Part 2. TEXAS DEPARTMENT OF INSURANCE, DIVISION OF WORKERS' COMPENSATION
Chapter 133. GENERAL MEDICAL PROVISIONS
Subchapter A. GENERAL RULES FOR MEDICAL BILLING AND PROCESSING
The Texas Department of Insurance (Department), Division of Workers' Compensation (Division) proposes amendments to §133.2 concerning definitions. The Division further proposes new §133.4 concerning notification to healthcare providers of contractual agreements with informal networks and voluntary networks and new §133.5, concerning informal network and voluntary network reporting requirements to the Division.
The proposed amendments to §133.2 are necessary to update existing rule definitions, citations, and to add definitions recently enacted by Labor Code §413.0115. Proposed new §133.4 is necessary to comply with Labor Code §413.011(d-2) which was enacted by House Bill (HB) 473, 80th Legislature Regular Session. Pursuant to Labor Code §413.011(d-1), an insurance carrier or the insurance carrier's authorized agent may use an informal or voluntary network, as those terms are defined by Labor Code §413.0115, to obtain a contractual agreement that provides for fees different from the fees authorized under the Division's fee guidelines. In order to provide increased transparency of insurance carrier access to health care provider contractual fee arrangements with informal and voluntary networks, Labor Code §413.011(d-2) requires the Commissioner by rule to establish the time and manner by which an informal or voluntary network, or the insurance carrier or the insurance carrier's authorized agent, must provide notice. The notice must inform the health care provider of any person that is given access to the health care provider's contract with the informal or voluntary network. Proposed new §133.5 is necessary to specify additional informal network and voluntary network reporting requirements to the Division as well as the requirements imposed by Labor Code §413.0115.
The proposed amendment to §133.2(1) makes a change to the definition of "bill review" by deleting the reference to "Division". This change is needed as Labor Code §413.011(d-1) allows an insurance carrier to pay fees to a health care provider that are inconsistent with Division fee guidelines if the insurance carrier, or a network under Insurance Code Chapter 1305, arranging out-of-network services under Insurance Code §1305.006, has a contract with the health care provider that includes a specific fee schedule. In addition, pursuant to certain statutory requirements, Labor Code §413.011(d-1) provides that an insurance carrier or the carrier's authorized agent, may use an informal or voluntary network, as those terms are defined by Labor Code §413.0115, to obtain a contractual agreement that provides for fees different from the fees authorized under the Division's fee guidelines. As such, when conducting a bill review, it may become necessary to review a fee guideline other than the fee guideline adopted by the Division.
The proposed amendment to §133.2(2) adds the symbol/and the term "Formats" after the term "Forms" to reflect the correct subsection title of §133.10 which is entitled "Required Billing Forms/Formats". In addition, §133.2(2) makes a change to the definition of "complete medical bill" by deleting the citation to "Chapter 135 of this title (relating to Electronic Medical Billing, Reimbursement, and Documentation)" and substituting the correct citation reference to "§133.500 (relating to Electronic Formats for Electronic Medical Billing Processing)." The proposed amendment to §133.2(6) revises the definition of "insurance carrier agent" to delete the term "or" and substitute it with the term "including". This revision makes clear that an insurance carrier agent is a person or entity that the insurance carrier contracts with or utilizes for the purpose of providing claims services and would include fulfilling the insurance carrier's obligations for medical bill processing. The proposed amendment to §133.2(9) adds the statutory definitions for "voluntary networks" and "informal networks" by stating such terms will have the meanings assigned by Labor Code §413.0115.
Proposed new §133.4(a) defines the term "person" used in the section to mean "an individual, partnership, corporation, hospital district, organization, business trust, estate trust, association, limited liability company, limited liability partnership, or other entity to whom an informal network or voluntary network's fee arrangement with a health care provider is sold, leased, transferred, or conveyed on behalf of an insurance carrier." Proposed new §133.4(a) specifies that the term "person" does not include an injured employee. Since the Division is at an early phase of determining the number of informal network and voluntary networks operating in Texas due to Labor Code §413.0115 reporting requirements, it is necessary to define "person" as any entity that is given access to the informal or voluntary network's fee arrangement with a health provider on behalf of an insurance carrier by way of selling, leasing, transferring, or conveying such fee arrangement.
Proposed new §133.4(b) is necessary to implement and specify the required health care provider notification. Proposed new §133.4(b) states that each informal network or voluntary network, or the insurance carrier, or the insurance carrier's authorized agent, as appropriate, shall notify each "affected health care provider of any person that is given access to the informal or voluntary network's fee arrangement with that health care provider, including, but not limited to, any person to whom the informal or voluntary network's fee arrangement with that health care provider is sold, leased, transferred, or conveyed, within the time and manner provided by this section." Section 133.4(b) is also necessary to implement the notification requirements of Labor Code §413.011(d-2). In addition, legislative analysis supports the necessity of giving notice to contracting health care providers. On April 3, 2007, the House Research Organization analyzed an earlier version of HB 473 and found that "[f]requently, providers do not know if they are in a voluntary or certified network because carriers can lease networks to other companies without informing the providers." In addition, proposed §133.4(b) allows for the flexibility to determine which entity will provide the notice to the affected health care provider.
Proposed new §133.4(c) establishes the content of the notification. Section 133.4(c)(1) states that notification to each contracted health care provider shall include contact information for the informal or voluntary network, including a toll-free telephone number accessible to all contracted health care providers. Proposed new §133.4(c)(2) further requires the following information in the body of the notice: "(A) contact information and identification of any insurance carrier, or other person that is given access to the informal or voluntary network's fee arrangement with a health care provider, including, but not limited to, any person to whom the informal network or voluntary network's fee arrangement with the health care provider is sold, leased transferred, or conveyed; and (B) the start date and any end date during which any person has been given access to the health care provider's fee arrangement." Pursuant to Labor Code §413.011, health care providers that enter into a contractual fee arrangement with an informal network or voluntary network need to receive notice when access to such contractual fee arrangement is allowed. Should providers have questions concerning the access allowed to their contractual fee arrangement, billing questions, duration of access allowed, or any other inquiries, it is necessary that the notice include the information specified in proposed new §133.4(c).
Proposed new §133.4(d) provides for the method of notification. Proposed new §133.4(d) provides that the information listed in §133.4(c) may be provided in an electronic format provided a paper version is available upon request by the Division. In addition, a link to a website may be provided only if the website (1) contains the information stated in §133.4(c)(2)(A) and §133.4(c)(2)(B); (2) is updated at least monthly; and (3) contains current and correct information. Therefore, §133.4(d) allows the notifying party to select a method of notification most appropriate for that entity's business needs as long as the notice contains the requisite information required by new proposed §133.4(c). For purposes of medical dispute resolution and Division enforcement matters, it is necessary that an entity that uses electronic means to notify the health care provider make available a paper version of such notification upon the request of the Division.
Proposed new §133.4(e) provides that the informal or voluntary network, insurance carrier or the insurance carrier's authorized agent, as appropriate, shall document the content of the notice, the delivery of the notice, to whom the notice was delivered, and the date of the delivery. Proposed new §133.4(e) further provides that failure to provide documentation upon the request of the Division or failure to provide notice that complies with the requirements of Labor Code §413.011 and this section creates a rebuttable presumption in a Division enforcement action or in a medical fee dispute that the health care provider has not received the notification. To assist in deciding medical fee disputes and enforcement matters, it is necessary that the notifying party document notification to the health care provider within the time and manner specified by this rule.
Proposed new §133.4(f) provides for the time of notification. Section 133.4(f)(1) states that for contracts with health care providers in effect on June 1, 2008, initial notification must be made no later than September 1, 2008, and subsequent notices to health care providers in accordance with this section shall occur thereafter on a quarterly basis. A period of ninety (90) days should provide the informal or voluntary network, insurance carrier, or the insurance carrier's authorized agent sufficient time to determine which entity will provide the initial notification. This ninety (90) day timeframe should provide the notifying entity sufficient time to provide such notification for all existing contracts in effect on June 1, 2008. The subsequent quarterly notices are to be sent to the health care providers after the entity providing notice (e.g., the insurance carrier, the insurance carrier's authorized agent, the informal network, or the voluntary network), sends the initial notice to affected health care providers. The subsequent quarterly notice to health care providers with contracts in effect on June 1, 2008, should provide adequate notice to health care providers of any person that is allowed access to their contractual fee arrangements while allowing these notices to be provided in a cost-effective manner for the notifying entity.
Proposed new §133.4(f)(2) provides that for contracts with health care providers entered into after June 1, 2008, initial notification must be made no later than the 30th day after the effective date of the contract and subsequent notices provided to health care providers in accordance with this section thereafter on a quarterly basis. A period of thirty (30) days should provide the informal or voluntary network, insurance carrier, or the insurance carrier's authorized agent with sufficient time to initially notify the contracting health care provider of access allowed to the fee arrangement and to determine which entity will provide the initial notification. The subsequent quarterly notices are to be sent to the health care providers after the notifying entity (i.e., the insurance carrier, the insurance carrier's authorized agent, the informal network, or the voluntary network) sends the initial notice to the health care providers. In addition, the subsequent quarterly notice to health care providers with contracts in effect after June 1, 2008, should provide adequate notice to health care providers of any person that is allowed access to their contractual fee arrangements while allowing these notices to be provided in a cost-effective manner for the notifying entity.
Proposed new §133.4(g) provides that the insurance carrier is not entitled to pay a health care provider at a contracted fee if (1) the notice to the health care provider does not meet the criteria outlined in subsections (c)(2)(A) and (c)(2)(B) of this section; or (2) the notice to the health care provider does not meet the requirements of Labor Code §413.011 and §133.4(b) - (f); or (3) there are no required contracts in accordance with Labor Code §413.011(d-1) and §413.0115. It is necessary that the notice contain the start date and any end date during which any person has been given access to the health care provider's contracted fee arrangement. If this information is not included in the notice, the health care provider has no means of determining whether the payment for a date of service falls within the dates during which the person had access to the health care provider's fee arrangement. In addition, Labor Code §413.011(d-2) provides that the time and manner of notification to the affected health care provider shall occur as provided by Commissioner rule. As such, if notification to the affected health care provider does not comply with proposed subsections (b) - (f) of this section, the insurance carrier is not entitled to pay at the contracted fee rate. There are specific contractual arrangements that are necessary before an insurance carrier, or the insurance carrier's authorized agent, may use an informal or voluntary network to obtain a contractual fee arrangement. If the requisite contracts do not exist, then the insurance carrier may not pay a health care provider at a contracted fee rate. Labor Code §413.011(d-1) requires a contractual arrangement between (1) the insurance carrier or the insurance carrier's authorized agent and the informal or voluntary network that authorizes the informal or voluntary network to contract with health care providers on the insurance carrier's behalf; and (2) the informal or voluntary network and the health care provider that includes a specific fee schedule and complies with the notice requirements established under subsection (d-2) of the Labor Code. In addition, Labor Code §413.0115(a)(1)(A) and (B) provide that an "informal network" means "a health care provider network described by §413.011(d-1) that is established under a contract between an insurance carrier and health care providers; and includes a specific fee schedule". Labor Code §413.0115(a)(2) further provides that a voluntary network means "a voluntary workers" compensation health care delivery network established by an insurance carrier under former Labor Code §408.0223, as that section existed before repeal by Chapter 265, Acts of the 79th Legislature, Regular Session, 2005.
Proposed new §133.4(h) provides that if the insurance carrier is not entitled to pay a health care provider at a contracted rate as outlined in subsection (g) of this section and as provided in Labor Code §413.011(d-1), the Division fee guidelines will apply.
Proposed new §133.4(i) provides that if notification to the healthcare provider does not meet the requirements of proposed new subsections (b) - (f) of this section, the insurance carrier may be held liable for any administrative violations. Labor Code §413.011(d-1) establishes that an insurance carrier may not reimburse a health care provider at a contracted fee rate if there is non-compliance with notification to the health care provider under this new proposed section. In addition, since under Labor Code §413.011(d-1) the insurance carrier, or an agent acting on behalf of the insurance carrier, makes the business decision to initiate a contractual fee arrangement with an informal or voluntary network, it necessarily follows that the insurance carrier may be held liable for any administrative violation if there is non-compliance with the Labor Code or this proposed new section for notification to the affected health care provider. In addition, Labor Code §413.011(d-1) provides the compliance requirements by stating that "[a]n insurance carrier or the carrier's authorized agent may use an informal network or voluntary network, as those term are defined by Labor Code §413.0115, to obtain a contractual agreement that provides for fees different from the fees authorized under the Division's fee guidelines. If a carrier, or the carrier's authorized agent, chooses to use an informal or voluntary network to obtain a contractual fee arrangement, there must be a contractual arrangement between: (1) the carrier or authorized agent and the informal or voluntary network that authorizes the network to contract with health care providers; and (2) the informal network or voluntary network and the health care provider that includes a specific fee schedule and complies with the notice requirements established under subsection (d-2)".
Proposed new §133.4(j) contains a severability clause and states that if a court of competent jurisdiction holds that any provision of this section is inconsistent with any statutes of this state, are unconstitutional, or are invalid for any reason, the remaining provisions of this section shall remain in effect. Proposed new §133.4(k) provides that in accordance with Labor Code §413.011(d-6), the provisions of this rule shall expire on June 1, 2011.
Proposed new §133.5(a) provides that each informal network and voluntary network must provide the following information to the Division: (1) the informal network or voluntary network's name and federal employer identification number (FEIN); (2) an executive contact for official correspondence for the informal or voluntary network; (3) a toll-free telephone number by which a health care provider may contact the informal network or voluntary network; (4) a list of each insurance carrier with whom the informal network or voluntary network contracts, including the insurance carrier's FEIN; and, (5) a list of each entity or insurance carrier agent associated with the informal or voluntary network working on behalf of the insurance carrier, including contact information for each entity. Proposed new §133.5(a) includes the Labor Code §413.0115 requirements imposed on an informal network and voluntary network for reporting information to the Division. As a means of ensuring that the Division appropriately identifies the reporting voluntary network or informal network, proposed new §133.5(a)(1) further requires the informal network or voluntary network to report its FEIN to the Division. Likewise, proposed new §133.5(a)(4) requires the informal or voluntary network to report each insurance carrier's FEIN with which the informal or voluntary network contracts to the Division for identification of the insurance carrier.
Proposed new §133.5(b) provides that the reports, including changes, must be submitted through the Division's on-line reporting system accessible through the Division's website at www.tdi.state.tx.us . This method of reporting will provide a consistent and direct method of reporting to the Division. Proposed new §133.5(c) provides that each informal network and voluntary network that has a contract with an insurance carrier or an insurance carrier's authorized agent in effect on September 1, 2007, must report to the Division in accordance with this section no later than June 1, 2008. Effective September 1, 2007, informal networks and voluntary networks were required to report information to the Division pursuant to Labor Code §413.0115. However, for the additional requirements under proposed new §133.5, the Division will allow additional time for the informal networks or voluntary networks to report in accordance with this proposed new section. Proposed new §133.5(c) further provides that except as provided in this subsection, informal and voluntary networks must report to the Division in accordance with this new proposed section no later than the 30th day after the effective date of the contract signed with an insurance carrier or an insurance carrier's authorized agent. In order for the Division to know the number of voluntary networks and informal networks that are operating in the workers' compensation system, it is necessary to require a deadline by which the newly contracted informal or voluntary network must satisfy the reporting requirements under Labor Code §413.0115 and this newly proposed section.
Proposed new §133.5(d) provides that each informal network and voluntary network shall report any changes to the information provided under subsection (a) to the Division not later than the 30th day after the effective date of the change in accordance with Labor Code §413.0115 and this section. Proposed new §133.5(e) provides that if the report to the Division does not meet the requirements of Labor Code §413.0115 and this section, the informal network or voluntary network may be held liable for any administrative violations. Labor Code §413.0115 and this section specifically require only the informal networks and the voluntary networks to report certain information to the Division. As such, should the informal network or the voluntary network not comply with Labor Code §413.0115 or this section, it may be held liable for any administrative violations. Proposed new §133.5(f) provides that the provisions of this rule shall expire on January 1, 2011. Labor Code §413.0115(b) provides that not later than January 1, 2011, each informal network or voluntary network must be certified as a workers' compensation health care network under Insurance Code Chapter 1305. In addition, the provisions of Labor Code §413.011(d-1) - (d-3) and (d-6) concerning the ability of an insurance carrier or the insurance carrier's authorized agent to use an informal network or voluntary network expire on January 1, 2011. As such, this section becomes unnecessary on or after January 1, 2011.
Brent Hatch, Policy Advisor, Policy and Research, has determined that for each year of the first five years the proposed sections will be in effect, there will be no fiscal impact to state and local governments as a result of the enforcement or administration of the rule. There will be no measurable effect on local employment or the local economy as a result of the proposal.
Brent Hatch, Policy Advisor, Policy and Research, has determined that for each year of the first five years that amended §133.2 and new §133.4 and §133.5 are in effect, the public benefit anticipated as a result of the administration and enforcement of the proposed amendments will be: (1) increased transparency of insurance carrier access to health care provider contractual fee arrangements with informal or voluntary networks; (2) enhanced Division access to the notification provided by the notifying entity and greater ability for the Division to enforce the application of its medical fee guidelines when necessary during medical fee dispute resolution; (3) improved communication between health care providers, informal or voluntary networks and insurance carriers regarding contractual fee arrangements prior to the initiation of medical fee disputes; (4) greater Division efficiency in maintaining the registration of voluntary and informal networks and improved knowledge of those networks that should seek certification by January 1, 2011; and (5) improved guidance for stakeholder conformance to newly enacted statutes.
It is anticipated that costs may be incurred by the informal network, the voluntary network, the insurance carrier, or the insurance carrier's authorized agent providing the notice to health care providers in the timeframe and manner required under proposed new §133.4. Specifically, proposed new §133.4 requires the initial notice to be sent to health care providers with contractual fee arrangements in effect on June 1, 2008, no later than September 1, 2008. For health care providers who enter into contractual fee arrangements with informal or voluntary networks after June 1, 2008, the initial notice is required no later than thirty (30) days after the effective date of the contract. Additional notices are to be sent to health care providers on a quarterly basis after the insurance carrier, or the insurance carrier's authorized agent, or the informal network, or the voluntary network sends the initial notice to the health care providers.
Additionally, proposed new §133.4 requires the party providing the notice to the health care provider to document the content of the notice, the delivery of the notice, to whom the notice was delivered, and the date of delivery. Proposed new §133.4 also requires documentation of the health care provider notice to be submitted to the Division upon request. Proposed §133.4 only restates the contractual arrangements required by Labor Code §413.011(d-1) and §413.0115(a). As such, no additional cost for amending contract language has been included in this cost estimate.
Proposed new §133.4 allows the insurance carrier, the insurance carrier's authorized agent, or the informal or voluntary network, the flexibility to determine which entity will provide the notice to affected health care providers, as well as the flexibility to deliver and document the health care provider notice using whatever method best fits its business needs so long as the notice contains the required information, is delivered in accordance with the timeframes stated in proposed §133.4, and can be reproduced at the request of the Division. Consequently, as a result of this flexibility, costs for delivering and maintaining records of the health care provider notice will vary depending on the method of delivery and documentation chosen by the entity providing the health care provider notice. The cost of delivering the notice and maintaining that documentation will also vary depending on the number of health care providers for whom notice is provided. The Division estimates the cost range for providing the notice in the timeframes and manner set out in proposed §133.4 and for maintaining documentation of the health care provider notice to be between $.51 cents and $3.62 per health care provider notice per contracted entity. These numbers are based on an estimate of $.41 cents postage and $.10 cents for a page of paper and the estimated cost of purchasing a records management system designed to handle electronic notification to several thousand health care providers. It should be noted, however, that the estimated cost for distributing an electronic notice assumes the front-ended costs of purchasing an electronic system. As such, the cost of distributing a health care provider notice through electronic means will be negligible over time. The actual cost will be determined by the implementation and business plan and model of the insurance carrier, insurance carrier's authorized agent, the informal network or the voluntary network. In addition, the probable estimated cost to an insurance carrier, insurance carrier's authorized agent or informal or voluntary network to provide documentation of the health care provider notice to the Division upon request will vary depending on the number of notices that are requested by the Division and the length of each notice. However, it should be noted that the primary reasons the Division would initiate such a request would be to provide needed information for a medical fee dispute or to process a health care provider complaint regarding compliance with the proposed sections. The Division estimates the cost of copying the notice to be $.10 a page and assumes that an average copy of a health care provider notice will be less than five (5) pages in length.
Proposed new §133.5 requires each informal and voluntary network to comply with the requirements of Labor Code §413.0115 and report to the Division using the Division's on-line reporting system available through the Division's website. The Division anticipates the cost for complying with this proposed section to be negligible for all informal or voluntary networks with internet access since the reporting process has been set up by the Division as an on-line form that can be reasonably completed in less than one hour per network. For entities without internet access, the Division estimates that the cost to obtain internet access for the purpose of complying with proposed §133.5 is approximately $20 per month.
It should be noted that the requirements under proposed new §133.4 and §133.5 and their cost impact on affected stakeholders expire on January 1, 2011, to correspond with Labor Code §413.011(d-6) and §413.0115(b), which require each informal or voluntary network to be certified in accordance with Insurance Code, Chapter 1305.
Any additional economic costs currently exist under existing rules or result from the enactment of Labor Code §413.011 (d-1) - (d-6) and §413.0111 and are not a result of the adoption, enforcement or administration of the proposed sections. There will be no difference in the cost of compliance between a large and small business as a result of the proposed sections. Although the Division has determined that this proposed section may have an adverse economic effect on one small business and one micro business, as explained below, it is neither legal nor feasible to waive the provisions of the proposed sections for small or micro businesses because the Labor Code requires equal application of these provisions to all affected individuals.
As required by the Government Code §2006.002(c), the Division has determined that the proposal may have an adverse economic effect on one small business and one micro business. The number of businesses operating as informal networks or voluntary networks was taken from Division records. Effective September 1, 2007, each informal network and voluntary network was required to provide certain information to the Division in accordance with Labor Code §413.0115. The Division contacted the executive contact person of the office listed by a majority of the entities that provided the information and researched the remainder of the entities not directly contacted in order to ascertain whether these entities met the statutory definition of a small business or micro-business under Government Code §2006.001(2). More small informal networks or voluntary networks could meet the statutory definition of a small business or micro-business and therefore be impacted by this rule proposal. However, the failure of these entities to comply with the reporting requirements of Labor Code §413.0115 makes it impossible to determine their numbers and whether this proposed rule may have an adverse economic effect on their small businesses or micro-businesses. Using the information compiled by the Division, the Division determined that one of the informal or voluntary networks that had registered with the Division as of this proposal, qualifies as a "small business" under the Government Code §2006.001(2) as it is an entity that is for profit, independently owned and operated, has fewer than 100 employees or less than $6 million in annual gross receipts. Additionally, the Division determined that one other informal or voluntary network qualifies as a "micro-business" under the Government Code §2006.001(1) because it does not employ more than 20 employees.
The Division anticipates that the impacted businesses will utilize the notification method that best suits the business needs of the informal or voluntary network, which includes the ability to electronically notify affected health care providers of any person that is given access to the informal or voluntary network's fee arrangement with that health care provider under the requisite provisions of proposed §133.4(d). Adverse economic impact will result to the two businesses because of storage of the health care provider notices sent under the proposed provisions of §133.4(d) since those notices may be requested by the Division during medical dispute resolution or to resolve complaints. Since proposed §133.4(b) additionally requires that a paper version of an electronic notice is made available upon request of the Division, the adverse economic impact to the affected two small and micro-businesses is approximately $200.00 for a period of 5 years. The amount is the projected cost for data storage for 5 years taking into account that informal or voluntary networks have to be certified not later than January 1, 2011 and requests for copies of required notification may reasonably stop 2 years thereafter. The anticipated cost of health care provider notification storage was provided by the small business adversely impacted by the proposed rule. The Division recognizes that the health care provider notice may be stored using a variety of methods, including electronic storage. Using information provided by the affected small business, the Division estimates that an informal or voluntary network the size of the impacted small business, with approximately 2,500 locations would be required to issue 10,000 notifications per year (1 notification per location per quarter). One possible electronic storage method that can be employed by a small business is to store an electronic image of the health care provider notice (jpg, gif, tif, etc.). At the typical image file size, the voluntary network would need 1.5GB - 4GB of storage capacity. Over 5 years, the estimated storage capacity needed by a small business would be 7.5GB - 20GB. Since storage costs over the years have increasingly diminished and the present price of a 100GB drive is about $200, it is expected that the data storage would equal that amount or less.
A second possible electronic storage method is the ability to "recreate" an image. If a small or micro business such as the two businesses impacted by proposed §133.4(b) are able to "recreate" an image at the request of the Division, then images would not need to be stored. A simple data table or electronic log could be created that would record the provider name and address, the content of the notice, the date of the notification, to whom it was sent, and the date of delivery. Using a data table or log storage method allows the notifying party to recreate the health care provider notice upon request of the Division. The Division estimates that using this electronic storage option would have an even lower cost than the first option.
REGULATORY FLEXIBILITY ANALYSIS
The other regulatory methods considered by the Division to accomplish the objectives of the proposal and to minimize any adverse impact on the two small and micro businesses affected included: (i) not adopting the proposed regulation, (ii) implementing different requirements or standards for the affected small business and micro-business and (iii) not requiring a paper copy when the affected small business or micro-business notify the contracted health care provider electronically.
Not adopting the proposed regulation. The Division rejected this approach because it would not accomplish the objective of the statute or the rule proposal and would not be consistent with the intent of the legislature. The primary objective of the proposed new §133.4 is to comply with the recently enacted requirement of Labor Code §413.011(d-2) which requires the Commissioner by rule to establish the time and manner in which an informal or voluntary network, or the carrier or carrier's authorized agent, as appropriate, would notify the health care provider of any person that is given access to the informal or voluntary network's fee arrangement with that health care provider.
Implementing different requirements or standards for the affected small and micro-businesses. If the proposal were not made applicable to the affected small or micro-businesses, the proposed rule would not have an adverse economic effect on the small or micro-businesses or would have a smaller possible adverse economic effect on the small or micro-businesses.
However, while the proposed rule might have an adverse economic effect on the affected small business or micro-business, it may not always create an adverse economic impact. As noted in the cost note analysis, proposed §133.4 allows the insurance carrier, the carrier's agent or the informal or voluntary network the flexibility to determine which entity will provide the notice to affected health care providers as well as the flexibility to deliver and document the health care provider notice using whatever method best fits its business needs so long as the notice contains the required information, is delivered in accordance with the timeframes stated in proposed §133.4 and can be reproduced at the request of the Division. As such, it is possible that the small business and micro-business under discussion may determine that the insurance carrier or the carrier's agent will provide the requisite notice under this proposed section.
Not requiring a paper copy when the affected small business and micro-business notify the contracted health care provider electronically. The Division also considered this potentially less burdensome alternative for the affected micro-business and rejected it. The Division would initiate a request for a paper copy of a health care provider notice when it needs information to resolve a medical fee dispute or to process a health care provider complaint regarding compliance with this proposed section. In these instances, the Division would need documentation to determine whether the health care provider actually received the requisite notice under this proposed section and Labor Code §413.011. The Division could not rely on the assertion of the affected small business or micro business that it provided electronic notice if there is no supporting documentation. To do so would undermine the purpose and intent of Labor Code §413.011, which is to notify the health care provider within the time and manner provided by Commissioner rule. To determine compliance with this proposed section and Labor Code §413.011 documentation is necessary.
The Division has determined that no real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code §2007.043.
To be considered, written comments on the proposal must be submitted to the Texas Department of Insurance, Division of Workers' Compensation no later than 5:00 p.m. on April 7, 2008. Comments may be submitted via the Internet through the Division's Internet website at http://www.tdi.state.tx.us/wc/rules/proposedrules/toc.html or by mailing or delivering your comments to Victoria Ortega, Legal Services, MS-4D, Texas Department of Insurance, Division of Workers' Compensation, 7551 Metro Center Drive, Suite 100, Austin, Texas 78744.
Any request for a public hearing should be submitted separately to the Office of General Counsel, MS-1, 7551 Metro Center Drive, Austin, Texas, 78744 before the close of the comment period. If a hearing is held, written and oral comments presented at the hearing will be considered.
The amendments and new sections are proposed under the Labor Code §§413.011, 413.0115, 408.0223 (repealed), 415.021, 415.023, 402.00111, and 402.061.
Section 413.011 requires the Commissioner by rule to establish the time and manner for an informal or voluntary network, or the carrier or the carrier's authorized agent, as appropriate to notify each health care provider of any person that is given access to the network's fee arrangements with the health care provider. Section 413.0115 requires voluntary networks and informal networks to report specific information to the Division. Former §408.0223 established the requirements of an insurance carrier network before its repeal by Chapter 265, Acts of the 79th Legislature, Regular Session, 2005, and constitutes the manner by which a voluntary network is defined. Section 415.021 provides that the Commissioner may assess an administrative penalty against a person who commits an administrative violation. Section 415.023 provides for certain administrative violations as a matter of practice. Section 402.00111 provides that the Commissioner of Workers' Compensation shall exercise all executive authority, including rulemaking authority, under the Labor Code and other laws of this state. Section 402.061 provides the Commissioner the authority to adopt rules as necessary to implement and enforce the Texas Workers' Compensation Act.
The following sections are affected by this proposal: Labor Code §§413.011, 413.0115, 408.0223 (repealed), 415.021, 415.023, 402.00111 and 402.061.
§133.2.Definitions.
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:
(1) Bill review--Review of any aspect of a medical
bill, including retrospective review, in accordance with the Act,
rules, and the appropriate [
Division
] fee and treatment guidelines.
(2) Complete medical bill--A medical bill that contains
all required fields as set forth in the billing instructions for the
appropriate form specified in §133.10 of this chapter (relating
to Required Billing Forms
/Formats
), or as specified for electronic medical bills in
§133.500 (relating to Electronic
Formats for Electronic Medical Bill Processing)
[
Chapter
135 of this title (relating to Electronic Medical Billing, Reimbursement,
and Documentation)
].
(3) Emergency--Either a medical or mental health emergency as follows:
(A) a medical emergency is the sudden onset of a medical condition manifested by acute symptoms of sufficient severity, including severe pain, that the absence of immediate medical attention could reasonably be expected to result in:
(i) placing the patient's health or bodily functions in serious jeopardy, or
(ii) serious dysfunction of any body organ or part;
(B) a mental health emergency is a condition that could reasonably be expected to present danger to the person experiencing the mental health condition or another person.
(4) Final action on a medical bill--
(A) sending a payment that makes the total reimbursement for that bill a fair and reasonable reimbursement in accordance with §134.1 of this title (relating to Medical Reimbursement); and/or
(B) denying a charge on the medical bill.
(5) Health care provider agent--A person or entity that the health care provider contracts with or utilizes for the purpose of fulfilling the health care provider's obligations for medical bill processing under the Labor Code or Division rules.
(6) Insurance carrier agent--A person or entity that
the insurance carrier contracts with or utilizes for the purpose of
providing claims services
, including
[
or
] fulfilling
the insurance carrier's obligations for medical bill processing under
the Labor Code or Division rules.
(7) Pharmacy processing agent--A person or entity that contracts with a pharmacy in accordance with Labor Code §413.0111, establishing an agent or assignee relationship, to process claims and act on behalf of the pharmacy under the terms and conditions of a contract related to services being billed. Such contracts may permit the agent or assignee to submit billings, request reconsideration, receive reimbursement, and seek medical dispute resolution for the pharmacy services billed.
(8) Retrospective review--The process of reviewing the medical necessity and reasonableness of health care that has been provided to an injured employee.
(9) In this chapter, the following terms have the meanings assigned by Labor Code §413.0115:
(A) Voluntary networks; and
(B) Informal networks
§133.4.Written Notification to Health Care Providers of Contractual Agreements for Informal and Voluntary Networks.
(a) Person. Under this section "person" is defined as an individual, partnership, corporation, hospital district, organization, business trust, estate trust, association, limited liability company, limited liability partnership or other entity to whom an informal network or voluntary network's fee arrangement with a health care provider is sold, leased, transferred, or conveyed on behalf of an insurance carrier. This term does not include an injured employee.
(b) Required notification. Each informal network or voluntary network, or the insurance carrier, or the insurance carrier's authorized agent, as appropriate, shall notify each affected health care provider of any person that is given access to the informal or voluntary network's fee arrangement with that health care provider, including, but not limited to, any person to whom the informal or voluntary network's fee arrangement with that health care provider is sold, leased, transferred, or conveyed, within the time and manner provided by this section.
(c) Content of notification. Notification to each contracted health care provider shall include:
(1) contact information for the informal or voluntary network, including a toll-free telephone number accessible to all contracted health care providers; and
(2) the following information in the body of the notice:
(A) contact information and identification of any insurance carrier, or other person that is given access to the informal or voluntary network's fee arrangement with a health care provider, including, but not limited to, any person to whom the informal or voluntary network's fee arrangement with the health care provider is sold, leased, transferred or conveyed; and
(B) the start date and any end date during which any person has been given access to the health care provider's contracted fee arrangement.
(d) Method of Notification. The information listed in subsection (c) of this section may be provided in an electronic format provided a paper version is available upon request by the Texas Department of Insurance, Division of Workers' Compensation (Division). A link to a website may be provided only if the website:
(1) contains the information stated in subsection (c)(2)(A) and (c)(2)(B) of this section; and
(2) is updated at least monthly; and
(3) contains current and correct information.
(e) Documentation: The informal or voluntary network, insurance carrier, or the insurance carrier's authorized agent, as appropriate, shall document the content of the notice, the delivery of the notice, to whom the notice was delivered, and the date of delivery. Failure to provide documentation upon the request of the Division or failure to provide notice that complies with the requirements of Labor Code §413.011 and this section creates a rebuttable presumption in a Division enforcement action and in a medical fee dispute that the health care provider did not receive the notification.
(f) Time of notification. Under this section:
(1) for contracts with health care providers in effect on June 1, 2008, initial notification must be made no later than September 1, 2008, and subsequent notices provided to health care providers in accordance with this section thereafter on a quarterly basis; and
(2) for contracts with health care providers entered into after June 1, 2008, initial notification must be made no later than the 30th day after the effective date of the contract and subsequent notices provided to health care providers in accordance with this section thereafter on a quarterly basis.
(g) Noncompliance. The insurance carrier is not entitled to pay a health care provider at a contracted fee if:
(1) the notice to the health care provider does not meet the criteria outlined in subsections (c)(2)(A) and (c)(2)(B) of this section; or
(2) the notice to the health care provider does not meet the requirements of Labor Code §413.011 and subsections (b) - (f) of this section; or
(3) there are no required contracts in accordance with Labor Code §413.011 (d-1) and §413.0115.
(h) Application of Division Fee Guideline. If the insurance carrier is not entitled to pay a health care provider at a contracted rate as outlined in subsection (g) of this section and as provided in Labor Code §413.011(d-1), the Division fee guidelines will apply.
(i) Administrative Violations. If notification to the health care provider does not meet the requirements of subsections (b) - (e) of this section, the insurance carrier may be held liable for any administrative violations.
(j) If a court of competent jurisdiction holds that any provision of this section is inconsistent with any statutes of this state, are unconstitutional, or are invalid for any reason, the remaining provisions of this section shall remain in full effect.
(k) In accordance with §413.011(d-6), the provisions of this rule shall expire on January 1, 2011.
§133.5.Informal Network and Voluntary Network Reporting Requirements to the Division.
(a) Reporting Requirement. Each informal network and voluntary network must provide the following information to the Texas Department of Insurance, Division of Workers' Compensation (Division):
(1) the informal network or voluntary network's name and federal employer identification number (FEIN);
(2) an executive contact for official correspondence for the informal network or voluntary network;
(3) a toll-free telephone number by which a health care provider may contact the informal network or voluntary network;
(4) a list of each insurance carrier with whom the informal network or voluntary network contracts, including the insurance carrier's FEIN; and
(5) a list of each entity or insurance carrier agent associated with the informal or voluntary network working on behalf of the insurance carrier, including contact information for each entity.
(b) Reporting Format. Reports, including changes, must be submitted through the Division's on-line reporting system accessible through the Division's website at www.tdi.state.tx.us.
(c) Reporting Timeframe. Each informal network and voluntary network that has a contract with an insurance carrier or an insurance carrier's authorized agent in effect on September 1, 2007, must report to the Division in accordance with this section no later than June 1, 2008. Except as otherwise provided in this subsection, informal and voluntary networks must report to the Division no later than the 30th day after the effective date of a contract signed with an insurance carrier or an insurance carrier's authorized agent.
(d) Reporting Changes. Each informal and voluntary network shall report any changes to the information provided under subsection (a) of this section to the Division not later than the 30th day after the effective date of the change in accordance with Labor Code §413.0115 and this section.
(e) Administrative Violations. If the report to the Division does not meet the requirements of Labor Code §413.0115 and this section, the informal or voluntary network may be held liable for any administrative violations.
(f) The provisions of this rule shall expire on January 1, 2011.
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 22, 2008.
TRD-200801084
Norma Garcia
General Counsel
Texas Department of Insurance, Division of Workers' Compensation
Earliest possible date of adoption: April 6, 2008
For further information, please call: (512) 804-4715