the opinion of a provider or carrier by making or causing to be made a threat to life, safety, or property. As before, medical benefit delivery is to be based solely upon reasonableness and medical necessity. This subsection prevents a chilling effect on the professional opinion of system participants performing duties arising under the Statute or Rules that may result from the threat.

Subsection (c) provides exceptions to subsections (b)(1) and (b)(2). The exceptions are those that apply to analogous provisions in Title 42, United States Code §1320a-7b(3). HB-2600 mandates that the commission by rule shall adopt the federal standards that prohibit the payment or acceptance of payment in exchange for health care referrals.

The commission added a new subsection (d) to the rule that provides that employers and carriers can offer incentives to employees to treat within a carrier network established under §408.0023. Although the commission intended the rule to allow employers and carriers to provide employees with incentives to seek health care from providers within a network (as evidenced by the exception under §180.25(b)(3)), the proposed language unintentionally limited the exception to voluntary networks that may be created after a feasibility study conducted under the direction of the Healthcare Network Advisory Committee (HNAC). The statute provided that carrier-established networks will have to comply with the standards recommended by the HNAC.

The language of the rule focuses on insurance carrier networks because the statute formally recognizes and regulates them while so-called "employer" networks are not. If an employer wants to provide an incentive to an employee to seek care from such a network, the employer can ask the carrier to include the employer's network as part of the carrier network. This would allow employers or carriers to provide incentives to the employee under this section while ensuring that the networks are governed by the same standards that regional networks will be held to.

Subsection (d) allows employers and carriers to offer employees incentives to seek health care from within an insurance carrier network. However, the rule prohibits employers or carriers from limiting the employee's right to request an alternate treating doctor under Texas Labor Code §408.023 as insurance carrier networks do not have that power under §408.0023. The rule also provides certain limits on the incentives to ensure that they are not constructed in such a way that they could be a barrier to the employee exercising his right to request authority to select an alternate treating doctor. The incentives must be conditioned in such a way that even if the employee leaves the network, the employee retains entitlement to the incentive the employee was entitled to while participating in the network. For example, if the employee was paid $20.00 per week to remain in the network and after twelve weeks leaves the network, the employee retains entitlement to the $240.00 of incentive owed for those twelve weeks.

New §180.26 - Doctor and Insurance Carrier Sanctions

This rule replaces requirements previously in §126.8(d) and expands them based upon the provisions of HB-2600. The rule sets out the grounds (conduct, actions, inactions, and events) that will require the Executive Director to delete a doctor from the Approved Doctor's List (ADL); the grounds that allow the commission to either delete a doctor or issue a sanction against a carrier or doctor; the evidence the commission may consider as conclusively establishing the grounds to issue a sanction; and the types of sanction the commission may issue.

Subsection (a) clarifies that sanctions provided and imposed under this rule are in addition to sanctions provided by statute or other commission rules and otherwise serves as an overview for the rule. The only changes made from the proposed language were minor clarifications.

Subsection (b) outlines the grounds that will require the Executive Director to delete a doctor from the Approved Doctor's List. This subsection is based upon new Texas Labor Code §408.0231 which states that the Executive Director "shall delete from the list of approved doctors" if any of four conditions apply. This subsection of the rule is virtually identical to the language in §408.0231 except that it adds clarification to one of the conditions. Section 408.0231(a)(3) provides for deletion by the Executive Director if the doctor's license to practice in this state "is revoked, suspended, or not renewed by the appropriate licensing authority". Subsection (b) makes it clear that the subsection covers voluntary relinquishment of a license by a doctor or deferred suspension or revocation by the licensing authority.

There were two changes from the proposed language. The first was a minor clarification. The second was also a clarification but a more significant one. As proposed, subsection (e) of the rule provided that if a doctor's training expired, the doctor was automatically suspended from the ADL until the training was renewed. However, this did not follow the requirements of HB-2600 in that the training is part of the registration process and the statute provides that the Executive Director shall delete a doctor that fails to meet registration and certification requirements. Therefore proposed subsection (e) was deleted and subsection (b) was clarified to indicate that the Executive Director shall delete a doctor who fails to meet required training.

Subsections (c) and (d) outline the grounds under which Medical Advisor shall recommend a doctor (any type of doctor) for removal from the ADL or may recommend removal or other sanctions against a doctor or a carrier. Subsection (c) covers grounds that require recommendation for deletion and subsection (d) provides grounds for recommendation of sanction (which can include deletion). The two subsections are very similar with some grounds appearing to be identical. However, subsection (c) covers mandatory recommendation for deletion because the grounds listed in the subsection are more serious (like "significant violations") than those in subsection (d).

As noted, amendments to §180.1 provide a definition of "significant violation" to help clarify §180.26. A significant violation is basically one which was willfully committed, which was part of an uncorrected pattern of practice, which resulted or could have resulted in significant harm to an employee or another system participant, or which, based upon the facts of the violation, raise reasonable concern about a violator's ability to conform its future conduct to applicable laws and rules. It is worth noting that the term "significant violation" is not applied only to violations of the statute and commission rules. It can also be a significant violation of regulations enforced by another regulatory body.

Subsection (c) lists the grounds for deletion and provides a non-inclusive list of examples where it was believed that such a list would provide clarification. Texas Labor Code §408.0231(c) amends the list of factors that the commission can consider for deleting a doctor or imposing other sanctions on a carrier or doctor. The commission may use "anything it considers relevant" and the list of examples that was already in the statute was made broader. In general, the changes to this subsection from the proposal language were minor and made for clarification purposes. There were a number of comments that indicated that the commenters did not understand that the subsection applied to carrier doctors (such as those who perform peer reviews) as well as doctors who provide treatment. Therefore §180.26(c) was modified in places to ensure that it was clear that doctors who act inappropriately but in a manner that helps carriers shall also be recommended for deletion.

Subsection (c)(1) states that the Medical Advisor shall recommend deletion of a doctor who commits a significant violation of the statute, commission rules, agreement, or a commission decision or order ("agreement" was added because one of the goals of the commission is to reduce disputes at the lowest possible level through the use of agreements; to be successful in this, agreements need to be complied with). Listed examples include willful or intentional violations as well as violations that are part of an uncorrected pattern. If a doctor commits a willful or intentional violation, or if the doctor continues a pattern of conduct that violates the statute, commission rules, or commission decisions or orders or agreements even after the doctor was notified of the noncompliance of the conduct, the doctor has demonstrated an unwillingness to abide by the requirements of the statute and commission rules and should not be allowed to participate in the Texas workers' compensation system.

Subsection (c)(2) is similar to subsection (c)(1) in that it involves significant violations but in this case, it is significant violations of statutes or regulations not administered by the commission. For example, behavior that causes sanctions by the Medicare or Medicaid programs is considered to be a significant violation. Because of clarifications made to the definition of "conviction" in §180.1, this subsection was simplified. In addition other clarifications were made to ensure that the license or practice restrictions included any "other limitation(s)" and to ensure that an adverse license action, whether "stayed, deferred, or probated," requires a recommendation of deletion.

Subsection (c)(3) provides for deletion for "professional failure to practice medicine or provide health care, including chiropractic care, in an acceptable manner consistent with the public health safety and welfare". Included as examples of this are things such as negligent practices that result in or substantially increase the probability of death or significant injury to a patient ("significant" was added because it clarifies intent). Some other examples include excessive or deficient care (changed from "excessive surgical care), excessive complications, having an uncorrected pattern of failing to timely and appropriately release an employee to return to work. The commission anticipates using benchmarks, guidelines, and recommendations from the Medical Advisor and the MQRP regarding the grounds in this subsection. Subsection (c)(3) references benchmarks rather than specific thresholds because over time, benchmarks fluctuate as standards of care change due to new techniques and technology. Setting specific thresholds in the rule would limit the commission's ability to ensure that the quality of care in the workers' compensation system keeps pace with advances in quality in other health care systems. In addition, in response to comments, the commission clarified that three ore more adverse malpractice judgments against the doctor during his career are grounds that require recommendation for deletion. The proposed language regarding over-prescribing medications was modified to focus on doing so willfully or as a pattern of practice to ensure that the subsection focused on the more serious conduct.

Subsection (c)(4) provides for deletion if a doctor has a significant (uncorrected or willful) pattern of conduct relating to the delivery of health care that the commission finds is not fair and reasonable or that the commission determines does not meet professionally recognized standards of health care. Some examples of this include unjustifiable differences between the doctor's diagnoses or treatments and acceptable standards of care (which covers both over- and under-treating); administering improper, unreasonable, or medically unnecessary treatment or services and/or seeking approval for the same; making unnecessary referrals; and having a practice of submitting medical bills with a pattern of inappropriate coding or which is abusive or violates rules and guidelines including but not limited to, practices such as upcoding and unbundling as defined in §133.1 (relating to Definitions for chapter 133) and which, if relied upon by the carrier, have the potential of unlawfully increasing the doctor's fee. The subsection was modified to clarify the proposed language relating to differences between the doctors charges or fees and the commission's fee guidelines because commenters pointed out that providers are instructed to bill their usual and customary charges not the maximum allowable reimbursements listed in the guidelines. In addition, subsection (c)(4)(F) was clarified to cover utilization review opinions as well as peer review opinions even though the terms are largely synonymous.

Subsection (c)(5) provides for deletion for dishonest conduct. Though this may appear redundant to subsection (c)(2), it is placed in a separate subsection to emphasize it and because the commission has the option of pursuing these matters administratively to establish that the conduct occurred. Subsection (c)(5)(C) was broadened to cover dishonest actions by a doctor or carrier that could cause reasonable and necessary care to be denied.

Subsection (c)(6) provides for deletion in a case where a doctor refuses to refund monies improperly paid to the doctor. Doctors are entitled to specific fees for reasonable and necessary medical care assuming the care was provided and billed in accordance with the statute and commission rules. If the commission finds that the doctor was paid monies he or she was not entitled to or was otherwise overpaid, the doctor is expected to comply with the refund order. Failure to do so (after opportunity for appeal of the order) constitutes a willful violation of the order and represents conduct that warrants recommendation for deletion. The adopted language regarding the order clarifies that it is a commission order.

Subsection (c)(7) is a "catch-all" category that allows the commission to recommend deletion for conduct not specifically stated in the rule but which otherwise rises to the level that makes it appropriate to recommend deletion. This subsection is functionally identical to language contained in previous §126.8.

Subsection (d) lists grounds that require the Medical Advisor to recommend some kind of sanction (including deletion or suspension of a doctor). Because the grounds under this section are similar to the grounds under subsection (c), no examples were provided under subsection (d). Lesser versions of the examples under subsection (c) can apply to subsection (d). For example, both subsections (c) and (d) reference "conduct relating to the delivery of health care that the commission finds is not fair and reasonable or that the commission determines does not meet professionally recognized standards of health care." However subsection (c), addresses a "significant (uncorrected or willful) pattern of practice" and subsection (d) does not require a significant pattern of practice.

Subsection (d) also provides that the Medical Advisor recommend imposition of a sanction for violation of the statute, commission rules, or commission decision or order or agreement; or violation of other statutes or regulations not administered by the commission but relevant to the provision of and payments for health care as well as "other activities which warrant sanction."

Sanction for refusal to "pay monies owed to a health care provider" was included in subsection (d) (instead of subsection (c) as in the analogous provision for doctors refusing to pay refunds) because the commission is not authorized to "delete" a carrier under HB-2600. Therefore, this provision was put under the subsection providing for grounds for sanctions. It is worth noting, however that this subsection is not limited to orders. Carriers are expected to reimburse providers under the statute and rules for reasonable and necessary health care related to the compensable injury. Failure to do so is an action that warrants sanction.

In reviewing public comments on the rule, the commission became concerned that the full intent of these rules was not being understood with regard to disciplinary actions. The commission intended to reserve for itself the right to enter into agreements on sanctions with the charged person (the sanctionee). To ensure this was clear, the commission had added a new subsection (e) that specifies that notwithstanding subsections (c) and (d), the commission may enter into a progressive disciplinary agreement. However, such agreements can only be entered into if the commission believes that such an agreement will achieve the goals of improving medical quality and cost containment in the system. If the commission does not believe that these goals will be achieved no agreement will be signed and the commission will recommend deletion or other sanction (depending on whether the grounds for sanction were under subsection (c) or (d)). The subsection specifies what such an agreement has to include, such as a description of the grounds that caused the sanction, the type of sanction agreed upon, the duration of the agreement, etc.

Subsection (f) identifies different types of evidence that the commission can use to establish the grounds for issuing a sanction against a carrier or doctor (including deleting or suspending a doctor from the ADL or DDL). The intent of this section is to allow the commission to use facts already established through adjudication, agreement, no contest plea or other finding by a regulatory entity, hearing, court, or administrative review process. This will save the commission the expense of reestablishing facts already established should the recommendation for sanction or deletion be appealed. The subsection also notes that information obtained from any source (including expert opinions such as from MQRP members) can be used as well. The subsection was revised slightly from the proposed language for clarification.

Subsection (g) states which of the types of evidence listed in subsection (f) are conclusive evidence. The subsection was modified for clarification purposes because of a number of comments that indicated confusion on how this subsection and subsection (f) operated together.

Subsection (h) lists the sanctions that the commission is authorized to impose or recommend against a doctor or carrier. The list is identical to Texas Labor Code §408.0231(f) but it contains some parenthetical examples to try to explain what form the sanctions might take.

Subsection (i) states that a doctor deleted or suspended from the ADL may not provide health care or receive remuneration after being deleted or while suspended. The definition of remuneration in §180.1 is "any payment or other benefit made directly or indirectly, overtly or covertly, in cash or in kind including, but not limited to forgiveness of debt." Therefore, by prohibiting remuneration to a doctor who has been deleted or suspended from the ADL, the health care providers in which the doctor has a financial interest will not be permitted to receive remuneration either (because this remuneration would take the form of an indirect payment to the doctor who was deleted or suspended). Language from proposed subsection (e) (that was not adopted) relating to the duty of a doctors who were removed from the ADL to inform their patients was moved into subsection (i). In addition, the exception that allows a doctor not on the ADL to provide care in an emergency was expanded to also cover immediate post-injury medical care.

New §180.27 - Sanctions Process/Appeals/Restoration/Reinstatement

This rule replaces requirements previously in §126.8(e) through (h) and modifies them based upon the provisions of HB-2600. The rule sets out the process for issuing sanctions authorized by §180.26, the process for appeals, and the processes for requesting and reviewing requests for reinstatement to the list or restoration of privileges (restricted by sanction). In addition, the analogous processes previously in §126.10 (relating to Commission Approved List of Designated Doctors) are replaced with those in this rule.

Some of the requirements of §180.27 are the same as they were under §126.8 and §126.10 while others are not. One difference is that this rule also applies to sanctions involving carriers while the previous rules did not. Where processes are different, they are noted.

Subsection (a) requires the commission to send notice of its intent to recommend or impose a sanction to the person by verifiable means other than if there is an agreement. Previous §126.8 and §126.10 went into more detail about how such notice was to be sent (certified mail with return receipt requested). However, certified mail is but one way to verify delivery and so the commission recommends language that will allow more flexibility to use other means of delivery. With the addition of the formal "progressive disciplinary agreement" concept in §180.26, the commission modified this section to not require notification to the sanctionee and to not provide for an appeal. Such notice and appeal would be redundant since the sanction would have been agreed to.

Subsection (a) also provides that the person has 20 days to request a hearing or the sanction recommendation will go to commissioners for their approval. This is not unlike previous §126.8 (for ADL deletions) but it is very different than previous §126.10 (for DDL suspensions or deletions). Previous §126.10 provided for an administrative review by the commission and the doctor had only 14 days to file it. However, HB-2600, by listing "deletion or suspension from the approved doctor and designated doctor lists," seems to require actions relating to designated doctors to be handled as they are for other sanctions. This means that the doctor is entitled to request a hearing.

Subsection (a) also provides that if a hearing is not timely requested then the commissioners shall act on the recommendation at a public meeting. If a hearing was requested, the commission generally will have the burden of proof unless the recommendation is based upon facts already established/adjudicated.

Subsection (b) provides that if the commission modifies, amends, or changes a recommended finding of fact or conclusion of law or order of the administrative law judge (ALJ), the commission's final order shall state the legal basis and specific reasons for the change. The intent of this subsection is to ensure that the commission's reasoning is well documented should the commission's order be appealed.

Subsection (c) requires the commission to provide copies of an order for sanction to the employees being treated by the doctor and requires the doctors to do the same. This requirement is a carryover from previous requirements of §126.8.

Employees should be informed so they understand that sanctions have been imposed and why the sanctions were imposed. It is important for employees to know both of these things so that (even if the doctor was not deleted) they can decide whether they want to change doctors. For example, the sanctions might impact their access to care that might cause them to want to change. Alternately, when they hear the grounds for the sanction, it might make them concerned about the quality of care they are receiving.

Subsection (d) provides that the commission can issue further sanctions against a person who fails to comply with sanctions.

Subsection (e) allows a person who was sanctioned to request the sanction be lifted (whether through restoration of privileges or readmission to the list the doctor was deleted or suspended from). Requests shall be evaluated by the Medical Advisor with assistance and recommendations from the MQRP. The subsection also requires the requestor to pay for the cost of the review, which may involve an audit of the doctor or carrier's practices in order to establish the that sanctions should be lifted. This charge is authorized by Texas Labor Code §402.064 which requires the commission to set reasonable fees for services requested from the commission.

The subsection provides that if the commission believes it is appropriate to lift the sanctions, the commissioners shall receive and act on that recommendation. If the commission does not believe that it is appropriate to lift the sanctions, the requestor shall be notified and have the opportunity to respond within 14 days. The response would be reviewed by the Medical Advisor and a final recommendation made to the commissioners who will also be provided a copy of the doctor's response. This subsection was modified from proposal to clarify that it is the commission and not the Medical Advisor that sends the letter of intent notifying the doctor that the Medical Advisor intends to recommend that the sanctions not be lifted and to clarify that the commission shall provide the commissioners with the doctor's response.

This process is similar to the process previously in place for actions relating to the DDL but different than the previous process for requests for reinstatement to the ADL.

In reviewing the rule for adoption it was noticed that as proposed the rule could be interpreted as requiring the commission to provide a doctor an opportunity for a hearing if the doctor is deleted by the Executive Director pursuant to §408.0231(a) and §180.26(b). This was not the intent. The statute requires the Executive Director to delete a doctor from the ADL in certain situations (such as when the doctor's license is revoked, suspended, or not renewed by the appropriate licensing authority). The statute does not provide for an opportunity for a hearing for deletion by the Executive Director as it does for sanctions by the commission (under §408.0231(e)).

Therefore the commission has added a new subsection (f) to the rule that exempts deletions by the Executive Director under §180.26(b) from the requirements of §180.27. The new language requires a notice to be sent by verifiable means that explains the reason for the action. The doctor will then have fourteen days to respond. If it is found that the grounds for removal under §180.26(b) do not exist, the doctor shall not be removed by the Executive Director.

Comments supporting and/or opposing all or some of the proposed amendments and adoptions were received from: El Paso Physical Therapy, Medical Advanced Systems, Stephanie At Work, Indemni-Med Management, LLC, Insurance Council of Texas, Flahive, Ogden & Latson, Texas Medical Association, Texas Association of Business and Chambers of Commerce, The State Office of Risk Management, The Texas Mutual Insurance Company, Texas Orthopaedic Association, Medical Evaluation Specialists, and The American Insurance Association as well as other individuals.

In addition to supporting or opposing various portions of the rules, many commenters made suggestions for improvements to the rules or asked for clarification on certain points. Summaries of the comments and commission responses are as follows:

Introductory Comment: The commission initially proposed the key date for changes in the ADL and DDL be August 1, 2003. However, the commission has changed this date to September 1, 2003 to coincide with the beginning of the new biennium in case the next legislative session results in additional changes that affect the ADL and DDL.

The references in the comments are to the rules/subsections as proposed. Based upon comments, some of these subsections have been renumbered in the adopted rules.

General Comments

Comment: Commenter indicated that his organization "generally supports the proposed rules to implement these provisions of HB 2600," opining that the rules "represent substantial reforms to the Approved Doctor List that will hopefully lead to improved quality and lower cost delivery of health care to injured workers." Another commenter supported proposed rules 180.1 through 180.27 "in concept and action." Still another commenter "commends the Commission for its work on these proposed amendments." Other commenters stated that the "commission and its staff's hard work is appreciated and the difficulty in drafting rules such as these is recognized. However, the ability of health care providers to properly care for injured workers and to participate in the Workers' Compensation system should be considered and the rules amended to prevent adverse impacts to health care delivery."

Commenter indicated that it "strongly supports efforts to improve our system of delivering care to injured employees. Specifically, making certain that the injured worker receives quality healthcare promptly and at a reasonable cost." Commenters indicated that they were involved during the consideration of HB-2600 and support efforts to improve our system of delivering health care to injured employees, "specifically making certain that the injured worker receives quality health care promptly and at a reasonable cost. However, it is very important in achieving these goals that the system not become overburdened with administrative requirements and that the requirements of the system do not discourage health care providers who have always provided quality health care at a reasonable cost from participating in the system because of overly complicated and burdensome requirements."

Response: As noted, the commission agrees that it is important to not discourage providers who provide quality care at a reasonable cost from participating in the system. As discussed in response to specific comments, the commission has made changes based upon the recommendations of commenters that should prevent adverse impact to health care delivery and should not overburden or discourage doctors who provide quality care at a reasonable cost.

Comment: In response to language in the preamble which stated that increased compliance should reduce overpayments caused by late reports from doctors, one commenter asked whether late reports cause unnecessary treatment and asked for clarification.

Response: Late reports probably don't cause much unnecessary treatment to be provided; however, late reports such as TWCC-69s and TWCC-73s can cause carriers to overpay TIBs when the carrier does not timely receive the report containing information showing that the employee is no longer entitled to income benefits.

Comment: In response to language in the preamble which stated that some doctors offer improper inducements to employees, one commenter asked why the commission hasn't taken enforcement action against these providers in the past.

Response: Prior to the adoption of this rule, there was no prohibition against providing many inducements. Therefore, the commission did not have the authority to take enforcement action in response to many of the types of inducements that the rule now defines as improper.

Comment: The preamble noted that the increased ability of the commission to hold carriers responsible for their actions and inactions should result in improved compliance and, as a result, payments of medical bills may be more timely and accurate while disputes may be reduced. In response to this language, one commenter asked whether the commission will be more responsive to the medical community "before they all leave the work comp arena?"

Response: The commission endeavors to be responsive to all system participants. The commission works with a group of stakeholders who were involved in the development of HB-2600 which included health care provider representation. In addition, the Medical Quality Review Panel will help ensure that the commission has access to medical expertise to assist the Medical Advisor with recommendations about medical issues.

Comment: The preamble noted that to the extent that the commission is able to change utilization and return to work patterns (e.g. by changing behavior or by removing doctors who won't change behavior), costs shall be reduced. One commenter suggested that it "should scare the medical community to see that the [commission] would write something like this. There are a few bad apples and the TWCC is driving out the good ones."

Response: The commission agrees that efforts to control system participants who operate outside of acceptable standards (all system participants, not just health care providers) may hamper those who wish to operate within acceptable standards. However, these rules should assist the commission in setting processes to more easily identify outliers and attempt to get them to correct their behavior without hampering other participants.

Comment: One commenter commented on the fiscal impact statement from the proposal preamble noting that providers are small business owners that pay for workers' compensation insurance.

Response: The commission agrees that many providers are small businesses. As employers, providers should be concerned about the costs in the workers' compensation system that are driving up their premiums and supportive of reasonable efforts to bring those costs under control.

Comment: The proposal preamble noted that among the benefits that health care providers would receive from adopting these rules was dealing with carrier doctors who "will be better trained" which "should reduce unnecessary disputes (both prospective and retrospective)." Commenter interpreted this as a bias of the commission towards carriers.

Response: The language was referring to the fact that, under the new rules, carrier-selected doctors are required to be trained in workers' compensation issues and therefore will be better trained than they are now. The preamble was not saying that carrier-selected doctors are better trained in general than other doctors (such as those who provide treatment).

Comment: One commenter suggested that the reductions in costs would not result in any benefit to employers since "there is NO way to force the carriers to pass the savings on to the consumers as noted in [the] MFG preamble!"

Response: The commission disagrees. Workers' compensation premiums are set in accordance with regulations by the Texas Department of Insurance (TDI) and they include consideration of claim costs. If claims costs are reduced sufficiently, premium rates will be reduced.

Comment: One commenter expressed concern "that the proposed regulations, if adopted, would put in place a burdensome, costly and inflexible regulatory framework where effective and efficient utilization review is discouraged, rather than encouraged, by the state."

Response: The commission disagrees with the broad characterization made by the commenter of the rules as proposed but agrees with suggestions made by various commenters and has revised the rules to address many of this commenter's concerns. These changes and the reasons for them are described in response to other comments.

Comment: Commenter opined that the rules impose additional burdens on physicians primarily to appease the carriers and hold physicians to a more restrictive standard of performance than it holds carriers.

Response: The commission disagrees that the proposed rules impose additional burdens to appease carriers or that they hold physicians (or other providers) to a more restrictive standard of performance than they hold carriers. The proposed rules were developed in response to legislation passed by the 77th Texas Legislature in HB-2600. HB-2600 was developed over the course of the legislative session with input from a workgroup composed of system participants, including health care providers. HB-2600 gave full responsibility for regulating health care providers to the commission while it split certain duties and authority (such as the authority to sanction carriers) between the commission and TDI. Numerous other rules require or prohibit specific actions on the part of carriers or their agents. Carrier sanctions under §180.26(d) can be based on carrier violation of these other rules relating to medical benefit delivery.

Comment: Commenter expressed concern that the system is moving in the wrong direction as relates to reducing costs while improving quality, particularly since the system is already more burdensome and costly than providing treatment outside the workers' compensation arena.

Response: The commission disagrees. The commission anticipates that the new rules will improve medical quality and reduce costs in a number of ways. Key to these efforts has been the development of processes and rules that do not impede system participants who are acting within expectations as a way to control those who act outside of expectations. HB-2600 gives the commission the authority to reduce burdens and modify requirements for providers as appropriate. This may include providers whose practice patterns produce outcomes that are better than the norm and the commission will begin tracking outcome data for this purpose. Once the commission has obtained a sufficient amount of data to set such standards, the commission will be able to establish rules that reduce burdens as appropriate.

Comment: Commenter expressed concern that by "complicating the process, increasing the required hours of continuing medical education CME for participation, and reducing reimbursement rates, the Commission is driving physicians from the system."

Response: Through HB-2600, the Legislature gave the commission additional tools to use to better control medical benefit delivery. Part of Article 1 of HB-2600 requires providers in the system to be better educated about the requirements of the workers' compensation system. This can most clearly be seen in Article 1 where the Legislature changed participation in the system from automatic inclusion (based upon initial licensure) to a discretionary privilege. The commission was charged with establishing reasonable training requirements for doctors who wish to be on the ADL. However, the commission has removed the requirement that the training be CME-certified as some of the subject matter may not qualify for such certification.

The commission disagrees that these rules will drive doctors from the system in a way that would limit employees' ability to obtain reasonable and necessary medical care. The system and injured employees are better served if employees receive health care from providers who are well educated in the requirements of the workers' compensation system and who are committed to working within that system.

Comment: Commenter noted that his organization "has consistently expressed concern over the quality of care in the workers' compensation system and the need for TWCC to aggressively investigate and take action against those providers who are abusing both the system and injured workers. House Bill 2600 has invested TWCC with substantial authority to identify and sanction the bad actors in the system, giving you the tools necessary to ensure the Approved Doctor List will be comprised of quality providers that have been properly trained and are being properly monitored."

Response: The commission agrees that new authority granted by HB-2600 should improve the commission's ability to achieve the goals of improving medical quality and controlling system costs.

Comment: Commenter "supports the Commission's efforts to ensure compliance by parties in the workers' compensation system with Commission rules" and offered a number of comments for improving those rules.

Response: The commission's responses to specific suggestions are addressed elsewhere in this preamble.

Comment: Commenter indicated opposition to these rules/amendments because the commenter felt that: HB-2600 is socialized medicine and that doctors will leave the workers' compensation system if HB-2600 is implemented; workers' compensation premium rates have never gone down; an insurance carrier testifying on the prior proposal of the Medical Fee Guideline was lying (because if they were really spending $1.32 in claim costs for every $1.00 in premium they would be out of business); providers have to do too much paperwork to get paid and carriers don't pay timely half the time and don't pay at all 25% of the time; carriers claim they never got the bills even when the doctor sends them by certified mail; carriers get their payments from employers up front but the system delays payment to doctors; the Texas Legislature should not be making laws to protect or increase the profits of insurance carriers (carriers should just go out of business if they can't make a profit); there is nothing requiring carriers to pay benefits or giving them any rules to follow; carriers do not obey laws; and the commission does not enforce the laws.

Response: The commission disagrees. First, the changes contained in HB-2600 were adopted and have become Texas law. The commission and system participants are required to implement and comply with its provisions. Second, workers' compensation premium rates went down in the early and mid-nineties. Third, insurance carrier profits and losses are not solely based upon premium dollars collected versus benefits paid but also based upon investments. Fourth, these rules do not focus on the paperwork that doctors have to do to get reimbursed for medical services (other than the registration to be on the ADL). Further, the commission has conducted numerous audits of carriers in the past year and, although some timeliness problems were found, they were not widespread and compliance was not 50% as the commenter suggested. Fifth, not all carriers get paid up front. Many accounts are based upon a retroactive premium calculation where the premium is not calculated until the end of the policy period. Sixth, the commission has no position on what the Texas Legislature "should" or "should not" be doing and does not have the authority to ignore state law. Seventh, as discussed in response to other comments, carrier duties are covered in numerous sections of the statute and rules and there was no need to duplicate them here. Finally, though some carriers commit violations, the commission disagrees with the suggestion that there are no carriers that obey the statute and rules. The commission likewise disagrees with the suggestion that there are no doctors who provide quality care simply because some doctors fail to do so. When the commission finds noncompliance by any system participant, it takes enforcement action designed to ensure future compliance. The commission has attempted to use a progressive disciplinary approach to correct compliance problems and some system participants are beginning to reach the steeper part of the progressive curve.

Comment: Commenter suggested that carriers should have to log receipt of medical bills; send confirmation of receipt of the bills; and pay bills in seven days instead of 45 (as provided by statute).

Response: The commission disagrees. With the exception of language in §180.20(h) which addresses payment when a doctor is not on the ADL, these rules do not address the manner in which medical bills are to be processed and paid. If done by a paper confirmation, requiring confirmation of receipt of medical bills would be contrary to the intent of HB-2511, which requires the commission to develop a plan to reduce paper in the system. Finally, Texas Labor Code §408.027 provides that carriers have 45 days to take action on a medical bill. A change to this provision would have to be made by the Legislature.

Comment: Commenter suggested that doctors should receive 60% of any fines imposed for late payment of medical bills and the commission use the rest to go after more carriers.

Response: The commission disagrees. The suggestion would require a statutory change.

180.1 Comments

Comment: Commenter expressed concern that "the proposed amendments to rules 180.1(20), 180.1(21), 180.1(22), and 180.7 might improperly subject persons to liability for conduct that the Legislature has not defined as administrative violations of the Texas Workers' Compensation Act and which the Legislature has, in fact, declined to define as administrative violations. We also fear that the application of these proposed amendments could, in certain fact instances, result in parties being unconstitutionally deprived of their right to due process of law to the extent that they permit the assessment of administrative penalties against the parties when the Commission had on an earlier occasion merely expressed its belief to the parties that they were violating the Act or a Commission rule, whether or not that belief had resulted in a conviction of the parties on the prior occasion."

Response: The commission disagrees. HB-2600 amended §415.0035 by adding subsections (e) and (f) to specify that a carrier or a provider who violates a provision of the statute or rules commits an "administrative violation" and that the commission may issue an administrative penalty under §415.021 (not to exceed $10,000). The commission may issue a penalty under this new legislation if the violation is repeated after the commission has previously provided notice to the carrier or provider of noncompliance; if it was committed willfully; or if the violation was a violation of a commission order.

Given that none of the language the commenter is referring to removes the right of a person accused of committing an administrative violation to a hearing at the State Office of Administrative Hearings (SOAH), it is not clear how the proposed language could be used to violate a person's rights to due process. Prior to issuing an administrative penalty, the commission almost always offers the alleged violator the opportunity to informally respond to the allegation. This response often provides the commission with information that it did not previously have and which may cause the commission to change its position regarding the conduct in question. If the commission and the alleged violator are unable to agree upon the facts or can agree on the facts but disagree as to whether they constitute a violation, the person is offered the opportunity to request a hearing at SOAH where the parties will be able to present their positions to an administrative law judge.

Comment: Commenters noted that HB-2600 not only speaks of the ability to monitor and sanction health care providers, it also adds authority to the Commission to sanction insurance carriers and utilization review agents. Therefore, the commenters suggested that in the definition of "abusive practice," a subsection (D) should be added to state that abusive practice includes "the improper denial of medical benefits or improper delay or denial of payments of claims and benefits."

Response: The commission agrees that the behavior commented upon can be an abusive practice; however, it disagrees that the language needs to be added in the definition because it is already covered by subsection (C) of that section. Subsection (C) defines an abusive practice as a practice that does not meet standards required by statute, rules, or previous notification to a system participant. The issues the commenters were concerned with are regularly looked at through the commission's monitoring efforts. With the definition as proposed, the commission will be able to label a pattern of practice of delaying payments or improperly denying benefits (as well as any other type of pattern or practice where compliance standards have been set by statute, rule, or prior notification) as an abusive practice. The proposed definition of abusive practice was written broadly to ensure that any type of abusive practice could be addressed.

Comment: Commenter wanted to know whether a Commission Hearing Officer or Appeals Panel Judge is an "administrative law judge" as contemplated by proposed §180.1(2), as used in proposed §180.26(f).

Response: Yes. §180.26(f) specifies that the commission can use the findings of fact or legal conclusions of an administrative law judge as evidence. This prevents the commission from having to "re-prove" what has already been "proven." Subsection §180.1(2) has been modified to ensure that it is clear that commission hearing officers and appeals panel judges are included.

Comment: Commenter pointed out that with regard to §180.1(3) "an element of a series containing three or more entries, there should be a comma between 'employee' and 'or attorney' in the first sentence."

Response: The commission agrees. The comma has been added.

Comment: Commenter felt that the example in §180.1(6) "is better placed in the preamble as opposed to the rule itself. Further the phrase "'get out' of continued noncompliance" is colloquial and should not be used in a rule that has the force of law.

Response: The commission disagrees that the example should be removed from the rule. Although preambles can and should be used to ensure system participants understand the intent of a rule, including the example will help improve understanding of the intent of the commission. The commission agrees that "get out" is colloquial and has changed the sentence to state that the person could "come into compliance" and has also simplified the example.

Comment: Two commenters noted the word "probated" in §180.1(8)(A) is misspelled.

Response: The commission agrees and has corrected the spelling. In addition, the term was misspelled in other areas of the rules. In reviewing the rules to make the corrections, the commission noticed that in some instances it used the term "probated" and in others it used "deferred." The intent was to cover any situation in which a judgment, finding, sentence, etc. was in any way held in abeyance. Therefore, the commission has modified the rules to reference "stayed, deferred, or probated" and this language should be read to apply broadly.

Comment: Commenters stated that the definition of "conviction" in §180.1(8) does not discuss the type of offenses that constitute a conviction. The most common criminal conviction is for violation of a traffic statute. Any criminal conviction must have some relevant nexus to the providing of health care services under the workers' compensation system.

Response: The commission disagrees. The definition is defining "conviction," not the type of convictions that are relevant. Section 180.26 establishes the types of convictions that are used for deleting doctors from the ADL, and it includes specific limitations that address the concerns of the commenters. Therefore, there is no need to differentiate between different types of convictions in this definition.

Comment: Commenter suggested putting the definition of "emergency" in this rule rather than referencing the definition in §133.1 (relating to Definitions).

Response: The commission disagrees. Because the definition of "emergency" is referenced in several different rules, all of these rules would have to be revised if the definition were quoted in each rule and the definition were revised in the future. By simply referencing the one definition in §133.1 (relating to Definitions for Chapter 133, Benefits - Medical Benefits), it is easier to make changes and maintain consistency at a future date.

Comment: Commenter asked whether there was a "gender neutral term" that could be used in §180.1 (10) & (11) rather than "his."

Response: Texas Government Code §311.012(c) provides that "words of one gender include the other genders."

Comment: Commenter suggested that in §180.1(15) there should be a comma after "to" as in "...but not limited to, forgiveness of debt."

Response: The commission agrees and has made the suggested change.

Comment: Commenters expressed concern regarding the language in §180.1(16) that makes it a significant violation if the violation "resulted" or "could have resulted" in significant physical or emotional harm to an injured employee or in significant economic harm to a system participant. The commenter felt that there are two different standards: one is that it actually has resulted in significant harm and the other is if it could have resulted in such harm. The commenter had no concern about calling a violation a "significant" violation in those cases where such harm did result. However, the commenter felt that the fact that a violation could have potentially resulted in such harm should not mean that it was significant and felt that it should be removed. One of the commenters pointed out that the language addressing deviation from acceptable standards for professional behavior exists to limit potential harm and that this should be sufficient.

Response: The commission disagrees. The phrase "could have resulted" is included because in many cases a violation may be discovered before it causes significant harm. A person who commits a violation that has the potential to do significant harm to a system participant should not be able to avoid having the violation labeled as a significant violation because the violation was caught before the damage resulted or because the potential harm did not materialize. Therefore, persons engaging in similar conduct are treated the same even if one person's violation is discovered before the harm results. Deviation from acceptable standards for professional behavior is directed more to quality of care issues and does not serve to limit potential harm in cases where the party intends to cause economic harm, such as deliberate cases of upcoding or unbundling.

Comment: Commenter expressed concern that the rule does not define "significant economic harm."

Response: The commission disagrees that such definition is needed or practical. The terms "significant" and "economic" are self-explanatory. Given the number of actions that could result in economic harm and the myriad of ways that one could experience such harm, further definition is not practical and would only serve to hamper the commission's ability to enforce this provision rather than to strengthen it.

Comment: Commenter suggested that the definition of the term "Uncorrected Pattern of Practice" would be strengthened if the commission would identify in the rule what constitutes "notice" in relation to this term, and address whether in the event of a dispute, the violator is permitted to continue the practice pending final resolution on the legality of the practice.

Response: The commission agrees that "notice" should be clarified. The rule has been changed to require that notice be written as the commission anticipates using audits reports and Notices of Violation or Warning Letters as the means of notification. In the event of a dispute, the alleged violator would be well advised to correct their practice until such time as the dispute is resolved in the alleged violator's favor. If the behavior is found to be a violation, all the violations committed while pending the resolution of the dispute could potentially result in enforcement action.

Comment: Commenter expressed concern that §180.1(20) (which defines the term "violation" as "a failure to comply with a duty established under the Statute or Rules or commission of an act prohibited by the Statute or Rules.") is too broad. The commenter believed this "because even after the legislative amendments made by House Bill 2600 to Texas Labor Code section 415.021, subsection (a) of that section still limits the authority of the Commission to assessing administrative penalties only against persons who commit "administrative violations," which are individually defined by various provisions of the Act itself. Assessing a penalty against a person who merely commits a "violation" as defined by the proposed rule would thus go beyond what the Act authorizes." The commenter recommended §180.1(20) be withdrawn.

Response: The commission agrees that it may only take enforcement action under Texas Labor Code §415.021 in the event of a person committing an administrative violation (other than as provided by Texas Labor Code §408.0231 and §§180.21 and 180.26 of this title). However, the commission does not believe that defining "violation" as a failure to comply with a duty established under the Statute or Rules or commission of an act prohibited by the Statute or Rules goes beyond its authority. The definition of "administrative violation" is not inconsistent with the statute.

Comment: Commenter was troubled by §180.1(21), which defines the term "violator" as "a person found to have committed an administrative violation or another offense." "Because the Commission lacks statutory authority to enforce any statute other than the Workers' Compensation Act and because the only relevant enforcement powers vested in the Commission by the Legislature concern the power to assess administrative penalties against persons found to have committed administrative violations under the Act, the inclusion of the words "or another offense" is irrelevant to the Commission's exercise of jurisdiction and is overly broad." The commenter recommended that the words "or another offense" be deleted from the proposed rule.

Response: The commission disagrees. Whether the person violated the Texas Workers' Compensation Act or another statute, they can still be labeled as a "violator." The definition does not exceed the commission's authority. It would only be a problem if the commission attempted to use this definition in a way that exceeded its authority. For example, if the commission attempted to issue a $10,000 fine because a person was convicted of driving while intoxicated (and was thus a violator of the DWI statute), the commission would be exceeding its authority. However, none of the proposed rules exceed the commission's authority. The use of the term "violator" to cover violators of other statutes is merely a convenience and not an attempt of the commission to unlawfully expand its authority. Section 180.26 establishes the offenses that may be sanctioned.

Comment: Commenter pointed out that the term "willfully" is spelled differently in various places in the proposed rules.

Response: The commission agrees and has changed the spelling of all references to the word to "willfully." The confusion was caused by the spelling of the word in the Texas Labor Code, which does not match the spelling in most dictionaries and computer spell-checking programs. Therefore, the commission has modified the definition to specify that "willfully" is the same as "wilfully" and will use "willfully" in these rules.

Comment: Commenter suggested that the proposed definition of "willfully" in §180.1(22) (which defines it as "intentionally or knowingly" and "continuing conduct after being notified of noncompliance") is both unnecessary and improper. "The Commission by its proposal is attempting to define 'wilful' to include merely negligent conduct, in addition to intentional and knowing conduct. Such a definition would therefore represent an exercise of rule-making power in excess of the statutory authority conferred upon the Commission by the Legislature."

The commenter stated that the "term 'wilfully' is used in sections 415.001, 415.002, and 415.003 of the act to establish a mens rea requirement that must exist before someone can be determined to have committed an administrative violation under these statutes. The Legislature could have defined the term 'wilfully' in the Act the same way the proposed rule does, but it did not. Generally, Texas law holds that in the absence of a statutory definition of a statutory term that constitutes an element of a statutory cause of action (such as a civil cause of action for an administrative penalty based on the alleged occurrence of an administrative violation), the fact-finder should be free to determine the meaning of the statutory term without definitions or instructions from the party prosecuting the claim. This is especially true where the statutory term has a plain and ordinary meaning, as the term 'wilful' does. See, e.g., Accord v. General Motors Corp., 669 S.W.2d 111, 116 (Tex. 1984) ("The jury need not and should not be burdened with surplus instructions."); Depriter v. Tom Thumb Stores, Inc., 931 S.W.2d 627, 629-30 (Tex. App. -Dallas 1996, writ denied) (a trial court's refusal to submit a definition for the term "because," as used in a jury question, was upheld on appeal where the statute on which the plaintiff's claim was based contained the same term and the word "as used in [the statute] is not a legal term requiring a special definition.") ("When statutory violations are the basis of jury questions, the questions should be submitted in terms as close as possible to the language of the statute."); compare Tex. Bus. & Comm. Code Section 17.45(9) (statutory definition of the term "knowingly" as used in the Deceptive Trade Practices Act).

When the Commission pursues a party for an administrative penalty based on an alleged violation of section 415.001, 415.002, or 415.003, the finder of fact is not the Commission but an administrative law judge at the State Office of Administrative Hearings. That official is capable of determining the meaning of the term 'wilful' without the Commission's assistance, But in the proposal, the Commission is attempting to give the term 'wilfull' a meaning that the Legislature did not intend it to have. The proposed rule thus conflicts with well-settled Texas jurisprudence granting freedom to the fact-finder to determine the existence or non-existence of elements of a cause of action without unnecessary instructions and definitions." The commenter recommended removing the proposed definition.

Response: The commission disagrees. "Negligent" conduct is covered by the definition of "willfully" only if the commission previously notified the violator of the noncompliance and the violator continued to commit the violations. Even if the initial act(s) was negligent, subsequent violations of the same type (particularly those that are part of an uncorrected pattern of practice) may be considered to be willful violations because the violator evidently failed to take the steps necessary to prevent a reoccurrence and thus the subsequent violations may have resulted from the violator's willful negligence.

The second application of the previous notice concept is more clearly understood when read with §180.7 where the commission may deem a violation to be willful if the violator remains in continued noncompliance 7 days after receiving notice from the commission of the noncompliance. The intent here is that if the commission tells someone they have committed a violation that needs to be corrected (e.g. a carrier has underpaid an injured employee and is required to pay the difference plus interest) and the violator fails to correct the behavior, then at that point, the continued noncompliance could be deemed to be willfully committed.

With regard to whether the commission is defining "willfully" in a way that is contrary to legislative intent, the commission also disagrees with the commenter. The Legislature has not defined "willfully" and thus it is within the commission's authority to do so for the purpose of implementation of the Workers' Compensation Act. However, the commission believes that the definition of "willfully" should not include notification of "noncompliance" because the term "willfully" is also intended to be used to characterize actions other than violations and the commission has modified the definition.

Comment: The commenter indicated that it believed that the intent behind attempting to define "willfully" was to enhance the ability of TWCC to issue violations and increase the likelihood of TWCC prevailing when a violation is appealed to the State Office of Administrative Hearings. The commenter was concerned that often employees and providers contact insurance companies and allege noncompliance with the statute and/or TWCC rules in instances where the insurance company is in compliance with the statute and/or TWCC rules and felt that the definition as proposed would "in all probability lead to factual disputes between injured employees or health care providers and insurance companies, and the filing of unfounded and unnecessary complaints with TWCC." Therefore, the commenter suggested that the language in the definition of the term "willfully" be modified to be clear that the notification of noncompliance referred to in the rule is notification "by the commission" which the commenter felt supported the Commission's intent as expressed in subsection (b)(2) of Rule 180.7.

Response: The commission disagrees that this will result in more referrals to the commission; the commission currently receives over 600 allegations of noncompliance per month and "willful" is merely an adjective that would be used to describe some violations. Nevertheless, the commission has modified this definition to refer to continuing to remain in noncompliance after notification by the commission (the rule originally did not reference who could serve the notice). The commission has also modified the subsection to allow the notice to come from another regulatory authority because the commission wants to be able to use the word "willfully" to characterize conduct outside the workers' compensation system as well as within it.

180.2 Comments

Comment: Commenter supported the adoption of Rule 180.2 as proposed.

Response: The commission agrees that the rule should be adopted but has also agreed that a change was appropriate based upon the following comment.

Comment: Commenter expressed concern regarding the scope of the language used in proposed new §180.2. "Insurance carriers do not provide medical care. To the extent a carrier is able to ensure quality medical care, such an ability is significantly tempered by an injured employee's legal right to choose his or her own health care provider. The scope of [the carrier's] duty to assist in ensuring quality medical care is not addressed by the rule." The commenter suggested removal of the reference to insurance carriers in regard to referrals for failure to provide/ensure quality medical care.

Response: The commission agrees that the language of the rule could be clearer but does not believe that the reference in the rule to the role of carriers relating to medical benefit delivery should be removed. HB-2600 addresses quality of care from both the carrier and provider sides. HB-2600 promotes quality care and recognizes that carriers have an important role to play in that regard. The high costs of benefits in the system cannot be attributed solely to provider overutilization or failure of the commission to regulate effectively. Overutilized care being paid for by carriers contributes to the system's failure to control costs. This rule makes it clear that the commission will accept referrals against carriers for their acts and omissions that hurt quality of care or unnecessarily raise system costs. However, to clarify the differences in the provider and carrier roles, the language has been amended.

Comment: Commenter asked how referrals are to be made.

Response: Referrals can be made by mail, telephone, facsimile, in person, and, in the future, email or internet form. (However, this is not available at this time as the commission has not yet built a secure form for sending confidential claimant information with referrals).

180.7 Comments

Comment: Commenter supported the adoption of Rule 180.7 as proposed.

Response: The commission agrees, but has clarified §180.7(b) in response to other comments.

Comment: In relation to 180.7(b)(2), the commenter asked whether all anticipated violations could be corrected in 7 days.

Response: Since most reports are required in 7 days or less and most benefits are paid weekly, the commission believes it is reasonable to expect system participants to correct their behavior within 7 days of notice. It is also worth noting that whatever time period is allowed under this rule, the violator already had the period of time originally allowed (e.g. a week in the case of income benefits) plus whatever period of time the violator was in noncompliance prior to receiving notice from the commission to come into compliance.

Comment: Commenters stated that making "a willful violation through failure to correct an error should only occur, if at all, after hearing and appeals have been exhausted and given adequate time to remedy."

Response: The commission disagrees. There are several different ways that a violation can be deemed to be willful. Under current processes, alleged violators are informally notified when the commission believes they have committed a violation and are in continued noncompliance. The violator is then given the opportunity to informally rebut the commission's finding of noncompliance and, if the commission and the violator are unable to agree on the facts of the case or that they constitute a violation, then the commission issues the formal notice of violation pursuant to Texas Labor Code §415.023 and the violator is offered an opportunity for a hearing. The only change that might occur under the current process is that the commission might now characterize the continuing nature of the noncompliance to be willful (because the violator was notified of continuing noncompliance and did not correct the situation).

Comment: Commenters were concerned that there may be situations where it might not be possible to remedy a violation within the seven days or situations where there is a dispute as to whether or not there has been a violation.

Response: The commission disagrees. As noted, the commission believes that seven days is enough time to correct noncompliance in nearly all situations. Further, the language in §180.7 is discretionary which means that the commission can evaluate the situation and the good faith efforts of the violator to come into compliance within the seven days. There is no requirement to label the continued noncompliance to be willful in those instances where the commission believes that every reasonable effort was made to come into compliance within the seven days.

Comment: Commenter recommended that the proposed amendments to Rule 180.7 be withdrawn. "The proposed amendment to rule 180.7 eliminates the existing rule's standard for determining the precise time when an 'administrative violation' occurs and replaces it with one that determines the time when a 'violation' has occurred. The amendment goes on to provide that a 'violation may be deemed 'wilful' if the person who committed the violation: (1) did so knowingly or intentionally; or (2) remains in continued noncompliance 7 days after the date the commission brought the violation to the attention of the violator.'

This proposed amendment appears to exceed the Commission's statutory authority. As noted in our comment to proposed rule 180.1(20), Section 415.021 of the Labor Code, even as amended by House Bill 2600, restricts the Commission from assessing an administrative penalty against a party unless that party has first been found to have committed an 'administrative violation.' It is therefore irrelevant whether the Commission believes the party to have committed a 'violation,' within the meaning the Commission has chosen to give that term. Moreover, as noted in our comment to proposed rule 180.1(22), the Commission appears to be attempting to create a new standard for the assessment of an administrative penalty that is lower than the standard imposed by Section 415.021(a) of the Labor Code. The proposed lower standard would permit the imposition of an administrative penalty to sanction conduct that is not committed 'knowingly' or 'intentionally,' which are the traditional benchmarks for defining 'wilful' conduct. The proposed lower standard implicitly concedes that a party who 'remains in continued noncompliance 7 days after the date the commission brought the violation to the attention of the violator' does not necessarily violate the pertinent statutory or rule provision either 'knowingly' or 'intentionally.' In other words, the Commission implies that its proposed new, lower standard is aimed at parties who may be only negligent or reckless in failing to bring themselves into compliance once they have been warned by the Commission of their improper conduct. However, the Legislature in sections 415.001 through 415.003 of the Labor Code has not defined 'administrative violations' in terms of a negligent or reckless failure to comply with a statutory or rule provision.

Furthermore, the proposed rule's definition of 'wilful' allows the Commission to characterize a party's conduct in one specific instance involving one specific claimant, employer, and carrier as 'wilful' simply because the Commission has previously warned the same party five years, 10 years, or even 20 years earlier that its similar conduct on that previous occasion constituted a 'violation' (and not even an 'administrative violation' at that) even though the previous occasion involved a different claimant or employer, or, in the case of a carrier, involved a completely different adjuster from the one whose conduct is currently the subject of scrutiny. Indeed, the proposed rule does not limit how far back in time the Commission can reach to pluck one isolated instance of a statutory or rule violation and use such a distant violation as the basis for claiming that the current conduct at issue was 'wilful.' Such unlimited reach exceeds the Commission's rule-making power.

Also, under the proposed rule, the party charged with a current 'violation' could be ordered to pay an administrative penalty for a 'wilful' violation even though the party had not committed a violation of the same statutory or rule provision. Under the proposed rule, it is not necessary that the accused party have been previously adjudicated of having violated the statutory or rule provision in question in the current dispute. All that is required is that at one time, more than seven days before the date of the current alleged incident, 'the commission brought the violation to the attention of the violator.' The proposed rule thus allows the assessment of an administrative penalty against a party simply because the Commission once told that party that the Commission merely believed that the party had failed to comply with a statutory or rule provision on an earlier occasion. The proposed rule, allows the assessment of an administrative penalty in such situations even if the Commission was incorrect in its belief or even if the Commission had actually prosecuted a claim for administrative penalties against the same party on the earlier occasion before SOAH with the result that SOAH had determined the party had not committed an administrative violation at all. In such a situation, the Commission had in fact 'brought the violation to the attention of the violator.'

Moreover, the Commission could prevent a party from having an impartial adjudication of whether it has committed an administrative violation in any particular instance by simply issuing a 'warning notice' to the party and accusing it of having committed the violation. Since the Commission would not be charging the party with an 'administrative violation,' the party would have no right to a hearing before SOAH; nonetheless, the Commission could come back to that same party in the future and then charge it with a current 'violation' on the basis of the previously issued warning letter. The proposed rule thus might occasion an unconstitutional denial of due process in an administrative violation proceeding that is based on a prior event that involves something less than a determination of guilt after an adversary process or an absolute confession of guilt by the same party currently being charged. This is because an administrative penalty could be assessed against a party under the proposed rule due to the party's having been warned by the Commission on an earlier occasion about the party's conduct even though the Commission never afforded the party the opportunity to defend itself in an adversarial proceeding with procedural safeguards in the earlier occasion."

Response: The Commission disagrees with the suggestion to withdraw the amendments and with the reasons offered by the commenter to do so.

First, as noted in response to this commenter's statements on §180.1(20) and §180.1(22), whether a person has committed a violation as opposed to an administrative violation is not relevant. Either way, the person violated the statute and/or rules regardless of whether the statute permits the issuance of an administrative penalty for the noncompliance. Further, as also noted, the rule does not lower standards for willfulness; it identifies ways for the commission to establish if the conduct was willful. Behavior is willful if the commission notified the violator that a violation had been committed and the violator did not to correct it.

Second, the suggestion that it is inappropriate for the commission to consider prior violations in taking enforcement action is clearly contrary to the requirements of the statute. Among the factors that the commission is, in fact, required to consider in assessing an administrative penalty (under Texas Labor Code §415.021(c)) is "the history and extent of previous administrative violations." By practice, the commission generally considers the two years prior to the violation in addressing violation referrals (however audit penalties generally go back to the prior audit and look at the change in performance as a measure of history - when performance goes up, penalties may be lowered, when performance goes down or remains essentially unchanged, penalties may be raised).

Third, regarding the suggestion that a person might have to pay a penalty for a willful violation where the underlying act was not a violation misinterprets the process. The commission is not planning on issuing separate penalties in these instances (one for the initial violation and one for the willful violation); rather, it would issue a single notice of violation that identifies the initial violation and then characterizes the continued noncompliance of the violator to be willful. If the accused violator goes to a hearing and is found to have not committed a violation in the first place, then it wasn't a willful violation either. Therefore, the commission's characterization of a violation as willful does nothing to limit the violator's right to due process. Similarly, the commission will not be using prior allegations of noncompliance that were found to not be violations by SOAH as "prior notice of noncompliance" or other history.

Finally, the commission is not attempting to prevent a party from having an impartial adjudication by issuing a warning letter and then using that warning to establish "prior notice of noncompliance." First, many warning letters are issued in accordance with a signed settlement agreement (i.e. with the violator's agreement of the facts). Second, although warning letters do not get appealed to SOAH, the commission often receives responses to the warnings that cause it to withdraw the notice. Third, if the commission were to use a warning letter as a means to establish a future violation as being willful, the violator would be able to raise the issue of the first violation in the hearing for the subsequent violation. It would be appropriate for the alleged violator to raise the issue of the validity of the prior notice that the commission is using to establish the subsequent violation as willful. The prior notice is a required element for proving the "willful nature of the subsequent violation" (unless it can be proven in other ways).

However, all of the comments and discussion on the issue of "previous notice" suggest that it would be helpful to better explain the difference between using notice on a prior violation to establish a willful subsequent violation and using notice of continued noncompliance as a way to establish that a current violation is willful. Therefore, the commission has modified §180.7 to better make this distinction.

180.20 Comments

Comment: Commenters opined that the goal of the approved doctor list should be to allow qualified health care providers to participate in the workers compensation system. Such list should not be unduly burdensome which would deter qualified physicians from participating in the system. The same holds true for the amount of training required to participate in the system. The commenter opined that "physicians normally take several hours of continued medical education annually. Some of the hours are required to maintain their license or board certification. While the number of hours required to participate in the compensation system may itself not appear burdensome, the number of hours required should be considered in light of the numerous areas of medical practice that the physician must stay current. Workers' compensation may not be a significant part of the practice of many physicians who treat injured workers and continuing education requirements might become a barrier to participation in the system. Burdensome rules likely would result in fewer providers delivering a greater percentage of the health care in the workers' compensation system."

Response: The commission agrees that the rules should not be so burdensome as to deter qualified, conscientious providers from participating in the system and has made some changes to the rule as proposed. The minimally required training under §180.23 can be completed via self-study/distance learning. This will make complying with commission training requirements less burdensome while improving quality of care at a reasonable cost.

Comment: Commenter suggested that for clarity and cross-reference, §180.20(a) should refer to Rule 126.8 by way of a statement such as: "Services provided prior to August 1, 2003, must be performed by a doctor on the ADL pursuant to §126.8 of this title (relating to Commission Approved Doctor List)."

Response: The commission agrees that having ADL provisions in two rules may be confusing. Therefore, the remaining provisions in §126.8 have been repeated in §180.20 much the way provisions from §126.10 were moved into §180.21. Therefore, the commission has restructured §180.20(a) and §180.20(b) to cover ADL issues both before September 1, 2003 and on or after that day. The commission intends §180.20 to be the governing rule should there appear to be any conflict between it and §126.8.

Comment: Commenter suggested that the following language: "or for the immediate post-injury medical care (care provided by the first doctor visited by the employee on the date the employee first seeks medical attention for the workers' compensation injury or illness)" from §180.20(a) be either clarified or deleted. The commenter was concerned that otherwise it might "become a loophole for providers to practice workers' compensation care without being on the ADL." The commenter felt that the commission should clarify that "immediate post-injury medical care" is very limited (e.g., one visit) or delete this language so that we do not create an avenue for providers to skirt the ADL requirements." Another commenter echoed this concern but felt that a reasonable maximum period should be established to "encourage required medical attention and system incorporation."

Response: The commission agrees with the need to clarify this section. The proposed language was intended to cover the initial day of treatment only. It was meant to be the care provided the first time the employee sees a doctor not "any care provided by the doctor first seen by the employee" and the rule has been revised to clarify that.

The commission disagrees with adding to this rule that the employee be required to see a doctor within a specific period of time because this rule regulates medical care and doctors, not injured employees (other than requiring them to seek care from a doctor on the ADL). For clarification purposes, a definition of immediate post-injury medical care has been added to §180.1 and the duplicative language has been removed from §180.20(a).

Comment: Commenter suggested that the word "may" should be replaced with the word "shall" in §180.20(b) to clearly indicate that the requirements for inclusion on the ADL are exclusive and mandatory and not permissive or discretionary.

Another commenter suggested that §180.20(b) be changed from

"A doctor licensed in this state or licensed by another jurisdiction may apply to be included on the ADL by:" to

"A doctor licensed in this state or licensed by another jurisdiction with a high volume of Texas Workers' Compensation employees (in excess of 12 employees treated in a 12 month period) shall apply to be included on the ADL by:"

The commenter interpreted the proposed language as not requiring doctors in other jurisdictions (such as those in border states) who treat more than 12 employees in a twelve-month period to be on the ADL and suggested that these doctors be held to the same standards as other doctors in the system.

Response: The commission agrees that clarification would be helpful. The subsection used "may" because doctors are not required to be on the ADL (unless they want to provide treatment to workers' compensation claimants). The use of the word "may" in this subsection did not override the requirements of §180.20(a) (requiring the doctor to be on the list). However, for clarification purposes, §180.20(b) has been amended to specify that a doctor seeking admission to the ADL shall take the steps required by the section. The commission did not use the language proposed by the commenter as the Statute requires all doctors who wish to participate in the Texas workers' compensation system to be on the ADL.

Comment: Commenter suggested that along with the requirements listed in §180.20(c), a doctor who wishes to be on the ADL should also be required to have a certain minimum level of malpractice insurance. The commenter felt that this can serve both as an indication of competence and to ensure adequate coverage to satisfy a carrier's subrogation right in any malpractice that results in increased medical and indemnity costs. The commenter suggested that this would shift the risk of the doctor's malpractice and reduce costs to the system.

Response: The commission disagrees. Much the way there is an insurer of last resort in the workers' compensation system to ensure that anybody can obtain workers' compensation insurance, there is a similar feature in the malpractice insurance market. Thus, obtaining malpractice insurance would not necessarily be a mark of quality. However, it is worth noting that §180.20(e) has been revised to state that the commission shall deny admission or only admit with restrictions, a doctor who could be deleted under §180.26. Section 180.26 provides that the Medical Advisor is to recommend deletion of any doctor who has had three or more malpractice judgments. In addition, the commission does not believe that it is responsible for ensuring that doctors have malpractice insurance just as the agency does not have the responsibility to ensure that employers carry workers' compensation insurance.

Comment: Several commenters pointed out that some doctors might not have an email address and suggested instead that if the doctor has one, then it should be provided. One of the commenters pointed out that carriers are not required to accept electronic claims yet the proposed rule requires doctors to have electronic addresses. Another commenter felt that it was not appropriate to require doctors to have internet access because this would require purchasing a computer as well as paying a monthly fee. The commenter felt that there is no reason to mandate or to require a physician to pay a monthly or routine fee just for the sake of a commission rule, arguing that "this is an extra tax on physicians, who already pay taxes for the government Internet systems."

Response: The commission disagrees. HB2511 required the commission to utilize electronic transmission methods to reduce paper in the system. Although carriers are not currently required to accept electronic billing, this is likely to change in the future. However, the commission needs to have the ability to quickly and inexpensively contact doctors in the system and share information with them. Some providers do not keep apprised of commission advisories and may find out about rule changes after committing a violation and being notified of it by the commission. On the other hand, all insurance carriers are required to have an Austin Representative who picks up mail from the commission's central office location (and the cost of having such a representative is assumedly many times more expensive than having internet access). When the commission needs to notify carriers of changes or concerns, it can easily do so by simply placing a copy of a memo or advisory in the box. The commission has a need for a similar mechanism for contacting doctors and intends to use email for that purpose.

Internet access can be obtained for as little as $10.00 per month with a simple dial-up account using a modem that can be obtained for as little as $20.00. Therefore, it does not represent a significant cost. Further, it appears that Internet access for health care providers is common. As part of the commission's 2000 Customer Satisfaction Survey (published May 26, 2000), the commission asked respondents to indicate whether they had internet access. 68.3% of the health care providers responded that they did have such access. Given that the date that doctors would be required to meet the new ADL requirements is September 1, 2003 (more than 3 years after the original survey was conducted) and that Internet access is becoming more and more common throughout business and society, it is reasonable to assume that an even greater proportion of doctors participating in the system on a regular basis will already have Internet access.

Comment: Commenter suggested that a comma should be put after "facsimile numbers" in §180.20(c)(1).

Response: Commission agrees and has made the change.

Comment: Commenters were concerned that "relevant restrictions" in §180.20(e) is not defined. The commenter was concerned because "sometimes a physician may have restrictions for technical violations such as a chart not being updated. A definition should be added that ties restrictions to relevant quality of care issues."

Response: The "relevant restrictions" referred to in §180.20(e) are taken from the new statutory language in Texas Labor Code §408.023(c) which states that the commission, in determining whether to accept a doctor on the ADL or sanction a doctor, may consider and condition its approval on any practice restrictions applicable to the applicant that are relavent to the services provided under this subtitle.

The commission disagrees that restrictions for what the commenter terms "technical violations" like failing to update charts cannot be relevant. Carriers need documentation to determine whether care being provided in a claim is reasonable and necessary. In addition, complete documentation may be needed by the commission to monitor quality of care. Failure to properly document claims and care could obscure the relatedness of care being provided.

Comment: Commenter noted that the word "of" is missing between "denial" and "the doctor's" in §180.20 (f).

Response: The commission agrees and has made the change.

Comment: Commenters suggested that the word "may" in §180.20(e) be replaced with the word "shall" to clearly indicate that the requirements for inclusion on the ADL are exclusive and mandatory and not permissive or discretionary.

Response: The commission agrees. However, the commission is concerned that, if it inadvertently added a doctor to the ADL when the rule requires the doctor to be denied admission or only be admitted with restrictions, that the doctor would attempt to argue that the commission had lost its chance to use its authority to prevent the doctor from being on the ADL. Like the commenters, the commission believes that the items in §180.20(e) represent barriers to serving on the ADL or grounds for restricted acceptance and that it should not lose the right to impose the requirements of this subsection at a later date (particularly if the commission was unaware of the disqualifying factor at the time it admitted the doctor). Admission to the list does not constitute "forgiveness" of the offenses. Therefore, §180.20(f) was modified to make this clear.

It was noticed that the proposed language only provided an explanation and opportunity to respond in a case where the commission was denying an application but not in the event that it was approving the doctor with conditions or restrictions. The commission believes that doctors who are added with restrictions may want to know why and have the opportunity to respond. Therefore, in addition to making the change suggested by the commenters, the commission is adding language to address these other issues.

In addition, the commission provided additional detail regarding the process for reviewing and responding to ADL denials or restrictions. The proposed rule did not clearly indicate that the commission would review the doctor's response and might change its mind. The subsection is now much clearer in this regard and also specifies that if the final decision is still not an unrestricted approval, the commission shall explain its reason(s) to the doctor so that the doctor will know why his rebuttal did not convince the commission that it was appropriate to allow an unrestricted admission (or possibly even a restricted admission) to the ADL.

Comment: Commenter expressed concern about the ability of the commission to regulate out-of-state providers feeling that the commission has little or no ability to regulate these providers. The commenter claimed to know of many instances where out-of-state doctors, health care facilities, and health care providers who treat Texas workers' compensation employees refused to comply with the Texas Labor Code and commission rules, guidelines, and/or policies. The commenter suggested that the Executive Director exercise the authority granted by Texas Labor Code §406.074 to enter into interjurisdictional agreements with other states to help ensure compliance with the statute and rules.

Response: The commission agrees that it needs to ensure that all participants in the Texas workers' compensation system comply with the statute and rules. It appears that the Legislature attempted to help ensure that this happen by requiring out-of-state doctors who conduct peer reviews or utilization reviews do so under the direction of a doctor licensed in this state (as that will ensure that there is someone in the state's jurisdiction that can be more easily held responsible for the out-of-state doctor's actions and inactions).

However, the commission disagrees that interjurisdictional agreements would solve the problem of regulating out-of-state providers. Texas Labor Code §406.074 allows such an agreement to resolve various conflicts of jurisdiction and noncompliance by employers. However, the fact that the section specifically mentions noncompliance by employers and not by other system participants could make it difficult to use such an agreement as suggested. This problem is exacerbated by the fact that the Statute says that if such an agreement is adopted by the commission as a rule, then it "binds all subject employers and employees," not carriers, attorneys, or providers.

Comment: The commission received numerous comments regarding subsection §180.20(h). As proposed, the subsection requires insurers to pay the medical bills of doctors licensed in another jurisdiction and who are not on the commission's approved doctor list and are low-volume doctors (treat or evaluate 12 or fewer Texas workers' compensation employees each year).

A number of commenters were concerned that the proposed language would allow out-of-state providers to avoid registering for the ADL because carriers were not permitted to withhold payment simply because the doctors were not on the ADL (even if the doctors provided care to more than 12 claimants per year). "As currently proposed Rule 180.20(h) provides an end-run to Rule 180.23. The same requirements for "X" certification under Rule 180.23 provide an exception under Rule 180.20(h). Where, then, is the incentive to obtain "X" certification? Such a doctor cannot provide peer reviews, but can treat, which thwarts the legislative intention."

In addition, commenters were concerned that carriers would not be able to monitor these doctors to identify whether the doctors were truly low volume doctors (and thus had to be paid even if not on the list). Commenters felt that carriers didn't have the necessary information to perform this action and felt that it was contrary to the intent of HB-2600. "The regulation as drafted would unfairly put the responsibility on the carrier to determine on its own whether the doctor has treated more or less than 12 claimants in a given year, prior to making a reimbursement determination. There is no way a carrier would have ready access to such information. The regulation should be revised to allow the carrier to withhold a reimbursement demand where the doctor is not on the ADL. The burden must be on the doctor, not the carrier, to provide sufficient information--perhaps through a Commission certification--that the doctor is entitled to reimbursement even though not on the ADL. If the carrier cannot withhold payment even after determining that the doctor is not on the ADL, there simply is no reason to have an ADL."

One commenter recommended that the commission develop a process wherein it identifies all out-of-state doctors who are not low-volume doctors and advise them of the need to complete the application process and appropriate levels of training required to be approved for inclusion on the ADL. The names and license numbers of the out-of-state high volume doctors who fail to comply with the commission's application and training requirements after notification by the commission of those requirements would then be posted on the commission's website and carriers would be permitted to deny payment.

The commenters felt that entitlement to reimbursement should be consistent for high or low volume providers, regardless of the jurisdiction and one suggested changing the subsection to the following:

(h) A carrier shall not withhold reimbursement to a doctor who:

(1) Treats more than 12 Texas workers' compensation employees per year and is on the ADL, or

(2) Treats 12 or less Texas workers' compensation employees per year who submits a TWCC approved form (ex. ADL Exception Form) indicating their exemption from the ADL.

The commenters believed that an out of jurisdiction doctor who provides routine medical treatment to a high volume of Texas employees or who performs a Texas workers' compensation specific examination (RME or DD exam) should be held to the same standards and qualifications as a doctor licensed in the state of Texas. "If a Texas employee seeks treatment from a doctor who treats a low volume of Texas workers' compensation patients (either outside of or within the state of Texas), that doctor would not likely be aware of the compensation laws. It appears that the purpose of the ADL process is to ensure quality heath care for Texas workers' compensation patients. The addition of a form indicating the provider's exemption from the ADL would enable the carrier to verify the reason for the provider not being on the ADL prior to reimbursement. This would help eliminate reimbursement to providers who have been denied approval to the ADL through the correct process.

The addition of an exemption form would enable the Commission to track the number of Texas injured employees that each low volume provider has treated in a 12-month period. This tracking device would enable the Commission to maintain and publish 2 lists (the ADL and the Exemption list) via the Internet. These lists would provide the carriers with the necessary information to comply with the reimbursement requirements of this rule. Any doctor that is not on either listing would not be eligible for reimbursement."

Commenter recommended that the names and license numbers of the out-of-state high volume doctors who fail to comply with TWCC's application and training requirements after notification by TWCC of those requirements be posted on TWCC's internet website. "The availability of a list of out-of-state high volume doctors (doctors who treat or evaluate 13 or more Texas workers' compensation employees per year) will allow insurance companies to identify low volume out-of-state doctors who are not required to complete TWCC's new approved doctor list application process and training and ensure that payment of medical bills is not withheld because these doctors are not on TWCC's approved doctor list."

Response: Regarding the issue of in-state and out-of-state providers being held to the same standards, notwithstanding the difficulties the commission sometimes has ensuring that out-of-state providers remain in compliance, the commission definitely believes that all doctors should be held to the same standards, just as all carriers, employers, attorneys, and employees should.

Subsection (h) was intended to ensure that doctors who are not regular participants in the system (whether in-state doctors or out-of-state doctors) do not lose their right to reimbursement without having the opportunity to be admitted to the ADL (since these doctors may not be aware of the ADL requirements). However, the commission agrees that there is a potential for abuse if carriers are not allowed to withhold payment on bills of doctors who are not on the ADL and the commission has rewritten the subsection.

Subsection (h) now requires carriers to withhold reimbursement to doctors not on the ADL except when the health care provided was emergency or immediate post-injury medical care or the doctor receives exception from the commission. If the doctor has not been deleted or suspended from the ADL and has not had his application for admission to the ADL rejected, the carrier will be required to process the medical bills in accordance with chapter 133 and determine whether or not the medical bills will be paid once the doctor is added to the ADL. The carrier's explanation of benefits (EOB) will include an explanation that the payment will be made if the commission grants the doctor an ADL exception for that claim. This will allow the carrier the full 45 days to review the medical bill for reasonableness and medical necessity and at the same time, not require a doctor to have to go through the 45 day delay twice. Carriers will have 14 days from receiving documentation of the approved exception to pay all bills previously processed on the approved claim but not paid due to the ADL status question.

In some cases, doctors will be able to get payment for services that were provided prior to being admitted to the ADL. However, because the delay in payment will be caused by the doctor's failure to register for the ADL and not any fault of the carrier, the carrier will not be required to pay interest on the payment unless the carrier took more than the allowable time to initially review the bills or failed to timely pay the benefits when finally notified that the doctor was eligible for payment due to timely ADL approval or ADL exception.

Doctors who were not entitled to payment because they were deleted or suspended from the list or had their application to be on the ADL rejected by the commission will not be eligible for retroactive payment. They will only be eligible for payment for services provided on or after the date the doctor was reinstated/added to the ADL.

It should also be noted that doctors who are on the ADL at the time they provide health care shall not be required to provide such documentation to the carrier in order to secure payment. Carriers shall have access to the ADL online and will be expected to use that information. Requiring doctors to submit documentation of ADL status with each medical bill or even an initial bill is unnecessary paperwork that runs contrary to the intent of HB-2511.

The commission disagrees with the suggestion that the commission post a list of exempt doctors separate and apart from the ADL. Doctors will be given exceptions on a claim-by-claim basis and the carrier will be given a copy of the approval. Therefore, such a list is unnecessary.

Regarding the issue of the difficulty that carriers will have identifying which doctors have exceeded the limit on the number of claimants they are permitted to provide health care to (for those doctors whose certification provides such a limit), the commission agrees that many carriers will be unable to identify doctors who are treating more than the permitted number of injured employees. Companies that have larger bill review companies should be able to easily track the number of patients a doctor is seeing using their computerized payment processing system. However, this could result in a doctor treating well over their maximum in a year without the carriers' knowledge if the employees did not all belong to the same carrier or to carriers using the same utilization review company. The commission will have to monitor doctors who are registered as doctors who infrequently provide care to ensure they comply with the participation restrictions which apply to that certification level. Doctors found to have violated the section will have the option of obtaining certification to treat employees without volume restrictions within 60 days or the Medical Advisor will recommend deletion from the ADL.

Comment: Commenter suggested that the commission make the information required in (i) available in a downloadable format by File Transfer Protocol (FTP), on its website, which carriers can use to keep their automated systems in sync with the commission's current list of qualified and approved doctors.

Response: The commission agrees and will make such files available for review and download when it begins posting the information on the website.

Comment: Commenters suggested that if the commission is going to put names of providers on their website who have been deleted from the list or have been sanctioned by the commission, the names of carriers and utilization review agents sanctioned should also be placed on the website.

Response: The commission believes that all system participants who have been sanctioned or otherwise penalized by the commission should be posted to the commission's website. However, this rule is not the proper place to put this requirement as it only focuses on doctors. Further, the reason that the commission is going to post information about sanctions against doctors is that these sanctions could have a significant effect on the doctor's eligibility to receive reimbursement, and thus, carriers need to be as aware of these sanctions as they need to know who is on the list. However, the commission anticipates developing a process for posting enforcement actions against all system participants as a deterrent and to build confidence in the system.

Comment: Commenter recommended changing §180.20(i)(1) to the following:

180.20 (i) (1) doctors (name, TIN #, license # and license state) on the ADL and their certification levels with the effective date of each level (once mandatory);

The commenter noted that the doctor's TIN, license # and state that they are licensed in will ensure accuracy when using the ADL listing. The addition of the effective dates for each level of certification also ensures proper reimbursement for services provided by a doctor as outlined within the ADL rules.

Response: The commission agrees that more than the simple names will need to be listed but disagrees with specifying exactly what information is to be provided as the information may change over time. For example, the commission anticipates relying on the national provider identification number required by the Health Insurance Portability & Accountability Act once it is available. The commission intends to make the list more and more comprehensive over time so that it will be able to be used for many things. For example, by including address information, it will eventually be possible for injured employees to find doctors in their areas who are on the ADL. Subsection (i) has been broadened to include additional information that will be posted on the website. For example, the commission will also identify doctors whose applications for the ADL were rejected (as this affects reimbursement). The commission also intends to post information about a doctor's privileges granted or restrictions imposed by the commission.

180.21 Comments

Comment: Commenter suggested that designated doctors who do a high volume of required medical examinations (RMEs) for carriers should be monitored by the commission for conflicts of interest. "These doctors, in some cases, are lacking in objectivity due to the ties with the carriers and the DD must always be beyond conflict of interest or an appearance of such a conflict." Another commenter suggested that all sources of income received by a designated doctor should be reported. The commenter felt designated doctors cannot be impartial if they perform carrier RMEs and thus should automatically be disqualified. Commenter accused the commission of intentionally appointing "corrupt" designated doctors.

Response: The commission agrees that designated doctors need to be unbiased and agrees that doctors who provide inaccurate ratings or incorrect assessments of MMI need to be removed from the designated doctor list (DDL). However, the commission disagrees that a doctor who has served as an RME doctor should be disqualified from serving as a designated doctor. The argument is predicated on the assumption that a doctor who does examinations for carriers is automatically biased towards carriers. The corollary to this position is that doctors who do not do examinations for carriers will be biased towards injured employees. The commission does not accept this premise as true.

The commission does not believe that it is appropriate to exclude doctors from being designated doctors based upon a perceived bias and what they might do. Rather, the commission will monitor designated doctor performance and take action when appropriate. The commission will be stepping up its monitoring of designated doctors, and these efforts will ensure that doctors whose quality of service as a designated doctor does not meet standards shall be removed from the designated doctor list. The commission disagrees that it would ever intentionally appoint a corrupt designated doctor.

However, in reviewing the comment, the commission noticed that, although the proposed rule required doctors to report "disqualifying associations" (as a means to ensure non-bias), the rule did not contain a definition of what a disqualifying association is. In transferring the requirements of §126.10 to §180.21, the commission inadvertently left out the definition along with the definitions of "party" (which is integral to the definition of "disqualifying association") and "self-refer" (which is another term that was used in proposed §180.21 but was unintentionally not defined). Therefore, the commission has added these definitions from §126.10 to §180.21 in a new subsection (o).

Comment: Commenter suggested that for clarity and cross-reference purposes, §180.21(b)(1) should include a reference to Rule 126.8.

Response: The commission agrees that a reference to the ADL rule is necessary but has made the reference to §180.20 rather than §126.8 because §180.20 as adopted covers the ADL both before and after September 1, 2003. So a reference to §126.8 is not necessary.

Comment: One commenter suggested deleting §180.21(b)(2) (which requires designated doctors to have maintained for the past three years and continue to maintain routine office hours for the treatment of patients in an active practice of at least 20 hours per week). "The status of a provider's practice is not a measure of the ability of a provider to perform the duties of a designated doctor. Those providers that wish to be included on the designated doctor list will be subject to training requirements and will be tested to demonstrate proficiency. Requiring an "active practice" unnecessarily limits the availability of designated doctors. It would exclude many in academic and research settings whose knowledge of best practices may be superior to doctors in busy office practices who are unable to keep up with the medical literature. Providers that are board certified, licensed in good standing, and complete the training and other ADL requirements should not be prohibited from being designated doctors."

Another commenter echoed this concern: "While we believe that eligibility for the designated doctors list should be restricted to highly qualified doctors, the 20 hours of active practice rule seems somewhat arbitrary and will likely serve to prevent many highly experienced and highly qualified specialists from participating in the process. The 20 hour per week active practice requirement is not in the statute and we would advise against its adoption by regulation because it may unfairly exclude the more experienced Texas medical specialists who could provide their expertise to the workers' compensation system. To ensure a qualified designated doctor pool, we would recommend that the DDL be open to those doctors who are Texas licensed in good standing, are Board certified in their medical specialty and who have completed the Commission's required training for designated doctors. This will allow the workers' compensation system to benefit from the knowledge and expertise of the medical society's more experienced specialists."

However, other commenters indicated support for the 20 hours per week active practice requirement. One commenter suggested that doctors who do not have active practices "often lose touch with current medical practices and the plights of the injured workers." Another commenter echoed this concern, opining that after a doctor is out of active practice for a certain amount of time, the doctor's income is impacted and this means that carriers will have more influence on the doctor. The commenter felt that doctors who do not have an active practice have a place in the system but that there should be some type of limitation on time.

Response: The commission agrees that the requirement for a doctor to have an active practice should be deleted. In the past, there was a concern that doctors who no longer had active practices would not be as aware of trends in their field and thus, over time, might see their knowledge grow out of date. This is an issue of quality. The commission and supporters of the active practice requirement were concerned designated doctors without active practices would produce opinions of lesser quality than those of designated doctors with active practices. The commission now believes that this can be prevented.

The commission plans to develop and/or find supplemental training for designated doctors who do not have active practices. Designated doctors are required to complete training and testing every four years under both the old and new rules. However, those without active practices will be permitted to be on the DDL only if the doctor also completes supplemental training/testing on MMI/impairment evaluation every four years in an alternating cycle of two year intervals (first the mandatory training/testing then the supplemental training/testing roughly two years later, then the mandatory training/testing again, etc.).

The commission was also, at one time, concerned about quality and allowing a designated doctor cottage industry to develop. The commission is no longer concerned about this. With the changes made by HB-2600 that give the commission additional authority and resources to ensure quality in the system, the commission believes that it can ensure that designated doctors will provide quality opinions. Further, it may be that doctors who are more active as designated doctors will provide higher quality impairment ratings as repetition may improve performance.

Regarding the suggestion by a commenter that a doctor who does not have an active practice is more likely to be biased, the commission disagrees. The greatest value in requiring an active practice is that designated doctors would remain current regarding medical treatment. However, as noted, the commission believes that there are alternative ways of ensuring that doctors who do not maintain active practices are qualified to be designated doctors by requiring additional continuing education training.

Regarding implementation of this change, §180.21(b) applies to qualifications to be a designated doctor prior to September 1, 2003. The subsection was intended to essentially carry over the requirements currently in effect in §126.10 (relating to Commission Approved List of Designated Doctors). The only change from §126.10 was to clarify that "active practice" means at least 20 hours per week. The commission is not ready at this time to lift the active practice requirement as it has not yet developed or approved any supplemental training. Therefore the change will apply for doctors who wish to be on the DDL on or after September 1, 2003. In addition, the commission has added a definition of "active practice" to the end of the rule to simplify the construction of §180.21.

Comment: Commenter noted that the word "to" is missing before "August" in §180.21(d). The commenter also suggested putting a comma after "2003."

Response: The commission agrees and has made the suggested changes (but changed the reference month to "September").

Comment: Commenter noted that there should be a comma after the word "to" as in "...but not limited to, prior deletion..." in §180.21(g)(5).

Response: The commission agrees and has made the suggested changes.

Comment: Commenters suggested that the word "may" in §180.21(g) be replaced with the word "shall" to clearly indicate that the requirements for inclusion on the DDL are exclusive and mandatory and not permissive or discretionary. "The use of shall is consistent with the verbiage used in Section (e) of this rule. Sections (b) and (c) use the term must when listing the qualifications for approval as a designated doctor and Section (e) uses the term shall when listing the information required for the application for a designated doctor. It appears that the intent of this rule is to monitor the qualifications of the applicants for the DDL, therefore, if the applicant does not have or does not provide proof of the required qualifications, the applicant should not be placed on the DDL."

Response: The commission agrees. However, as was the case in §180.20, the commission is concerned that if it inadvertently added a doctor to the DDL who is not qualified, that the doctor would attempt to argue that the commission had lost its chance to use its authority to prevent the doctor from being on the DDL. This has been clarified in §180.21(h). Like the commenters, the commission believes that the items in §180.21(e) represent barriers to serving on the DDL and that it should not lose the right to impose the requirements of this subsection at a later date (particularly if the commission was unaware of the disqualifying factor at the time it admitted the doctor).

In addition, the subsection was changed to provide additional detail regarding the process for appealing a DDL denial. The proposed rule did not clearly indicate that the commission would review the doctor's response and might change its mind. The subsection is now much clearer in this regard and also specifies that if the final decision is still a denial not an unrestricted approval, the commission shall explain its reason(s) to the doctor so that the doctor will know why his rebuttal did not convince the commission that it was appropriate admit the doctor to the DDL.

Comment: Commenter felt that §180.21(g)(6) which provides that a doctor can be denied admission to the DDL for any "other activities which warrant the application denial" was too vague.

Response: The commission disagrees. To attempt to enumerate all possible grounds to deny admission to the DDL would require a level of prescience that is impossible. Further, the subsection provides examples of "other activities which warrant application denial" by referencing §180.26 which lists numerous grounds for sanction or removal of a doctor from the ADL.

Comment: Commenter suggested changing "deny" to "denial of" in the first sentence of §180.21(h).

Response: The commission agrees and has made the change.

Comment: Commenters expressed concern regarding the scope of authority to waive requirements for DDL admission pursuant to proposed §180.21(i). One commenter was of the opinion "that substantial doubt exists as to the accuracy of an impairment rating when an out-of-state doctor, who has not completed [the commission's] designated doctor training course, serves as a designated doctor for the purpose of resolving a dispute regarding an injured employee's impairment rating."

One noted that no "minimum controls are established, nor does the rule provide guidance on the scope of review required for the granting of such waivers." The commenter suggested establishing minimum standards for such out-of-state doctors, including but not limited to "such minimum requirements as licensure, familiarity with correct versions of AMA Guides and commission rules, etc." The commenter also requested "clear delineation in the rule to specify the procedures whereby alternate out-of-state doctors are selected and evaluated, and requirements for notice and participation of parties."

Both commenters noted that the rule makes no exception with regard to the presumptive weight status accorded reports of designated doctors under existing rules and believed that it would be inappropriate to accord presumptive status to out-of-state doctors by circumventing the Commission-established requirements for Designated Doctors via broad waiver provisions. The commenters suggested that an untrained out-of-state designated doctor should not be given the same degree of presumptive weight as a designated doctor who has completed the commission's designated doctor training course.

Response: The commission disagrees. First, the language that the commenters are objecting to is virtually identical to the language that has been in the existing rule since December 1, 1995 (the sole difference being the deletion of the word "deemed", as in "when deemed necessary"). Further, the requirements for serving as a designated doctor are set out by the commission and are thus within the authority of the commission to modify. HB2600 did not limit the commission's authority in this regard. Although the commission prefers designated doctors to go through its training and testing, this is clearly not going to be possible in all cases. The Texas workers' compensation system has had thousands of injured employees living in states other than Texas. It is not reasonable to expect a doctor in the state of Washington who might see one Texas workers' compensation claim in his or her career to attend training and take a test to perform one examination. Clearly some out-of-state doctors (such as those bordering Texas) will want to be added to the DDL much the way they are now. The commission does not intend to grant exceptions to doctors who are regularly serving as designated doctors but do not get the training.

Regarding the qualifications of out-of-state doctors who do not take commission training, other states and systems use the AMA Guides and have doctors who function in a manner similar to our designated doctors. They may have similar training requirements that could help ensure that the doctors selected are appropriately trained. In addition, the American Academy of Disability Evaluating Physicians, the American Board of Independent Medical Examiners and other state societies and boards offer training and certifications in the use of the AMA Guides that could serve as a substitute for commission training on a case by case basis.

Finally, regarding the issue of somehow lessening presumptive weight of a doctor to whom the commission granted an exception in order to have the doctor serve as a designated doctor, there is no such provision in the statute and the commission does not believe that the distinction is warranted because of the factors noted in the preceding paragraph.

Comment: Commenter suggested changing the 180.21(k) from "allowing" the commission to delete or suspend a doctor from the DDL for the listed infractions to "requiring" it to. The commenter felt that the grounds listed in Section (k) (1)-(12) are intended to ensure compliance with qualifications to be a designated doctor; necessary and cost effective health care treatment; and compliance with TWCC rules. "To ensure the most effective and necessary health care be provided to the injured workers in Texas, a doctor who violates the standards required as a designated doctor should be deleted or suspended from the DDL until such time that the doctor can prove their pattern of practice has changed."

Response: The commission agrees. Some of the infractions listed in this subsection are clearly serious enough to require deletion from the list. However, others may be less serious and thus may require less severe action (such as a short term suspension). Nevertheless, changing the word "may" to "shall" does not remove the commission's discretion to address these issues in an appropriate manner as the subsection provides that the commission shall delete or suspend the doctor and the commission has changed the rule.

Comment: Commenter expressed concern about the breadth of reasons to delete a doctor from the DDL in 180.21(k). The commenter was also concerned that the provision relating to inaccurate reports "is quite broad and it can be very subjective." The commenter asked whether one failure to timely respond to a request for clarification allows the commission to remove a doctor from the DDL.

Response: The grounds for deletion or suspension from the DDL are not substantially broader than what existed under the original rule. The prior rule specified that a doctor could be deleted for "any violation of the Texas Workers' Compensation Act or Commission rules," and this would include a failure to timely respond to a request for clarification (since such a failure would be a violation).

The commission disagrees with the commenters' suggestion that the accuracy of reports is very subjective. Many of the things that may be inaccurate regarding a report are not at all subjective. Regarding medical issues, the commission will use the findings of the MQRP to evaluate the accuracy of the reports when the MQRP conducts case reviews or audits of a doctor. In addition, the commission can also use the findings of hearings officers and appeals panel decisions. Because designated doctor opinions are given presumptive weight, if the great weight of medical evidence is sufficient to overturn the designated doctor's opinion, then it is likely that there were significant errors in the report.

Regarding the question of whether one failure to timely respond to a request for a clarification is sufficient to delete a doctor from the DDL, the answer is that it can be under the right circumstances (e.g. a willful violation). However, to ensure that single, incidental occurrences do not automatically result in suspension or deletion, the commission has modified several of the provisions of subsection (k) to focus on willful violations or violations that are part of a pattern of practice including subsection (k)(5) regarding failure to respond to a request for clarification.

Comment: Commenter had questions about what the provisions of §180.21(k)(3) mean and how the commission would prove that a violation took place.

Response: Designated doctors are permitted to enlist the help of other health care providers in the assignment of impairment ratings and determination of MMI. This is intended to occur in two circumstances: when the doctor does not have sufficient experience with an aspect of an injury (such as hearing or vision loss) and needs a specialist to assist or when the doctor wants to let another provider perform the range of motion, strength, and sensory testing required by the AMA Guides as provided in Rule 130.6 (relating to Designated Doctor Examinations for Maximum Medical Improvement and/or Impairment Ratings). §180.21(k)(3) is intended to ensure that designated doctors who abuse this allowance (such as by referring the entire examination out to another provider) are removed from the DDL. The commission will likely use the MQRP to help determine whether a doctor makes unnecessary referrals under this provision.

Comment: Commenter suggested that there was a superfluous "an" in 180.21(k)(4).

Response: The commission agrees and has made the change.

Comment: Commenter asked how many assignments of MMI and/or impairment ratings would have to be overturned to result in suspension or deletion from the DDL as required by §180.21(k)(6).

Response: This decision will have to be made on a case-by-case basis or based upon standards set by the commission and the Medical Advisor with recommendations from the MQRP. The question is likely to include consideration of what percentage of challenges to the doctor's opinions are upheld and not just how many times it happened. The commission would also likely consider the reason that the doctor's opinion was overturned (e.g. the type or magnitude of the mistakes).

Comment: Commenter noted that there was an extra period in 180.21(k)(7).

Response: The commission agrees and has made the change.

Comment: Commenter suggested that for the sake of uniformity and maintaining a more central location, all notices of disqualifying associations from §180.21(k)(9) should be sent to the office of the medical adviser, rather than to the field offices.

Response: The commission disagrees. The Medical Advisor does not administer the process of assigning or reassigning designated doctors and thus does not need to receive or maintain this information. The field offices performed these functions under the prior rule and will continue to do so.

Comment: Commenters expressed concern that a listing on the internet of doctor sanctions and the type of sanction may lead to doctors not wanting to be designated doctors, because they could be sanctioned or removed for an inaccurate, though innocent, report.

Response: The commission disagrees and believes that all system participants who have been sanctioned or otherwise penalized by the commission should be posted on the commission's website. Although this rule is not the proper place to put this requirement as it only focuses on designated doctors, the commission anticipates developing a process for posting enforcement actions against all system participants as a deterrent and to build confidence in the system.

Commission comment: Texas Labor Code §408.0041 requires the commission to assign the next designated doctor on the list that meets the requirements for the individual claim. However, in reviewing the comments to these rules and in developing a new system to select and assign designated doctors in accordance with §408.0041, the commission noticed that there was no provision in the proposed rule that explained where on the list a doctor will be placed when added or readmitted to the list. Therefore, the commission added subsection (n) that puts doctors who are added to the list (whether for the first time or a readmission following suspension or deletion) at the bottom of the list.

180.22 Comments

Comment: Commenters opined that the treating doctor's role and responsibilities are "greatly increased" under the proposed rule and additional information is required that will increase the time and expense in providing that information. The commenters suggested that the treating doctor receive increased reimbursement for the increased duties and the costs of providing the information.

Response: The commission agrees that §180.22 places some additional requirements on treating doctors for submitting information on patient outcomes but disagrees with the suggestion that the treating doctor's role and responsibilities are "greatly increased." Treating doctors have always been considered gatekeepers in the system and Texas Labor Code §408.021(c) always required treating doctors to approve or recommend treatment not provided in response to an emergency. Likewise, the responsibilities of treating doctors to maintain efficient utilization of health care or to communicate about the employee's ability to return to work are not new ones. This rule does not govern medical fees.

It may be possible to get some of this data (particularly on work release and cost and utilization) from carriers. However, it is not yet clear how patient satisfaction data is going to be captured and it may well have to come from doctors themselves. The commission will work with all system participants in obtaining the information. There may be portions of the data that can and will be obtained from carriers.

Comment: Commenters felt that the duties of the referral doctor are increased as he or she must get preauthorization for every medical service from the treating doctor "(apparently for even the most minor or routine procedure)" and also must report to the treating doctor at least every 30 days. The commenters stated that this can also add to the costs of treating the injured worker and advocated additional reimbursement for these increased requirements.

Response: The commission disagrees. As noted, Texas Labor Code §408.021(c) always required treating doctors to approve or recommend treatment not provided in response to an emergency (thus meaning that other providers providing health care to the injured employee have needed to coordinate with the treating doctor). Likewise, the requirement for referral doctors to send status reports to the treating doctor every 30 days existed under §133.4 (Consulting and Referral Doctors) that this rule replaces. This rule does not govern medical fees.

Comment: Commenter felt that the proposed rules do not set out any of the roles and responsibilities of any other participant in the system. "What are the responsibilities of carriers and employers in the system? The carriers are on the receiving end of all the reports and have extreme latitude to question everything."

Response: The purpose behind this rule was to centrally locate and better differentiate between the various roles that doctors play in workers' compensation claims because there are so many. Carriers' and employers' responsibilities are fairly well laid out in other rules. However, as the commission continues to update its rules, it will evaluate whether additional "roles and responsibilities" rules would serve a useful purpose.

Comment: Commenter suggested that the "or" in Rule 180.22(a)(2) should be an "and." The commenter opined that although each of these constitutes a "medical benefit" pursuant to section 401.011 of the Labor Code, a "health care provider" should strive to provide all three.

Response: The commission disagrees with the specific suggestion for changing the rule but agrees that providers should strive to provide care that cures or relieves the effects naturally resulting from the compensable injury, promotes recovery, AND enhances the ability of the employee to return to or retain employment. However, if the commission substituted the word "and" for "or" as suggested, then the rule would require providers to only provide medical benefits that meet all three requirements which does not mirror the definition of medical benefits found in the Statute. In some cases, a provider might need to provide a treatment that only meets one or two of the three requirements, and this would be perfectly appropriate under the statute. However, to emphasize the importance of trying to provide care that meets all three requirements, the commission has changed the "or" to "and/or".

Comment: Commenter suggested putting a comma between "including" and "but" in 180.22(b).

Response: The commission agrees and has made corrections relating to the phrase "including, but not limited to," throughout the rules.

Comment: Commenters suggested that "sf 12" in 180.22(c)(4)(C) was either extraneous material or else a misspelled word.

Response: The commission disagrees. "sf 12" stands for Short Form 12, a simple outcomes measure with 12 functional categories. It is an abbreviated rendition of the more sophisticated SF-36. Both are widely accepted outcomes measurement tools. However, the commission has modified the rule to clarify what is meant by "sf 12."

Comment: Commenter recommended that "health" be substituted for the word "medical" in 180.22(c) since a treating doctor can be a chiropractor and the word "medical" does not apply to a chiropractor.

Response: The commission agrees that the term "health care" is appropriate because this term is defined by statute while "medical care" is not. However, the adjective "medical" doesn't automatically exclude chiropractors (e.g. chiropractors submit "medical bills," not "chiropractic care" bills). The commission has made the change here and in other places in these rules where applicable. However, the commission used the phrase "immediate post-injury medical care" rather than "immediate post-injury health care" in these rules because the language is used in 408.0023; but the context clearly indicates that it applies to chiropractors as well.

Comment: Commenter felt that the requirement in 180.22(c)(1) that treating doctors approve or recommend all health care rendered to the employee (except in an emergency) would drive doctors out of the system.

Response: The commission disagrees. This requirement mirrors §408.021(c) and has existed since the act was first passed. Further, it was contained in rule 133.3 and is merely being moved to this new rule. This language does not represent a new requirement on treating doctors.

Comment: Commenter felt that the requirements under 180.22(c) regarding reporting work release data, cost and utilization data, and patient satisfaction exceeded the commission's authority as HB-2600 did not specify that treating doctors had to provide this information. The commenter suggested that carriers should have to do this as they have the data.

Response: The commission disagrees. Texas Labor Code §408.025 provides that the commission by rule shall adopt requirements for reports and records that are required to be filed with the commission. It may be possible to get some of this data (particularly on work release and cost and utilization) from carriers. However, it is not yet clear how patient satisfaction data is going to be captured and it may well have to come from doctors themselves. The commission will work with all system participants in obtaining the information. There may be portions of the data that can and will be obtained from carriers.

Comment: Commenter recommended including "insurance carrier" after the word "employer" in 180.22(c)(3) so as to ensure that the insurance carrier is kept abreast of the injured employee's ability to work or any work restrictions on the employee.

Response: The commission agrees and has made the change. In addition, the commission noticed that the rule did not require the treating doctor to communicate return to work information with the injured employee which was an oversight that has been corrected. Communicating with injured employees is important to ensuring a timely and appropriate return to work.

Comment: Commenter recommended adding a new subsection (c)(5) to 180.22 which requires the treating doctor to report the employee's status, prognosis, plan of treatment, response to past and on-going treatment, and expected date of maximum medical improvement to the insurance company within 30 days of initiation of treatment and at every 60 days thereafter.

Response: The commission disagrees. The commenter's proposal would put back into place requirements that existed prior to the introduction of the Work Status Report in §129.5 (relating to Work Status Report) and the addition of the requirement to submit chart notes with medical bills for specific types of treatment. Those requirements coincided with the repeal of the rules that required filing the Initial Medical Report and the Subsequent Medical Report and those changes were made based upon the input of stakeholders; the commission does not agree that there is a need to reintroduce the repealed reporting duties.

Comment: Commenter suggested adding a new subsection to 180.22(d) that would require the consulting doctor to forward a copy of the consultation report to the insurance company. The commenter also suggested changing 180.22(e)(2) to require the referral doctor's report to the treating doctor also be sent to the carrier. The commenter felt that insurance companies are not always provided with the necessary medical records and documentation necessary to effectively manage workers' compensation claims and that it is extremely important that the insurance company receive a copy of the consulting doctor's consultation report and the referral doctor's status report so as to allow the insurance company to properly manage the claim, set proper levels of claim reserves, and keep abreast of the status of the injured employee.

Response: The commission agrees that the consulting doctor's report needs to be sent to the carrier and §133.104 (relating to Consultant Medical Reports) already requires it. However, the commission has copied requirements into §180.22 to make it easier to locate. In addition, the commission has modified the rule to specify that the referral doctor's status report is to be provided to the carrier as well as to the treating doctor.

Comment: Commenter suggested changes to §180.22 (d) and (e) to prohibit consulting and referring doctors from making referrals to other providers for either treatment or another consultation. The proposed rule prohibited a consulting doctor from making referrals for treatment without the treating doctor's approval and was silent on referring for consultation and the rule was likewise silent on the issue of the referral doctor making any referrals. The commenter also suggested requiring the treating doctor to provide written approval to the consulting doctor prior to the consulting doctor providing treatment (the proposed rule did not require written approval).

The commenter was concerned about the situation where a referral or consulting doctor might make further referrals and sets up a "daisy chain" of referrals where the treating doctor is likely to lose control of treatment. The commenter was worried the health care provider, who receives the second level referral, may not know who the treating doctor is and felt that allowing only the treating doctor to make referrals to other health care providers would enhance the quality and cost-effectiveness of care.

The commenter based these recommendations on the general understanding that "a consulting physician is a specialist who examines a patient and makes a written report back to the referring physician. There is no circumstance where the consulting physician should be referring the patient to another health care provider for treatment or consultation. That is the job of the treating doctor. A consulting doctor should not be able to convert a referral for consultation into a referral for treatment without the written approval of the treating doctor."

Response: The commission agrees in part. The commission agrees that the rule should control consulting and referring doctors trying to make referrals to other providers for consultation or treatment but disagrees that this should be completely prohibited. There may be circumstances where the consulting or referral doctor feels that another doctor's opinion is needed, particularly in a complicated case. Although such referral should not be made without the treating doctor's approval, the consulting or referral doctor may know of or have a working relationship with another doctor who has the additional medical expertise being sought and, therefore, it would be appropriate for the consulting or referral doctor to make the referral with the treating doctor's written approval. Regarding the suggestion that the referral or approval to initiate treatment be made in writing, the Medical Advisor has advised that this does not follow standard medical practices for this type of situation. It is very common for doctors to telephone one another on such matters for approval and this is a more efficient way to handle the referral or approval. However, it is important for the new consulting or referral doctor to know who the treating doctor is. Therefore the rule was changed to ensure this information is provided with the referral. In addition, the commission modified subsection (f) to provide that if the RME doctor makes a referral, the same requirements apply.

Comment: Commenter believed that the rule should be modified because the commenter felt that §180.22(f) as proposed did not require an RME doctor to provide unbiased evaluations regarding MMI and impairment (when permitted to perform such evaluations).

Response: Although implied, the commission agrees that this could be clearer and has modified the rule.

Comment: Commenter asked whether the peer reviewer in §180.22(g) has to have the same licensure and specialization as the doctor whose care is being reviewed. The commenter also suggested that a utilization review doctor under §180.22(h) should be a true peer and be familiar with current tests and procedures.

Response: §180.22(g) outlines the role of a peer reviewer and utilization reviewer but does not govern the specific qualifications that a doctor should have to conduct a specific peer review. Under §133.304 (relating to Medical Payments and Denials), if a carrier chooses to deny a bill because the carrier has a peer review that indicates that the care is not reasonable or necessary, the carrier is required to use a licensed provider who: 1) is of the same or similar specialty as the provider who prescribed or performed the health care under review; 2) is licensed to prescribe or perform the category of health care under review; and 3) if a doctor, must not have been removed from the ADL.

Comment: Commenter suggested combining §180.22(g) and (h) because the functions of peer review and utilization review doctors are largely the same. The commenter suggested changing this in other rules using the terms as well. Further, the commenter pointed out that the level of training for both types of doctors is the same.

Response: The commission agrees and has combined the subsections.

Comment: Commenter expressed concern with the language in the rule relating to membership on the MQRP. The commenter's concern related to the fact that the focus is on "doctors" even though HB2600 clearly allows other health care providers to be on the MQRP.

Response: The commission agrees that the language regarding MQRP membership should be broader and has modified the rule to change the reference from "doctor" to "provider."

180.23 Comments

Introductory Comment: The commission received numerous comments that related to the proposed certification levels and their authorizations. Some of the concerns related to the amount of training that doctors would be required to receive. Other concerns related to the various authorizations and limitations that each certification level had (such as the number of claims that doctors who infrequently provide care would be permitted to treat). Still others related to the issue of impairment rating training.

As originally proposed, there were four distinct certification levels. Based upon the public comment and a reanalysis of HB-2600 and the needs of the system, the commission is adopting a different structure. There are 2 different certification levels for doctors on the ADL. Level 1 Certification shall be for doctors who either infrequently provide care or doctors who only wish to perform peer/utilization review functions for carriers. Level 2 Certification shall be for doctors who wish to fully participate in the system. Training necessary to achieve these certifications will be available through self-study/distance learning.

Full authorization to evaluate MMI/impairment is separate from the doctor's certification level and optional. Doctors who do not choose to seek full authorization will not be permitted to certify MMI or assign an impairment rating in the case where the employee has permanent impairment as a result of the compensable injury. When faced with such a situation, an unauthorized doctor will either have to receive permission by exception from the commission (which will be reserved primarily for cases where the employee is living well out of state) or refer the employee to a doctor who is fully authorized to perform such evaluations in the workers' compensation system. These provisions are consistent with recent amendments to rules in chapter 130 (relating to Benefits - Impairment and Supplemental Income Benefits).

Given the importance that impairment ratings play in the system and the fact that they generally do not occur throughout the claim, the rule requires doctors seeking full authorization to evaluate MMI/impairment to successfully complete commission-prescribed training and testing. This training/testing is the same that designated doctors are required to complete. Training all doctors who evaluate MMI/impairment to the same level of competence is expected to result in more accurate certifications and ratings which should reduce disputes and costs.

A simplified structure and more flexibility for doctors regarding the training they need to obtain are among the advantages these changes offer. The proposed rule required doctors who wished to be treating doctors to take impairment rating training even though they might not have wanted to be responsible for assigning impairment ratings. Under the adopted rule, these doctors can concentrate their practices on the employee's clinical recovery and return to work and make referrals to another doctor for assignment of an impairment rating should the injury result in permanent impairment.

The training requirements for designated doctors (other than the MMI/IR training) were moved to §180.21 which regulates the DDL. This places training requirements with requirements for supplemental training for doctors who do not have active practices. However, on or after September 1, 2003, §180.21 requires designated doctors to obtain full authorization under §180.23 to be a designated doctor.

These changes are based upon comments addressed previously in this preamble and on other comments that follow.

Comment: Commenter supported the adoption of Rule 180.23 as proposed.

Response: The commission agrees. However, the commission believes that some changes are appropriate as discussed in response to other comments.

Comment: Commenters suggested that the commission remember that physicians annually have many continuing education requirements for either licensure or board certification for their particular specialty or for a need to stay current in their various areas of specialty or practice. The commenters cautioned the commission to not set up the training requirements such that they deter doctors from participating. The commenter recommended utilizing online training and other innovative training methods that would limit the amount of time that the doctor would have to spend away from the office.

Response: The commission agrees with this and other suggestions that the commission needs to ensure that its training requirements not serve as deterrents to participating in the system. As noted, the commission has modified its proposed training requirements and simplified its certification level structure.

Comment: Commenter felt that "it is inappropriate for physicians to have to receive additional training of any kind to be able to provide care for TWCC patients. There is no reason to have continuing education credits required within the TWCC system to take care of patients that are the same patients that we routinely care for in our everyday practices. I am strongly opposed to this requirement. I believe that burdens imposed by the new certification requirements will cause many Texas physicians to seriously reconsider participating in the Texas Workers Compensation System."

Response: The commission disagrees. The commission is required by §408.023 to specify reasonable training and registration requirements for doctors who wish to participate in the Texas workers' compensation system. There are aspects of the workers' compensation system that are different from other health care systems. However, although doctors will be required to complete training to participate in the system, as previously noted, the commission has removed the requirement that the training be CME approved because it is believed that some of the subject matter may not qualify for such accreditation.

Comment: Commenter supported the requirement that doctors who practice in the workers' compensation system on a regular basis should have at least one day of basic training in the rules and definitions used in the system. However, the commenter felt that since most doctors have already passed numerous boards, one or two days more of training will not ensure quality of care.

Response: The commission agrees that training alone may not ensure quality of care in all situations. However, a better understanding of the general requirements of the system and how reporting and benefit delivery are interdependent can improve quality of care because doctors are more likely to act in a manner that reduces disputes and helps ensure the uninterrupted delivery of reasonable and necessary benefits.

In addition, general workers' compensation training puts doctors on notice as to what is expected of them particularly as relates to return to work. Further, it improves the commission's ability to take enforcement action if a doctor is not providing quality care or otherwise violates the statute or rules as the commission can prove that the doctor was aware of the requirements.

Comment: Commenter suggested that the training requirements for RME doctors, peer or utilization review doctors and designated doctors be made the same. The commenter explained that it was his experience that the specialty or licensing board of the doctor meant very little when it came to quality medical care and to quality medical reports, based on the peer reviewed medical literature and the AMA Guides.

The commenter believed that, with rare exception, a bad designated doctor is a bad RME doctor, and a bad designated doctor is a bad treating doctor. The commenter felt that no amount of training or testing will make a bad required medical exam doctor an excellent designated doctor.

Response: The commission agrees in part. Under the adopted rule, if an RME doctor wants to be able to evaluate employees for MMI and assign impairment ratings when the employee has permanent impairment, the doctor will have to successfully complete the same training and testing relating to MMI/impairment that a designated doctor does.

However, the commission has not required the same training for peer/utilization review doctors as designated doctors because the statute requires the commission to modify its registration and training requirements for doctors who only provide peer review or utilization services for a carrier. Further, the difference in training will largely be a matter of depth of coverage of the material on basic workers' compensation matters, and MMI/Impairment training (which peer and utilization review does not really have a role in).

Comment: Commenter felt that the treatment of the injured worker should be based on accepted medical practices, based on the peer reviewed medical literature. The subsequent evaluations performed by physicians, whether at a peer review level, utilization review level, required medical exam level, or designated doctor exam level, should also be based on accepted medical practices, based on the peer reviewed medical literature. This is what is best for the injured worker and for the system.

Response: The commission agrees the treatment of the injured worker should be based on accepted medical practices, based on the peer reviewed medical literature. HB-2600 requires any treatment guidelines adopted by the commission to be "nationally recognized, scientifically valid, and outcome-based and designed to reduce excessive or inappropriate medical care while safeguarding necessary medical care." Therefore, as the commission adopts new guidelines they should help ensure that the care provided meets the commenter's suggestion. However, this rule does not govern how medical care is provided or reviewed and thus such a requirement does not belong here.

Comment: Commenter felt that the phrase "per year" (as in 12 employees or fewer per year) was unclear. The commenter wanted to know if "per year" was a calendar year or if the year was a 12 month period that would rotate with each provider upon first treating an injured employee (i.e. if the first employee was treated on September 23, 2001 then the time frame would go until September 23, 2002 and the doctor could not treat/evaluate more than 12 different employees during this period).

Other commenters suggested that the number of claimants that a doctor who has "Level X Certification" (which the adopted rule replaces with "Level 1 Certification") should be raised from 12 per year to 24 per year. The commenter was concerned that in some areas there may be a limited number of doctors available and employees should have access to care as close to home as possible.

Response: The commission agrees that a change in the number of claimants that a doctor who infrequently provides care can see in a one year period, is appropriate. The commission has performed a rough analysis of fiscal year 1999 system data to identify the number of claimants seen by the providers in the system. Based upon this analysis, the commission has changed the number from 12 to 18. This should ensure that about 80% of all employees are seen by a doctor who has received the regular training and is fairly active in the workers' compensation system. That will mean that roughly 20% of the employees will receive care from doctors who are less active participants. In addition, the commission has modified the requirement so that providing only emergency care or immediate post-injury medical care to an injured employee does not count toward the 18 claimant limit. This is important in a case where a doctor has already provided care to 18 claimants during a year and a new employee comes in following an injury needing immediate treatment.

Because a rolling period would probably be harder for doctors to track, the period shall be calendar years beginning January 1 of each year. This is more fully explained in §180.23 as well.

Comment: Commenters felt that the proposed requirement that a doctor receive Level 2 Certification to be a treating doctor was excessive and recommended that Level 1 Certification be the level required. The commenter noted that even Level X doctors were allowed to be treating doctors and that the Level 1 Certification required training more often that Level 3 Certification (once every 2 years versus once every 5 years).

Another commenter suggested that the Level 1 Certification should allow the certification of MMI, which would be a prerequisite to referring out to a Level 2 or 3 doctor to evaluate the permanent impairment. "A certification of MMI is nothing more than a determination that the claimant is unlikely to improve with further medical treatment. If the treating doctor is able to prescribe treatments that are designed to get the claimant to MMI, it would seem that he or she would be qualified to determine when those treatments have had a satisfactory result. This is a simple medical opinion. It is the evaluation of permanent impairment that requires special training."

Still another commenter disagreed with the proposal that doctors with Level X Certification be allowed to certify MMI and evaluate impairment. The commenter felt that only those doctors with appropriate training should be authorized to certify MMI and evaluate impairment. The commenter expressed concern that providing for exceptions without adequate controls will result in confusion regarding the scope of commission authority and increased costs relating to disputes.

Response: The commission agrees that the training requirements relating to MMI and impairment should be modified so that doctors who do not wish to be fully authorized to certify MMI and assign impairment ratings will not have to go through the training. The commission does not want to force doctors who are uncomfortable or uninterested in assigning impairment ratings and certifying MMI when there is impairment to do so because it would likely result in lower quality evaluations.

Doctors who want full authorization will be required to successfully complete training and testing relating to MMI/impairment evaluation. Otherwise, a doctor on the ADL will receive training in determining whether an employee has permanent impairment. They will be able to certify MMI if the doctor finds that the employee does not have permanent impairment. If the doctor finds that there is permanent impairment, the doctor will either have to refer the employee to a doctor who is fully certified to evaluate MMI and impairment or would have to receive permission from the commission by special exception (which the commission anticipates will happen primarily in cases where the employee lives well out of state) to perform those examinations.

Comment: Commenter noted that §408.023(f) provides for exceptions to being on the ADL for out-of-state doctors reviewing health care services provided under the statute for a carrier but that the proposed rule did not comply with this provision. The statute provides an exception as long as the doctor works under the direction of a doctor who is licensed in Texas. However, the proposed rule required the doctor to be on the ADL and to work under the direction of a doctor licensed in Texas.

In addition, commenters suggested that the doctor who directs the out-of-state doctors should not have to have Level 3 Certification. The commenters noted that peer/utilization review does not deal with MMI and impairment and the chief difference between Level 1 Certification and Level 3 Certification (as proposed) was the additional focus on impairment ratings and testing to be a designated doctor. The commenters pointed out that this would need to be changed in §180.20 as well.

Response: The commission agrees in general. The commission agrees that it is not necessary for the supervising doctor to have the same level of training as a designated doctor (which is what the proposed rule required). Doctors performing peer and utilization review functions for carriers do not need MMI/Impairment training as a designated doctor does. When a carrier has concerns about a designated doctor's report, the carrier is permitted to have an examination by a doctor of their choice and this doctor will required to have the MMI/Impairment training as well as passing the same test required to be on the DDL.

In addition, the commission agrees that HB-2600 provides for an exception such that out-of-state doctors performing peer/utilization review functions for carriers are not required to be on the ADL. Therefore, the commission has modified the rule to reflect these changes. However, the rule requires that a doctor directing out-of-state doctors have Level 2 Certification, which requires more in-depth training. Although one might argue that the medical director should only be required to have Level 1 Certification because that level allows a doctor to perform peer/utilization review for carriers, the commission disagrees. A medical director has more responsibility for ensuring quality reviews of health care services than a doctor simply performing the services. Essentially, a doctor who directs multiple doctors will impact far more reviews and thus it is more important that this doctor be better trained.

Comment: Commenter expressed concern that the rules were silent on the qualifications of medical directors of utilization review agents who do not conduct utilization review or peer reviews. The commenter wanted to know whether these qualifications would be addressed by the Department of Insurance.

Response: §408.023 provides that any doctor who wishes to provide services under the statute and rules is required to be on the Commission's approved doctor's list. Under the new certification structure adopted under this rule, a medical director for a utilization review agent would be required to be on the ADL and have Level 2 Certification if the doctor is supervising peer/utilization review doctors who are not licensed in Texas. Utilization review and peer review functions can encompass reviewing preauthorization requests.

Comment: The commenter pointed out that psychologists, PT, OT etc are involved in peer review and other utilization review functions for services rendered by a like professional within their scope of practice. "TDI rules require preauthorization reviews be performed by someone trained and licensed to perform the service under review. Thus, only psychologists can review psychological testing, since even physicians do not receive such training. This has implications for peer, UR, and MQRP participation." The commenter felt that Level 1 training would be appropriate.

Commenter recommended that either: a separate set of rules be developed quickly for "other healthcare providers" who will perform peer review, UR, or serve on the MQRP, or 2) the present rule be clarified that "other healthcare providers" performing peer review, utilization review, or serving on the MQRP require only Level 1 or at most Level 2 training.

Response: The commission disagrees. This rule focuses on training requirements for doctors. Setting training requirements for other providers who provide peer and utilization review services for carriers or serve on the MQRP goes beyond the scope of these rules.

Comment: 180.23(c)(4)(A)(i) misspelled word: "toe" should be "to"

Response: The commission has rewritten the language regarding certification levels and training requirements.

Comment: Commenter supported the availability of limited exceptions to the certification and training requirements under §180.23 but was concerned that the rule is silent as to the mechanism of carrier notification of approved exceptions.

Response: The commission agrees and has amended subsection (b) to require the commission to provide the carrier a copy of the approved exception when it is approved.

Comment: Commenter suggested moving "every two years" in §180.23(c)(2) after "complete in-depth training."

Response: The commission has rewritten the language regarding certification levels and training requirements.

Comment: Commenter suggested that the commission should make a special effort in its implementation of the doctor training under 180.23 to utilize vendors who are non-profit in nature and who have demonstrated ties to the state of Texas, due to the complexity of the law in this state and its unique nature, especially considering the probability of having the network established in the next 12 months.

Response: The commission has modified the training requirements so doctors can receive some training directly from the commission based on the concerns raised about the amount of time doctors might have to take away from their practices to attend training. The TWCC Doctor Training and the Modified TWCC Doctor Training Modules will be developed by the commission in various self-study/distance learning formats.

The main training that doctors will receive in person from a commission-approved trainer will be for certifying MMI and assigning an impairment rating when an employee has permanent impairment as a result of a compensable injury. This training will likely be very similar to existing impairment rating training required of designated doctors but will have a testing component. It is likely that many of the commission's currently approved trainers (some of which are non-profit in nature with Texas ties) will be among the first to be approved to provide the new training. However, the commission will not limit its approval to those entities as suggested by the commenter. There may be other qualified entities that can provide such training.

180.24 Comments

Introductory Comment: The commission noticed that there were two misreferenced subsections in the proposed rule and corrected them. The first was in subsection (a)(2)(C) and the other was in (b)(3)(B).

Comment: Commenter supported the adoption of Rule 180.24 as proposed.

Response: The commission believes that the rule should be adopted but that revisions were appropriate as a result of various comments received.

Comment: Commenter felt that the rule will "further compromise the role of the independent practitioner of rehab services. For a physician owned facility, services will be requested as financial gain is clearly linked with the referral however for a treating doctor to have to sit and wait for a carrier to authorize or speak to the referring doctor is not practical. Further this is not found in any present general form of health care. If you link this rule with a Stark II type approach where a doctor can't refer if he owns the facility then you'll save money and persons will get good care. Since Stark II, our Medicare patient load has more than doubled since physician owned facilities are reluctant to deal with the federal government."

Response: The commission disagrees. Texas Labor Code §413.041 differs from federal provisions in that it does not prohibit "self-referrals." The section mandates that the commission adopt rules requiring the disclosure of financial interests. However, it does not prohibit referrals when financial interests are involved.

Comment: Commenter suggested that all sources of income received by a designated doctor should be reported. The commenter felt that "TWCC is determining someone's life and to appoint a corrupt [designated doctor] is a civil rights violation. TWCC does appoint corrupt [designated doctors] intentionally and TWCC violates civil rights by intentionally depriving an injured worker of statutory guaranteed benefits.

Response: The commission disagrees that it would ever intentionally appoint a corrupt designated doctor or violate an employee's civil rights. The intent of the rule is to address fraud and overutilization issues by ensuring timely disclosure of certain financial arrangements or interests. The issue the commenter is addressing is not a matter intended to be covered by the financial disclosure requirements of §413.041. Bias of the designated doctor is sufficiently addressed by §180.21, which requires the doctor to report if he or she has a disqualifying association. Further, the commission intends to monitor designated doctors to ensure the quality of their decisions using the Medical Advisor and reviews and recommendations by the MQRP.

Comment: Commenter suggested that the terms "health care practitioner" and "health care provider" need to be defined and suggested that, if no difference is intended between the two, then the commission should use only one term. Otherwise, define one or both terms in the definition section of the chapter, making clear the difference.

Response: The commission disagrees that definitions are necessary. The language in the rule is consistent with the Statute. These terms are defined in the Act. Pursuant to §401.011(21), "health care practitioner" means "(A) an individual who is licensed to provide or render and provides or renders health care; or (B) a nonlicensed individual who provides or renders health care under the direction or supervision of a doctor." Pursuant to §401.011(22), "health care provider" means "a health care facility or health care practitioner."

Comment: Commenters noted that HB-2600 requires a doctor to disclose financial interests in other health care providers as a condition of registration. "There is no requirement to disclose information to the carrier as set out in the proposed rule. To require a disclosure to the carrier of every patient referred to such entities is unduly burdensome and exceeds the statutory authority granted in HB 2600. The information on any interest a doctor has in another entity is already filed with the commission and is available there."

Response: The commission agrees that requiring separate disclosure at the time of a referral would be duplicative to the practitioner's disclosure that was already made to the commission and that will be available on the commission's website for viewing and/or download. Therefore, proposed subsection (c) which contained this requirement has been deleted and proposed subsection (d) renumbered as (c). However, the commission does not agree that this proposed disclosure requirement exceeded the commission's authority as the commission is authorized to define the reports providers are required to file.

The commission also noted that the proposed rule required annual disclosure which the commission has reevaluated and believes is unnecessary. Therefore, the rule was rewritten to take out the reference to annual disclosure. In general, practitioners will be required to disclose financial interests within 30 days of the first time they make a referral to the other provider. However, doctors will also be required to make the disclosure when they apply to be on the ADL and then will be required to update their disclosure within 30 days of any change.

Comment: Commenter recommended replacing §180.24 (a)(2)(C) with the following:

"The statutory and regulatory exceptions that apply to referrals in Title 42, United States Code §1395nn(b) - (e) and have been adopted at the time of the adoption of this rule shall apply to the disclosure requirements of the interests in paragraph (1)(A) and (B) of this subsection. In determining whether to incorporate revised or new Federal Statute or regulations, the Executive Director shall consider whether use is consistent with applicable statutory requirements and with commission rules in effect on the date of the revision. The Executive Director shall inform the commissioners of a determination not to adopt a revision or a new Federal Statute or regulation on the effective date established by the publisher, and shall inform the public by issuing a commission advisory regarding the determination and by filing the determination for publication in the Texas Register."

The commenter preferred this language as it would automatically keep state and federal standards aligned unless the Executive Director saw a need to make them different (which is the opposite of what the proposed language provided). "Consistency between state and federal standards is almost always beneficial to all participants in the workers' compensation system."

Response: The commission agrees that change is necessary but disagrees with the suggested language. In reviewing comments on the issue of financial disclosure and, in particular, those relating to the rebuttable presumption created that a referral is not reasonable and necessary if there is a failure to disclose, the commission realized that the exception concept needed to be tied to the consequences for failing to disclose, not to the duty to disclose itself.

HB-2600 changed Texas Labor Code §413.041 to require "each health care practitioner to disclose to the commission the identity of any health care provider in which the health care practitioner, or the health care provider that employs the health care practitioner, has a financial interest" (emphasis added). The statute further required the commission to adopt "financial interest" as provided in analogous federal regulations. Under the federal statute, the exceptions are exceptions to the prohibition against referrals to an entity with which a provider has a "financial relationship" (which is the term used by the federal rules). Therefore these exceptions aren't really part of the definition itself but rather the use of the definition. As such, the commission has removed the exception from the definition and referenced it in subsection (c)(3) (originally proposed as subsection (d)(3)). Under the adopted rule, if a practitioner makes a referral without making the required disclosure, there is a rebuttable presumption that the services provided under the referral are not reasonable and necessary unless the financial interest was one of those covered by one of the exceptions. The rule does not apply the rebuttable presumption to referrals that the federal system would not prohibit because the evidence that such practices increase referrals that are not reasonable and necessary is not as well established.

Comment: Commenter suggested that the financial disclosure address direct and indirect interests. "It should also address legal and beneficial interests. Indirect interests arise when a doctor owns an interest in a corporation that has a subsidiary that provides durable medical equipment. A beneficial interest, as opposed to a legal interest, arises when a doctor is a beneficiary of a family trust that owns the durable medical equipment company. Disclosure of all direct and indirect beneficial interests should be required."

Response: The commission believes that, as a result of changes made in response to the prior comment, the rule covers disclosure as suggested by the commenter (though it doesn't use terms like "legal interests" and "beneficial interests"). The rule already covered direct and indirect interests.

Comment: Commenter asked whether a health care practitioner who owns a building and rents space out to another health care provider would have to disclose this relationship as a financial interest.

Response: Rental of office space by one provider from another may be a disclosable financial interest. Rule 180.24 closely tracks the language of the Stark law (42 U.S.C.A. §1395nn). Given that the Legislature mandated that the commission adopt federal standards that relate to referrals, and the fact that the provisions are patterned on the federal provisions, interpretations of federal law will be persuasive authority as they relate to the commission's rules. Consistent with Texas Labor Code §413.041, however, the rule does not prohibit self-referrals, it simply requires that the information relating to ownership or compensation arrangements be disclosed. When in doubt, the practitioner should err on the side of disclosing the arrangement in the manner and at the time set forth in the commission's rules.

Comment: Commenter suggested that in addition to providing a disclosure of the financial interests of the doctor, the provider should also be required to disclose the financial interests in the doctor's practice.

Response: The commission disagrees. Texas Labor Code §413.041 requires the commission to establish rules requiring that health care practitioners (including doctors) disclose their financial interests and those of the providers who employ them. These financial interests are considered relevant because they may lead to excessive referrals and overutilization of services. This conclusion is derived from a number of studies that consistently found that physicians who had ownership or investment interests in entities to which they referred ordered more services than physicians without those financial relationships (some of these studies involved compensation as well). However, there is no provision to require the kind of disclosure recommended by the commenter. The commission does, however, note that the information may be obtainable from the reverse. That is, a doctor may not have to disclose who has an interest in his practice but if another practitioner does have such an interest, then that practitioner will have to make the disclosure and reviewing the data will allow the relationship to be seen. The commission is planning to maintain financial disclosure information in a relational database to allow such analysis.

Comment: In reviewing §180.24(d), which outlines the consequences of failing to disclose, the commenter was concerned about inadvertent nondisclosure, such as when a practitioner is unaware of the existence of a financial interest. The commenter provided an example in which the referral doctor recommends an MRI and the treating doctor ends up sending the employee to a facility in which the referral doctor had a financial interest.

Response: The commission agrees that given the complexity of some financial interests, the fact that the rule extends broadly to many family members, and what could be a substantial forfeiture for noncompliance as required by the statute, some knowledge requirement is appropriate. Consistent with federal provisions found at 42 CFR 411.354 for Designated Health Services entities in indirect relationships, the commission adopts the "actual knowledge or reckless disregard or deliberate ignorance" standard. The commission believes that the "knows or has reason to suspect" standard fairly balances the burden of compliance against the abuse that Texas Labor Code §413.041 is intended to prevent. This is especially fair to practitioners in light of the fact that compliance with the commission rule requires only a disclosure, unlike federal provisions that may require restructuring of financial and business relationships. In adopting this standard, the commission cautions that this standard imposes a duty of reasonable inquiry, which requires that practitioners in possession of facts that would lead a reasonable person to suspect the existence of a financial relationship take reasonable steps to determine whether such a financial relationship exists. The reasonable steps to be taken will depend on the circumstances.

Regarding the commenter's example, if the treating doctor refers the injured employee to a facility in which only the referral doctor has an interest, there is no financial interest of the treating doctor to disclose.

Comment: Commenter asked whether §180.24(d)(1), which prohibits a health care practitioner from billing for services rendered on a claim during a period in which the practitioner was out of compliance with the disclosure requirements, applies to all injured employees seen by the practitioner. The commenter also wanted to know whether it applied to the practitioner or the facility that he/she has interest in.

Response: The prohibition against billing is intended to apply only to the claim in which the practitioner is in noncompliance. The commission has modified the rule to reference "the claim" rather than "a claim" to make this clearer and also inserted "for that claim" into subsections (d)(1) and (d)(2) (now subsections (c)(1) and (c)(2)) for the same purpose. However, if the doctor has multiple claims that were referred without disclosure as required, then the doctor is not eligible for reimbursement on any of the affected claims.

Regarding the question of whether the prohibition applies to the practitioner or the facility, the subsections are limited to health care practitioners. Facilities are not included in the definition of health care practitioner under the definition in §401.011(21). Facilities are not required to disclose; therefore, facilities cannot be noncompliant with regard to disclosure.

Comment: Commenters believed that the portions of the rule relating to penalties for failure to disclose exceed the authority of the statute. The commenters pointed out that a medical service provided by the doctor unrelated to the referral (and thus not subject to disclosure) could be forfeited or required to be refunded, even if medically necessary.

Response: The commission disagrees. §413.041(c) clearly states "a health care provider that fails to comply with this section is subject to penalties and sanctions as provided by this subtitle including forfeiture of the right to reimbursement for services rendered during the period of noncompliance." Thus, during a period in which the referring provider is in noncompliance regarding a required disclosure, that provider is not entitled to reimbursement for services rendered during the period of noncompliance. For example, if a doctor made a referral to a physical therapy facility in which the doctor had a minor interest but which the doctor had failed to disclose, the statute prohibits the doctor who made the referral to receive reimbursement for any services provided on that claim (including those unrelated to the referral). To read the statute differently would mean that the physical therapy facility that was not in violation would be penalized while the doctor that committed the violation would avoid the consequences.

Texas Labor Code §413.041 provides that the Commission by rule shall adopt the federal standards relating to fraud, abuse, and kickbacks. However, §413.041 differs from the federal provisions in two important ways. First, federal law prohibits "self-referrals." Second, federal law prohibits the payment to any entity for covered services provided in violation of the provisions, prohibits billing of the services, and requires the entity to refund any amounts collected (42 U.S.C. §1395nn). By contrast, §413.041 does not prohibit "self-referrals." It only requires the disclosure of information that will assist in evaluating "self-referrals." Moreover, as discussed elsewhere in these comments, compliance by disclosure is a simple process. Also, §413.041 provides that the doctor or health care provider that fails to comply with the section is subject to penalties including forfeiture of the right to reimbursement for services rendered during the period of noncompliance. It does not provide for forfeiture by any other entity. Therefore, if the forfeiture of payment provision is read as limited to only the services that were not in compliance (services that resulted from referrals to providers in which the practitioner had an interest), as the commenter suggests, it would be ineffective. In the example above, the doctor who made the referral had no right to reimbursement for the physical therapy anyway because it was provided by the physical therapy facility not the doctor. Under Texas Labor Code §134.801 (relating to Submitting Medical Bills for Payment), with limited exception, the health care provider that provided the service is the only party that is permitted to submit the bill. Under the commenters' interpretation, there would be no significant consequence to the noncompliant referring practitioner. The commission declines to read the provision of §413.041 in a manner which gives it no effect.

Comment: Commenters opined that the commission does not have the authority under the statute or in fact to create a "rebuttable presumption" that services provided for which there was a requirement of disclosure were not medically necessary.

Response: The commission disagrees that in implementing Texas Labor Code §413.041, it cannot create a presumption. While the legislature sets forth policy and standards, the agency is expected to fill in the detail by prescribing rules and regulations that promote the spirit and intent of the statute. As stated in the preamble to the proposed rules, the rebuttable presumption is justified by both the absence of disclosure and a number of studies that consistently found that physicians who had ownership or investment interests in entities to which they referred, ordered more services than physicians without those financial relationships (some of these studies involved compensation as well). Increased utilization occurred whether the physician owned shares in a separate company that provided ancillary services or owned the equipment and provided the services as part of his or her medical practice. This correlation between financial ties and increased utilization was the impetus for Congressional action resulting in section 1877 of the Social Security Act. See 66 Federal Register 856, 859 (January 4, 2001). Once the predicate facts are established, (1) that there was a financial interest known to the practitioner and (2) that the interest was not disclosed by the practitioner, a prima facie conclusion that the services were not medically necessary is justified. The conclusion logically flows from the predicate facts. The presumption simply shifts the burden of bringing forth evidence of medical necessity when the predicate facts are shown. Moreover, the presumption is rebuttable and its effect is tempered by the commission's adoption of the "knows or has reason to suspect" standard with regard to nondisclosures described previously. In addition, as noted, the adopted rule provides for exceptions to the rebuttable presumption that are analogous to the federal exceptions in Title 42, United States Code §1395nn(b)-(e).

180.25 Comments

Comment: Commenter suggested that the commission draft rules in the future relating to advertising content and that there should be an approval process for advertising.

Response: There are statutes that govern advertising content and misrepresentations and may commission may propose rules in the future.

Comment: Commenter asked whether the rule would prohibit the use of "advertising, public relations or other legitimate marketing business functions" through television, radio, yellow page ads, or billboards. Commenter wanted to ensure that "legitimate advertising and marketing is excluded from [the prohibition of] this rule." The commenter also asked whether the rule prohibits an employee from using advertising information to decide which doctor to select.

Response: By the terms of the rule, advertising is not included. Advertising itself is not an improper inducement. The particular services being advertised or offered are, however, subject to the provision of the rule. Further, to the extent that an improper inducement is advertised, the advertisement itself may be considered in enforcement actions (for example, with regard to intent, likelihood to induce, etc.).

Comment: Commenter asked whether the language in §180.25(b)(1) and (2) prohibits an advertising agency from receiving payments to design and develop advertising materials or buying media for a health care provider. The commenter argued that such advertising can inform an employee that "a health care provider accepts workers' compensation, is on the new approved doctors' list, provides transportation, provides translator services or provides patient advocate services. Providing this information may cause a particular provider to be selected and thus generate services for which payments are made under statutes and rules."

Response: §180.25(b)(1) and (2) do not regulate an advertising agency's right to receive payment for developing advertising for a provider (even advertising which offers improper inducements). §180.25(b)(1) and (2) prohibit actions in return for referrals whether to a third party or to the injured employee. Advertising is not within the scope of this prohibition.

Comment: Commenter asked whether §180.25(b)(2) would prohibit things that are legal under the statute such as attorney services. The commenter felt that this was excessive.

Response: The language in §180.25 is directed at medical benefits. Therefore, the commission has modified §180.25(b)(1) and (2) to more clearly make this point. However, regarding the commenter's example of providing attorney services, though such services would not be prohibited under subsection (b)(2), they would be prohibited under subsection (b)(3). Section 180.25(b)(3) prohibits providing any financial incentive to have the employee treat with the provider or comply with the provider's proposed treatment. Providing monetary benefits either by cash, gifts, gift certificates, or by such things as services (for instance, by providing free of charge services that are normally subject to charge) is prohibited.

Situations in which free legal services are offered to injured employees and where injured employees are provided supplemental food, clothing support, or other services that normally cost money through gift certificates are considered financial incentives and are thus prohibited. Free advice or referrals for undiscounted professional services are not financial incentives or income enhancements and are permitted. However, paying for or providing a discount for professional services (such as those provided by an attorney) for an injured employee and free professional advice provided to an injured employee are financial incentives and/or income enhancements and when provided to induce the employee to treat with a specific provider or otherwise follow a given form of treatment are prohibited by this rule.

Comment: Commenter asked whether the language in 180.25(b)(3) prohibits the "education of an injured worker about their entitlement to rights and benefits or to the education of an injured worker about their duties and responsibilities. If an injured worker is informed that they might be entitled to mileage reimbursement this would have the effect of enhancing the workers' income benefits. Many injured workers have never seen a TWCC-3 thus they don't know if their AWW is correct. If an error was made and subsequently corrected this would also enhance an injured workers' income. Providing this information may cause a particular provider to be selected and thus generate services for which payments are made under statutes and rules."

Response: Free legal advice or referrals for undiscounted professional services are not financial incentives or income enhancements and are permitted. However, paying for or providing a discount for professional services for an injured employee and free professional advice provided to an injured employee are financial incentives and/or income enhancements which are prohibited by this rule. Mileage reimbursement is not an income benefit.

Comment: Commenter noted that the items listed in the rule as "conveniences" is not all inclusive and felt that the use of the term "etc." implied that such a list could be generated. The commenter asked what criterion should be used to determine if a service is a convenience (and thus permitted under this rule). The commenter went on to ask whether any of the following would be conveniences: a Patient Advocate that provides individual or group counseling sessions, i.e. benefits, rights, responsibilities; ensures the availability of all TWCC Employee forms; investigates complaints regarding treatment, staff, doctors, schedules, etc.; provides a liaison function between the injured worker and a clinic; provides a liaison function between the injured worker and an attorney; coordinates a transportation schedule; or performs a translation service.

Response: The commission agrees that the reference to "conveniences" is unclear. Moreover, upon reviewing the proposed rule the commission notes that some or all or the items listed could in the appropriate circumstances be contrary to federal law as it relates to federal programs. Health care providers that offer free goods or services to Federal health care beneficiaries may be subject to civil monetary penalties under federal law. In section 1128A(a)(5) of the Social Security Act, Congress specifically addressed the issue of providers offering remuneration to Medicare and Medicaid beneficiaries in order to influence their selection of a particular provider by authorizing the imposition of civil monetary penalties against such providers. Moreover, conveniences such as free transportation services may implicate the criminal anti-kickback statute which prohibits offering anything of value to any "person" (including a federal health care beneficiary) to reward or induce referrals (including self-referrals) for items or services reimbursable under any federal health care program. Even when the value of the convenience is small, frequent rendering of items or services to an individual may preclude such items and services from being classified as nominal in value. For example, transportation, although occasionally of nominal value, has been noted as an area of historical abuse (Department of Health and Human Services OIG Advisory Opinion No. 00-7). Because Texas Labor Code §413.041 requires the commission to adopt the federal standards, and because commission rule 180.25 is patterned in part on the federal law, the proposed exclusion is not tightly enough defined.

The allowance of conveniences raises considerable concerns with regard to kickbacks. The federal legislative history regarding concerns over increased system costs caused by kickbacks, and the similar concern shown by §413.041, indicates the term "kickback" does not mean only the secret return of a sum of money received. As interpreted by federal law, "kickback" also includes a payment for granting assistance to one in a position to control a source of income. Therefore, in the case of an inducement, even if the practitioner performs some service for the money received, the potential for unnecessary costs to the worker's compensation system remains. The Texas Workers' Compensation Act is aimed at the inducement factor. Section 180.25(b)(1) & (2) of the rule refer to "any remuneration." Under analogous Federal law that includes not only payment for which no actual service was performed but also payments for which some professional time was expended. Therefore, to the extent that the injured employee controls an income stream by having the right to select the provider, payments to the injured employee (directly or indirectly, in cash or in kind) implicate improper kickbacks even when professional services are in fact provided.

Regarding the examples offered by the commenter, as noted in response to other comments, provision of professional services (other than health care) is an improper inducement. To the extent that the "patient advocate" is providing professional services (such as representation), the conduct is not permitted. However, other activities such as reviewing a complaint regarding the treatment provided by the provider's staff or the providers at a facility are allowable as they are merely customer service functions. Similarly, services to ensure the employee's access to care, such as transportation to and from the provider (which does not include chauffeur services elsewhere) and translation services while being evaluated or receiving treatment are appropriate as is providing access to worker's compensation information or forms. However, when the provider or staff begins to provide "a liaison function between the injured worker and the attorney," this is inappropriate because the function being provided is that of support staff for the attorney, which is essentially part of the provision of professional services. Accordingly, the exclusion has been modified to more clearly tie the exclusions to the provision of care and provide for limited exceptions in this area unique to the Texas workers' compensation system.

Comment: The commenter supported the commission's effort to prohibit the use of threats by any system participant but believed that it should be extended beyond the language presented in the proposed rule. "As written the rule prohibits threatening to make a claim or assertion which might interfere with a participant's license, but ignores the far more serious reality of threats against the safety or lives of system participants. Especially at this time, when all citizens recognize our vulnerabilities, the commission should make a strong statement condemning threats of violence and not merely those of groundless action or accusation."

Response: The commission agrees. A subsection (6) has been added that prohibits intentionally, knowingly, or willfully making or causing to be made a threat against life, safety, or property directed toward a system participant related to their performance of duties arising under the Statute or Rules. This language is intended to cover threats against anybody, not just the system participant to whom the threat is communicated.

Comment: Commenter recommended that 180.25(c) include a list of exemptions for clarity or access to United States Code.

Response: The commission disagrees. The exceptions are too lengthy to make listing in the Rule practical. The United States Code and the Code of Federal Regulations are publicly available in print and are also readily accessible through Government websites such as http://law2.house.gov.

Comment: Commenter recommended the addition of a new subsection (d) regarding refunds of amounts collected for billed services delivered as the result of offering improper inducements and threats. The commenter recommended the following language be adopted as the new subsection (d) "If a health care provider collects any amount for billed services delivered to an injured employee as result of offering improper inducements and threats, regardless of whether the services were medically necessary, the health care provider shall be liable to the individual or entity for, and shall timely refund, any amounts collected."

Response: The commission disagrees. A refund provision similar to that provided in §180.24 exceeds statutory intent in this area. In the realm of financial disclosure, the legislature specifically addressed forfeiture of payment as being included within permissible penalties and sanctions. Further, federal law similarly specifically provides for refunds in the area of financial interests. With respect to inducements and threats, appropriate penalties and sanctions elsewhere in the commission's rules serve as adequate deterrents. Moreover, the provision suggested could be read too broadly to require refunds of medically necessary services even in cases in which the provider of the service was not involved in the improper activity. To the extent that threats or inducements result in unnecessary medical services, these can be handled by appropriate refund orders.

Comment: Regarding §180.25(b)(4) commenter felt that a distinction should be made between inducements that are offered in order to influence an injured employee to seek the services of a particular provider and those inducements that are provided in order to motivate an injured employee to follow through with treatments that have already been approved. "After all, the medical necessity of treatment has been established by the insurance company or the commission, prior to the beginning of treatment. It seems counterproductive and cost ineffective not to attempt to motivate an injured employee to get the most out of treatment that is being paid for by the employer. It would seem that one would want to maximize compliance with treatments that have been deemed medically necessary.

For many years, behavioral research has demonstrated the powerful effect of incentives in shaping human behavior. This has become a clinically accepted form of treatment in many settings. It is important to understand that the injured worker, in many instances, has to make a tremendous shift from being a patient to becoming a productive person again. Certain types of incentives are used to maintain the worker's motivation over the difficult period of transition.

By the time that injured workers get into pain management treatment, they typically have been through months and often years of primary and secondary care, which has done very little to provide pain relief. They predictably feel defeated and discouraged. They have begun to see themselves as permanently disabled and have adopted life-styles and patterns of behavior that correspond to their belief that they will no longer be able to lead fulfilling lives.

When these patients enter into pain management, they are highly skeptical of how this treatment will be of any benefit when all others have been heartbreakingly disappointing. It takes at least several weeks of intensive treatment before they begin to accept that their condition does not have to be defined by a removal of their pain. That is to shift the goal of treatment from one of pain relief to one of improved functioning. However, during these initial weeks, their pain typically increases because of their increased level of activity in therapy. Incentives such as small gift certificates or movie tickets seem to keep them coming in to the clinic until the fruits of their own efforts begin to become evident to them.

Our experience over the years has taught us that the most salient factor in determining which patients will be successful and which will remain disabled is the consistency of participation in prescribed treatment regimens. Inconsistency leads to higher medical costs since treatment is pain for whether participation is conscientious and productive or halfhearted and lackluster."

Response: The commission disagrees. Injured employees are responsible for their own actions. The commission agrees that injured employees need to be educated as to the potential result of remaining off work for extended periods (which is the reduced likelihood of ever returning) and of failing to seek medical treatment and comply with appropriate treatment plans. The statute and rules specify the forms of compensation an employee is entitled to: these include income and medical benefits. The amount of income benefits an employee is entitled to is very clearly laid out by statute and rule based upon the employee's average weekly wage. Likewise, "medical benefits" are very clearly defined by statute. Neither includes provisions for paying an employee to continue or complete treatment. Inducements to do so are therefore inappropriate and forbidden by this rule.

The injured employee has a responsibility in the recovery and return to work process, and it is important that the employee understand this role. Education is an essential component in ensuring the injured employees' compliance with all treatment. The health care provider is responsible for providing education to the injured employee about health care treatment appropriate to the workers' compensation injury. Health care providers must encourage injured employees to be active participants in their health care treatment regimens. This is to be done through communication with the injured employee, not by offering financial incentives.

The concern of the federal provisions incorporated by the legislature in Texas Labor Code §413.041 is the risk of overutilization of services when remuneration is involved. The commission has heard of instances in which employees have felt ready to return to work but were offered inducements to complete programs such as work hardening at a substantial additional cost to the system. This is inappropriate. There is a substantial risk of overutilization of services when an injured employee is provided economic incentives to participate in treatment whether those incentives are gift certificates, movie tickets, or other rewards. Further, the incentives mentioned by the commenter may violate both the federal kickback laws (self-referral) and Section 1128A(a)(5) of the Social Security Act. With respect to kickbacks, in the commission's view, the federal legislative history regarding concerns over increased system costs caused by kickbacks, and the similar concern shown by §413.041, indicate the term "kickback" does not mean only the secret return of a sum of money received. As interpreted by Federal law, "kickback" also includes a payment for granting assistance to one in a position to control a source of income. Therefore, in the case of an inducement, even if the practitioner performs a service for the money received, the potential for unnecessary cost to the workers' compensation system remains. The statute is aimed at the inducement factor. The rule refers to "any remuneration." Under analogous federal law that includes not only sums for which no actual service was performed but also those amounts for which some professional time was expended. Similarly, to the extent that the injured employee controls an income stream, payments to the injured employee (directly or indirectly, in cash or in kind) implicate improper kickbacks even when professional services are in fact provided.

Comment: In reviewing §180.25(b)(5), commenter suggested that "frivolous" is ambiguous and should be defined or examples should be given in the preamble. The commenter stated that the preamble states that the subsection "prohibits attempting to influence the opinion of a provider or carrier by threatening to file a complaint or embroil them in other legal action" but "this is not what the subsection provides" suggesting that the language used should match the intent.

Response: The commission agrees that the term "frivolous" should be better defined. The term "frivolous" was meant to have its ordinary legal meaning. However, for clarity the term has been defined in §180.1. The definition is consistent with the provision of §415.009 of the Act (relating to Frivolous Actions; Administrative Violation) and reads as follows:

"Frivolous - that which does not have a basis in fact or is not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law."

The commission disagrees that the language in the preamble does not match the language in the rule. The rule prohibits either threatening to or actually making, presenting, or filing any frivolous claim or assertion. The commission does not want to deter people from filing legitimate allegations.

Comment: Commenter expressed concern that, while §180.25(b) prohibits various improper inducements designed to influence the provision of care, selection of a doctor, etc. there is no similar prohibition against attempting to influence a provider to issue opinions favorable to a carrier or to terminate an employee's treatment. The commenter cited the example of carrier-selected RME doctors who the commenter believed are pressured to cut off the employee's benefits. The commenter stated that there was no way to regulate fees to RME doctors and that therefore, they could be influenced to issue the opinions that carriers want (because the consequence of doing otherwise is not being selected by the carrier and the doctor would lose access to conducting these exams that the commenter believes have higher, unregulated fees). The commenter felt that this sort of activity adds cost to the system because the employee is inappropriately delayed in getting necessary care that causes the injury to linger much longer.

Response: The commission agrees in part. The intent of the rule is to ensure quality of care by prohibiting actions that could affect delivery of medical benefits. Care is supposed to be based upon reasonableness and medical necessity (not coupon books, gift certificates, threats, etc.). Therefore, prohibiting inducements that would improperly limit medical or income benefits is clearly within the original intent of the rule, and the commission has modified §180.25(b)(3) to clearly prohibit that.

The commission also agrees that unnecessarily delaying reasonable and necessary medical care can drive system costs up. However, the commission disagrees with the commenter's statement that costs for RME exams are not regulated. The commission's Medical Fee Guideline clearly prescribes maximum allowable reimbursements (MARs) for these exams and as such regulates their maximum costs. Carriers that pay in excess of these MARs for these examinations are in violation of the statute and rules.

Although the commission intended the rule to allow employers and carriers to provide employees with incentives to seek health care from providers within a network (as evidenced by the exception under §180.25(b)(3)), the proposed language unintentionally limited the exception to voluntary networks that may be created after a feasibility study conducted under the direction of the Healthcare Network Advisory Committee (HNAC). The statute provided that carrier-established networks will have to comply with the standards recommended by the HNAC.

The rule has been modified to allow employers and carriers to offer employees incentives to seek health care from within an insurance carrier network. However, the rule prohibits employers or carriers from limiting the employee's right to request an alternate treating doctor under Texas Labor Code §408.023 as insurance carrier networks do not have that power under §408.0023. However, the rule provides certain limits on the incentives to ensure that they are not constructed in such a way that they could be a barrier to the employee exercising his or her right to request authority to select an alternate treating doctor. The incentives must be conditioned in such a way that even if the employee leaves the network, the employee retains entitlement to the incentive the employee was entitled to while participating in the network. For example, if the employee was paid $20.00 per week to remain in the network and after twelve weeks leaves the network, the employee retains entitlement to the $240.00 of incentive owed for those twelve weeks.

180.26 Comments

Comment: Commenters were concerned that the rule provides that some of the conduct that could result in sanction "requires a knowing, intentional or willful intent to engage in conduct while others, regardless of intent, even when accidental or minor, can result in deletion from the list." The commenters were concerned that the rules are analogous to "holding in football" which could be called on every play regardless of intent to violate the rules.

Response: The commission disagrees. The rule requires recommendation for deletion from the ADL in cases of significant conduct/violation, which will generally mean those that are willful/intentional or part of a pattern of practice or that result in significant harm or substantial risk of significant harm. The main exception is under subsection (c) which provides for deletion in cases involving dishonest conduct. The behaviors that result in deletion are serious issues that go to the heart of a doctor's duties under the statute and rules and quality of care; they are not incidental matters.

However, based on this comment and others received, the commission has changed the rule as proposed for clarity. It is the commission's hope and belief that most system participants whose actions fall outside of acceptable standards will correct their behavior and become valuable contributors to the system. This has been evidenced through the commission's various enforcement methodologies it has used over the years relating to correcting other noncompliance.

The fact that the proposed rule required the Medical Advisor to recommend deletion or sanction in a wide variety of situations was not intended to remove the commission's ability to work cooperatively with doctors or carriers who are willing to correct their practices. A progressive disciplinary approach allows the commission to work cooperatively with those whose conduct requires the Medical Advisor to recommend deletion or sanction. Nothing in the proposed rule prevented the carrier or doctor from entering into an agreement relating to sanctions but the commission has modified the rule by adding a new subsection (e) to make it clear that the commission has the authority to enter into a progressive disciplinary agreement with the carrier/doctor. The rule allows this to occur only if the commission believes that such an agreement will achieve the goals of improving medical quality and cost containment in the Texas workers' compensation system.

There will be situations where the commission refuses to enter into such an agreement because the commission does not believe that an agreement can achieve the goal. There will also be situations where the commission offers such an agreement but the carrier or doctor is unwilling to agree to the sanction and monitoring. In that situation, the Medical Advisor will be required to recommend deletion or other sanction (depending on whether §180.26(c) or (d) applies).

In addition to outlining the circumstances under which the commission may enter into an agreement, the subsection specifies what is required to be included in such an agreement. Requirements include: the duration of the agreement; the specific goals of the agreement ("improving medical quality and cost containment" is a general, not a specific goal); the way that progress toward the goal is to be measured (to eliminate any arguments at the end of the agreement as to whether it was successful); and the consequences of failing to meet the goals (breaking the agreement requires the Medical Advisor to recommend deletion or sanction under §180.26(c) or (d)). In addition, given that in many of these cases, verifying compliance with the agreement and progress towards the goals will require a commitment of commission resources, the progressive disciplinary agreements shall require the sanctionee to agree to pay the cost of monitoring.

The agreement will also describe the action(s)/behavior(s) that were the grounds for the sanction(s) and the agreement will contain no denial of these grounds by the doctor or carrier. The agreement does not require admission but will not include denial. The commission is interested in changing inappropriate behavior. If the other party does not believe that the behavior is inappropriate or denies that the action(s)/inaction(s) occured, the other party should appeal the recommendation to SOAH.

An agreement may include any sanction provided by statute or rule or otherwise agreed to by the parties. However, whatever sanction(s) is agreed upon must be specified in the agreement. The commission's intent with regard to all sanctions (whether agreed upon or otherwise imposed) is that they directly impact the behavior that the commission is trying to change. For example, if the commission finds that a carrier's screening criteria for a given type of health care inappropriately denies approval in some situations, the progressive disciplinary agreement might require the carrier to amend their screening criteria. If a doctor is abusing a given type of treatment, the agreement could call for the doctor to obtain concurrence from a member of the MQRP or a peer or the insurance carrier before performing the treatment (even if it did not require preauthorization).

Comment: Several commenters were concerned that the rules focused most closely on doctors and not enough on insurance carriers. Two commenters stated that the rules only listed one type of conduct by a carrier that could result in sanction (unjustifiably denying preauthorization). Another commenter opined that carriers sometimes delay or deny treatment and there is no factual or justified reason as to why that treatment would be denied. This commenter thought that a standard needed to be set in the rule that would deal with this situation. The commenters pointed out that the language in HB 2600 gave the commission authority to monitor and enforce rules regarding providers and carriers and felt that the rules should apply to all of those involved. Another commenter recommended removing references to carriers from rule 180.26 and possibly providing provisions specific to carrier sanctions in a separate rule that specifies the scope of such sanctions.

Response: The commission agrees that these rules are more specific with regard to conduct that can result in sanction of a doctor than that which can result in sanction of a carrier; however, the commission disagrees that this implies that the commission does not intend to hold carriers to high standards as relates to medical benefit delivery. The difference is that the statute and rules are already filled with specific requirements and prohibitions that govern carrier behavior as it relates to medical benefit delivery while there are fewer such specific (though a number of general and otherwise implied) requirements for doctors. For example, Texas Labor Code §408.027(d) requires a carrier who does not believe that a provider is entitled to payment for a service to provide a report that sufficiently explains the reasons for the denial. Failure to provide sufficient reason is a violation of the statute, and §415.0035 provides that a subsequent violation is subject to penalties not to exceed $10,000 under §415.021. The commission fully intends to take action to ensure both carrier and provider compliance with the statute and rules.

The standards that apply to doctors who provide care for injured employees are intended to also apply to doctors employed by carriers when they evaluate injured employees and the health care provided or proposed to be provided. If a doctor in the employ of a carrier is deleted or sanctioned under the various grounds listed in §180.26, there is a reasonable possibility that the carrier too would be subject to action. For example, if the carrier's doctor has a pattern of practice of unreasonably denying preauthorization, the doctor may be removed and the carrier may otherwise be sanctioned based upon its responsibility to ensure quality review of requests for preauthorization.

However, the commission does agree that the rule needs clarification on the issue of conduct by the carrier or its doctors and has made a number of changes to this effect such as changing subsection (c)(4) to apply to both the delivery and evaluation of health care, and including those described in response to other comments. In doing so, the commission also added references to violating commission agreements and guidelines as they are also relevant to this rule.

In addition, with the passage of amendments to §134.600 (relating to Preauthorization, Concurrent Review and Voluntary Certification of Health Care), simply referencing "preauthorization" in the rule is too limiting. The intent was to focus on improperly seeking approval or improperly denying approval of health care. In order to ensure that the rule is not interpreted as only applying to preauthorization, the word "preauthorization" was removed from the rule and instead "requests for approval," "seeking approval" and similar phrases have been added. "Approval" is intended to refer to both prospective and retrospective approval because, when a carrier pays a bill, such payment is essentially "approval."

Comment: Commenters felt that subsection (b)(4) should provide some consideration for a revocation or suspension for technical reasons, such as late payment of annual licensure fee. They suggested that deletion should apply to those situations involving quality of care, fraud, or related criminal conduct.

The commenters were also concerned that proposed subsection (e) provided that a doctor that did not timely renew training requirements was suspended as they believed that this "will adversely affect injured employees under the care of a doctor and also will potentially lead to many doctors saying comp is not worth the hassles." The commenters felt that subsection (e) should provide for notice to the doctor of upcoming training requirements and a grace period if the doctor fails to meet the requirements as this "is the standard operating procedures of most licensing authorities. The punishment in the rule as written does not fit the crime and disrupts medical care to patients."

Response: The commission agrees that revocation or suspension of a license for nonpayment of licensing fees or failure to meet continuing education requirements are not as serious an issue of quality of care, fraud, or criminal conduct. However, the statute provides no discretion in this area. Texas Labor Code §408.00231(a)(3) requires the Executive Director to delete from the ADL a doctor whose license to practice in this state is revoked, suspended, or not renewed by the appropriate licensing authority.

Under §180.20(b), training is part of the minimal registration and certification requirements for being on the ADL. Further, when the doctor receives his or her certificate, it will have an expiration date on it. The commission is required by statute to provide at least 60 days notice to doctors prior to the expiration of their registration. Given that the training will be available through self-study/distance learning and that the doctor should already be familiar with the information to be covered, there is no reason to provide anything but a minimal grace period.

Because training is part of the registration and re-registration requirements (successful completion of the follow-up training required by §180.23(h) serves as a defacto re-registration), Texas Labor Code §408.0231(a) requires the Executive Director to delete a doctor who fails to meet his or her training requirements. Therefore, the commission has deleted the proposed language in §180.26(e) and put a reference to training requirements in §180.26(b)(1). In addition, the commission has moved some of the language relating to the doctor's duty to notify any employees treating with the doctor that they need to seek care from other doctors to §180.26(i) which already placed requirements on doctors who were deleted or suspended.

In an attempt to prevent unnecessary deletions under this section in a situation where the doctor is able to relatively quickly correct the problem (such as where the doctor can quickly pay the licensing fee or complete required training), adopted §180.27 now provides that a doctor will be sent a notice of intent to delete under §180.26(b) and given 14 days to file a response (filed means received). The intent here is to provide doctors with an opportunity to prove that the grounds for deletion do not exist. In addition, if the matter was relatively minor (such as paying licensing fees) and the doctor is able to correct the matter prior to the expiration of the 14 day period, the Executive Director will not delete the doctor. Otherwise, a doctor who is deleted by the Executive Director will have to request to be readmitted to the list once the doctor's license/training is back in good standing.

Comment: Commenter asked what the definition of "significant" was as used in §180.26(c)(1).

Response: "Significant" refers to "significant violation," which is defined in §180.1.

Comment: Commenters suggested that very few courts or legal scholars have been able to agree on which offenses involve moral turpitude and that the offenses involving moral turpitude should either be defined or the part of the subsection mentioning moral turpitude be deleted.

Response: The commission disagrees. Throughout Texas statutes are references to the commission of a crime of moral turpitude precluding participation in various activities or employment. This concept is well established.

Comment: Commenters felt that under subsection (c)(3), a single negligent event, without regard to severity of injury, could result in suspension. The commenters also felt that the list is arbitrary in some respects, e.g., surgeons are singled out for "excessive surgical care" and "excessive complication rates," whatever these terms may mean.

Response: The commission agrees in part. Although subsection (c)(3)(A) provides for deletion for engaging in any negligent practice resulting in death, injury, or substantial probability of death or injury to the provider's patients, the introductory heading in subsection (c)(3) describes the standard as being a professional failure to practice in a manner consistent with the public health, safety, and welfare. To ensure this intent is upheld, the commission has modified subsection (c)(3)(A) to focus on death or "significant injury" or substantial probability of "significant injury" (rather than just "injury").

The commission also agrees that subsection (c)(3)(B)(i), referring to excessive surgical care, is more specific than necessary. In addition, in order to ensure that the rules adequately cover doctors who over treat and those who under treat, the subsection has been changed to refer to "excessive or deficient care." However, the commission does not believe that "excessive complication rates" is too specific or that it singles out surgeons. The references to repeat surgeries and infections are merely examples of "excessive complication rates" (an example of a professional failure to practice in a manner consistent with the public health, safety, and welfare).

The commission has the authority to enter into progressive disciplinary agreements where appropriate and thus doctors who are sincerely committed to improving their practices will, in some cases, be able to avoid deletion.

Comment: Commenters were concerned about a provision in subsection (c)(3)(B)(iv) requiring deletion of a doctor with three or more malpractice judgments. The commenters felt that deletion for having three medical malpractice claims without regard to a time frame was not reasonable because "some of the most capable physicians practice in high risk areas" and that this "sometimes results in higher than normal claims activity and many of these cases are settled for nominal amounts because of the high dollar exposure and not because of negligence. There should be a timeframe such as three judgments in a five-year period."

Response: The commission disagrees. The proposed rule did not provide for deletion for three malpractice claims, or even three malpractice settlements. It provided for the Medical Advisor to recommend deletion if a doctor has had three final adverse malpractice judgments. The commission is aware that sometimes doctors and their malpractice insurance carriers are willing to settle malpractice claims that are without merit simply because it is less expensive to settle the claim than fight it. The standard was written as "final adverse malpractice judgments" because these would be cases in which a judge or jury found guilt or liability on the part of the doctor and thus represents a significant occurrence. A time period of "during the doctor's career" has been added to clarify the rule.

Comment: Commenters suggested that "cause" under subsection (c)(3), which provides for deletion if a doctor loses hospital privileges or is excluded or removed from participation in other health plans "for cause," be defined to relate to quality of care issues, fraud, or similar conduct.

Response: The commission disagrees. Although the commission agrees that quality of care, fraud, or similar conduct are among the most serious reasons that a doctor might lose privileges, the commission believes that other offenses that the commenters implied should not be grounds for sanctions (such as failing to maintain accurate patient records) would in fact constitute cause and thus grounds for sanction. Inaccurate/incomplete records can pose a danger to a patient's health and further suggest that the doctor might not be willing or capable of meeting reporting and record keeping requirements in the workers' compensation system. It is important to remember that due to the addition of the provisions relating to Progressive Sanction Agreements, the commission will have the discretion to offer the doctor the opportunity to enter into an agreement that provides for a lesser sanction than deletion where the commission believes that such a sanction will achieve the goals of improving medical quality and cost containment. Therefore, doctors who demonstrate their willingness to improve their practices by entering into an agreement, will be able to avoid deletion if the commission agrees that it is appropriate.

Comment: Commenters were concerned that the authority to delete a doctor because of over prescribing medications "potentially has a chilling effect on doctors properly taking care of their injured workers-an area of health care where it is likely to have a greater percentage than average of cases involving pain."

Response: The commission disagrees. Overprescribing medication negatively impacts costs in the system, the employee's condition, and return to work. However, the commission has modified the subsection slightly to reference willfully overprescribing or doing so as a pattern of practice to ensure that a single inadvertent case does not result in deletion under subsection (c)(3)(H).

The commission also disagrees with the suggestion that injuries in the workers' compensation system are more likely to involve pain (and thus need prescription medications) than other health care systems. The commenter provides no evidence to support the idea that there is more "pain" in a practice that focuses on workers' compensation claims than one that does not. There is no reason that an orthopedist's or a chiropractor's workers' compensation patients are in more pain than their patients who had similar injuries from recreational activities. When looking at the question of appropriateness of care, care will be evaluated based upon the type of injury and standards of care.

Comment: Commenter was curious whose opinion would be used as the standard (or who would set the standards) for judging actions under subsections (c)(3)(B), (G), and (H).

Response: The statute provides that the Medical Advisor, with the assistance of the Medical Quality Review Panel, will have the responsibility of evaluating quality of care issues and recommending or setting the standards.

Comment: Commenters felt that subsection (c)(4) has very broad categories relating to doctors' deletion from the list and "could subject physicians who do not have the intent to violate commission rules and standards to sanctions and deletion from the list."

Response: The commission disagrees. The subsection clearly applies to having a "significant pattern of practice," which is defined as willful or uncorrected, and not simply incidental conduct.

Comment: Commenters questioned §180.26(c)(4)(B), which relates to doctors having unjustifiable differences between their charges or fees and the commission's fee guidelines. The commenters pointed out that providers are directed to bill their usual and customary amounts and that these may well exceed the Maximum Allowable Reimbursements under the guidelines. Another was curious whose opinion would judge whether the differences were "unjustifiable."

Response: The commission agrees that the provision should be clarified. The language was intended to address violating the fee guidelines in such a way as to raise the doctor's reimbursement beyond that to which the doctor is entitled. It also applies to the situation in which the doctor is billing more to provide workers' compensation care than the doctor would bill other payors. The commission has modified the subsection to address "billing" differences and to clarify this has moved the language proposed as §180.26(c)(4)(F) into this subsection. It should also be noted that this provision is analogous to one of the provisions explicitly listed in the statute. Regarding whose opinion would be used, it will be the commission's based upon findings through the medical dispute resolution process, the audit or violation referral review processes, or the fraud investigation process.

Comment: Commenter asked whether §180.26(c)(4)(C), which provides that a doctor can be deleted for having a significant pattern of practice of administering improper, unreasonable, or medically unnecessary treatment or services and/or seeking preauthorization for same, meant that too many preauthorization denials could result in deletion and asked how many denials would be too many.

Response: Section 180.26(c)(4)(C) provides that a doctor who has a significant pattern of practice of seeking preauthorization for improper, unreasonable, or medically unnecessary treatments or services shall be recommended to be deleted from the ADL. The specific number of denials necessary to establish a "significant pattern of practice" will vary depending on the facts of the particular case. The commission intends to monitor preauthorization activity of both doctors and carriers to identify inappropriate conduct and take action to correct it. In the case of a doctor under this subsection, if the doctor's practices were not willfully committed, then the doctor would be given the opportunity to correct the practice. If the practice is not corrected, then the doctor shall be recommended for deletion.

Requesting preauthorization for health care that is not reasonable or necessary has the potential to significantly add costs to the system. First, the preauthorization request and response process costs time and money for both the requesting doctor and the carrier. Second, because carriers are required to pay the costs of a preauthorization dispute that is appealed to medical dispute resolution (even if the carrier wins), carriers may be inclined to approve unnecessary health care because it is less costly to approve it than to rightfully deny it (the commission will be monitoring this behavior as well). Finally, requesting approval for care that is not reasonable and necessary needlessly raises the level of tension in the system because it increases the number of denials even though the denials are appropriate because the care is, in fact, not reasonable and necessary.

Comment: Commenters stated "none of the items on the list in (c)(5) require any intent to engage in the conduct. An inaccurate statement or report or failure to include information may not be 'dishonest or criminal conduct' but could result in deletion from the list."

Response: The Commission disagrees. The commission does not believe that failing to dot "I's" and cross "T's" will result in deletion as these are not actions of "dishonesty" (which requires either lying or wilfull ignorance of the truth). However, in reviewing this comment, the commission realized that referencing both "dishonest" and "criminal" conduct in the rule was redundant to other portions of the rule. Therefore, the word "criminal" was removed from the rule and it merely focuses on "dishonest conduct."

Comment: In commenting on §180.26(c)(6), which provides for deletion for refusing to refund monies improperly paid to the doctor when ordered, commenter claimed that in "almost every case in which a carrier requested a refund the carrier was in error" and asked whether "there some where to go if the request is inaccurate?"

Response: The subsection only applies when a doctor fails to refund money pursuant to an order, not simply when the carrier requests a refund. If a provider refuses to refund monies in response to the carrier's request, the carrier can request medical dispute resolution and the commission will issue an order to refund the money if it finds in favor of the carrier. This order can be appealed to SOAH.

Comment: Commenter supported the behaviors that could result in deletion but felt that the commission had left out "false statements, misrepresentation, and omission of facts that cause the carrier to DENY payment or preauthorization." The commenter claimed to have seen many peer review and preauthorization reviews "where the reviewing professional has left out information or misrepresented the facts in a way that was grossly inaccurate and resulted in the injured worker being denied care inappropriately. This too is dishonest, fraudulent, and must be sanctioned to protect the injured workers." The commenter opined that "only balanced, fact based, and research supported opinions should be used for decision making, whether they come from the treating doctor or a UR doctor" and that "those who dishonestly promote overtreatment OR block necessary treatment need to be kicked out of the system."

Response: The commission agrees in part. As noted in response to a prior comment, the Commission intended this rule to apply to all doctors in the system, not just doctors who provide care to injured employees. Therefore, the commission has gone through the rule and made modifications to ensure that inappropriate actions includes actions that can be taken by a doctor to cause fees to be paid or care to be rendered which is not reasonable and necessary and also includes actions taken to cause reasonable and necessary care not to be rendered or paid for.

The language in proposed subsection (c)(5)(A) included submitting a false statement or misrepresentation or omitting pertinent facts used to determine entitlement to payment (which includes actions by the carrier's doctor that could deny payment, or actions by the billing doctor that could result in payment) and therefore does not need to be modified. However, proposed subsection (c)(5)(C) only applied to actions by the provider requesting approval and so has been modified.

The commission agrees that those whose behavior is not appropriate or in compliance either should change their habits or be removed from the system.

Comment: Commenter noted that the word "monies" is misspelled in §180.26(d)(4).

Response: The commission agrees and also noted other places where it was misspelled. The errors have been corrected.

Comment: Commenter recommended modifying subsection (d) to read as follows:

(d) The Medical Advisor may recommend a sanction against a doctor or a carrier or the deletion or suspension of a doctor from the ADL if any of the following occur:

(1) violation of the Texas Labor Code, commission rules and/or guidelines, or a final commission decision or order;

(2) violation of other statutes or regulations not administered by the commission but relevant to the provision of health care;

(3) conduct of a doctor relating to the delivery or evaluation of health care that the commission finds is not fair and reasonable and does not meet professionally recognized standards of health care; or

(4) refusing to pay moneys owed to a health care provider if the health care is medically necessary, reasonable, related to the compensable injury, and the carrier is liable for payment of the health care, has preauthorized the health care, or approved a request for concurrent review.

The commenter felt that the substitute language would clarify the circumstances under which the Medical Advisor could recommend that a sanction be imposed against a doctor or a carrier or that a doctor be deleted or suspended from the ADL because the proposed language "is too broad and includes the authority to recommend that TWCC take action against an insurance carrier for an act which violates statutes, such as the Insurance Code, which are not administered by TWCC. The Insurance Code regulates the business of insurance in the state of Texas. The Texas Department of Insurance is the only regulatory agency which has jurisdiction over an insurance company which violates a provision of the Insurance Code.

The Texas Legislature did not direct or authorize TWCC to adopt or amend rules which result in dual regulation of insurance companies when it passed HB 2600 as this rule would if adopted as proposed. TWCC's authority to sanction an insurance company is limited to acts which violate the Texas Labor Code and the rules properly adopted by TWCC. Texas courts have ruled that a state agency has only the powers and authority granted to them by statute and are precluded from the enactment of rules which are inconsistent with the expression of the Legislature's intent."

The commenter included case cites and summaries of four court decisions which the commenter believed were relevant to the issue at hand: Stauffer v. City of San Antonio, 344 S.W.2d 158 (Tex. 1961), State v. Jackson, 376 S.W.2d 341 (Tex. 1964) and Sexton v. Mt. Olivet Cemetery Assn., 720 S.W.2d 129 (Tex.App. - Austin 1986).

"In Stauffer v. City of San Antonio, the Texas Supreme Court held that 'an administrative agency...has only such powers as are expressly granted to it by statute together with those necessarily implied from the authority conferred or duties imposed. See Brown v. Humble Oil & Refining Co., 126 Tex. 296th, 83 S.W.2d 935...' The authority to sanction an insurance company who violates a statute administered by another regulatory agency rests solely with that agency.

The Texas Supreme Court ruled in State v. Jackson, that '[i]t is elementary that the legislature may withdraw from an administrative agency it has created any or all of the powers delegated, for authority to give includes authority to take away. Moreover, delegated powers maybe withdrawn by preemption as well as by expressed declaration when the legislature acts with respect to a particular matter, the administrative agency may not so act with respect to the matter as to nullify the legislature's action even though the matter may be within the agency's general regulatory field...the rule-making power of administrative agencies does permit the enactment of regulations which are inconsistent with the expression of the lawmakers intent in statutes other than those under which the regulations were issues.'

The inclusion of a provision in a rule proposed by TWCC that provides for the sanctioning of an insurance company who fails to comply with a statute not administered by TWCC is not consistent with the Texas Legislature's intent as expressed in the Texas Labor Code and HB 2600.

In Sexton v. Mt. Olivet Cemetery Assn., the Austin Court of Appeals ruled that '[i]t is axiomatic that...agencies are creatures of statutes and have no inherent authority. They may, therefore, exercise only those specific powers conferred upon them by law in clear and expressed language and no additional authority will be implied by judicial construction.' TWCC's powers are limited to those conferred by the Texas Labor Code. Those powers do not include the authority to expand the scope of the liability of insurance companies for payment of health care treatment and services beyond the liability set forth in the Texas Labor Code.

The Texas Labor Code does not provide TWCC with the authority to adopt a rule that allows its Medical Advisor to recommend that an insurance company be sanctioned for failing to comply with a statute not administered by TWCC."

Response: The commission agrees in part. Regarding subsection (d)(1), the commission disagrees that a reference to violating "guidelines" should be added because guidelines are adopted by commission rule and thus such a reference would be redundant. In addition, the commission does not agree that only "final" orders should be referenced. Many orders are binding during the pendency of an appeal and it is a violation to fail to comply with them. There are orders that are not final but that are still binding during the pendency of an appeal. As such, it would be more accurate to describe the orders as "final or otherwise binding." However, if the order is not binding or final (and thus otherwise binding), then it cannot be violated. As such, it would be redundant to add such adjectives to the rule.

The commission disagrees with the suggestion for (d)(2), which would remove the commission's authority to recommend sanctions for violations of other statutes not administered by the commission but relevant to the payment for health care (thus removing carriers from the scope of this subsection). For example, if a carrier is found to have violated preauthorization review requirements in another jurisdiction that are largely similar to those in Texas, the commission believes that it would be appropriate to impose a sanction such as requiring training on §134.600 (relating to Preauthorization, Concurrent Review, and Voluntary Certification of Health Care). The statute says that the criteria for "recommending or imposing sanctions may include anything the commission considers relevant." The commission considers this relevant. The commenter did not recommend that similar provisions in the rule that focus on doctor behavior should also be removed for exceeding the commission's authority, although as doctors are similarly regulated by other government entities beside the commission. Finally, any action taken in this regard would be in accordance with the memorandum of understanding between the commission and the Texas Department of Insurance. Thus, there will not be duplicative regulation of insurance carriers.

For the same reasons, the commission also disagrees with the suggestions for (d)(3), which would once again remove carriers from the scope of this subsection. The commenter's reason for this suggestion is not clear as the commenter's argument about enforcing other statutes does not seem relevant to this subsection.

However, the commission does agree that additional clarification to subsection (d)(4) could be helpful. The commission has modified this subsection consistent with the commenter's suggestion but has used slightly different wording.

Finally, the commission disagrees with the suggestion that subsection (d)(5), which provides for sanctions for other activities that warrant a sanction, be deleted, as this category is intended as a catch-all to ensure that inappropriate conduct can be sanctioned.

Comment: Commenter wanted to know whether a commission Hearing Officer or Appeals Panel Judge is an "administrative law judge" as used in §180.26(f).

Response: Yes. "Administrative law judge" is defined in §180.1 and the definition was modified to make it clear that it includes a commission Hearing Officer or an Appeals Panel Judge. If a contested case hearing or appeals panel makes a finding of fact or conclusion of law that establishes the facts in a situation and those facts make a doctor or carrier subject to sanction of some kind, the commission intends the finding or conclusion to be used as evidence in subsequent sanction actions.

Comment: Commenters felt that the grounds in subsection (f) are relevant in consideration of sanctions but that the establishment of certain items as "conclusive grounds" for sanction or deletion (as subsection (g) does) is arbitrary but otherwise takes discretion away from the commission. "The commission should have the authority to look at the items and make decisions based upon sound judgment and not by rule make any of the items conclusive. Under this rule a plea of nolo contendere for a traffic ticket would be conclusive grounds for sanction. The decision of a court or independent review organization on a minor matter or even non-relevant matter would be conclusive grounds. The provision relating to conclusive grounds should be deleted."

Response: The commission disagrees. Subsections (f) and (g) do not provide criteria for sanction. The subsection merely identifies sources of proof that the criteria for sanction have been met and ensures that, in three of the situations, the commission does not have to reprove the facts that substantiate that the criteria for sanction were met. Since a simple traffic infraction, such as failing to come to a complete stop at a stop sign does not meet the requirements for sanction under subsections (c) or (d), a plea of nolo contendere for such a violation can not establish conclusive grounds for sanction.

Comment: Regarding subsection (f), commenter objected "to the inclusion of any provisions which would allow TWCC to sanction an insurance company for any action taken by a federal, state, local court, an administrative law judge, an independent review organization, licensing or certification authority or regulatory authority on matter in which an insurance company was or had the opportunity to be a party." The commenter's based this position upon the same rationale for the commenter's suggestions for subsection (d): "TWCC is attempting to adopt a rule which exceeds its statutory authority and [is] inconsistent with the expression of the Legislature's intent." The commenter also felt that the language in subsection (f)(5) "gives the appearance that TWCC is attempting to provide the Medical Advisor with authority not provided for by the Texas Labor Code."

Response: As it did before in response to this commenter's suggestions for subsection (d)(2) and (d)(3), the commission disagrees with the commenter's position on subsection (f), which would remove the commission's authority to recommend sanctions for violations of other statutes not administered by the commission but relevant to health care delivery. The statute says that the criteria for "recommending or imposing sanctions may include anything the commission considers relevant." In addition, the statute provides that the commission may consider "findings of fact and conclusions of law made by a court, an administrative law judge of the State Office of Administrative Hearings, or a licensing or regulatory authority."

However, in reviewing the rule and the comment, the commission decided to clarify the language in subsection (g) to make it clear what the intent of these subsections is: that certain things constitute evidence and other constitute conclusive evidence until and unless overturned on appeal.

Comment: Commenter suggested that subsection (g) should be changed so as to clarify that the commission can impose sanctions on an insurance company or a utilization review agent in accordance with a memorandum of agreement between the Texas Department of Insurance and the commission for issues related to health care decisions reached by the insurance company or utilization review agent under the provisions of the Texas Labor Code and Article 21.58A of the Insurance Code. The commenter felt that the "current language in subsection (g) gives the appearance that TWCC is attempting to exceed its statutory authority described in Section 408.023(e) of the Texas Labor Code."

Response: The commission disagrees. Subsection (h) specifies the kinds of sanctions the commission may impose or recommend against a doctor or carrier, and it references the memorandum of understanding.

However, in reviewing this comment, the commission noticed that subsection (a)(4) stated that the rule established the types of sanctions the commission may "issue" rather than "recommend or impose" and that other subsections contained similar, incomplete language. Therefore, the commission has changed the language throughout the rule to include "recommend and impose."

Comment: Commenter questioned whether the term "section" was the correct word to be used in §180.26(g) instead of "subsection."

Response: The correct term is "subsection." The term "section" would refer to the rule as a whole. Since the reference is to specific portions of the rule, the term "subsection" is appropriate. However, the proper language would be "subsections (f)(1), (2), or (4) of this section," and the rule has been changed to reflect this.

180.27 Comments

Comment: Commenter supported the adoption of Rule 180.27 as proposed.

Response: The commission agrees.

Comment: Commenter suggested that the rule require the sanction notice sent by the commission in subsection (a) to be sent by return receipt so that the receipt shall require the signature of the doctor.

Response: The commission disagrees for several reasons. First, the commission occasionally experiences instances in which system participants refuse to sign for certified mail from the commission. Second, some system participants have all their mail delivered to a post office box and the Postal Service will not deliver certified mail to post office boxes. Finally, such a requirement would reduce the commission's flexibility. Currently, the commission sends such notices to doctors by certified mail, return receipt to the extent possible and sends a second copy via regular, first-class mail because §102.5 (relating to General Rules for Written Communications To and From the Commission) deems a document to be received five days after the date mailed unless the great weight of evidence indicates otherwise. However, future notices may be sent by any number of other means, such as the Postal Service's "Delivery Confirmation" service, which is less expensive and which does not require signature of the recipient. Further, the commission generally sends these notices to carriers via the carrier's Austin Representative Box at the commission's central office.

Comment: Commenter noted that carriers have been excluded from notice of sanctions requirements and authority to appeal such sanctions under §180.27. The commenter felt that the rule should require notice to carriers and authorize carrier requests for hearings at SOAH.

Response: The commission disagrees. Pursuant to Texas Government Code §311.005(2), the term "person" includes "corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity." Thus, "person" in §180.27(a) already included carriers and carriers receive notice under this rule and can request hearings at SOAH. However, to be clearer, the subsection has been modified.

Commission Comment: In reviewing the rule for adoption it was noticed that as proposed the rule could be interpreted as requiring the commission to provide a doctor an opportunity for a hearing if the doctor is deleted by the Executive Director pursuant to §408.0231(a) and §180.26(b). This was not the intent. The statute requires the Executive Director to delete a doctor from the ADL in certain situations (such as when the doctor's license is revoked, suspended, or not renewed by the appropriate licensing authority). The statute does not provide for an opportunity for a hearing for deletion by the Executive Director as it does for sanctions by the commission (under §408.0231(e)). Therefore, when the rule was proposed, the language in §180.27(a) applied when "the commission" intended to take action under this §180.26.

However, as noted, the commission believes that the proposed language was confusing. Therefore the commission has added a subsection to the rule that exempts deletions by the Executive Director under §180.26(b) from the requirements of §180.27. The new language requires a notice to be sent by verifiable means that explains the reason for the action. The doctor will then have fourteen days to respond. If it is found that the grounds for removal under §180.26(b) do not exist, the doctor shall not be removed by the Executive Director.

Subchapter A. GENERAL RULES FOR ENFORCEMENT