TITLE 28.INSURANCE

Part 2. TEXAS WORKERS' COMPENSATION COMMISSION

Chapter 133. GENERAL MEDICAL PROVISIONS

Subchapter D. DISPUTE AND AUDIT OF BILLS BY INSURANCE CARRIERS

The Texas Workers' Compensation Commission (the commission) proposes an amendment to §133.308, concerning Medical Dispute Resolution By Independent Review Organizations. The amendment is proposed to direct medical disputes regarding retrospective medical necessity of medical services costing less than the cost of a review by an Independent Review Organization (IRO) to proposed new §133.309, Alternate Medical Necessity Dispute Resolution by Case Review Doctor (AMDR).

Proposed new §133.309 is concurrently being proposed pursuant to the statutory provisions in Texas Labor Code §413.031. House Bill 3168, adopted during the 2003 Texas Legislative Session, amended §413.031 to add a new subsection (m) regarding new authority for commission medical dispute resolution. This new statutory provision states the commission by rule may prescribe an alternate dispute resolution process to resolve disputes regarding medical services costing less than the cost of a review of the medical necessity of a health care service by an independent review organization.

Rule 133.308, regarding Medical Dispute Resolution By Independent Review Organizations, has been amended in order to direct a party to the proposed new process, §133.309, regarding AMDR, which is the exclusive process for retrospective review of medical necessity disputes where the sum of disputed billed charges is less than the tier one IRO fee. Rule 133.308 will continue to be the process for retrospective review of medical necessity disputes where the sum of disputed billed charges is equal to or greater than the tier one IRO fee. The amendment to §133.308 also establishes August 1, 2004 as the effective date for dispute requests filed in accordance with the proposed new rule and the amended rule.

The Texas Register published text shows words proposed to be added to or deleted from the current text, and should be read to determine all proposed changes.

Amended subsection (a) establishes applicability. The amendment states that when applicable, retrospective medical necessity disputes shall be governed by the provisions of §133.309 of this title (relating to Alternate Medical Necessity Dispute Resolution by Case Review Doctor), effective for dispute resolution requests filed on or after August 1, 2004.

Mr. Robert L. Shipe, Director of Medical Review, has determined that for the first five-year period the proposed amended rule is in effect there will be no fiscal implications for other state or local governments as a result of enforcing or administering the rule. The commission does not anticipate any fiscal impact as a result of enforcing or administering the proposed amended rule.

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

Mr. Shipe has also determined that for each year of the first five years the rule as proposed is in effect, the public benefits anticipated as a result of enforcing the rule will be reduced costs in the system.

Health care providers that substitute the AMDR process for the IRO process will experience less costs due to the lower AMDR case review fee. Health care providers and injured employees should also benefit from the opportunity to resolve disputes over lower cost services.

Insurance carriers should experience a reduction in costs associated with low dollar disputes filed by injured employees that were previously resolved through the IRO process at the carrier's expense. This has the potential to reduce costs for insurance carriers participating in the medical dispute resolution process.

The proposed AMDR process, as provided by proposed new §133.309, is the exclusive process to resolve low dollar medical necessity disputes instead of resolution by the IRO process. Consequently, fewer disputes may be assigned to IROs, which could result in a decrease in revenue. During the two year period of January 2002 through December 2003, there were approximately 1,100 of the 5,900 retrospective medical dispute resolution filings involving disputes of care with charges totaling less than the tier one IRO fee. It is anticipated that, at a minimum, the same number of requests will be submitted for review through the AMDR process, with a proportionate decrease in IRO assignments.

Economic costs will not be incurred by injured employees as a result of the proposed amendment.

No increased costs are anticipated to be incurred by health care providers or insurance carriers who are required to comply with the proposed amended rule.

There will be proportionate costs of compliance for small businesses or micro-businesses to the extent of their participation in the new AMDR process referenced by the proposed amended rule. However, there will be no adverse economic impact on small businesses or micro-businesses that must comply with the proposed amended rule.

Comments on the proposal must be received by 5:00 p.m., April 5, 2004. You may comment via the Internet by accessing the commission's website at www.twcc.state.tx.us and then clicking on "Laws, Rules & Forms" and then clicking on "Proposed Rules." This medium for commenting will help you organize your comments by rule chapter. You may also comment by emailing your comments to RuleComments@twcc.state.tx.us or by mailing or delivering your comments to Linda Velasquez, Legal Services, Mailstop #4-D, Texas Workers' Compensation Commission, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744.

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

A public hearing on this proposal will be held on April 14, 2004, at the Austin central office of the commission (7551 Metro Center Drive, Suite 100, Austin, Texas 78744). Those persons interested in attending the public hearing should contact the Commission's Office of Executive Communication at (512) 804-4430 to confirm the date, time, and location of the public hearing for this proposal. The public hearing schedule will also be available on the commission's website at www.twcc.state.tx.us .

The previously cited sections of the Texas Labor Code are affected by this proposed rule. No other code or statute is affected by this proposal.

§133.308.Medical Dispute Resolution by Independent Review Organizations.

(a) Applicability. This rule is to be applied as follows.

(1) This rule applies to the independent review of prospective or retrospective medical necessity disputes (a review of health care requiring preauthorization or concurrent review, or retrospective review of health care provided) for which the dispute resolution request was filed on or after January 1, 2003. Dispute resolution requests filed prior to January 1, 2003 shall be resolved in accordance with the rules in effect at the time the request was filed. When applicable, retrospective medical necessity disputes shall be governed by the provisions of §133.309 of this title (relating to Alternate Medical Necessity Dispute Resolution by Case Review Doctor), effective for dispute resolution requests filed on or after August 1, 2004. All independent review organizations (IROs) [ ~~(IRO's)~~ ] performing reviews of health care under the Texas Workers' Compensation Act (the Act), regardless of where the independent review activities are based, shall comply with this rule.

(2) (No change.)

(b) - (y) (No change.)

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

Filed with the Office of the Secretary of State on February 23, 2004.

TRD-200401267

Susan Cory

General Counsel

Texas Workers' Compensation Commission

Earliest possible date of adoption: April 4, 2004

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

28 TAC §133.309

The Texas Workers' Compensation Commission (the commission) proposes a new rule §133.309, concerning Alternate Medical Necessity Dispute Resolution by Case Review Doctor (AMDR), a process to resolve retrospective medical necessity disputes of medical services costing less than the cost of a review by an independent review organization (IRO).

This new rule is proposed pursuant to the statutory provisions in Texas Labor Code §413.031. House Bill 3168 (HB-3168), adopted during the 2003 Texas Legislative Session, amended §413.031 to add a new subsection (m) regarding new authority for commission medical dispute resolution. This new statutory provision states that the commission by rule may prescribe an alternate dispute resolution process to resolve disputes regarding medical services costing less than the cost of a review of the medical necessity of a health care service by an independent review organization. With the exception of injured employees, who will never be required to pay the review fee, the cost of a review under the alternate dispute resolution process shall be paid by the nonprevailing party.

Commission Rules 133.305 (regarding Medical Dispute Resolution - General), 133.307 (regarding Medical Dispute Resolution of a Medical Fee Dispute), and 133.308 (regarding Medical Dispute Resolution by Independent Review Organizations) are the commission's current medical dispute resolution processes. These rules are the current processes for resolving medical necessity disputes (prospective and retrospective) and medical fee disputes.

Medical fee disputes are resolved by commission staff. Prospective and retrospective medical necessity reviews are conducted by an IRO under Article 21.58C, Texas Insurance Code, in the same manner as reviews of utilization review decisions by health maintenance organizations. IROs are entities certified by the Texas Department of Insurance (TDI) to conduct independent review of the medical necessity and appropriateness of health care services that have been provided or are proposed to be provided. Assessments of the IRO fees are based on TDI's two-tiered structure. The tier one fee is currently $650.00 for disputes that are reviewed by a medical doctor, or a doctor of osteopathy. The tier two fee is currently $460.00 for disputes that are reviewed by a medical professional other than a medical doctor or a doctor of osteopathy. This new rule proposal establishes the exclusive process for retrospective review of medical necessity disputes where the sum of disputed billed charges is less than the tier one fee.

The proposed new rule is designed to provide an alternative for resolving disputed services that are less than the IRO fee. The IRO fee has been a barrier to the resolution of low dollar medical necessity disputes. As an example, pharmacists often fill prescriptions and are denied reimbursement for medical necessity reasons. The pharmacist must often make a business decision as to whether it is cost effective to pursue a dispute through the IRO process. The prescription reimbursement is often much lower than the cost of the IRO process to the pharmacist. Using another example, injured employees at times personally pay for prescriptions and treatments. This may occur when the health care provider indicates that the carrier will deny reimbursement of associated bills. This often results in the pharmacist not being reimbursed or the injured employee not being able to recoup out-of-pocket expenses.

Additionally, it is often difficult for the pharmacist or injured employee to obtain the prescribing physician's documentation of the prescription's medical necessity. Without this documentation, it is unlikely that the pharmacist or injured employee will prevail in the dispute. This proposed new rule mandates that the prescribing doctor provide the required documentation to the requestor.

Other significant elements of the proposed new process include:

* restrictions on the amount of documentation allowed for processing and resolution;

* expedited resolution through a compressed timeframe not to exceed 30 days;

* utilization of case review doctors from a pool of commission approved doctors;

* procedural assistance to injured employees from the commission;

* a case review fee consistent with low dollar dispute amounts;

* conclusion of the dispute when the case review doctor submits the final decision and order to all parties and the commission;

* required reimbursement within five days of the final decision and order;

* assignment of responsibility for the case review fee to the nonprevailing party; and

* consolidation of multiple claim-specific medical bills for consideration.

Proposed subsection (a) establishes definitions for terms used and referenced in this process.

Proposed subsection (b) establishes applicability. AMDR is the exclusive process to resolve claim-specific retrospective medical necessity disputes where the amount in dispute is less than the tier one fee for an IRO review. This rule will apply to AMDR disputes filed with the commission on or after August 1, 2004. Subparagraphs (1)(A) and (B) establish that the permissible sum of disputed billed charges on a single or on multiple bills is less than the tier one fee as established for the review of health care by an IRO. Additionally, subparagraph (1)(B) limits multiple billings to bills from a single health care provider. Paragraph (3) expressly limits the use of AMDR to the resolution of retrospective medical necessity disputes as defined in subparagraphs (1)(A) and (B). Paragraph (4) prohibits disputes adjudicated through the IRO or SOAH processes from being subsequently reviewed under the AMDR process. Paragraph (5) directs that disputes in which the sum of billed charges is greater than or equal to the tier one IRO fee must be filed and processed in accordance with §133.308 (relating to Medical Dispute Resolution by Independent Review Organizations). Paragraph (6) directs that disputes regarding the amount of payment for health care rendered must be filed and processed in accordance with §133.307 (relating to Medical Dispute Resolution of a Medical Fee Dispute) and any claim-related disputes must be filed and processed in accordance with §141.1 (relating to Requesting and Setting a Benefit Review Conference). Paragraph (7) provides for the ongoing application of AMDR to appropriate disputes if a court of competent jurisdiction invalidates some provision or application of the rule.

Proposed subsection (c) addresses the effects of other disputes on the AMDR process. Paragraph (1) addresses the impact of §409.021 (relating to Initiation of Benefits; Insurance Carrier's Refusal; Administrative Violation) in instances where care has been provided for the claimed injury and the insurance carrier has not yet disputed compensability of the claim. The provision makes it clear that the carrier will be liable for all medically necessary care that was provided for the claimed injury prior to the insurance carrier's dispute of compensability. As such, the request for AMDR will proceed to a final decision and order. Paragraph (2) provides that the insurance carrier is liable for any medically necessary care that has been provided for the claimed injury if the insurance carrier has still not disputed liability or compensability and the 60-day period to do so, or a later period if there is a finding of evidence that could not reasonably have been discovered earlier, under §409.021 has lapsed. Again, the request for AMDR will proceed to a final decision and order. The purpose of paragraphs (1) and (2) is to address the recent legislation that changed the time frame in §409.021 from seven to fifteen days in response to the Texas Supreme Court's decision in Continental Casualty Co. v. Downs , 81 S.W. 3d 803 (Tex. 2002). Insurance carriers are liable for all benefits that accrue from the date of injury, and must either initiate payments that are due or dispute the claim's compensability by the 15th day after the date the insurance carrier receives written notice of the claimed injury. The insurance carrier has 60 days after the date it receives written notice of the claimed injury to investigate the claim and decide whether to contest compensability. The only exception to the 60-day time limit is that, if there is a finding of evidence that could not reasonably have been discovered earlier, the insurance carrier may reopen the issue of compensability. If the insurance carrier does not timely dispute compensability, it waives its right to contest compensability, and becomes liable for all benefits that accrue, whether medical or indemnity. However, even if the claim is accepted as compensable, medical necessity and fee issues remain subject to potential dispute resolution. Paragraph (3) establishes that if a carrier has denied a claim's compensability, the AMDR process will not continue until the injured employee or the health care provider files a request for a benefit review conference (BRC) in accordance with §141.1 (relating to Requesting and Setting a Benefit Review Conference). Furthermore, paragraph (4) establishes that the AMDR process shall proceed to a final decision and order regardless of a pending dispute regarding the carrier's liability for the subject claim or regarding compensability of the injury for which the care is the subject of the AMDR request. The resulting final decision and order is conditioned upon an adjudication of liability and compensability for the injury. Paragraph (5) establishes that where a claim's compensability has been adjudicated or accepted, and liability for the claim has been adjudicated or accepted, the AMDR request shall proceed to a final decision and order. Paragraph (6) establishes that the AMDR request will be dismissed if any pending compensability disputes have been resolved or have been finally adjudicated in favor of the carrier prior to a final AMDR decision and order.

Proposed subsection (d) establishes the parties in the AMDR process shall be: the health care provider; the prescribing doctor, if other than the health care provider who provided the care in dispute; the injured employee, if denied reimbursement for health care paid by the injured employee; and the carrier. The carrier participates in this process as a responding party and shall not be considered a requesting party.

Proposed subsection (e) addresses timeframes for filing an AMDR dispute. A request must be filed with, and received by, the commission no later than one year from the disputed health care's date of service. Health care providers must adhere to the reconsideration process in accordance with §133.304 (relating to Medical Payments and Denials) prior to requesting AMDR. However, an injured employee seeking reimbursement is not required to request reconsideration. Additionally, paragraph (2) provides that an injured employee may initiate AMDR by contacting the commission in any manner, and that this initial contact establishes the date used to determine timeliness for an injured employee's request. Paragraph (3) states that any party that does not timely file a request for review waives the right to AMDR.

Proposed subsection (f) establishes criteria for complete requests submitted by health care providers. Paragraph (1) requires that two legible copies of the request be submitted to the commission, which prescribes the form and manner of the request. The elements of the request are described in subparagraphs (2)(A) - (D) and include: a designation that the request is for review under AMDR; a copy of medical bill(s); copies of written notices of denials from the carrier (explanations of benefits (EOBs)), or, if no response from the carrier, verifiable evidence or documentation of the carrier's receipt of the request; and a maximum of three single-sided pages of documentation supporting the medical necessity of disputed care which must be provided by the prescribing doctor. These three pages of documentation may consist of summaries or excerpts of medical records. Failure of the prescribing doctor to provide this documentation may subject the prescribing doctor to an enforcement action.

Proposed subsection (g) establishes criteria for complete requests submitted by injured employees. The elements of the request are described in paragraphs (1) - (4) and include: a designation that the request is for review under AMDR; documentation or evidence (such as itemized receipts) of the amount the injured employee paid the health care provider; a copy of any written notice of adverse determinations such as an EOB indicating that reimbursement is denied due to the health care not being medically necessary, or, if the carrier fails to respond to the request for reimbursement, verifiable evidence or documentation of the carrier's receipt of the request; and a maximum of three single-sided pages of documentation supporting the medical necessity of disputed care which must be provided by the prescribing doctor. These three pages of documentation may consist of summaries or excerpts of medical records. Failure of the prescribing doctor to provide this documentation may subject the prescribing doctor to an enforcement action. The commission anticipates providing injured employees with assistance, as needed, in compiling this information.

Proposed subsection (h) describes the commission's assignment of a case review doctor, within 10 days of receipt of a complete request for AMDR, to resolve the medical necessity dispute. The case review doctor will be selected, at the commission's discretion, from among commission-approved doctors having appropriate qualifications. The doctors utilized by the commission for this process will be of sufficient number to service the volume of AMDR requests. A case reviewer must be of the same or similar licensure as the prescribing or performing doctor and have no known conflicts of interest with any of the providers known by the case review doctor to have examined, treated or reviewed records for the injured employee's injury claim. Additionally, the case review doctor may not have previously treated or examined the injured employee within the past 12 months, and not have examined or treated the injured employee with regard to a medical condition being evaluated in the AMDR request. The case reviewer must preserve the confidentiality of individual medical records as required by law. Written consent by the injured employee is not required for the case review doctor to obtain medical records relevant to the review.

Proposed subsection (i) describes the notification order. The notification order is issued by the commission to the parties within 10 days of receipt of a complete request for AMDR. The notification order contains the following elements: the case reviewer's name, license number, practice address, telephone number and fax number; an explanation of the purpose of the case review; an order to the carrier to pay a case review fee; an advisory to the carrier to forward a response to the case review doctor; and an advisory to the parties of a pending compensability and/or liability dispute in accordance with section (c). A carrier's failure to comply with the order to pay the case review fee, as with other commission orders, will result in an administrative violation. Additionally, subsection (i) states the commission's notice to the carrier shall also include a copy of the AMDR request. The notice shall be forwarded to the carrier through its Austin representative. The carrier is deemed to have received the notification order and request for AMDR in accordance with §102.5(d) of this title (regarding General Rules for Written Communication to and from the Commission). Upon issuance of the notification order, withdrawals are not permitted by any party.

Proposed subsection (j) sets the case review fee at $100.00. However, an injured worker is never required to pay this fee. The carrier initially pays the fee, and final liability for the fee is determined pursuant to subsection (n).

Proposed subsection (k) describes the carrier response to an AMDR request. No later than seven days from the date of the notification order, the carrier shall submit directly to the case review doctor: the $100.00 case review fee with an annotation identifying the case review number; and by facsimile or electronic transmission, a written response, either explaining why the disputed health care is not medically necessary, or indicating that no documentation will be submitted for review. The response shall be limited to a maximum of three single-sided pages of supporting documentation. These three pages of documentation may consist of summaries or excerpts of medical records. If the carrier elects to not provide a response, the AMDR process will proceed to a final decision and order.

Proposed subsection (m) describes the case review doctor's report, which must be completed within five days from the date the carrier's response was due. The report must include: the specific reasons for the case review doctor's determination, including the clinical basis for the decision; a description of, and the source of, the screening criteria that were utilized; a description of the qualifications of the case review doctor; and a certification by the case review doctor that no known conflicts of interest exist with any of the providers known by the case review doctor to have examined, treated or reviewed records for the injured employee's injury claim, and that the case review doctor has not previously treated or examined the injured employee within the past 12 months, nor has the case review doctor examined or treated the injured employee with regard to a medical condition being evaluated in the AMDR request. The case review doctor shall forward the completed report and a copy of the reviewed carrier's response to all parties and the commission. This information shall be forwarded by facsimile or electronic transmission. If the party is an injured employee and a facsimile number has not been provided, this information shall be provided by other verifiable means. Requests for clarification from the parties will not be accepted by the commission or the case review doctor. The commission, at its discretion, may seek clarification from the case review doctor and may require the case review doctor to issue an amended report within three days of the commission's request.

Proposed subsection (n) describes the final decision and order. The case review doctor's report is deemed to be a commission decision and order, and is effective the date signed by the case review doctor. The decision and order is final and is not subject to further review. If the decision and order indicates that none of the disputed care was medically necessary, the prescribing doctor will be ordered to reimburse the carrier for the case review fee. If the decision and order indicates that any of the disputed care was medically necessary, the carrier will be ordered to pay for that care in accordance with the commission's fee guidelines. In that instance, the carrier will not be reimbursed for the case review fee. The decision and order shall identify any pending liability and/or compensability dispute as previously identified by the commission in accordance with subsection (c) and (i)(1)(E). An AMDR decision and order favorable to the requestor is not enforceable absent an affirmative adjudication of any pending liability or compensability dispute. A party shall comply with the decision and order by issuing payment no later than five days after the issuance of the order if it is immediately enforceable, or no later than five days after an affirmative adjudication of the pending liability or compensability dispute. The final decision and order shall not be used by a carrier to prospectively deny future medical care.

Proposed subsection (o) states that the commission may dismiss a request for AMDR if the commission determines that good cause exists.

Robert L. Shipe, Director of Medical Review, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for other state or local governments as a result of enforcing or administering the rule. The anticipated fiscal impact on the commission cannot, as of yet, be quantified, but will hinge on several factors associated with administering the new AMDR process. The commission envisions that intake of AMDR requests, and the assistance that will be provided to injured employees in completing AMDR requests, will occur primarily in the field. While the distribution of these requests among field offices cannot be known, it is anticipated that the volume of total requests will, at a minimum, match the number of IRO disputes filed regarding low dollar (less than the current tier one IRO fee of $650) medical necessity disputes. During the two-year period of January 2002 through December 2003, approximately 1,100 of the 5,900 retrospective medical dispute resolution filings involved disputes of care with charges totaling less than the tier one IRO fee. Approximately 60% of these disputes were withdrawn or dismissed and were not resolved through the current process, due in part to the IRO fee. An anticipated benefit is that a greater number of these disputes will proceed to a resolution under the streamlined AMDR process. From a fiscal standpoint, the removal of the fee barrier should result in even more disputes being received and processed by the commission. The staffing requirements and effects on administrative costs cannot be determined as the balance between a proportionate decrease in IRO requests (for these low dollar disputes) and the number of AMDR requests cannot be quantified. However, it is anticipated that there will be increases in these areas. Costs associated with staff development, form development or modifications, and development of public information materials are also expected to be incurred during implementation of the proposed rule. Additionally, programming costs may be incurred to modify the existing automated system used to capture medical dispute data. As the commission has processes in place for the selection of various examination doctors (designated doctors and RME doctors), the fiscal impact of administering the assignment of case review doctors is expected to be minimal. Savings to the commission are expected in the area of costs associated with SOAH proceedings, as a decrease in the number of IRO reviews will proportionately decrease the number of appeals to SOAH.

Mr. Shipe has also determined that for each year of the first five years the rule as proposed is in effect the public benefits anticipated as a result of enforcing the rule will be reduced costs in the system as well as payment for medical care to which an injured employee is entitled, and non-payment of care that is not reasonably required for the compensable injury.

Health care providers and injured employees will experience reduced costs in participating in the retrospective medical necessity dispute process due to the lower cost associated with an AMDR review. Also, health care providers and injured employees now have the ability to obtain reimbursement for disputed health care that would otherwise not be pursued due to the expense of an IRO review.

The injured employee will benefit from the elements of the proposed new rule designed to simplify the process in comparison to the current process. A request by an injured employee shall be initiated by contacting the commission in any manner for assistance with the AMDR requirements, including assistance with the reconsideration process. The injured employee's initial contact establishes the date used to determine timeliness. The proposed new rule allows for the consolidation and review of multiple, claim-specific medical bills. There will be limitations placed on the amount of documentation required to be submitted with a request. The commission anticipates providing injured employees assistance as needed in compiling the information necessary to complete their request. In total, these elements will promote a quicker resolution of the dispute as evidenced by the proposed timeframe that does not exceed 30 days. The injured employee will also benefit from receiving the final decision and order directly from the case review doctor, and from the requirement that reimbursement of health care services previously paid by the injured employee be made within five days of this final decision and order.

Health care providers will also benefit from limitations placed on the amount of documentation required to be submitted with a request. This will result in easier access for health care providers and will ultimately promote quicker resolution of the dispute. This quicker resolution is confirmed through the proposed timeframe that does not exceed 30 days. As previously stated, the case review fee is consistent with low dollar dispute amounts making the AMDR process less costly and, consequently, a more viable option for health care providers. Health care providers will also benefit from receiving the final decision and order directly from the case review doctor and from the requirement that reimbursement for health care services provided be made within five days of this final decision and order. If the health care provider does not prevail and is not the prescribing doctor, the prescribing doctor shall be liable for the case review fee. This focuses responsibility for the prescribed treatment on the appropriate party, the prescribing doctor. The proposed new rule allows for the consolidation of multiple claim-specific medical bills to be included in an AMDR request. This has the potential to reduce costs and complexity for health care providers participating in this dispute resolution process.

Insurance carriers will also benefit from limitations placed on the amount of documentation required to be submitted with a request, as this will ultimately promote quicker resolution of the dispute. This quicker resolution is confirmed through the proposed timeframe that does not exceed 30 days. Insurance carriers should experience a reduction in costs associated with low dollar disputes filed by injured employees that were previously resolved through the IRO process at the carrier's expense. Insurance carriers will also benefit from receiving the final decision and order directly from the case review doctor, and from the requirement that reimbursement be made within five days of receiving this final decision and order. As previously stated, the nonprevailing party, excluding the injured employee, is responsible for the case review fee. The proposed new rule allows for the consolidation of multiple claim-specific medical bills to be included in an AMDR request. This has the potential to reduce costs and complexity for insurance carriers participating in this dispute resolution process.

There are also system wide benefits. Currently, the IRO process does not encourage the review of low dollar medical necessity disputes, as the cost of an IRO review is disproportionately high relative to the value of the services in question. Consequently, health care providers and injured employees have borne the cost of these services without a reasonable forum for disputing an insurance carrier's denial of reimbursement. The proposed AMDR process offers the opportunity for low dollar medical necessity disputes to be expeditiously resolved in a cost effective forum.

Initially, AMDR is expected to increase the number of retrospective medical necessity disputes, potentially generating a proportionate increase in system costs to carriers, both in administrative costs and in reimbursements. However, this increase actually reflects hidden costs that have traditionally been absorbed by health care providers who did not request IRO review. AMDR should allocate these hidden costs to the appropriate system participants. Further, it is expected that the AMDR forum will encourage insurance carriers to proactively scrutinize low dollar services for proper adjustment, thereby lowering overall system costs.

Economic costs are not anticipated to be incurred by injured employees who choose to access the AMDR process.

Economic costs are anticipated to be incurred by health care providers who are required to comply with the proposed new rule. These costs include the administrative costs of filing and following the dispute to its resolution. There may also be internal business practice modifications necessary for an individual provider to file a dispute, provide appropriate documentation and monitor the outcome. Prescribing health care providers will also be responsible for reimbursing the case review fee to the carrier if services in dispute are found to be not medically necessary. With this new AMDR process, small health care businesses may begin to file low dollar medical necessity disputes that they previously did not file due to the costs associated with an IRO review. Consequently, while staff time in a small health care business may be required to prepare and file a request, which may result in increased administrative costs, use of AMDR should also result in increased reimbursement to the health care provider, and thus result in no adverse economic impact. In comparison, a large business is more likely to have staff dedicated to providing this function. These costs should, however, be less than the costs associated with an IRO review, or, the cost associated with not pursuing reimbursement for disputed care.

Economic costs are anticipated to be incurred by insurance carriers, who are required to comply with the proposed new rule. Insurance carriers are initially liable for the case review fee for all requests. Additional costs include the administrative costs associated with the preparation of a response to an AMDR request, the filing of the response, and following the dispute to its resolution. Again, these costs should be less than the costs associated with an IRO review.

There will be proportionate costs of compliance for small businesses and micro-businesses to the extent of their involvement in the AMDR process. This involvement is not expected to rise to the level of an adverse economic impact for the reasons discussed above.

A public hearing on this proposal will be held on April 14, 2004, at the Austin central office of the commission (7551 Metro Center Drive, Suite 100, Austin, Texas 78744). Those persons interested in attending the public hearing should contact the commission's Office of Executive Communication at (512) 804-4430 to confirm the date, time, and location of the public hearing for this proposal. The public hearing schedule will also be available on the commission's website at www.twcc.state.tx.us .

The previously cited sections of the Texas Labor Code are affected by this proposed rule. No other code or statute is affected by this proposal.

§133.309.Alternate Medical Necessity Dispute Resolution by Case Review Doctor.

(a) Definitions. The following terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise:

(1) case review doctor--a commission selected doctor assigned to conduct retrospective review of health care for medical necessity under this subsection.

(2) claim-specific--pertaining to one injured employee, a single workers' compensation claim filed by that injured employee, and a single insurance carrier (carrier), as defined in §133.1(a)(10) of this title, that has accepted liability for the claim.

(3) retrospective medical necessity dispute--a dispute regarding health care provided to an injured employee by a health care provider (HCP), as defined in §133.1(a)(9) of this title, for which reimbursement has been denied to an injured employee or HCP by the carrier based upon the carrier's determination that the health care is not medically necessary.

(b) Applicability.

(1) Alternate Medical Necessity Dispute Resolution by Case Review Doctor (AMDR) is the exclusive process to resolve claim-specific retrospective medical necessity disputes, wherein:

(A) the sum of disputed billed charges on a single bill is less than the tier one fee as established for the review of health care by an Independent Review Organization (IRO) (pursuant to Article 21.58C of the Texas Insurance Code); or

(B) the sum of disputed billed charges on multiple bills is less than the tier one fee as established for the review of health care by an IRO. Multiple billings may not include bills from more than one HCP.

(2) This rule applies to AMDR requests filed with the commission on or after August 1, 2004.

(3) The AMDR process is expressly limited to the resolution of retrospective medical necessity disputes as defined in subsection (b)(1)(A) and (B) of this section.

(4) This process shall not be utilized for the purpose of reviewing or appealing an IRO decision or a State Office of Administrative Hearings (SOAH) decision, nor pending decisions before those bodies, regarding retrospective medical necessity disputes.

(5) For medical services in which the sum of disputed billed charges, as determined in accordance with subsection (b)(1) of this section, is greater than or equal to the tier one fee for an IRO review or for requests received prior to August 1, 2004, the requesting party must file a separate request that adheres to the medical dispute process outlined in §133.308 of this title (relating to Medical Dispute Resolution By Independent Review Organizations).

(6) All disputes involving issues other than medical necessity shall be filed separately and processed under §133.307 of this title (relating to Medical Dispute Resolution of a Medical Fee Dispute) and/or §141.1 of this title (relating to Requesting and Setting a Benefit Review Conference).

(7) Where any terms or parts of this section or its application to any person or circumstance are determined by a court of competent jurisdiction to be invalid, the invalidity does not affect other provisions or applications of this section that can be given affect without the invalidated provision or application.

(1) If, by the fifteenth day after the insurance carrier receives the first written notice of the injury, the insurance carrier has not disputed liability or compensability of the claimed injury, the insurance carrier is liable for all medically necessary care that is provided for the claimed injury until the insurance carrier timely disputes liability or compensability of that injury. A request for AMDR regarding the medical necessity of health care that was provided to treat the claimed injury prior to the insurance carrier's dispute shall proceed to an AMDR final decision and order.

(2) If, by the sixtieth day after the insurance carrier receives the first written notice of the injury, or a later day if there is a finding of evidence that could not reasonably have been discovered earlier, the insurance carrier still has not disputed liability or compensability of the claimed injury, the insurance carrier is liable for all medically necessary care that is provided for the claimed injury. A request for AMDR regarding the medical necessity of health care provided to treat the claimed injury shall proceed to an AMDR final decision and order.

(3) If the carrier timely disputes liability for the subject claim, denies compensability of the injury, or denies compensability of the body parts or conditions for which the health care in dispute was provided, AMDR will not proceed until the injured employee or the HCP, as a sub-claimant, files a request for a Benefit Review Conference under §141.1 of this title (relating to Requesting and Setting a Benefit Review Conference) to dispute the carrier's denial.

(4) The AMDR process shall proceed to a final decision and order regardless of a pending dispute regarding the carrier's liability for the subject claim or regarding compensability of the injury for which the care is the subject of the AMDR request. The resulting final decision and order is conditioned upon an adjudication of liability and compensability for the injury.

(5) A request for AMDR regarding the medical necessity of health care provided for body parts or conditions already accepted by the carrier as to liability or compensability, or already adjudicated as to liability or compensability, shall proceed to a final decision and order.

(6) If the pending liability or compensability disputes have been resolved or have been finally adjudicated in favor of the carrier prior to a final decision and order being issued on a request for AMDR, the request will be dismissed.

(d) Parties. The following individuals shall be parties to an AMDR:

(1) the HCP who has been denied reimbursement for health care rendered;

(2) the prescribing doctor, if that doctor is not the HCP who provided the care in dispute;

(3) the injured employee, if denied reimbursement for health care paid by the injured employee; and

(4) the carrier. The carrier participates in this process as a responding party and shall not be considered a requesting party.

(e) Timeliness. A request shall be filed with and received by the commission no later than one year from the disputed health care's date of service.

(1) A request by a HCP may be submitted after exhaustion of the reconsideration process as established in §133.304 of this title (relating to Medical Payments and Denials).

(2) A request by an injured employee shall be initiated by contacting the commission in any manner for assistance with the AMDR requirements. The injured employee's initial contact establishes the date used to determine timeliness. The injured employee is not required to request reconsideration under §133.304 of this title (relating to Medical Payments and Denials) prior to requesting AMDR.

(3) A party who fails to timely file a request waives the right to AMDR.

(f) Request by HCPs.

(1) Two copies of the request for AMDR shall be submitted to the commission in the form and manner prescribed by the commission.

(2) Each copy of the request shall be legible and shall include:

(A) a designation that the request is for AMDR;

(B) a copy of all medical bill(s) as originally submitted for reconsideration in accordance with §133.304 of this title (relating to Medical Payments and Denials);

(C) copies of written notices of adverse determinations from a carrier (both initial and on reconsideration) such as an explanation of benefits indicating that reimbursement is denied due to the health care not being medically necessary, or, if the carrier failed to respond to the request (either initial or on reconsideration), verifiable evidence or documentation of the carrier's receipt of the request; and

(D) a maximum of three single-sided pages of documentation supporting the medical necessity of disputed care, clearly identified as the documentation to be reviewed by the case review doctor. The prescribing doctor shall provide the required documentation to the requesting HCP.

(g) Request by Injured Employee. Requests by the injured employee shall be legible and shall include:

(1) a designation that the request is for AMDR;

(2) documentation or evidence (such as itemized receipts) of the amount the injured employee paid the HCP;

(3) a copy of any written notice, if in the possession of the requestor, of adverse determinations from a carrier such as an explanation of benefits indicating that reimbursement is denied due to the health care not being medically necessary, or, if the carrier failed to respond to the request for reimbursement, verifiable evidence or documentation of the carrier's receipt of the request; and

(4) a maximum of three single-sided pages of documentation supporting the medical necessity of disputed care, clearly identified as the documentation to be reviewed by the case review doctor. The prescribing doctor shall provide the required documentation to the injured employee.

(h) Assignment. The commission, within 10 days of receipt of a complete request for AMDR, shall assign a case review doctor to review and resolve the disputed medical necessity. The case review doctor will be selected, at the commission's discretion, from among commission-approved doctors having appropriate qualifications. The doctors utilized by the commission for this process will be of sufficient number to service the volume of AMDR requests. The case review doctor shall:

(1) be of the same or similar licensure as the prescribing or performing doctor;

(2) have no known conflicts of interest with any of the providers known by the case review doctor to have examined, treated or reviewed records for the injured employee's injury claim;

(3) not have previously treated or examined the injured employee within the past 12 months, nor have examined or treated the injured employee with regard to a medical condition being evaluated in the AMDR request; and

(4) preserve the confidentiality of individual medical records as required by law. Written consent from the injured employee is not required for the case review doctor to obtain medical records relevant to the review.

(i) Notification Order.

(1) The commission, also within 10 days of receipt of a complete request for AMDR, shall issue a written notification order to the parties which:

(A) indicates the case reviewer's name, license number, practice address, telephone number and fax number;

(B) explains the purpose of the case review;

(D) advises the carrier to forward a response to the case review doctor; and

(E) advises the parties of a pending compensability and/or liability dispute in accordance with subsection (c) of this section.

(2) The commission's notice to the carrier shall also include a copy of the AMDR request. The notice shall be forwarded to the carrier through its Austin representative. The carrier is deemed to have received the notification order and request for AMDR in accordance with §102.5(d) of this title (regarding General Rules for Written Communication to and from the Commission).

(3) Once the notification order has been issued, withdrawals by any party are not permitted.

(j) Case Review Fee. The AMDR case review fee is $100.00.

(1) An injured employee is never liable for the AMDR case review fee.

(2) The case review fee shall be initially paid by the carrier.

(3) Final liability for the AMDR case review fee shall be determined as provided in subsection (n) of this section.

(k) Carrier Response. No later than seven days from the date of the notification order, the carrier shall submit directly to the case review doctor:

(1) the $100.00 case review fee with an annotation identifying the case review number, and

(2) by facsimile or electronic transmission, a written response, either explaining why the disputed health care is not medically necessary, or indicating that no documentation will be submitted for review. The response shall be limited to a maximum of three single-sided pages of supporting documentation. If the carrier elects to not provide a response, the AMDR process will proceed to a final decision and order.

(l) Case Review. The case review doctor shall review up to three single-sided pages of documentation provided by each party.

(1) If a party's documentation exceeds the limit of a maximum of three single-sided pages, the case review doctor shall not review any of the offending party's documentation and the case review doctor shall indicate this in the report.

(2) If the case review doctor does not receive a timely response from the carrier, the case review doctor shall proceed with the review and issue the report required by subsection (m) of this section.

(3) To avoid undue influence on the case review doctor, any communication regarding the AMDR dispute between a party and the case review doctor, before, during, or after the review, is prohibited.

(4) Upon completion of the case review, the case review doctor shall maintain a copy of the report, all documentation submitted by the parties, the date the documentation was received and from whom, and the date the report was issued to all parties.

(m) Report. No later than five days after the date the carrier's response was due, the case review doctor shall issue a report addressing the medical necessity of the disputed health care.

(1) The report must include:

(A) the specific reasons for the case review doctor's determination, including the clinical basis for the decision;

(B) a description of, and the source of, the screening criteria that were utilized;

(D) a certification by the case review doctor that no known conflicts of interest exist with any of the providers known by the case review doctor to have examined, treated or reviewed records for the injured employee's injury claim. The certification must also include a statement that the case review doctor has not previously treated or examined the injured employee within the past 12 months, nor has the case review doctor examined or treated the injured employee with regard to a medical condition being evaluated in the AMDR request.

(2) The case review doctor shall forward the completed report and a copy of the reviewed carrier's response to all parties and the commission.

(A) This information shall be forwarded to all parties and the commission by facsimile or electronic transmission.

(B) If the party is an injured employee and a facsimile number has not been provided, this information shall be provided by other verifiable means.

(3) Requests for clarification from the parties will not be accepted by the commission or the case review doctor. The commission, at its discretion, may seek clarification from the case review doctor and may require the case review doctor to issue an amended report within three days of the commission's request.

(n) Final Decision and Order. The case review doctor's report is deemed to be a commission decision and order, and is effective the date signed by the case review doctor.

(1) The decision and order is final and is not subject to further review.

(2) If the decision and order indicates that none of the disputed care was medically necessary, the decision and order will direct the prescribing doctor to reimburse the carrier for the case review fee.

(3) If the decision and order indicates that any of the disputed care was medically necessary it will include an order that the carrier pay for that care in accordance with the commission's fee guidelines. The carrier will not be reimbursed for the case review fee.

(4) The decision and order shall identify any pending liability and/or compensability dispute as previously identified by the commission in accordance with subsections (c) and (i)(1)(E) of this section. An AMDR decision and order favorable to the requestor is not enforceable absent an affirmative adjudication of any pending liability or compensability dispute.

(5) A party shall comply with the decision and order within five days of:

(A) the issuance of the AMDR order if it is immediately enforceable; or

(B) the affirmative adjudication of the pending liability or compensability dispute.

(6) This final decision and order shall not be used by a carrier to prospectively deny future medical care.

(o) Dismissal. The commission may dismiss a request for AMDR if the commission determines that good cause exists.

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

Filed with the Office of the Secretary of State on February 23, 2004.

TRD-200401268

Susan Cory

General Counsel

Texas Workers' Compensation Commission

Earliest possible date of adoption: April 4, 2004

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

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

Subchapter G. PROSPECTIVE AND CONCURRENT REVIEW OF HEALTH CARE

28 TAC §134.650

The Texas Workers' Compensation Commission (the commission) proposes a new rule §134.650, concerning Prospective Review of Medical Care Not Requiring Preauthorization (PRM process). This new rule is proposed to resolve the pretreatment impasse between insurance carriers and health care practitioners regarding health care that, by rule, does not require preauthorization, but is informally being denied in advance by insurance carriers on the basis of medical necessity and, in some instances, relatedness to the compensable injury. Health care practitioners are reluctant to provide such treatments with the knowledge, or pattern of experience, that reimbursement will ultimately be denied retrospectively. As a result, injured employees may effectively be denied health care reasonably required by the nature of the injury as and when needed. The absence of a process to resolve these disputes (and the detrimental consequences that arose in one specific case) was recently noted by the United States Court of Appeals for the Fifth Circuit in Gregson v. Zurich Am. Ins. Co., 322 F.3d 883, 887. Further, this informal denial process has also been used to deny all future medical care in contravention of commission rule 124.2(j)(6).

The proposed new rule resolves the impasse by reality-testing the proposed care against the insurance carrier's position, first, by facilitating an active dialogue between the insurance carrier and the doctor proposing the care. If the dialogue breaks down, and resolution remains appropriate, the commission may then order a medical examination of the injured employee. If in the opinion of the examining doctor the proposed care is medically necessary and related to the compensable injury, an opportunity is provided for the parties to reach an agreement regarding the care. If negotiation fails at this point, the commission shall issue an interlocutory order to ensure that the injured employee receives prompt, appropriate and necessary medical care. An insurance carrier may later appeal the commission's order.

Participation in this process does not preclude simultaneous participation in dispute resolution regarding other compensability, indemnity, or income issues as provided in Chapters 141 through 143 of the commission's rules. In fact, parties are particularly encouraged to pursue extent and relatedness issues as they arise as required by commission rule 124.3(c), and not wait for these considerations to hamper what may be necessary medical care and possibly delay or interfere with an injured employee's recovery.

Subsection (a) of the proposed rule provides that the rule applies to any request filed on or after August 1, 2004 from an injured employee or the injured employee's representative for a prospective review to be conducted regarding the medical necessity of specific care, which does not otherwise require preauthorization, being proposed for the treatment of the current medical condition for which the compensable injury is, or is suspected to be, a producing cause.

Subsection (b) provides that the parties to the process are: the injured employee or his representative as the person who initiates the request; the proposing doctor, who is the doctor proposing the specific care in question (also required is that the specific care proposed must be within that doctor's licensure authority); and the insurance carrier.

Subsection (c) provides that an injured employee initiates the process in the form and manner prescribed by the commission with the help of his doctor. The request for prospective review must include a description of the specific care being proposed, including the duration of the proposed care. Treatments that will be considered under the PRM process are limited in duration to one-month periods during the first three months following an injury. This limitation recognizes that doctors are usually seeing their patients at this frequency during the acute phases of an injury. This accommodates the need to allow for relatively quick intervention regarding ongoing treatment in connection with the development of diagnoses for the specific condition. After the first three months, the time limit is increased to three-month terms in recognition of conditions moving appropriately into longer-term, maintenance care. The process will not continue to the next step without the active participation of the proposing doctor.

The process also requires the proposing doctor to provide a thorough explanation of why the care is medically necessary and how the compensable injury is a producing cause of the condition that is requiring care. Further, the doctor must explain what circumstances have occurred that caused him to believe the carrier will not pay for the proposed care. Finally, the proposing doctor must certify that he is not simply seeking a guarantee of payment for the sole purpose of avoiding the retrospective process currently in place pursuant to statute and commission rule.

Subsection (d) provides that the commission shall initiate facilitation of communication between the proposing doctor and the insurance carrier upon the receipt of a complete request. The commission will utilize a seven-day period to attempt to resolve the matter. The insurance carrier's participation in the facilitation efforts is voluntary. If the insurance carrier does elect to participate, resolution may be obtained by the insurance carrier agreeing to liability for the specific care proposed, or the proposing doctor and the insurance carrier mutually agreeing upon alternative specific care. This agreement would constitute voluntary certification for which the carrier will be liable regardless of any later determinations as to compensability or extent of injury.

If the parties are not able to reach a resolution by the seventh day from the date the commission receives the complete request, the commission may appoint a doctor to perform a Prospective Review Medical Examination (PRME). The commission has sole discretion in determining whether a PRME will be scheduled. If the commission determines that a PRME is not appropriate, the commission will notify the parties and provide a written rationale explaining its decision. The commission's decision to close out the request is not subject to review. At that point, the parties will have an opportunity to review the disputed care, and either modify the proposed care and initiate a new request for prospective review, or provide the care and pursue retrospective review if the insurance carrier denies payment for the submitted bill.

Subsection (e) details the PRME process in the event that the commission elects to appoint a doctor to review the proposed care. The selected doctor will be known as the PRME doctor and is designated as such to distinguish him from routine RME doctors. A scheduling order will be issued to the parties by the seventh day after the date the commission received the complete request. The commission anticipates that the examination will be scheduled to occur approximately ten to fifteen days from the date of the scheduling order. The purpose of the abbreviated timeline is to ensure that appropriate and timely medical care for the compensable condition is provided to the injured employee. The scheduling order will ask the PRME doctor to address very specific, narrow questions to include whether the proposed care is medically necessary and, if applicable, whether the condition to be treated is causally related to the compensable injury. The PRME doctor will be directed to address only the questions asked and not to volunteer additional opinions regarding relatedness or propose alternative care options.

The proposing doctor and the insurance carrier will be directed by the scheduling order to send all relevant records, both medical and other appropriate records, to the PRME doctor and, simultaneously, to the opposing party. Records shall be sent in a manner to ensure they are received by the PRME doctor and the opposing party no later than five working days prior to the examination. Unlike the designated doctor process, the examination will still take place regardless of whether the PRME doctor has received records from the proposing doctor or the insurance carrier. The resulting opinion will have presumptive weight and may form the basis of a commission decision that is binding on the parties pending an appeal. Therefore, it is important to both the proposing doctor and the insurance carrier to provide the PRME doctor with all relevant medical information in a timely manner. If the proposing doctor feels there is other medical documentation not in the doctor's possession that is needed for the PRME doctor to make an informed decision, it is the proposing doctor's responsibility to obtain that documentation and ensure that it is forwarded to the PRME doctor and the insurance carrier prior to the examination.

The PRME doctor will be selected from the commission's designated doctor list (DDL). It should be noted that the doctor selected from the DDL is not obligated to participate in this process, as it is voluntary. If a DDL doctor does not wish to participate in the prospective review process, this will not subject the doctor to removal from the DDL. Additionally, the strict requirements regarding scope of practice used in the designated doctor process will not be applied to prospective review of medical care. The commission shall select a doctor from the DDL who is of the same or similar licensure as the proposing doctor.

The commission shall use the same doctor for all subsequent requests for review on that claim if the doctor is still qualified and available in order to maintain consistency. A doctor would be replaced, however, if he has treated or examined the claimant outside of the realm of the PRME within the twelve months prior to the PRME, or if the doctor has ever treated the injured employee for the condition he is being asked to evaluate. The doctor could also be disqualified if he had a disqualifying association as identified in commission rule 180.21, or if the doctor no longer has the same or similar licensure as the proposing doctor. It should also be noted that a doctor selected for the PRME process will not be eligible to be a designated doctor for the purposes of assigning MMI/IR or for assessing the injured employee's ability to return to work regarding this particular claim, as provided in commission rule 130.5.

To ensure the PRME doctor's impartiality, the new rule requires that the parties not contact the PRME doctor, verbally or in writing, before or after the examination, with the following limited exceptions: when the injured employee needs to reschedule the appointment due to a conflict; when the insurance carrier or the proposing doctor needs to confirm with the PRME doctor's office administrative personnel that records were received or confirm that the examination took place; or when the insurance carrier needs to confirm billing information for the cost of the examination with administrative personnel at the PRME doctor's office. All other communication must occur through appropriate commission staff. In the event that the PRME doctor feels additional information is required to make an informed decision regarding the proposed care, the PRME doctor may contact other healthcare providers involved with the claim.

Please also note the language in subsection (e) regarding the importance of the injured employee attending the PRME examination or promptly rescheduling the appointment if there is a conflict. Failure to attend the examination would further delay receipt of the care that is being sought. Additionally, if an injured employee fails to attend or call to reschedule the appointment, the insurance carrier may stop the payment of temporary income benefits (if applicable pursuant to Texas Labor Code §408.004) until the injured employee does submit to the examination.

Additionally, the issued opinion and the medical records that were received for the examination are to be kept by the PRME doctor in the same manner as required of the designated doctors in the MMI/IR examination process. It is important for the doctor to maintain the actual records as it is anticipated the injured employee may return to the same doctor more than once to address subsequent issues of the necessity of proposed medical care. The doctor's maintenance of the records will ensure continuity between examinations and will reduce the need to repeatedly provide duplicate copies of records that have already been provided. Record keeping requirements identified do not exceed the general record keeping requirements in accordance with those of a doctor's respective licensing authority.

Subsection (f) provides for resolution after completing a PRME. The PRME doctor shall provide a written opinion in the form and manner required by the commission within five days after the examination. The opinion shall specifically address the questions that were posed to the PRME doctor by the commission. The PRME doctor is to refrain from opining on any other issues or treatment options. The written opinion is required to be forwarded to the commission, the injured employee, the injured employee's representative (if any), the proposing doctor and the insurance carrier by personal delivery, mail, fax or electronic transmission. The specific means of delivery is left to the doctor's discretion, but must be made in a way that is verifiable.

Upon receipt of the PRME opinion, only the commission may contact the PRME doctor for clarification if the PRME doctor did not fully or clearly answer the questions posed, or if the PRME doctor included information that was not requested. This contact will be made solely at the commission's discretion. Requests for clarification or submission of additional documentation by the parties will not be accepted. It is important that the parties provide all the information they wish to be taken into consideration in a clear and concise manner prior to the examination.

If it is the PRME doctor's opinion that the proposed care is not medically necessary and/or not related to the compensable injury, the commission will take no further action regarding the proposed care. The proposing doctor may elect to provide the care anyway and utilize the retrospective review option if the carrier denies the bill. Or, the proposing doctor may choose to pursue alternative treatment options and repeat the PRM process. It is anticipated the PRM process will eliminate the impasse that currently occurs by reality-testing the proposing doctor's specific care and the insurance carrier's position, and encouraging the proposing doctor, injured employee, and insurance carrier to consider other care options, thereby allowing the injured employee to obtain appropriate treatment in a timelier manner.

If the parties are at odds regarding whether the condition proposed to be treated is related to the compensable injury, and the PRME doctor was directed to indicate his or her opinion regarding that issue, the parties may pursue dispute resolution as outlined in Chapters 141 through 143 of the commission's rules. In fact, it is expected that any dispute over relatedness or extent of injury would have been identified and dispute resolution begun prior to, or concurrent with, this process. The PRME doctor's opinion regarding relatedness shall have presumptive weight that can only be overcome by the great weight of other medical or factual evidence in the pursuit of a resolution of this issue.

Also in subsection (f), the proposed rule provides that if the PRME doctor opines that the proposed care is medically necessary (and, in situations where relatedness is at issue and the PRME doctor's opinion is that the compensable injury is the producing cause for the condition the proposed care is intended to treat), the commission shall facilitate communication between the parties and seek a written agreement from the insurance carrier that it is liable for the specific care identified by the PRME doctor as medically necessary. If the carrier agrees to accept liability for the proposed care via a written agreement, pursuant to §413.014(e) of the Act, it shall not later refuse payment based on there being an unresolved issue of medical necessity or relatedness. However, like the rest of the PRM process, participation in the agreement aspect is voluntary, and the insurance carrier is not required to participate and agree in writing to accept liability for the care identified by the PRME doctor to be medically necessary. Nevertheless, it is hoped insurance carriers will choose to participate, as the process provides helpful tools that would enhance insurance carriers' appropriate claims handling in general. Additionally, a pattern of repeatedly refusing to agree to liability for care that is medically necessary to treat the effects of a compensable injury could be indicative of practices that violate §408.021 of the Act.

Subsection (g) of the proposed rule provides that if the carrier elects not to voluntarily accept liability for the proposed care in spite of the PRME doctor's opinion, the commission shall issue a medical interlocutory order requiring payment within the commission's fee guidelines for the proposed care. It is understood that the care may be provided and billed by a health care practitioner other than the proposing doctor, such as a pharmacist, DME, or PT. The PRME's opinion regarding medical necessity carries presumptive weight and shall only be overcome by the great weight of other medical and/or factual evidence.

Subsection (h) of the proposed rule provides that if the commission elects to issue a medical interlocutory order, that order is appealable to the State Office of Administrative Hearings (SOAH) pursuant to §413.055 of the Act. An insurance carrier has twenty days from the date the medical interlocutory order was received to file an appeal. Appeals must be filed with the commission's Chief Clerk of Proceedings pursuant to commission rule 148.3 and a copy sent to all other parties involved.

Subsection (i) of the proposed rule provides that if a medical interlocutory order that has been issued by the commission is later overturned by a decision from SOAH, the insurance carrier may seek reimbursement from the commission's Subsequent Injury Fund pursuant to the procedure provided in commission rule 116.11.

Subsection (j) of the proposed rule indicates that the commission will review the outcomes of the Prospective Review Medical Examination (PRME). If a pattern and practice of a doctor proposing and pursuing care that is determined in the PRM process to not be medically necessary becomes apparent, or if a pattern and practice of an insurance carrier declining to agree to accept liability for care that is determined in the PRM process to be medically necessary for the treatment of the compensable injury becomes apparent, the commission will take appropriate administrative action.

Heidi Jackson, Director of Hearings, and Robert L. Shipe, Director of Medical Review have determined that for the first five-year period the proposed rule is in effect there will be no substantial fiscal implications for state or local governments as a result of enforcing or administering the rule other than as a regulated entity as described later in this preamble for persons required to comply with the rule as proposed. The commission already engages in activities such as facilitation of communication, selection of examination doctors, and scheduling exams; and the commission actions imposed in this rule would become part of ongoing activity. There may, however, be increased commission actions with respect to medical interlocutory orders. It is also determined that there may be a resulting increase in benefit review conferences, contested case hearings, and appeals due to the parties being provided an opportunity to resolve extent and relatedness disputes that are intertwined in issues of the medical necessity of proposed care. However, there may be a resulting decrease in requests for retrospective medical dispute resolution, as this process will resolve many issues that, without this rule, would have required retrospective review after a bill has been submitted to, and payment denied by, the insurance carrier. The commission considers both of these eventualities to be positive impacts to the system. Furthermore, with the expected decrease in the number of requests for retrospective medical necessity dispute resolution, the commission should realize a decrease in SOAH related costs. However, the fiscal impact on the commission cannot be determined.

Ms. Jackson and Mr. Shipe have also determined that for each year of the first five years the rule as proposed is in effect the public benefits anticipated as a result of enforcing the rule will be that:

* injured employees will be able to obtain prompt, appropriate and necessary medical care in situations where currently they are unable to;

* doctors and insurance carriers who are experiencing an impasse regarding issues of liability for medical care that is being proposed for the treatment of current conditions will have the opportunity to seek impartial, commission-authorized, third-party input regarding the proposed care;

* economic uncertainty for all parties regarding the future care for compensable injuries will be addressed among the parties through productive communication;

* parties will be properly motivated to timely pursue issues of extent of injury and relatedness of conditions to the compensable injuries;

* disputes affecting indemnity and medical benefits could be handled in tandem, thus reducing time, money and effort expended by commission staff and system participants since, in many instances, resolution of one dispute type ultimately affects the other;

* insurance carriers would be motivated to practice more efficient claims handling and avoid prospectively denying treatment without proper review of the claim and medical documentation

* cost of providing care that would have later been determined through retrospective review to not be medically necessary can be avoided; and

* litigation expenses regarding disputes of medically necessity, particularly when the first opportunity to review medical necessity occurs only after the care has been provided, can also be avoided, including the commission's related SOAH costs.

There will be anticipated economic costs to persons who are required to comply with the rule as proposed. Insurance carriers will be required to pay for the cost of the examination (currently $350.00, in accordance with the commission's fee guidelines). However, the commission believes the savings ultimately experienced through the opportunity provided by this rule for the early intervention in the decision-making process regarding appropriate medical care for the compensable injury will far outweigh the cost to carriers for the PRME examinations.

Designated Doctors who elect to provide PRM examinations will also experience added cost of storage of medical records for the injured employees that are examined under this new rule. The cost will be determined by the extent of involvement the doctor chooses to have in the process, but should not exceed the storage costs that are already experienced in the doctor's regular course of business. PRME doctors will be paid a fee for the review and issuing an opinion.

Although the proposing doctor must provide documentation to process a request, the commission anticipates providing a form that should be fairly easy to use and will supply the information that is required to accompany the documentation. Again, the cost to the proposing doctor will be determined by the extent of his participation in this voluntary process.

Economic costs to injured employees are not anticipated.

There will be proportionate costs of compliance for small businesses and micro-businesses to the extent of their involvement in the PRM process. This involvement is not expected to rise to the level of an adverse economic impact for the reasons discussed above.

Comments on the proposal must be received by 5:00 p.m., April 5, 2004. You may comment via the Internet by accessing the commission's website at www.twcc.state.tx.us and then clicking on "Proposed Rules." This medium for commenting will help you organize your comments by rule chapter. You may also comment by emailing your comments to RuleComments@ twcc.state.tx.us or by mailing or delivering your comments to Linda Velasquez at the Office of the General Counsel, Mailstop #4-D, Texas Workers' Compensation Commission, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744.

The previously cited sections of the Texas Labor Code are affected by this proposed rule. No other code or statute is affected by this proposed rule.

§134.650.Prospective Review of Medical Care not Requiring Preauthorization.

(a) Applicability.

(1) This rule applies to any request from an injured employee or injured employee's representative for a prospective review to be conducted regarding the medical necessity of specific care, which does not otherwise require preauthorization, being proposed for the treatment of the current medical condition for which the compensable injury is, or is suspected to be, a producing cause.

(2) A dispute as to whether the compensable injury is a producing cause of the current medical condition that is the subject of the proposed care may be simultaneously pursued as outlined in Chapters 141 through 143 of this title.

(3) This rule applies to any request for review filed on or after August 1, 2004 regarding proposed care that has not yet been provided to the claimant.

(b) Parties. The following persons are parties to the prospective review of medical care process:

(1) the injured employee or the injured employee's representative as the initial requestor;

(2) the proposing doctor, who is the doctor proposing the specific care in question. The specific care proposed must be within that doctor's licensure authority; and

(3) the insurance carrier.

(1) To initiate the prospective review process, the initial requestor must obtain written documentation, in the form and manner prescribed by the commission, from the injured employee's doctor who is proposing the specific care in question, that the compensable injury is a producing cause of the current medical condition that is the subject of the proposed care, and the proposed care is necessary to treat the subject condition. The documentation must contain:

(A) the proposing doctor's name and contact information (at a minimum, the proposing doctor's phone number, and either his fax number or email address)

(B) the injured employee's name and TWCC claim number;

(C) a description of the specific care and recommended number of sessions or the duration of care that the doctor is proposing:

(i) during the first three months from the date of injury, treatment proposed to be prospectively reviewed shall be limited to a maximum of one-month periods; and

(ii) after the first three months from the date of injury, treatment proposed to be prospectively reviewed shall be limited to a maximum of three-month periods.

(D) a thorough explanation of the medical necessity for the care being proposed;

(E) the basis for the doctor's opinion that the compensable injury is a producing cause of the current medical condition that is the subject of the proposed care; and

(F) a detailed description of the specific information or action from the insurance carrier that led the doctor to believe that fees for the care will not be paid.

(2) The doctor's signature on the request for the prospective review process certifies that the review is being sought for the purpose of obtaining necessary medical care and not for the purpose of obtaining a guarantee of payment.

(3) The proposing doctor must simultaneously submit the documentation to the insurance carrier and the commission.

(d) Initiation of Facilitation.

(1) The commission shall initiate facilitation of communication between the proposing doctor and the insurance carrier upon receipt of a complete request for prospective review by the commission. The insurance carrier's participation in discussions is voluntary.

(2) Resolution may be obtained by:

(A) the insurance carrier agreeing to liability for specific care proposed; or

(B) the proposing doctor and insurance carrier mutually agreeing upon alternative specific care.

(3) If resolution is not obtained by the seventh day from the date the commission receives the complete request for prospective review, the commission may appoint a commission-approved doctor to perform a Prospective Review Medical Examination (PRME).

(4) If the commission determines that a PRME is not appropriate, the commission will notify the parties and provide a written rationale explaining its decision. The commission's decision to close out the request is not subject to review.

(e) Prospective Review Medical Examination

(1) If the commission elects to appoint a commission-selected doctor from the Designated Doctors List to perform a PRME, the commission's written order assigning a PRME doctor shall:

(A) be issued to the parties by the seventh day after the commission receives the complete request for prospective review;

(B) indicate the PRME doctor's name, license number, practice address and telephone number, and the date and time of the examination;

(D) direct the PRME doctor to render an opinion on:

(i) whether the specific care proposed is medically necessary and, if applicable;

(ii) whether the compensable injury is a producing cause of the current medical condition that is the subject of the proposed care.

(E) direct the doctor to refrain from including any opinion or discussion regarding alternate care options.

(F) require the proposing doctor and insurance carrier to forward all medical records and other appropriate records in compliance with subsection (e)(3) of this section; and

(G) require the insurance carrier to pay the PRME doctor for the examination in accordance with the commission's fee guidelines.

(2) If at the time the request is made, the commission has previously assigned a PRME doctor to the claim, the commission shall use that doctor again, if the doctor is still qualified, as described in this subsection, and available. Otherwise, the commission shall select an available doctor from the commission's Designated Doctor List who:

(A) has not previously treated or examined the injured employee within the past twelve months and has not examined or treated the injured employee with regard to a medical condition being evaluated in the PRME;

(B) does not have any disqualifying associations as specified in §180.21 of this title (relating to Designated Doctor List); and

(3) The PRME doctor is authorized to receive the injured employee's confidential medical records to assist in the resolution of a dispute under this section without a signed release from the injured employee

(A) The proposing doctor and the insurance carrier shall provide to the PRME doctor, and simultaneously to the opposing party, copies of all the injured employee's medical records and other appropriate records in their possession relating to the medical condition to be evaluated by the PRME doctor.

(B) The proposing doctor and the insurance carrier shall ensure that the required records are received by the PRME doctor and the opposing party no later than the fifth working day prior to the date of the PRME. Regardless of whether the PRME doctor receives any medical records from either the proposing doctor or the insurance carrier, the PRME doctor shall proceed with the examination of the claimant.

(4) To avoid undue influence on the PRME doctor, communication with the PRME doctor before or after the examination regarding the injured employee's medical condition or history may only be made through appropriate commission staff, except that:

(A) the PRME doctor may initiate communication with any doctor who has previously treated or examined the injured employee for the work-related injury or any doctor identified by the insurance carrier to have performed a peer review on the injured employee's claim;

(B) if a scheduling conflict exists, the PRME doctor or the injured employee who has the scheduling conflict must make contact with the other at least 24 hours prior to the appointment. The 24-hour requirement will be waived in an emergency situation (such as a death in the immediate family or a medical emergency). The rescheduled examination shall be set for a date within seven days or as soon as possible after the originally scheduled examination;

(C) communication between the insurance carrier or the proposing doctor and administrative personnel at the PRME doctor's office is permitted for the sole purpose of confirming that records were received or to confirm that the examination took place; and

(D) communication between the insurance carrier and administrative personnel at the PRME doctor's office is permitted for the sole purpose of confirming billing information for the cost of the examination.

(5) If the injured employee fails to submit to the examination or fails to comply with subsection (e)(5)(B) of this section regarding rescheduling the appointment, the insurance carrier may suspend temporary income benefits pursuant to §408.004 of the Act.

(A) If, after the insurance carrier suspends temporary income benefits, the employee submits to the PRME, the carrier shall reinitiate temporary income benefits as of the date the employee submitted to the examination.

(B) The reinitiation of temporary income benefits shall occur no later than the seventh day following the latter of:

(i) the date the insurance carrier was notified that the employee had attended the examination; or

(ii) the date the insurance carrier was notified that the commission found that the employee had good cause for failure to attend the examination.

(6) The PRME doctor shall provide a written opinion on the issues identified in subsection (e)(1)(D)(i) and (ii) of this section within five days to the commission, the injured employee, the injured employee's representative (if any), the insurance carrier, and the proposing doctor by facsimile or electronic transmission if the PRME doctor has been provided the recipient's facsimile number; otherwise, the opinion shall be provided by other verifiable means.

(7) Requests from the parties for clarification from the PRME doctor will not be accepted. The commission may, at its own discretion, contact a PRME doctor to clarify issues regarding his opinion.

(8) The PRME doctor shall maintain in accordance with the record keeping requirements of the PRME doctor's licensing authority: a copy of the opinion; documentation of the date of the examination; the medical records reviewed; documentation of the date medical records were received and from whom; and the date, addresses, and means of delivery that the opinion was transmitted or mailed by the PRME doctor.

(f) Resolution.

(1) If the PRME doctor's opinion is that the compensable injury is not a producing cause of the current medical condition that is the subject of the proposed care and/or the proposed care is not medically necessary, the proposing doctor may:

(A) elect to provide care regardless of that opinion and pursue retrospective review of the bill if it is subsequently denied by the insurance carrier; or

(B) elect to pursue alternative care options.

(2) If the PRME doctor's opinion is that the compensable injury is a producing cause of the current medical condition that is the subject of the proposed care and the proposed care is medically necessary, the commission shall seek a written agreement from the insurance carrier to be liable for the specific care. While the commission may not mandate an agreement by the insurance carrier, if an agreement is reached, the insurance carrier shall not dispute payment for the proposed care for reasons of medical necessity or compensability at a later date.

(3) If no written agreement regarding liability for the care identified in the PRME can be reached, the commission shall issue a medical interlocutory order under subsection (g) of this section.

(4) If requested in the commission's scheduling order, the PRME doctor's opinion regarding whether the compensable injury is a producing cause of the current medical condition that is the subject of the proposed care, regardless of his opinion regarding whether the care is medically necessary, may form the basis of a request for a benefit review conference to resolve the issue of extent of injury pursuant to Chapters 141 through 143 of this title. The PRME opinion regarding whether the compensable injury is a producing cause of the current medical condition that is the subject of the proposed care is presumed to be correct and must be upheld upon review unless the great weight of other evidence indicates that the PRME opinion is incorrect.

(g) Medical Interlocutory Order.

(1) If the insurance carrier and the proposing doctor do not enter into a written agreement regarding liability based on the opinion of the PRME doctor, the commission shall issue a medical interlocutory order requiring payment in accordance with the commission's fee guidelines for the specific care identified as medically necessary by the PRME doctor.

(2) The PRME opinion regarding medical necessity, upon which the interlocutory order is based, is presumed to be correct and must be upheld upon review unless the great weight of other evidence indicates that the PRME opinion is incorrect.

(h) Appeal of Medical Interlocutory Order.

(1) The insurance carrier may appeal the medical interlocutory order by filing a written request for a SOAH hearing with the commission's Chief Clerk of Proceedings, Hearings Division, in accordance with §148.3 of this title (relating to Requesting a Hearing) pursuant to §413.055 of the Act.

(2) The request for a hearing to appeal the medical interlocutory order must be filed no later than 20 days from the date the order was issued and a copy of the request must be served on all other parties involved in the dispute. For purposes of this section, the proposing doctor is considered a party involved in the dispute and must be served.

(3) The commission shall file the request for a hearing with SOAH.

(4) The hearing shall be conducted by the State Office of Administrative Hearings within 90 days of receipt of a request for a hearing in the manner provided for a contested case under Chapter 2001, Government Code (the Administrative Procedure Act).

(5) Notwithstanding other provisions of this rule or any other rules, the acquiring, providing, assembling, filing and offering of documents at any de novo hearing (a new hearing based upon evidence admitted at the SOAH hearing) conducted by the State Office of Administrative Hearings, whether or not previously exchanged, is the responsibility of the requestor and respondent. The commission and the proposing doctor shall be co-respondents. Admission and use of such documents at the hearing are controlled by the procedural Rules of the State Office of Administrative Hearings. The commission will not file a copy of the PRM request, the PRME doctor's opinion, or medical and/or other records reviewed by the PRME doctor with SOAH or any party for a hearing scheduled to be conducted by SOAH.

(6) The parties to the dispute must represent themselves before SOAH.

(7) The insurance carrier shall not later dispute liability for the care based on medical necessity or compensability through any retrospective review process.

(8) A party who has exhausted the party's administrative remedies under the Act and who is aggrieved by a final decision of the State Office of Administrative Hearings may seek judicial review of the decision. Judicial review under this subsection shall be conducted in the manner provided for judicial review of contested cases under Subchapter G, Chapter 2001, Government Code.

(9) The commission shall post the SOAH decision on the commission website after confidential information has been redacted.

(i) Subsequent Injury Fund. An insurance carrier that makes an overpayment pursuant to an interlocutory order may be eligible for reimbursement from the subsequent injury fund. An insurance carrier must make a request for reimbursement in accordance with §116.11 of this title (relating to Request for Reimbursement or Payment from the Subsequent Injury Fund).

(j) Compliance. If the commission believes that any person is in violation of the Act or this rule, the commission may initiate an appropriate compliance and enforcement action.

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

Filed with the Office of the Secretary of State on February 23, 2004.

TRD-200401269

Susan Cory

General Counsel

Texas Workers' Compensation Commission

Earliest possible date of adoption: April 4, 2004

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

Subchapter I. PROVIDER BILLING PROCEDURES

28 TAC §134.800, §134.802

The Texas Workers' Compensation Commission (commission) proposes amendments to §134.800 and §134.802, concerning Provider Billing Procedures.

The Texas Register published text shows words proposed to be added to or deleted from the current text, and should be read to determine all proposed changes.

The amendments to §134.800 are proposed to specify changes in the forms that should be used by health care providers when submitting medical bills for payment. Proposed amendments to §134.802 will allow the commission to begin collecting medical billing data of pharmaceutical and dental benefits.

Currently, §134.800 specifies the forms that must be used by health care providers when billing for medical services provided to injured employees. In order to achieve standardization with Centers for Medicare and Medicaid Services (CMS) policies, as directed by the Texas Labor Code §413.011, subsections (a)-(c) will no longer state which form is required; instead, the commission proposes to delete subsection (c) and to require, in subsections (a) and (b), that bills be submitted on forms consistent with current CMS requirements.

The commission proposes to re-designate subsections (d) through (h) as subsections (c) through (g) as a result of the deletion of subsection (c). The commission also proposes to amend re-designated subsection (d) by changing references to forms TWCC-66c and TWCC-66a to TWCC-66, as there is currently a single form for billing pharmacy services. The TWCC-66c and the TWCC-66a form were the same form, except that the TWCC-66c was printed on a dot-matrix printer. Because there is no longer a need to distinguish the type of printer upon which a form is produced, the proposed amendment refers only to the TWCC-66 rather than to multiple forms. If a valid business need exists, however, health care providers can request approval of an alternate TWCC-66.

The commission proposes to amend re-designated subsection (e) by deleting references to specific forms approved by the American Dental Association (ADA) for billing dental services, and substituting more general language requiring that health care providers use a form currently approved by the ADA and prepared according to commission instructions.

The commission proposes to amend re-designated subsection (g) by changing the effective date for the rule as amended to June 1, 2004.

Rule 134.802 establishes the requirements for an insurance carrier to submit medical billing data to the commission. The rule currently in effect excludes collection of medical billing data for pharmaceutical benefits; in addition, it does not address the collection of medical billing data for dental benefits. The commission proposes to amend subsection (a) by deleting the language that excludes pharmaceutical benefit billing data and by adding language to require carriers to submit billing data within 30 days after the carrier receives a refund of overpayment on a bill for medical, dental, or pharmaceutical services.

The commission also proposes to amend subsection (d) to state that the rule applies to all dates of service on or after July 15, 2000, for facility and professional medical services except pharmaceutical and dental services. Proposed new subsection (e) will provide that the rule applies to all dates of service on or after January 1, 2005, for pharmaceutical and dental services.

Robert Shipe, Director of the Medical Review Division, has determined the following fiscal impact on state and local governments as a result of enforcing or administering the proposed rules for the first five-year period the proposed rules are in effect. Proposed amendments to §134.800 will result in a minimal, if any, fiscal impact to the commission associated with enforcing or administering the amended rule. These costs would include staff time involved with any necessary modifications to the instructions, or the potential development of educational materials, associated with use of the forms referred to in the amended rule.

Proposed amendments to §134.802 will have a fiscal impact to the commission in its enforcement or administration of the amended rule, including expenses associated with the purchase of related software and programming computer systems. The commission estimates the cost of implementing this collection of medical billing data to be approximately $75,000.00. This amount includes the agency's receipt of medical billing data in the proper format for all bill types, professional, institutional, pharmacy and dental, as well as the electronic data interchange (EDI) acknowledgment process.

No reductions in costs associated with the enforcement or administration of either of the amended rules are anticipated for the commission or any other state or local government. Nor does the commission anticipate any increase or decrease in revenues by either the commission or other state or local governments as a result of enforcing or administering the amended rules.

Mr. Shipe has also determined that for each year of the first five years the proposed rule is in effect the public benefits anticipated as a result of the proposed rule include the use of billing forms that have a well-known, standardized structure that is more consistent with national health care billing standards for the delivery of quality medical care. This should provide greater administrative efficiencies to system participants, including the commission, by reducing multiple reporting requirements.

Another public benefit anticipated as a result of enforcing the amended rules will be an improved system for monitoring the delivery of dental and pharmaceutical health care benefits, which will allow the commission to more comprehensively and effectively monitor and evaluate patterns of practice among system participants, and to possibly develop pharmacy formularies.

There will be some anticipated economic costs to persons required to comply with the rules as proposed. There will be no economic costs to injured employees, as these proposed rules do not impose any requirements on injured employees.

There may be initial transition costs for some carriers to convert their automated systems to a CMS-based billing forms system. These costs are difficult to quantify because each carrier has unique processing systems and internal controls. For the multiple-line carriers who already process claims submitted in a nationally standardized format, the cost to convert their systems to accept forms submitted in a manner that is standardized with CMS policies should be minimal. Some of these carriers may eventually realize a decrease in claims processing costs, as it may not be necessary to have unique processing systems for workers' compensation claims.

By contrast, single-line carriers who only process medical bills for workers' compensation claims subject to the Act and commission rules will likely experience a greater fiscal impact than multiple-line carriers as a result of the proposed amendments to these rules. The single-line carriers are likely to experience a fiscal impact similar to that of the commission's costs associated with enforcement or administration of the amended rule, because the single-line carriers may be required to purchase new software to program their data processing systems for the new requirements established by these proposed amendments, or may contract with a billing entity.

In order to more closely align the commission's reporting requirements with those of the Healthcare Insurance Portability and Accountability Act (HIPAA), the commission may work with trading partners to implement the International Association of Industrial Accident Boards and Commissions (IAIABC) 837 medical billing format for its TXCOMP system at a future date. The commission anticipates that there will be start-up costs to the agency and to some system participants once the IAIABC 837 format is implemented, but again, it may ultimately decrease claims processing costs for carriers.

Employers who purchase workers' compensation insurance should experience no direct economic impact from the requirement to comply with these proposed rules because there is no additional administrative requirement for the employer.

Similar to a carrier, self-insured employers who self-administer their claims and perform their own medical bill review may experience costs related to compliance depending on their unique processing systems and internal controls. Self-insured employers who outsource claims adjusting and/or medical bill review may also have increased costs depending on their software, computer systems, and vendor relationships.

Most healthcare providers are already billing on CMS-required forms, either in the workers' compensation setting or otherwise. For these healthcare providers, any increase in cost related to compliance with the amended rules as proposed should be minimal. However, depending on their organizational structure and CMS recognition, some healthcare providers will be required to change the forms upon which they bill for services within the workers' compensation system. These providers are likely to incur greater costs of compliance than providers that are already billing on the appropriate forms within the CMS system. Health care providers that do not currently participate in the CMS system will also incur additional costs in adapting their billing systems and training staff to utilize the CMS policies for their worker's compensation population. Once the billing systems are modified and staff is trained, the costs to bill for workers' compensation health care should decrease or remain the same.

As with carriers, it is difficult to quantify the costs associated with compliance with the proposed rules by self-insured employers and health care providers, due to variances between their respective processing systems and internal controls.

Small businesses or micro-businesses that may be impacted by this rule include employers, carriers, and health care providers. There should be no adverse economic impact because of the offsetting ultimate processing cost savings. There will be no difference in the cost of compliance for small businesses and micro-businesses as compared to large businesses because the same basic processes and procedures apply to all entities regardless of size.

Comments on the proposal must be received by 5:00 p.m., April 5, 2004. You may comment via the Internet by accessing the commission's website at www.twcc.state.tx.us and then clicking on "Laws, Rules & Forms" and then "Proposed Rules." This medium for commenting will help you organize your comments by rule chapter. You may also comment by emailing your comments to RuleComments@twcc.state.tx.us or by mailing or delivering your comments to Linda Velasquez, Legal Services, Mailstop #4-D, Texas Workers' Compensation Commission, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744-1609.

Based upon various considerations, including comments received and the staff's or commissioners' review of those comments, or based upon the commissioners' action at the public meeting, the rule as adopted may be revised from the rule as proposed in whole or in part. Persons in support of the rule as proposed, in whole or in part, may wish to comment to that effect. Commenters may wish to express their opinion regarding an employee's ability to refuse a generic prescription, and include references to statutory authority supporting that opinion.

A public hearing on this proposal will be held on April 14, 2004 at the Austin central office of the commission (7551 Metro Center Drive, Suite 100, Austin, Texas 78744-1609). Those persons interested in attending the public hearing should contact the commission's Office of Executive Communication at (512) 804-4430 to confirm the date, time, and location of the public hearing for this proposal. The public hearing schedule will also be available on the commission's website at www.twcc.state.tx.us .

The amendments to these rules are proposed under Texas Labor Code §402.042, §402.061, §406.010, §408.021(a), §408.025, §408.028, §413.011, and §413.053.

The previously cited sections of the Texas Labor Code are affected by this proposed rule action. No other code, statute, or article is affected by this rule action.

§134.800.Required Billing Forms and Information.

(a) Except as provided by §134.801 of this title (relating to Submitting Medical Bills for Payment), health care providers shall submit medical bills for payment on standard [ ~~the~~ ] forms used by the Centers for Medicare and Medicaid Services (CMS) or applicable forms prescribed in subsections (b) and (c), completed [ ~~this section~~ ] in accordance with Commission [ ~~-prescribed~~ ] instructions. All information on medical bills shall be legible when submitted.

(b) Except as provided in subsections (c), and (d)[ ~~, and (e)~~ ]of this section, all health care providers, as defined in §401.011 of the Texas Labor Code, shall submit medical bills using [ ~~the~~ ] national standard [ ~~HCFA 1500~~ ] health insurance claim forms [ ~~form~~ ], prepared according to Commission[ ~~-prescribed~~ ] instructions.

[ ~~(c)~~ Hospitals, including hospital-based emergency centers and ambulatory surgical centers, shall submit bills using the UB-92 billing form for institution services and the national standard HCFA 1500 health insurance claim form for professional services, prepared according to Commission-prescribed instructions for each form.]

(c) [ ~~(d)~~ ] Pharmacists shall submit bills using the Commission[ ~~-prescribed~~ ] form TWCC-66 [ ~~a or TWCC-66c,~~ ] Statement for Pharmacy Services, prepared according to Commission[ ~~-prescribed~~ ] instructions.

(d) [ ~~(e)~~ ] Dentists shall submit bills using a billing form currently approved by the American Dental Association prepared according to Commission instructions [ ~~the J-504 or J-505 form~~ ].

(e) [ ~~(f)~~ ] Health care providers may submit medical bills by facsimile or electronic transmission, when mutually agreed upon between the health care provider and the insurance carrier, unless the bill and/or supporting documentation cannot be sent by those media, in which case the health care provider shall send the documentation by mail or personal delivery.

(f) [ ~~(g)~~ ] The Medical Review Division may order the health care provider to reimburse a carrier when the carrier pays the health care provider in excess of the amount allowed by the appropriate Commission fee guideline.

(g) [ ~~(h)~~ ] This rule shall apply to all dates of service on or after June 1, 2004 [ ~~July 15, 2000~~ ].

§134.802.Insurance Carrier's Submission of Medical Bills to the Commission.

(a) The insurance carrier shall[ ~~, except for the Statement of Pharmacy Services, forms TWCC-66a, and TWCC-66c,~~ ] submit medical billing data to the Commission within 30 days after the insurance carrier makes payment , [ or ] denies payment , or receives a refund of overpayment on a medical bill.

(b) Insurance carriers shall submit medical billing data electronically in the form and format prescribed by the Commission.

(d) This rule shall apply to all dates of service on or after July 15, 2000 , for facility and professional medical services except pharmacy and dental services .

(e) This rule shall apply to pharmacy and dental services performed on or after January 1, 2005.

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

Filed with the Office of the Secretary of State on February 23, 2004.

TRD-200401270

Susan Cory

General Counsel

Texas Workers' Compensation Commission

Earliest possible date of adoption: April 4, 2004

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