ADOPTED 
 RULES 
 
 An agency may take final action on a section 30 days after a proposal has been 
published in the  Texas Register. The section becomes effective 20 days after 
the agency files the correct document with the  Texas Register, unless a later 
date is specified or unless a federal statute or regulation requires 
implementation of the action on shorter notice. 
 If an agency adopts the section without any changes to the proposed text, only 
the preamble of the notice and statement of legal authority will be published. 
If an agency adopts the section with changes to the proposed text, the proposal 
will be republished with the changes. 
 
   
  TITLE 7. BANKING AND SECURITIES 
 Part II. Texas Department of Banking 
  Chapter 26. Perpetual-care Cemeteries 
  
  7 TAC sec.26.1 
 
  The Banking Department of Texas (the department) adopts an amendment to 
sec.26.1, concerning fees and assessments for perpetual-care cemetery 
corporations, with changes to the proposed text as published in the January 16, 
1996, issue of the  Texas Register (21 TexReg 418). 
 The amendment to sec.26.1(c) increases certain fees paid by corporations 
operating as perpetual-care cemeteries regulated by the department. As amended, 
sec.26.1(c) permits the department to annually assess each corporation at a rate 
not greater than $0.0026 for each dollar of the value of its perpetual-care 
cemetery trust fund, with certain exclusions, in an amount not to exceed $5,500 
for one examination in each fiscal year. The amendment also requires each 
corporation to pay $500 a day plus travel costs for each examiner required to 
perform any subsequent examination in a given fiscal year because of 
noncompliance with the Texas Health and Safety Code, Title 8, Subtitle C, 
Chapter 712 (the Act), or rules adopted pursuant thereto, or because of failure 
to respond to departmental requests in furtherance of the department's 
enforcement responsibilities. In addition, as amended, sec.26.1(c) provides for 
a minimum $100 examination fee. Previously, the minimum examination fee was $25. 
The adopted fee increases and other fee-related amendments are necessary to 
enable the perpetual-care cemeteries section of the special audits division to 
be self-funding. In previous years, this section of the division has not borne 
the costs associated with regulating perpetual-care cemeteries; therefore, in 
the past, other areas of the agency have absorbed these costs. Other changes to 
the section merely simplify its text. 
 The department held a public hearing on the proposed amendment and also 
received one set of written comments. A commenter, appearing at the hearing on 
behalf of the Texas Cemetery Association (the Association) requested additional 
time to poll its membership for comments. The department agreed to this request 
and set a deadline of February 26, 1996, for receiving additional written 
comments; however, the department did not receive comments from the Association. 
 No group or association submitted comments for or against the proposed 
amendment, although one commenter objected to it. 
 The commenter stated that the section should exclude voluntary contributions 
from the amount of perpetual-care cemetery funds subject to assessment for the 
examination fee. The department concurs and has excepted voluntary 
contributions, as well as capital gains and losses, from the fund amount subject 
to assessment. 
 The commenter also alleged that individuals with smaller funds carry the burden 
of the increased examination fees. The department has declined to change the fee 
structure; under sec.26.1, as amended, every perpetual-care cemetery covers its 
own cost of regulation. 
 The same commenter also stated that increased fees reduce the funds available 
for cemetery maintenance. The Act, sec.712.021(b), requires that the principal 
of the perpetual-care cemetery fund remain inviolate. Furthermore, the Act, 
sec.712.044, mandates that the examination fee be "reasonable and necessary . . 
. to defray the cost of administering [the Act]." The department maintains that 
the fee established under the amendment to sec.26.01 is both reasonable and 
necessary as the statute requires. 
 This commenter also noted that the annual increase to both small and large 
businesses is considerably more that the proposed preamble indicated. The 
department has examined projections the commenter submitted to substantiate its 
claim and is unable to determine their basis, whereas the department's 
projections of the fiscal implications of this section are based on the 
application of the statutory mandate of the Act, sec.712.044, and the terms of 
sec.26.01, as amended, to the various cemetery fund levels. 
 Finally, this same commenter stated that the criteria established in sec.26. 
1(c) for assessing an additional fee for examinations following the initial 
examination each year are not sufficiently specific and that the fee structure 
will overcompensate the department for the amount of an examiner's time. The 
department disagrees. First, the criteria, i.e., failure to comply with the Act 
or rules promulgated under the Act and failure to comply with departmental 
requests in furtherance of the department's regulatory responsibilities, are 
specific and subject to ready, verifiable determination as to whether they 
exist. Secondly, the Act, sec.712.044(b), does not limit the amount of the 
examination assessment to the cost of an examiner's time. It provides that the 
fee be sufficient to defray the cost of administering the Act; as a consequence, 
the examination fee applicable to perpetual-care cemeteries must be adequate to 
cover the entire cost of regulation of this industry, not just the cost of the 
examiners. The amendment to sec.26.01 has been designed to accomplish this 
purpose. 
 The amendment is adopted pursuant to the department's rule-making authority 
under the Act, sec.712.042(a) and sec.712.044(b), which empowers the department 
to set fees in an amount sufficient to defray the cost of administering the Act. 
 
 
  sec.26.1. Fees and Assessments. 
 
  (a) Definitions. The following words and terms, when used in this section, 
shall have the following meanings, unless the text clearly indicates otherwise. 
 
  (1)-(2) (No change.) 
   
  (3) Corporation-A corporation that is organized under the Act, or any 
corresponding statute in effect before September 1, 1993, to operate one or more 
perpetual care cemeteries in Texas. 
   
  (4)-(7) (No change.) 
     
  (b) Filing fees. The filing fees set forth in this subsection are either 
specifically set out in the Act or have been set in accordance with the Act to 
reasonably approximate the agency's cost of administering the Act with respect 
to each particular filing. 
 
  (1)-(2)  (No change.) 
   
  (3) Time of payment. Except as otherwise provided in this section, all fees 
are nonrefundable and due at the time the related documentary filing is made. 
Failure to timely pay fees or costs under this section constitutes grounds for 
enforcement action by the department under the Act. 
     
  (c) Examination fees. The department shall assess and collect nonrefundable 
examination fees in accordance with this subsection. Except as otherwise 
provided in this section, any assessed fee or an installment payment as part of 
a fee is due at the time of billing. The department shall annually assess each 
corporation an examination fee for one examination, not to exceed $5,500 in a 
fiscal year, at a rate of not more than $0.0026 per dollar of the aggregate of 
required deposits to the fund, excluding capital gains, capital losses, and any 
voluntary contributions, from inception of the fund to the date of the most 
recent examination report or annual statement as determined pursuant to the 
Health and Safety Code, sec.712.028, and reflected in the examination report or 
annual statement. The department may levy this fee in quarterly or fewer 
installments in such periodically adjusted amounts as reasonably appear 
necessary to defray the costs of examination and the administration of the Act. 
If the examination fee as computed in this subsection is less than $100, a 
minimum examination fee of $100 shall be levied and collected. If additional 
examinations of a corporation are required in the same fiscal year as a result 
of the corporation's failure to comply with the Act or this chapter or as a 
result of its failure to comply with departmental requests in furtherance of the 
department's regulatory responsibilities under the Act or this chapter, an 
additional fee of $500 per day, plus examiner travel costs, will be assessed 
against the corporation for each examiner assigned to an additional examination. 
   
  (d)-(e) (No change.) 
 
  This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority. 
 Issued in Austin, Texas, on March 12, 1996. 
 TRD-9603455 
  Everette D. Jobe 
 General Counsel 
 Texas Department of Banking 
    Effective date: April 2, 1996 
 Proposal publication date: January 16, 1996 
 For further information, please call: (512) 475-1300 
         
                 
  TITLE 16. ECONOMIC REGULATION 
 Part I. Railroad Commission of Texas 
  Chapter 1. General Rules of Practice and Procedure 
  
  Subchapter C. Docketing, Notice, and Service 
 
  16 TAC sec.1.49 
 
  The Railroad Commission of Texas adopts new sec.1.49, applicable to oil and 
gas contested cases brought by the Legal Enforcement Section of the Office of 
General Counsel, without changes to the version published in the January 26, 
1996, issue of the  Texas Register (21 TexReg 650). 
 The new rule sets out legal standards and procedures for service of process, 
answers, requests for hearing, the setting of hearings, the issuance of default 
final orders, and motions for rehearing in oil and gas enforcement cases. Under 
the new rule, hearings will no longer be automatically set in most oil and gas 
enforcement cases; setting of a hearing will not take place until the respondent 
files a hearing request or an answer to the original complaint. In cases of 
actual or imminent pollution, a hearing date will be set and notice of the 
hearing will be provided along with the Original Complaint. The new rule also 
makes clear that motions for rehearing may be made on equitable grounds or on 
grounds that there is error in the commission's final order. 
 No comments were received regarding adoption of the new section. 
 The new rule will increase efficiency and decrease processing time for the 
majority of oil and gas contested cases brought by Legal Enforcement. Under 
current practice, hearings are set for every case, even though about nine out of 
ten result in default. Under this new rule, hearings will be set in most cases 
only when a respondent files a hearing request or an answer. Avoiding needless 
setting of hearings will clear the hearing docket of unnecessary items and make 
hearing rooms more available for contested cases with appearances. Setting the 
initial hearing date with the benefit of a response to the Original Complaint 
will result in fewer postponements and encourage settlements. 
 The Railroad Commission adopts the new rule pursuant to Texas Government Code, 
sec.2001.004(1), which requires the commission to adopt rules of practice 
stating the nature of all available formal and informal procedures; Texas 
Government Code, sec.2001.056(4), which authorizes administrative contested 
cases to be informally disposed of by default; Texas Natural Resources Code, 
sec.81.052, which authorizes the commission to adopt all necessary rules for 
governing persons and their operations under the jurisdiction of the commission; 
and sec.1.1(c) of this title (relating to Purpose, Scope, and Conflict with 
Special Rules), which permits the Railroad commission to adopt special rules of 
practice applicable only in proceedings before a specific division. 
 The following are the statutes, articles, or codes affected by the adopted new 
rule: sec.1.49-Texas Government Code,  sec.sec.2001.056(4); 2001.004(1) and 
Texas Natural Resources Code, sec.81.052, et seq. 
 
  This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 12, 1996. 
 TRD-9603505 
  Mary Ross McDonald 
 Assistant Director, Gas Services Section, Office of General Counsel 
 Railroad Commission of Texas 
    Effective date: April 2, 1996 
 Proposal publication date: January 26, 1996 
 For further information, please call: (512) 463-7008 
         
               
  TITLE 22. EXAMINING BOARDS 
 Part XXXIII. Texas State Board of Examiners of Perfusionists 
  Chapter 761. Perfusionists 
  
  22 TAC sec.761.14 
 
  The Texas State Board of Examiners of Perfusionists adopts new sec.761.14, 
concerning the regulation of licensed perfusionists and provisionally licensed 
perfusionists, without changes to the proposed text as published in the January 
2, 1996, issue of the Texas Register (21 TexReg 20). 
 The new section establishes continuing education requirements for licensed and 
provisionally licensed perfusionists. The new section will assure the regulation 
of perfusionists continues to identify competent practitioners and that 
licensees are increasing their knowledge and abilities through continuing 
education. 
 No comments were received regarding adoption of the new section. 
 The new section is adopted under the Licensed Perfusionists Act, Texas Civil 
Statutes, Article 4529e, sec.7, which provides the Texas State Board of 
Examiners of Perfusionists with the authority to adopt rules concerning the 
regulation and licensure of perfusionists. 
 
  This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be within this agency's authority to adopt. 
 Issued in Austin, Texas, on March 14, 1996. 
 TRD-9603613 
  Shannon Ballard 
 Chairman 
 Texas State Board of Examiners of Perfusionists 
    Effective date: April 4, 1996 
 Proposal publication date: January 2, 1996 
 For further information, please call: (512) 458-7236 
         
             
  TITLE 28. INSURANCE 
 Part II. Texas Workers' Compensation Commission 
  Chapter 134. Guidelines for Medical Services, Charges, and Payments 
  
  Subchapter L. Medical Fee Guidelines 
 
  28 TAC sec.134.201 
 
  (Editor's Note: The following adopted new rule submitted by Texas Workers' 
Compensation Commission was inadvertently omitted from the March 12, 1996, issue 
of the Texas Register. This new rule was submitted in conjunction with the 
repeal of this section which was printed in the March 12, 1996, issue (21 TexReg 
2090). The effective date is April 1, 1996.) 
   
  The Texas Workers' Compensation Commission (the commission) adopts new 
sec.134.201, concerning the Medical Fee Guideline for medical treatments, and 
services provided under the Texas Workers' Compensation Act, with changes to the 
proposed text as published in the October 20, 1995, issue of the Texas Register 
(20 TexReg 8573) and simultaneously adopts the repeal of current sec.134.201, 
concerning the medical fee guideline for medical treatments, and services 
provided under the Texas Workers' Compensation Act, as published in the October 
20, 1995, issue of the Texas Register (20 TexReg 8573) and adopted in the March 
12, 1996, issue of the Texas Register  (21 TexReg 2091). New sec.134.201 adopts 
by reference the Texas Workers' Compensation Commission Medical Fee Guideline 
1996 . Copies of the guideline may be obtained from the Publications Department, 
Texas Workers' Compensation Commission, Southfield Building, 4000 South IH-35, 
Austin, Texas 78704. 
 As required by the Government Code, sec.2001.033(1), the commission's reasoned 
justification is set out in this preamble. The reasoned justification is 
contained throughout the preamble, including the following portions: the reasons 
why the new rule and repeal are necessary; the factual, policy, and legal bases 
for the rule; restatement of the factual basis of the rule; a summary of 
comments received; names of those who commented and whether the commenters were 
for or against adoption of the new rule and repeal; and the reasons why the 
agency disagrees with some of the comments, submissions, and proposals. 
 Changes made to the rule and the guideline as proposed are in response to 
public comment received in writing and at a public hearing held on November 9, 
1995, and are described in the summary of comments and responses section of this 
preamble. Other changes were made for consistency or clarification, or, to 
correct typographical or grammatical errors. 
 This new rule establishes guidelines for reimbursements made for medical 
treatments, services, and equipment rendered by health care providers, excluding 
inpatient hospitalization and ambulatory surgical centers, and for rentals or 
sales of certain durable medical equipment including orthotics and prosthetics. 
The rule adopts by reference the publication of a new fee guideline manual, 
entitled Texas Workers' Compensation 1996 Medical Fee Guideline . The fee 
guideline is divided into the following sections ("medical services groups"): 
Evaluation/Management; Medicine; Surgery; Anesthesia; Radiology; Pathology; 
Durable Medical Equipment; and Pharmaceutical. Ground rules at the beginning of 
each section provide definitions necessary to correctly interpret, report, and 
reimburse the treatments, services, and equipment covered by the section. The 
new rule requires that when a maximum allowable reimbursement ("MAR") is 
established in the guideline for medical treatments, services, or equipment 
rendered under the Texas Workers' Compensation Act, the amount of reimbursement 
payable to the health care provider will be the lesser of the providers' usual 
fees and charges or the MAR established in the medical fee guideline. For 
supplies, for codes used for miscellaneous billings, and for durable medical 
equipment, no MARs have been established. Reimbursement for Durable Medical 
Equipment (DME) or Health Care Financing Administration Procedure Coding System 
(HCPCS) are to be paid at the prenegotiated contract rate or, if no contract 
exists, reimbursement is to be fair and reasonable. Fair and reasonable 
reimbursement for DME shall be the same as fees set for "D" codes in the 1991 
Medical Fee Guideline. All other items for which an MAR is not established shall 
be reimbursed at fair and reasonable rates. The rule states that copies of the 
guideline may be obtained from the Publications Department, Texas Workers' 
Compensation Commission, the Southfield Building, 4000 South IH-35, Austin, 
Texas 78704. 
 Medical treatments and services are identified in the new sec.134.201 by a 
five-digit numeric code obtained from  Physicians' Current Procedural 
Terminology, Fourth Edition, Copyright 1994 by the American Medical Association. 
These numeric codes are commonly referred to as "CPT" codes. CPT codes and 
descriptions only are copyright 1994 American Medical Association (or such other 
date of publication as defined in the federal copyright laws). The Physicians' 
Current Procedural Terminology includes with the numeric codes a listing of 
descriptive terms and modifiers for reporting medical treatments, services, and 
equipment. These codes are industry standard and are used by Medicare, Medicaid, 
CHAMPUS, and private insurance plans. CPT codes have been used in the 
commission's medical fee guidelines since 1988. The use of CPT codes will 
continue to provide an efficient means for TWCC to track services in its 
database, for health care providers to bill and receive payment, and for 
insurance carriers to make proper payments. CPT codes are divided into medical 
services groups. 
 Items in the durable medical equipment group are identified in the new 
sec.134.201 by a code obtained from the HCPCS rather than the CPT coding system. 
The HCPCS coding was chosen for the durable medical equipment group because it 
has standardized detailed descriptions which address equipment, services, and 
supplies not addressed by the use of CPT codes. It was determined that use of 
HCPCS codes will provide expanded information about the durable medical 
equipment group in the commission database and that this information will be 
useful during future modifications of the commission's medical fee guideline. 
The use of these codes is appropriate because they are an industry standard. 
 The commission also created three of its own procedural codes -WC001, WC002, 
and WC003. The codes are used by health care providers billing for second 
opinion on spinal surgery examinations. Because these examinations are unique to 
Texas' workers' compensation system, no national coding system provides codes 
for them and it was necessary for the commission to create its own. 
 The commission-appointed Medical Advisory Committee (MAC) provided direct input 
during the development of the rule and the new medical fee guideline. The MAC, 
by statute (Texas Labor Code, sec.413.005), is to advise the Medical Review 
Division in developing and administering the medical policies, fee guidelines, 
and utilization guidelines established under the Texas Labor Code, sec.423.011. 
The MAC advises the commission in the review and revision of medical policies 
and fee guidelines required under the Texas Labor Code, sec.413.012. The MAC is 
composed of representative members appointed by the commission as follows: a 
representative of a public health care facility, a representative of a private 
health care facility, a doctor of medicine, a doctor of osteopathic medicine, a 
chiropractor, a dentist, a physical therapist, a pharmacist, a podiatrist, an 
occupational therapist, a medical equipment supplier, a registered nurse, a 
representative of employers, a representative of employees, and two 
representatives of the general public. The expertise of this group played an 
important role in the development of this rule and the new medical fee 
guideline. 
 The commission's medical forms database played a central role in the 
development of the new medical fee guideline. This database contains in excess 
of 16.5 million bills from Texas' workers' compensation system. These bills 
represent $4.1 billion in charges and $3.1 billion in reimbursement for medical 
and hospital services provided since 1991. Between 300,000 and 400,000 bills are 
added to the database monthly through electronic data submitted by insurance 
carriers. The electronic filing of the bills makes the information contained in 
the database reliable because the necessity of manual entry of billing data into 
the commission system and, thus, a significant cause of errors in the database, 
is eliminated. This data provides a wealth of information on charges, 
reimbursements, and patterns of practice of health care providers. The bills 
detail the type of medical treatments, services, and equipment being billed by 
the various health care professions and the amounts being paid for those medical 
treatments, services, and equipment by insurance carriers. 
 Prior to the development of the new medical fee guideline, an extensive 
research program and review of the relevant literature (see the bibliography 
following the comments portion of this preamble) and the existing medical fee 
guideline ("December 1991 guideline") was undertaken by the commission to assist 
in evaluating the strengths and deficiencies of that guideline. In December 
1993, the Workers' Compensation Research Institute in Cambridge, Massachusetts 
released an extensive analysis of the workers' compensation medical fee 
guidelines in 27 states. With one exception, the medical fee guidelines 
considered were those in effect on January 1, 1992, including Texas' December 
1991 guideline. Fee reimbursement systems were analyzed for reimbursement 
amounts, the difference between the fee guideline reimbursement amounts and the 
actual charges, comprehensiveness, access to care, and regional economics. The 
results of WCRI's analysis revealed that, overall, Texas' December 1991 
guideline reimbursed at 9.0% above the median fee guideline level and that 
variations in reimbursements among the states were apparently not related to 
variations in costs between the states. Both the WCRI study and the commission's 
own analysis indicated that Texas' workers' compensation system reimbursed 65% 
above Medicare national full fee reimbursement. Based on this research and 
review of the literature and the December 1991 guideline, the commission 
established overall policy objectives. The new medical fee guideline was to move 
Texas towards a median cost position in comparison with other states and towards 
a market based system which reimburses based on values set by the market for 
procedures rather RVUs which are set by McGraw-Hill using provider surveys. 
 After the commission established this policy objective, the commission again 
analyzed its database to determine what impact a move to the median would have. 
The commission's database indicated a great variation existed between the 
reimbursement allowed by the December 1991 guideline and the amounts being 
billed by health care providers for their services ("the usual and customary 
charge"). As a result, an immediate and full shift away from the relative value 
system used in the December 1991 guideline and towards a market based system 
could destabilize the system by significantly altering which health care 
providers participated in the workers' compensation system as well as how those 
participants utilized the various treatments, services, and equipment. For 
example, health care providers who built their practice around a group of codes 
for which reimbursement was dropped significantly might elect to drop out of the 
workers' compensation system which would interfere with the commission's 
obligation to ensure access to quality of medical care. Utilization patterns for 
services for which fees increased might also shift and those shifts might 
prevent the commission from achieving its statutory duty of medical cost 
control. The goal of establishing an expenditure neutral system was identified 
as an alternative to a fully market based system, which would allow Texas to 
move toward a market-oriented system without interrupting injured workers' 
access to quality medical care while achieving cost containment. Remaining as 
close as possible to expenditure neutral would also keep expenditures on medical 
services in Texas relatively stable so that the effects of inflation and changes 
in other states' medical fee guidelines would help move Texas towards a median 
position. 
 With the statutory and policy mandates and objectives in mind, commission staff 
undertook an analysis of the commission's database to determine what revisions 
to the medical fee guideline were necessary. Seven million, nine hundred 
thousand, and three hundred seventy-one billable units in the commission's 
medical forms database for services rendered from June 1, 1993 to May 31, 1994 
were used to do statistical analysis. Each unit represented a single billing for 
a specific CPT code. These billable units represented the top 200 CPT codes 
("the sample") by total amount of reimbursement paid which were selected for 
analysis and to compare the December 1991 guideline reimbursements against 
statewide usual and customary charges. The top 200 codes were chosen as the 
sample because the total amount paid for reimbursement of these codes 
represented approximately 82% of the total reimbursement for all CPT codes 
during the period in question. The analysis also revealed that approximately 40% 
of health care providers were billing the reimbursement amount set by the fee 
guideline. Because no reference point or benchmarking against market based 
charges was done during the development of the December 1991 guideline, the 
commission determined that it was appropriate to obtain data from outside 
sources to use in evaluating what changes in reimbursements were necessary to 
move Texas towards a median cost position while remaining close to expenditure 
neutral. 
 As a result, maximum allowable reimbursements in the adopted medical fee 
guideline were derived, in part, from the use of relative values units (RVUs) 
contained in Relative Values for Physicians, McGraw-Hill, Inc., copyright 1995. 
A relative value for each CPT code is derived by rating the time, skill, 
severity of illness, risk to patient, and risk to physician and is used to 
determine, in part, how much reimbursement should be paid for a particular code 
in relation to all other codes. The RVUs used in the new guideline were assigned 
to each code by McGraw-Hill after considering the factors listed previously in 
this preamble. The commission elected to switch from its current source of 
relative values, the California Relative Value System, to McGraw-Hill's  
Relative Values for Physicians  because it is an industry standard and has been 
in use since 1984. The publication was developed through intensive research that 
reflects medical practice and reimbursement issues as compiled and relayed by 
national physician surveys. 
 Maximum allowable reimbursements in the adopted medical fee guideline are also 
derived, in part, from the use of conversion factors contained in copyrighted 
information provided by Innervation Technology Corporation (ITC). A conversion 
factor is the dollar value for each relative value unit and is used to convert 
RVUs to a dollar value reimbursement amount. A separate conversion factor is 
assigned to each medical services group. Conversion factors are derived by 
dividing the sum of all charges for a medical services group by the sum of the 
RVUs for each charge in the same group. As is common statistical practice, ITC 
supplied conversion factors for every 10th percentile starting at the 20th 
percentile (i.e. 20th, 30th, 40th, etc.). The copyrighted information obtained 
from ITC contained 20 million medical bills submitted statewide during the 
period from February 1, 1994 to January 31, 1995. ITC collects medical bills for 
services provided in a fee-for-service environment. This excludes bills for 
services covered by governmental payors (e.g. Medicare and Medicaid) as well as 
bills covered under managed care contracts. A fee-for-service environment is 
most representative of Texas workers' compensation system because injured 
workers are allowed to select their own health care providers, the payors 
(insurance carriers) generally do not have any contractual arrangements 
regarding fees with the health care providers, and the health care providers 
have broad latitude in determining the course of treatment for each individual 
injury. Therefore, ITC's database was most representative of the Texas' workers' 
compensation system. 
 A review of the ITC data was undertaken to identify whether any substantial 
variance in reimbursements existed among various regions of the state. To do 
this, ITC's medical billing data for Texas was grouped by ITC according to zip 
code to create 30 regional zones (29 metropolitan regions and one rural region 
representing all zip codes not included in a metropolitan region) and then 
analyzed according to medical service groups and amounts charged. The analysis 
revealed minimal overall variance. The sample was then ranked in percentile 
form. This entailed putting all of the bills for each of the chosen CPT codes in 
rank order from the lowest amount billed for the code to the highest amount 
billed for the code. The bills were then divided into 10 groups with each group 
having an equal number of bills. The bill for the highest amount in each group 
then represented the dollar value of the percentile. (For example, a group of 20 
medical bills for the same code is put in rank order and shows charges of $1.00, 
$2.00, $3.00, $4.00, $5.00, $6.00, $7.00, $8.00, $9.00, $10, $11, $12, $13, $14, 
$15, $16, $17, $18, $19, and $20. When divided into ten equal size groups, each 
group has two bills. Since the highest billed amount in the group representing 
the two lowest bills is $2.00, $2.00 represents the 10th percentile. Likewise, 
$4.00 represents the 20th percentile because it is the highest bill in the group 
representing the third and fourth lowest bills.) Conversion factors were then 
calculated for every 10th percentile of every region by taking the sum of the 
fees charged for each medical services group and dividing that number by the sum 
of the relative values of the CPT codes within that group. The conversion factor 
for each medical services group was then compared to the conversion factors for 
the same medical services group in each of the other 29 Texas regions and it was 
determined that the conversion factors were quite homogenous in nature. The 
conversion factors for each medical services group were then averaged to arrive 
at a single conversion factor for each medical services group. The purpose of 
this analysis was to determine whether charges differed substantially among the 
30 regions. The exhibited variance did not justify developing a medical fee 
guideline with regional MARs. 
 After completing the regional analysis and obtaining the McGraw-Hill RVUs, the 
number of codes in the sample dropped from 200 to 165. Thirty-five codes were 
dropped from the sample either because McGraw-Hill did not assign a relative 
value to them or because the individual code was a "dump code" which is used to 
bill a large number of different treatments, services, or equipment which do not 
have a specific RVU assigned to them (e.g. Code 97139 is used to bill for 
physical medicine services ranging from acupuncture to taping to stabilize or 
align). The codes that were dropped from the sample due to lack of an assigned 
RVU fell into two groups. Some of the codes do not have relative values because 
the complexity of the procedure depends on the severity of the individual injury 
while others were in the anesthesia group to which ITC does not assign 
conversion factors. After these 35 codes were dropped from the sample, the 
remaining 165 codes were analyzed and it was determined that this group 
represented approximately 79% of the total amount reimbursed for all codes 
during the period of June 1, 1993 to May 31, 1994. 
 All of the bills in the commission's database for the 165 CPT codes in the 
sample were divided by medical services group and the total amount reimbursed 
for each group during the sample period was determined. The staff then 
determined the number of times each code was billed (frequency) and multiplied 
the frequency of each code in the sample by the McGraw-Hill RVU for the code and 
the ITC conversion factors for the appropriate medical services group. The 
resulting product represents the total dollar amount that would be reimbursed 
for the sample codes in each medical services group at a chosen ITC conversion 
factor. This amount was compared with the total dollar amount reimbursed for the 
sample codes in that medical services group under the December 1991 guideline. 
The ITC conversion factor which brought total reimbursement for each medical 
services group closest to the reimbursement for that group under the December 
1991 guideline was assigned as the conversion factor for that group. The 
reimbursement for an individual code ("the new reimbursement amount") was then 
calculated by multiplying the McGraw-Hill RVU for each code by the ITC 
conversion factor for the appropriate medical services group. It is important to 
note, however, that while this methodology attempted to retain the same level of 
total reimbursement for each medical services group, the reimbursement for 
individual codes within a group did change. This occurred because a new set of 
RVUs was utilized and the conversion factors for each medical services group 
differed from the group's conversion factor in the December 1991 guideline. As a 
result, the reimbursement for individual treatments and services varied from the 
reimbursement for the same treatment, service, or equipment under the December 
1991 guideline. Assigning a single conversion factor to each medical services 
group rather than to each CPT code is appropriate because it is the predominant 
practice in workers' compensation and it was done in the December 1991 
guideline. 
 As noted previously in this preamble, the commission did not benchmark its MARs 
during the development of the December 1991 guideline. This led to the 
development of a fee guideline in which some medical services groups were 
reimbursed around the 10th percentile when compared to ITC data while other 
groups were reimbursed above the 90th percentile. In addition, some of the 
individual codes within each group were reimbursed far above or far below the 
median of the ITC data. This meant that reimbursements for some individual codes 
were too high while others were too low. During the development of the new 
guideline, the commission was concerned that significant reductions in the 
reimbursement of individual codes would seriously affect providers whose 
practice focused primarily on activities associated with those codes and lead to 
a loss of health care providers from the system. This, in turn, could affect 
access to quality health care. In addition, significant increases in the 
reimbursement for individual codes may also lead to significant changes in 
utilization of those codes and impact on the effort to implement an expenditure 
neutral system. These problems were intensified by the fact that the commission 
changed vendors of RVUs which resulted in changes to the RVU assigned to many 
individual codes. Either an increase or decrease in both the RVU and conversion 
factor for an individual code could radically change the reimbursement for that 
code. 
 To address this problem, an acceptable deviation ("window") of 25% more or less 
than the December 1991 guideline reimbursement was established and the new 
reimbursement amount for each CPT code in the sample was compared with the 
reimbursement for the same code under the December 1991 guideline. If the 
reimbursement calculated using the new methodology varied more than 25% from the 
reimbursement for the same code under the December 1991 guideline, then the code 
was considered a statistical outlier. For example, CPT code 95861 is needle 
electromyography and the MAR established by the December 1991 guideline was 
$242.32. Under the new guideline, the code is assigned an RVU of 24.8 and a 
conversion factor of $6.44. As a result, the MAR for this code is $159.71 under 
the new guideline (24.8 x 6.44). The MAR for this code under the December 1991 
guideline ($242.32) is 51.7% more than the amount calculated using the new 
methodology ($159.71). This falls outside the acceptable 25% deviation window. 
The codes identified as statistical outliers were selected for recalculation to 
avoid a radical reimbursement change. Codes which were not identified as 
outliers were set at the amount calculated using the new methodology. 
 To adjust the codes ("the adjusted reimbursement amount") which had an MAR 
under the new methodology which was more than 25% less than the MAR under the 
December 1991 guideline MAR, the MAR under the new methodology was multiplied by 
1.25 so the adjusted reimbursement amount was set 25% above the amount initially 
calculated using the new methodology. This decreased the reduction from the 
December 1991 fee guideline amount. In the example in the previous paragraph of 
this preamble, the adjusted MAR for CPT code 95861 is set at $199. 64 (or $200 
when rounded to the closest whole dollar amount). To adjust the codes which had 
an MAR under the new methodology which was more than 25% above the MAR under the 
December 1991 guideline MAR, the MAR under the new methodology was multiplied by 
.75 so the adjusted reimbursement amount was set 25% below the amount initially 
calculated using the new methodology. This reduced the increase in the MAR from 
the December 1991 guideline amount. The adjustment of the MAR for codes falling 
outside the 25% window was necessary to ensure that reimbursements remained high 
enough to encourage health care providers to remain in the workers' compensation 
system while not being so high that insurance carriers were forced to raise 
premium rates and employers elected to drop out of the workers' compensation 
system. 
 Analysis of the commission's database also indicated that for one medical 
services group, radiology, the reimbursement rates in the December 1991 
guideline were actually far above the usual and customary charges and were, in 
fact, above ITC's 90th percentile. In fact, a majority of the bills in the 
commission's database for codes within the radiology group actually charged less 
than the MAR allowed under the December 1991 guideline for the specific 
radiology CPT code. This meant that Texas was allowing reimbursement for these 
codes at far above the median level of reimbursement statewide. Using the new 
methodology as the basis for establishing reimbursements for the radiology group 
would mean Texas would continue to reimburse for these codes at the high end of 
the ITC range. After further review of the reimbursements under the new 
methodology, it was determined that all other medical services groups were being 
reimbursed at or below the 50th percentile indicating that the radiology group 
as a whole was an outlier and needed to be moved in the direction of the other 
groups. The commission determined that setting the conversion factor for the 
radiology group at the 60th percentile reduced the total amount reimbursed for 
radiology by only 11% and moved the reimbursements paid for radiology closer to 
what the market was actually charging. 
 Reimbursements for the anesthesia group are based on the new methodology except 
that the RVUs assigned to codes in the anesthesia group were not derived from 
McGraw-Hill. Instead, the RVUs are those copyrighted by the American Society of 
Anesthesiologists (ASA). To calculate the total anesthesia value, the RVU (which 
is related to the complexity of the service) is added to modifying units (which 
adjust for factors such as patient physical status and qualifying circumstances) 
plus time units (which adjust for the length of the procedure). The ASA system 
of relative values is nationally used and highly respected and the methodology 
used to develop the RVUs is compatible with other systems of RVU development. 
 Reimbursements for the durable medical equipment group are based on 
prenegotiated contract rates or fair and reasonable reimbursement rather than 
MAR. As an interim measure, fair and reasonable reimbursement has been 
established as the same fees set for "D" codes in the 1991 Medical Fee 
Guideline. The commission will consider at its April public meeting, 
establishing a "cost plus a percentage of cost" method for reimbursement of DME 
to be used until MAR's can be established. These interim fees will provide a 
minimum fee and prevent DME providers from being reimbursed at an amount which 
will not cover their costs. In addition to the normal bill, a health care 
provider must also submit a statement of medical necessity together with an 
order or a prescription. Reimbursement in this manner was necessary for this 
group because the commission does not have a comprehensive database which 
differentiates between various types of durable medical equipment in sufficient 
detail to establish an MAR for individual types of equipment. The use of the 
more detailed and specific HCPCS codes in this medical fee guideline should 
remedy this problem by providing the commission's database with more 
comprehensive information. 
 Total reimbursement for the evaluation/management group under the December 1991 
guideline fell between the 30th and 40th percentiles and closer to the 30th. As 
a result, in the proposed medical fee guideline, reimbursement for this group 
was based on the conversion factor for the 30th percentile. Under this scenario, 
health care providers would be paid less for this group than under the December 
1991 guideline. A number of comments during the public comment period pointed 
out that the workers' compensation system places a higher administrative burden 
on health care providers than other systems (e.g. periodic reports required from 
treating doctors on their workers' compensation patients, treating doctors 
required to review all other doctors' certifications of maximum medical 
improvement and impairment rating) and this higher administrative burden 
justified an increase in the reimbursements for codes in the 
evaluation/management group. The commission agreed that the workers' 
compensation system did place an additional administrative burden on health care 
providers and recognized that the ITC data did not reflect this additional 
burden. As a result, reimbursement for the evaluation/management codes was 
recalculated using the conversion factor for the next closest percentile, the 
40th. The commission believes this will encourage primary care physicians, who 
are reimbursed most often by the use of these codes, to remain in the workers' 
compensation system. 
 Reimbursement for the pathology codes is based on the new methodology but 
pathology codes outside the original sample were used in making the calculation. 
In the original sample of 200 codes, only three of the codes fell into the 
pathology group. This did not constitute a statistically significant sample. To 
remedy this problem, a new list of the top 500 CPT codes was generated and the 
nine most frequently billed pathology codes were used to calculate the 
reimbursement for this group and to determine which conversion factor was 
closest to allowing the new medical fee guideline to remain close to expenditure 
neutral. 
 Reimbursement for the physical medicine group was calculated using the 
conversion factor for the 20th percentile. Reimbursement for this group under 
the December 1991 guideline was far below the 20th percentile and, therefore, 
far below the median. As a result, although raising this group to the 20th 
percentile had a negative impact on the goal of expenditure neutrality, it was 
necessary to meet the policy objective of moving Texas towards the median as 
well as the statutory mandates of fair and reasonable reimbursement and access 
to quality health care. In addition, ITC does not provide a conversion factor 
below the 20th percentile. 
 The requirements for the filing of and reimbursement for medical reports have 
been deleted from the new medical fee guideline. The commission received a 
significant amount of public comment on this area and the issues raised require 
further consideration. The commission intends to address these issues in the 
future. 
 A number of the CPT codes are designated as I-codes by McGraw-Hill. Although 
RVUs are assigned to these codes, the designation indicates that less data or 
less consensus existed during the formulation of these RVUs than existed 
relative to other CPT codes not given the I-code designation. As a result, the 
designation indicates that the codes do not meet McGraw-Hill's highest level of 
confidence but they do, however, meet an acceptable level of confidence. Codes 
which do not meet even an acceptable level of confidence are identified as RNE 
(relativity not established) codes and those codes are not assigned relative 
values. Because I-codes often relate to new procedures on which little 
information is available, the commission determined that use of these codes was 
necessary to ensure that information about such procedures was available for the 
development of future guidelines. The commission also determined that the use of 
the McGraw-Hill RVUs for these codes was appropriate because McGraw-Hill had 
enough confidence to assign an RVU to these codes rather than identifying them 
as an RNE code. However, if sufficient evidence was submitted during the public 
comment period to demonstrate that an alternative RVU for an individual I-code 
was appropriate, the commission would use the alternative RVU supported by the 
evidence on the record rather than the McGraw-Hill RVU for that code. No 
evidence was submitted during the public comment period which was sufficient to 
establish the need for and to establish a basis for recalculating a change in 
the RVU of any I-code and, as a result, the medical fee guideline uses the RVUs 
assigned by McGraw-Hill to each individual I-code. 
 The one entirely new group of I-codes are the codes for osteopathic 
manipulation. These codes are a part of the medicine group. Although 
chiropractic and osteopathic manipulations are essentially the same service, the 
RVUs and, thus, the reimbursement for the osteopathic codes is significantly 
lower. As a result, the commission has amended the ground rules for these codes 
to allow a health care provider to bill an appropriate office visit code along 
with an osteopathic manipulation code to ensure reimbursement. 
 The public benefit anticipated as a result of enforcing the rule will be the 
revision of the medical fee guideline to update reimbursement amounts 
implementing medical cost containment measures designed to assure access to and 
the quality of medical care as required by the Workers' Compensation Act. It is 
anticipated that clear, fair guidelines will minimize disputes and encourage 
prompt payments to health care providers. 
 Based on current patterns of utilization, insurance carriers required to comply 
with the guidelines should experience less than a 4.0% increase in total medical 
service payments. This increase in medical service payments could be expected to 
result in a total system cost increase of less than 2.5%; however, total 
decreases in system costs achieved over the past four years through workers' 
compensation reform will more than compensate for this adjustment to medical 
service payments as will savings resulting from fewer medical fee disputes. As a 
result, no increase in employer's workers' compensation insurance premiums is 
expected. 
 There will be no fiscal impact on employees as a result of enforcing the rule. 
Because of some redistribution of total reimbursements, fiscal impact of this 
revision to the medical fee guidelines on health care providers will depend on 
their area of practice. Some health care providers will experience an increase 
in fees for services, while others will experience a decrease in fees and still 
others will experience no fiscal impact as a result of the adopted reimbursement 
system. Providers of radiology services will incur the largest overall decrease 
in reimbursements because the current allowable maximum reimbursement amounts 
for this medical services group were generally greater than the usual and 
customary charges of health care providers billing for these codes. The effect 
will not be as great as it first appears because reimbursement under the 
December 1991 guideline was the lesser of the amount billed or the MAR and the 
majority of bills in this group were for amounts considerably less than the MAR. 
The opposite effect will be experienced by those providers who bill for codes 
with reimbursements that are currently much lower than the usual and customary 
charges for those codes. The inclusion of an acceptable deviation in the medical 
fee guidelines will allow providers who bill for codes which are significantly 
decreased under the new methodology to escape the full impact of being forced 
immediately into the indicated percentile. Overall, there is expected to be a 
slight increase in payments to health care providers. 
 This guideline is adopted in order to comply with the statutory mandates in the 
Texas Labor Code, sec.413.011 that the commission establish by rule guidelines 
relating to fees charged or paid for medical services for employees who suffer 
compensable injuries, including guidelines relating to payment of fees for 
specific medical treatments or services, that the guidelines for fees be fair 
and reasonable and designed to ensure the quality of medical care and achieve 
effective medical cost control. 
 The commission considered all relevant statutory and policy mandates and 
objectives and designed this rule to achieve those mandates and objectives, 
including the following: 
 (1) establish guidelines relating to fees charged or paid for medical services 
for employees who suffer compensable injuries, including guidelines relating to 
payment of fees for specific medical treatments or services; 
 (2) ensure that injured workers receive the health care reasonably required by 
the nature of their injury, as and when needed; 
 (3) ensure guidelines for medical services fees are fair and reasonable; 
 (4) ensure quality health care to the injured workers of Texas; 
 (5) achieve effective medical cost control; 
 (6) ensure guidelines for medical services fees do not provide for payment of a 
fee in excess of the fee charged for similar treatment of an injured individual 
of an equivalent standard of living and paid by that individual or someone 
acting on that individual's behalf; 
 (7) consider the increased security of payment afforded by the Act in 
establishing the fee guidelines; 
 (8) maintain a statewide database of medical charges, actual payments, and 
treatment protocols that may be used by the commission in adopting medical fee 
guidelines; 
 (9) ensure the commission's database contains information necessary to detect 
practices and patterns in medical charges and actual payments; 
 (10) ensure the commission's database can be used in a meaningful way to allow 
the commission to control medical costs as provided by the Act; 
 (11) move Texas towards a median cost position in comparison with other states; 
and 
 (12) remain close to expenditure neutral. 
 This rule achieves these objectives by its provisions, including the following: 
 (1) specifying the fees to be paid for medical treatments and services provided 
under the Texas Workers' Compensation Act; 
 (2) utilizing reimbursement rates that take into account the charges currently 
billed for each service and the current utilization rate of each service; 
 (3) utilizing reimbursement rates, which as a whole, should result in a less 
than 4.0% increase in total medical service payments; 
 (4) requiring that payment to a health care provider be the lesser of the 
amount specified in the fee guideline or the health care provider's usual fees 
and charges so that health care providers are not reimbursed for workers' 
compensation patients in excess of the amount that would be paid for similar 
treatment of non-workers' compensation patients; 
 (5) requiring supplies and durable medical equipment to be billed under an 
alternative coding system so that a reliable database regarding these items can 
be developed; 
 (6) shifting the methodology of the reimbursement system away from a relative 
value of services system and toward a market-based reimbursement system and 
phasing in this new methodology to avoid any adverse affect on access to quality 
medical care as well as any shocks or unintended shifts in utilization within 
the system; 
 (7) allowing anesthesia to be reimbursed under a relative value of services 
methodology which is widely accepted for that particular specialty and 
reflective of new technology in the field; 
 (8) moving MARs toward the median of the ITC data rather than to the higher 
percentiles to take into account the increased security of payment in the 
workers' compensation system; and 
 (9) increasing reimbursement for the evaluation/management group to ensure 
health care providers receive fair and reasonable reimbursement and injured 
workers have access to quality medical care. 
 In formulating this rule and the medical fee guideline, the commission 
carefully and fully analyzed all of the statutory and policy mandates and 
objectives and all the facts and evidence available and submitted, as well as 
all comments received. The commission utilized all of this, and its expertise 
and experience, to formulate this rule and the medical fee guideline which 
balance the statutory mandates to ensure injured workers receive the quality 
health care reasonably required by the nature of their injury as and when needed 
and to ensure the fee guidelines are fair and reasonable, with the statutory 
mandate to achieve effective medical cost control. Full and objective analysis 
and consideration was given to all comments received, as evidenced by the 
revisions made from the rule as proposed and the commission's responses to 
comments in this preamble. 
 Fair and reasonable fees are ensured by utilizing a market-based methodology 
that establishes reimbursement amounts which take into account the fees charged 
for each service and the minimal variance in these charges between different 
regions of the state. The guideline also ensures fair and reasonable fees by 
recognizing specific areas in which the Texas workers' compensation system 
places greater burdens on health care providers than does the open market and 
adjusting fees upward accordingly to compensate for these additional burdens. 
The guideline also ensures fair and reasonable fees by bringing the 
reimbursements for all codes and all medical services groups toward the median 
of the states in the WCRI study and, thereby, eliminating both the overpaid and 
underpaid outliers. 
 Quality of medical care is ensured by the commission's reliance upon input from 
experts from a variety of health care fields including medical doctors, medical 
equipment suppliers, registered nurses, and physical therapists. The guideline 
ensures access to health care and that quality care will be available by phasing 
in the shift from a relative value methodology to a market-based methodology 
which prevents destabilization in the system. 
 Effective medical cost control is ensured by establishing maximum allowable 
reimbursements for each medical treatment or service covered by the guideline; 
by lowering the maximum allowable reimbursement for the radiology codes when the 
commission's database indicated that most doctors charged less than the maximum 
reimbursement allowed by the December 1991 guideline; by moving the 
reimbursements allowed toward the median of the states in the WCRI study; and by 
adjusting the evaluation/management group codes to encourage the continued 
participation of primary care physicians in the system and reduce the need for 
routine treatments, procedures, and services to be performed by specialists 
billing more highly reimbursed codes. 
 A complete description of the changes in the proposed text made in response to 
public comment is found in the summaries of comments and responses which follow. 
Some of the more significant changes are as follows: 
 (1) The requirements for the filing of and reimbursement for medical reports 
have been deleted from the new medical fee guideline. The commission received a 
significant amount of public comment on this area and the issues raised require 
further consideration. The commission intends to address these issues in the 
future. The provisions of current TWCC rules regarding filing of and 
reimbursement for medical reports will remain in effect. 
 (2) The majority of the provisions in the proposed rule regarding the 
orthotics/prosthetics group were deleted and the remaining billing provisions 
have been combined with the durable medical equipment group because the 
information relating to the orthotics/prosthetics group text was too short to 
warrant its own section. These items are billed using HCPCS K- and L-codes and 
are reimbursed at a fair and reasonable rate. Insufficient data is currently 
available to set MARs for these codes but the use of HCPCS codes will allow the 
collection of data so that MARs can be set in future editions of the medical fee 
guideline. 
 (3) Reimbursement for DME was changed to allow pre-negotiated rates to be paid 
or if there is no pre-negotiated rate, the fair and reasonable rate. A fair and 
reasonable reimbursement for DME has been defined as the fees set for "D" codes 
in the 1991 Medical Fee Guideline. 
 (4) As noted previously in this preamble, reimbursement for the 
evaluation/management group has been increased from the 30th to the 40th 
percentile to take into account the additional administrative burdens imposed by 
the workers' compensation system. 
 (5) The ground rules governing the osteopathic manipulation codes have been 
changed to allow health care providers to bill an appropriate office visit code 
in addition to the osteopathic manipulation code. 
 (6) Documentation of procedure is not required for any supplies provided by a 
health care provider in the health care provider's office with a value of less 
than $50. DOP is also not required for supplies provided by a DME vendor. 
 (7) Throughout the new medical fee guideline the words "should", "will", and 
"must" have been changed to "shall" for consistency in situations where the 
provision is a requirement. This change also occurred in sections taken directly 
from the AMA CPT manual for consistency throughout the medical fee guideline. 
 (8) Reimbursements were increased for Designated Doctors and Required Medical 
Examination (RME) Doctors performing impairment ratings where only a specialty 
area is being rated. In addition, reimbursements were increased for designated 
doctor examinations and required medical examinations where it is determined 
that maximum medical improvement has not been reached. 
 Comments were received on the proposed new Medical Fee Guideline from: Casey 
Cochran; Roger Canard; Kallene Purl, Medical Development Company; Peggy Lee, 
Capitol Anesthesiology Association; Sam Sakowitz, Allen Medical Equipment and 
Texas Association of Medical Equipment Dealers; Craig R. Dubois, Neural Logics, 
P.A.; Mike Allen, Certified Orthotic & Prosthetic Advocates, Inc.; Bohn D. 
Allen, Texas Medical Association; Michael Berkowitz, T-Bones; June Cheatham, 
Neuroskeletal Center; Janet Gabbert, Associated Orthopedics & Sports Medicine; 
Richard L. Amato, A-Tech Medical, Inc.; Troy Robinson, Prescription Management 
Services, Inc.; John Landino, MediQuip; C. M. Schade, Center For Pain Control; 
Gary A. Lamb, Professional Orthotic Services; Rhonda Fellows, EMPI, Inc.; Kyle 
Babick; Gail L. Chiasson, Orthofix; Arie J. Bronkhorst, Certified Orthotic and 
Prosthetic Advocates; Bruce P. McClellan, Prosthetic-Orthotic Associates of East 
Texas, Inc.; C. Michael Schuch, American Academy of Orthotist & Prosthetists; 
Dan Morgan, Texas Chapter of the American Academy of Orthotist and Prosthetists; 
Debbie Gauthier, Allen Orthotics and Prosthetics, Inc.; Deborah P. Kelly; 
Shapiro Dickstein; Doug Meyers, Meyers Brace and Limb Company Inc.; Dwain R. 
Faso, American Board For Certification in Orthotics and Prosthetics, Inc.; Gary 
W. Prescott, Prescott's Orthotics; George Brooks, Rehab West Texas 
Rehabilitation Center; James C. Hughes, Austin Orthotics and Prosthetics, Inc.; 
James M. McCoy, Professional Prosthetics; Jeff Bloch, Bloch Orthotic Labs; Joe 
Jones; John D. Martinez, San Antonio Orthotic; Jon B. Holmes, Muilenberg 
Prosthetics, Inc.; Kelly Kimbrough, IAOP; Kenneth Ray Hindman, The Walking Shop; 
Kim Doolan, Amputee Coalition of America; Lynda G. Marsh, Orthobionics, Inc.; 
Mark Voit, Center for Orthotics of South Texas; Pauline Ostermeyar; R. E. 
Draeger, Galveston Brace Limb Company; R. Dean Morgan, Footwear Consultants, 
Inc.; Rick Ravel, Karavel Shoes Pedorthic Center; Rudolph B. Becker, American 
Orthotic and Prosthetic Association; Scott B. Atha, Austin Orthotics and 
Prosthetics, Inc.; Tarif Zaki, International Association of Orthotics and 
Prosthetics; Tom LeTourneau, LeTourneau Lifelike Orthotics & Prosthetics; Vicki 
Smith, Smith's Orthopedic shoes, Inc.; Walter Hoke, Foot Specialty Products by 
Sunnyland; William J. Barringer, University of Oklahoma Health Sciences Center; 
William Millar, Millars Orthotic and Prosthetic Service; Richard D. Rehm, 
Occusystems, Inc.; Melissa A. Hood, OccuSystems, Inc.; Philip A. Becker, A. I. 
Saheba, & Kraig Martin, Gateway Industrial Medical Clinic; Roy S. Marokus, Earl 
C. Hoffer & Jacob Liebman, Amarillo Industrial Health Center; Jeremiah J. 
Twomey, Internal and Occupational Medicine; Bernard T. Swift, Jr., Texas 
MedClinic; Gregory M. Gilbert, OccuSystems, Inc.; Jeff Hunter, EBI Companies; 
Lyn D. Gurkoff, Center for Pain Control; Lori Tappan-Zahn, Center For Pain 
Control; Sylvia Burns; Richard R. Blide, Disability Evaluating Center; Carol 
Lusk, Spine Care Associates of Tyler; Gordon A. Irving, The University Center 
for Pain Medicine and Rehabilitation at Hermann; Mark E. Huff, Jr.; Charles 
Kennedy; Steven F. Reeder; Richard Riley Constant; Jeffrey N. Zink; Phillip 
Osborne; M. Cliff Cornette; William C. Monell; Don E. Blanton; J. Scott Hassell; 
P. J. Chandler; Michael D. Ciepiela; James Loftin, Dallas Pulmonary Association; 
W. John Ryan, Dallas Pulmonary Associates; John Harney; Lloyd Garland, 
Neurosurgical Unit; Richard W. Blide, Disability Evaluating Center; M. Gayle 
Glidewell; Terry Boucher, Texas Osteopathic Medical Association; Gary Gray, 
Texas Physical Therapy Association; Jeanette Winfree; Jaelene Fayhee, Texas 
Workers' Compensation Insurance Fund; H. Martin Blacker, Baylor College of 
Medicine; David Axelrad, Baylor College of Medicine; Kenneth M. Alo, Pain & 
Health Management Center; R. Sanford Kiser, Texas Pain Medicine Clinic; Richard 
L. Thomas, American Academy of Pain Management; Richard A. Peck, Acupuncture & 
Anesthetics Center; Robert Paige, Advanced Pain Center; Gordon A. Irving, Baylor 
College of Medicine; Carl E. Noe, Doctors Haynesworth, Noe and Bamberger; R. E. 
Nussbaum, The Institute for Pain; Martin S. Glore, The Institute for Pain; Joe 
G. Gonzales, Patrick S. Garman & Lawrence O. Shortas; Warm Springs & Baptist 
Rehabilitation Center Northwest; Duane Hill, Beaumont Bone & Joint Clinic; David 
Fletcher, The Neuro-Skeletal Center; Albert E. Sanders, Texas Orthopaedic 
Association; Steve Renfrow, The Brooks Agency; Thomas J. Lowry, Austin Ortho 
Clinic; American Society of Orthopaedic Physicians Assistants; Bernadette 
Williams; Bobbie Williams, Texas Orthopedic Physicians Assistants; C. C. Kell; 
Cyndi Arege; David W. Duffner, East Texas Orthopedics; David Fogle, Orthopaedic 
Associates of North Texas; Debra L. Loftier; Denton Bryant; Don McConnell, 
American Society of Orthopaedic Physician's Assistants, Inc.; Frankie Eastman; 
H. Lynn Rodgers, Jr., Orthopaedic Associates of North Texas; J.H. Garrett, 
Azalea Orthopedics & Sports Medicine Clinic; Jeffery G. Pearce; Joyce McClure; 
Kelly D. Irons; Kim A. Foreman, East Texas Orthopedics; M. Joseph Shepard, East 
Texas Orthopedics; Margaret Frankenfield; Mark W. Rodgers; Michael D. Adams, 
Orthopaedic Associates of North Texas; Michael Bowman; Terry Weber, Orthopaedic 
Associates of North Texas; Wade W. Whitmer; Andrew P. Kant, KSF Orthopaedic 
Center; Clark Hornbaker, Dallas Spine Group; Robert Peinert, Texas Orthopaedic 
Association; Mark R. Wilson, Physical Medicine and Rehabilitation; Richard K. 
Simpson, Jr., Baylor College of Medicine; James A. Ghadially, Orthopaedic 
Rehabilitation Association; James W. Simmons, Bone Joint Clinic; Dianne 
Ahlfinger, Cost Review Services; G. R. Kaestner, Texas Medical Association; Tom 
Mayer, PRIDE; Pam Beachley, Business Insurance Consultant; Melissa Hood, 
OccuSystems; Kenneth R. (Randy) Hart, Custom Care Bracing, L.L.C.; Thomas C. 
Thompson, Medical Device Manufacturers Association; Emil Cerullo, T-Bones and SW 
Spine Ortho Specialists; Guy Fogel, Medical Arts Clinic; Larry Tonn, Texas 
Medical Association; Edward A. Talmage, West Houston Doctor's Center; Mike 
Barber, Texas Orthopedic Administration Association; Bruce Hinkley; Michael T. 
Mccann, Texas Pain Medicine Consultants, P.L.L.C.; Randall Wolcott, Physical 
Medicine and Rehabilitation; James Tustin, Diagnostic Radiology Associates, 
L.L.P.; H. Dane Harris, Sr., Texas Association Business & Chambers of Commerce; 
Greg M. Gilbert, OccuSystems, Inc.; Brady G. Giesler; Denton Watamull; Donald L. 
Kramer, Pain Health Management Center; Gabor B. Racz, Texas Tech University 
Health Sciences Center; J. Lowell Haro, Pain Management Consultants, P.A.; J.H. 
Isern; J.L. White, Jr., Paincare at Presbyterian Hospital of Plano; James Diede, 
Department of Anesthesiology Texas Tech University; John C. Milani, OrthoNeuro 
Consultants, P.A.; Judi Bergett; Lawrence R. Gelman, Edmundo C. Canales; McAllen 
Pain Center, P.A.; Nicki D. Rimekrau; Martin Scott Glore, The Institute for 
Pain; Raka C. Gohel, Pain & Health Management Center; Robert R. Bulger, 
Southwest Pain Specialists; Thomas W. Grahm, Tyler Neurosurgical; and William 
Lynn Switzer, Neuromed. 
 Comments expressing overall support for the proposed rule were received from 
Tom Mayer of PRIDE; Michael D. Ciepiela; Richard L. Thomas, of the American 
Academy of Pain Management; Kyle Babick; Dianne Ahlfinger, of Cost Review 
Services; Jeanette Winfree; Thomas J. Lowry, of the Austin Orthopaedic Clinic; 
H. Dane Harris, Sr., of the Texas Association of Business; Jeff Hunter, of EBI 
Companies; Pam Beachley, of the Business Insurance Consumers Association of 
Texas; and Gary Gray, of the Texas Physical Therapy Association. 
 Comments expressing overall opposition to the proposed rule were received from 
Arie J. Bronkhorst, of Conner Brace Company, Inc.; Jeremiah J. Twomey; Gary A. 
Lamb, of Professional Orthotics Services; Roger Canard; Deborah P. Kelly, Scott 
B. Atha, of Neuromed; William Lynn Switzer, of Texas MedClinic; Bernard T. 
Swift, Jr.,; Steven F. Reeder; Richard Riley Constant; William C. Monell of 
Custom Care Bracing; Randy Hart; Edward A. Talmage; Robert R. Bulger, of 
Southwest Pain Specialists; Michael T. McCann, of Texas Pain Medicine 
Consultants, P.L.L.C.; Kenneth M. Alo, of Pain & Health Management; J.L. White, 
Jr. of Paincare at Presbyterian Hospital of Plano; R.E. Draeger, of Galveston 
Brace & Limb Company; Doug Meyers, of Meyers Brace & Limb Company, Inc.; Sam 
Sakowitz, of Texas Association of Medical Equipment Dealers; Robert Peinert, of 
the Texas Orthopaedic Association; Emil Cerullo, of T-BONES and Southwest Spine 
Ortho Specialists; and June Cheatham of the Neuroskeletal Center. 
 Comments suggesting revisions, but not expressing either overall opposition or 
support for the proposed rule were received from Cyndi Arege; Eric M. Goldberg; 
Melissa A. Hood, of Occusystems, Inc.; Terry Boucher, of the Texas Osteopathic 
Medical Association; Steve Renfrow, of The Brooks Agency; Richard W. Blide; 
William J. Barringer, of the University of Oklahoma; Jon B. Holmes, of 
Muilenberg Prosthetics, Inc.; Richard D. Rehm, of Occusystems, Inc.; Sam 
Sakowitz, of Allen Medical Equipment; Phillip A. Becker, A. I. Saheba, and Kraig 
Martin, of Gateway Industrial Medical Clinic; Rhonda Fellows, of EMPI, Inc.; 
Dwain R. Faso, of the American Board for Certification in Orthotics and 
Prosthetics, Inc.; Roy S. Marokus, Earl C. Hoffer, and Jacob Liebman, of 
Amarillo Industrial Health Center; Andrew P. Kant, of the KSF Orthopaedic 
Center; James M. McCoy of Professional Prosthetics; Richard A. Peck of 
Acupuncture and Anesthetics Center; R.E. Nussbaum, of The Institute for Pain; 
Martin Scott Glore, The Institute for Pain; Tom LeTourneau, LeTourneau Lifelike 
Orthotics & Prosthetics; Debbie Gauthier, Allen Orthotics and Prosthetics, Inc.; 
Mike Allen, Certified Orthotic & Prosthetic Advocates, Inc.; Janet Gabbert, 
Associated Orthopedics & Sports Medicine; Kenneth R. (Randy) Hart, Custom Care 
Bracing, L.L.C.; Brady G. Giesler; John D. Martinez, San Antonio Orthotic; Lynda 
G. Marsh, Orthobionics, Inc.; J. Scott Hassell; P.J. Chandler; James Loftin, 
Dallas Pulmonary Association; W. John Ryan, Dallas Pulmonary Associates; Kallene 
Purl, Medical Development Company; M. Joseph Shepard, East Texas Orthopedics; 
Nicki D. Rimekrau; James C. Hughes, Austin Orthotics and Prosthetics, Inc.; 
Joyce McClure; Margaret Frankenfield; Kim A. Foreman, East Texas Orthopedics; 
Donald L. Kramer, Pain Health Management Center; Michael D. Adams, Orthopaedic 
Associates of North Texas; H. Lynn Rodgers, Jr., Orthopaedic Associates of North 
Texas; Terry Weber, Orthopaedic Associates of North Texas; David Fogle, 
Orthopaedic Associates of North Texas; Don E. Blanton; the American Society of 
Orthopaedic Physicians Assistants; Bobbie Williams, Texas Orthopedic Physicians 
Assistants; Don McConnell, American Society of Orthopaedic Physician's 
Assistants, Inc.; Frankie Eastman; J. H. Garrett, Azalea Orthopedics & Sports 
Medicine Clinic; Kelly D. Irons; Jeffery G. Pearce; Debra L. Loftier; Tarif 
Zaki, International Association of Orthotics and Prosthetics; J. H. Isern; Gary 
W. Prescott, Prescott's Orthotics; Dan Morgan, Texas Chapter of the American 
Academy of Orthotist and Prosthetists; David W. Duffner, East Texas Orthopedics; 
Gordon A. Irving, The University Center for Pain Medicine and Rehabilitation at 
Hermann, and Baylor College of Medicine; David Axelrad, Gordon A. Irving, and H. 
Martin Blacker, Baylor College of Medicine; C. M. Schade, the Center for Pain 
Control; C. C. Kell; Joe Jones; Mark Voit, Center for Orthotics of South Texas; 
John Harney; M. Gayle Glidewell; M. Cliff Cornette; Lawrence R. Gelman and 
Edmundo C. Canales, McAllen Pain Center, P.A.; Casey Cochran; Robert Paige, 
Advanced Pain Center; Thomas C. Thompson, Medical Device Manufacturers 
Association; Mark W. Rodgers; John C. Milani, OrthoNeuro Consultants, P.A.; 
Bernadette Williams; Pauline Ostermeyar; Jaelene Fayhee, Texas Workers' 
Compensation Insurance Fund; J. Lowell Haro, Pain Management Consultants, P.A.; 
Gail L. Chiasson, Orthofix; Denton Bryant; Peggy Lee, Capitol Anesthesiology 
Association; Raka C. Gohel, Pain & Health Management Center; Joe G. Gonzales, 
Patrick S. Garman & Lawrence O. Shortas; Warm Springs & Baptist Rehabilitation 
Center Northwest; Richard K. Simpson, Jr., Baylor College of Medicine; R. 
Sanford Kiser, Texas Pain Medicine Clinic; Gabor B. Racz, Texas Tech University 
Health Sciences Center; Kelly Kimbrough, IAOP; Bruce P. McClellan, Prosthetic-
Orthotic Associates of East Texas, Inc.; Vicki Smith, Smith's Orthopedic shoes, 
Inc.; Bohn D. Allen, Texas Medical Association; Craig R. Dubois, Neural Logics, 
P.A.; Rudolph B. Becker, American Orthotic and Prosthetic Association; R. Dean 
Morgan, Footwear Consultants, Inc.; Thomas W. Grahm, Tyler Neurosurgical; Rick 
Ravel, Karavel Shoes Pedorthic Center; Wade W. Whitmer; James W. Simmons, Bone 
Joint Clinic; Kenneth Ray Hindman, The Walking Shop; Richard L. Amato, A-Tech 
Medical, Inc.; Lyn D. Gurkoff, Center for Pain Control; Walter Hoke, Foot 
Specialty Products by Sunnyland; Jeff Bloch, Bloch Orthotic Labs; Albert E. 
Sanders, Texas Orthopaedic Association; Sylvia Burns; William Millar, Millars 
Orthotic and Prosthetic Service; Michael Bowman; Troy Robinson, Prescription 
Management Services, Inc.; Gregory M. Gilbert, OccuSystems, Inc.; David 
Fletcher, The Neuro-Skeletal Center; Kim Doolan, Amputee Coalition of America; 
Charles Kennedy; C. Michael Schuch, American Academy of Orthotist & 
Prosthetists; Carol Lusk, Spine Care Associates of Tyler; Arie J. Bronkhorst, 
Certified Orthotic and Prosthetic Advocates; Mark E. Huff, Jr.; Michael 
Berkowitz, T-Bones; George Brooks, Rehab West Texas Rehabilitation Center; John 
Landino, MediQuip; Bruce Hinkley; Duane Hill, Beaumont Bone & Joint Clinic; 
Michael Barber, the Texas Orthopaedic Administrators Association; James Diede, 
Department of Anesthesiology Texas Tech University; Kenneth M. Alo, Pain & 
Health Management Center; G.R. Kaestner, Texas Medical Association; Larry Tonn, 
Texas Medical Association; Jeffrey N. Zink; and Judi Bergett; 
 Late comments from the following persons were received after the deadline for 
the comment period had passed: Mitch Presley (received November 22, 1995); 
Belinda Taylor, of interturbine (received November 27, 1995); Mike Wilson, of 
ELCOM (received November 27, 1995); Mike Allen, of the Certified Orthotic & 
Prosthetic Advocates, Inc. (received (November 29, 1995); Ralph G. Menard, M.D. 
(received November 27, 1995); Manju Nath, M.D. (received November 27, 1995); 
Sanford M. Silverman, M.D. (received December 3, 1995); James Cicero, of 
Hedgecock Artificial Limb Company (received December 11, 1995); Steve Farmer, of 
Home Medi-Care Equipment, Inc. (received January 2, 1996); and David A. Miller, 
of The MEDGROUP. 
 The commission held a public hearing on the proposed new Medical Fee Guideline 
on November 9, 1995. The following persons either testified and/or submitted 
written statements regarding the proposal: Troy Robinson, of Prescription 
Management Services, Inc.; Dr. Richard D. Rehm, of Occusystems, Inc.; C. M. 
Schade, M.D. of the Center for Pain Control; Lori Tappan-Zahn, of the Center for 
Pain Control; Greg M. Gilbert, of Occusystems, Inc.; Casey Cochran, D.O.; Judi 
Burgett, of Quest Medical Inc.; Tom Mayer, M.D., of PRIDE; Sam Sakowitz, of the 
Texas Association of Medical Equipment Dealers; Melissa Hood, of Occupational 
Health Centers; H. Martin Blacker, M.D., of Baylor College of Medicine; Terry 
Boucher, of the Texas Osteopathic Medical Association; Robert Peinert, M.D., of 
the Texas Orthpaedic Association; David Fletcher, M.D., of the Neuro-Skeletal 
Center, Inc.; Bruce Hinkley, M.D.; Emil Cerullo, of T-Bones and the Southwest 
Spine and Ortho Specialists; June Cheatham, of the Neuro-Skeletal Center, Duane 
Hill, of the Beaumont Bone and Joint Clinic; Michael Barber, representing Robert 
Peinert, M.D., and the Texas Orthopaedic Administrators Association; C.W. 
Kennedy; Clark A. Hornbaker, of the Dallas Spine Group; Phillip Osborne, M.D., 
of the Impairment and Disability Center of HealthSouth Corporation; Richard W. 
Blide, M.D.; James Diede, of the Texas Tech Department of Anesthesiology; Carol 
Lusk, of Spine Care Associates; Kenneth M. Alo, M.D., of the Pain and Health 
Management Center; G.R. Kaestner, M.D., of the Texas Medical Association; C. 
Michael Schuck; Gary Lamb; Kim Doolan, of the Amputee Coalition of America; Mike 
Allen, of Certified Orthopedic and Prosthetics Advocates; Debbie Gauthier; Larry 
L. Tonn, of the Texas Medical Association; Kyle Babick, Ph.D., of the Texas 
Psychological Association; Sanford Kiser, M.D.; Steve Renfrow, of the Smart 
Corporation; Richard Amato, of A-Tech Medical, Inc.; Gary Gray, of the Texas 
Physical Therapy Association; Jeffrey N. Zink; Mark E. Huff, Jr., M.D.; and Arie 
J. Bronkhorst, of C.O.P.A. 
 Summaries of the comments and commission responses are as follows. 
 The following comments were received regarding the Anesthesia Ground Rules. 
 COMMENT: (II)(B)(1)-(4). Two commenters objected to the use of only one 
modifier -45 in the Anesthesia Ground Rules because it would require the 
provider to note the number of concurrently supervised procedures. The 
commenters felt this was cumbersome and suggested modifiers -41 through -44 be 
reinstated in the anesthesia section as it existed in the 1991 Medical Fee 
Guideline Medical Fee Guideline and that the requirement for noting the number 
of concurrently directed procedures be deleted. 
 RESPONSE: The commission agrees. Modifiers -41 through -44 will be reinstated 
from the 1991 Medical Fee Guideline and the modifiers will replace the 
requirement of listing the number of concurrent procedures. This will result in 
an easier method which will still accurately identify the number of concurrent 
procedures. The Anesthesia Ground Rules sections (II)(B)(1)-(4) has been 
rewritten to state: 
 "(B) Concurrent Supervision (Modifiers "-41" to "-44"): When an 
anesthesiologist is directing the services of a CRNA, including pre- and post-
operative evaluation and care, but is not personally administering the 
anesthesia, the total anesthesia value (TAV) of the anesthesia care for the 
patient shall not exceed the anesthesia TAV for that service, and one of the 
modifiers "-41" through "-44" shall be added to the procedure code. The 
anesthesiologist providing the medical direction shall remain on-site in or and 
shall extend medical direction to no more than four concurrent anesthetic 
procedures. Medical direction excludes simultaneous administration of anesthesia 
or performance of surgical services by the directing anesthesiologist. 
Reimbursement shall be as follows: 
 (1) when there is no other concurrently directed anesthetic, reimbursement for 
the anesthesiologist is 100% of the TAV. Use modifier "-41,"; 
 (2) when there are two concurrently directed anesthetic procedures, 
reimbursement for the anesthesiologist is 90% of TAV. Use modifier "-42,"; 
 (3) when there are three concurrently directed anesthetic procedures, 
reimbursement for the anesthesiologist is 85% of TAV. Use modifier "-43,"; 
 (4) when there are four concurrently directed anesthetic procedures, 
reimbursement for the anesthesiologist is 80% of TAV. Use modifier "-44"." 
 The Anesthesia Ground Rule Modifier Section and General Instructions Section 
(IX)(D) have been rewritten to state: 
 " -41 Medical Direction of Nonphysician Anesthetist (CRNA) by and 
Anesthesiologist: Indicate by using this modifier when the services are 
performed by the nonphysician anesthetist (CRNA) who is supervised by an 
anesthesiologist. Refer to concurrent supervision guidelines in the general 
information section of the anesthesia section. 
 -42 Concurrent Supervision of Two Certified Registered Nurse Anesthetists 
(CRNA) by an Anesthesiologist: Indicated by using this modifier when the 
Anesthesiologist is directing two concurrent anesthetic procedures. The 
reimbursement shall be at 90% of the total anesthesia value. 
 -43 Concurrent Supervision of Three Certified Registered Nurse Anesthetists 
(CRNA) by an Anesthesiologist: Indicated by using this modifier when the 
Anesthesiologist is directing three concurrent anesthetic procedures. The 
reimbursement shall be at 85% of the total anesthesia value. 
 -44 Concurrent Supervision of Four Certified Registered Nurse Anesthetists 
(CRNA) by an Anesthesiologist: Indicated by using this modifier when the 
Anesthesiologist is directing four concurrent anesthetic procedures. The 
reimbursement shall be at 80% of the total anesthesia value." 
 COMMENT: (IV)(B). The commenter believed a greater unit value is needed for a 
lower valued anesthesia code when the patient is in a position other than supine 
or lithotomy. The commenter suggested that the provision in the 1991 Medical Fee 
Guideline be used because of the greater difficulty when a patient is in a 
position other than supine or lithotomy. 
 RESPONSE: The commission agrees that a greater unit value is needed for lower 
valued anesthesia codes when the patient is in a position other than supine or 
lithotomy. The American Society of Anesthesiologists (ASA) is a professional 
association that is partly responsible for the development of national medical 
practice parameters and is a nationally recognized authority for 
anesthesiologists. and Anesthesia Ground Rule section (IV)(B) is taken directly 
from the ASA, which states: 
 "Any procedure around the head, neck or shoulder girdle that requires field 
avoidance; or any procedure compromising the anesthesia administration (e.g., 
requiring a position other than supine or lithotomy) has a minimum basic value 
of 5.0 units regardless of any lesser basic value assigned to such procedure in 
this guideline. Modifier "-22" and documentation of procedure (DOP) are 
required." 
 COMMENT: (VI)(A)(2). The commenter requested a change in language to match 
HCFA-1500 billing instructions as follows: "For anesthesia, show the elapsed 
time (in minutes). Convert hours into minutes and enter the total minutes 
required." The commenter suggested that this instruction is standardized and 
more familiar to doctors and should be used instead of the billing information 
contained in the proposed Medical Fee Guideline. 
 RESPONSE: The commission agrees that anesthesia time should be billed in 
minutes but disagrees that a in but no change is needed. Anesthesia Ground Rules 
section (VI)(A), clearly requires the listing of anesthesia time in minutes. For 
those health care providers (HCP's) who are familiar with Medicare this will be 
a familiar practice. 
 The following comments were received regarding the durable medical equipment 
ground rules. 
 COMMENT: The commenters supported the adoption of the HCPCS coding system as it 
will provide the best means possible for HCPs to fully describe their services 
to others. 
 RESPONSE: The commission agrees. 
 COMMENT: (IV). A number of commenters objected to the requirement for 
documentation of procedure (DOP) for supplies. Many commenters felt that the 
HCPCS codes were specific enough to adequately describe supplies and that the 
documentation of procedure (DOP) requirement was unduly time consuming, costly 
and of questionable value. Even in the case where there is no HCPCS code, the 
general code 99070 can be used and a listing provided, not a documentation of 
procedure (DOP). Another commenter recommended use of a multiplier of 1.2 to be 
applied to the supply cost. 
 RESPONSE: The commission agrees in part. The requirement for documentation of 
procedure (DOP) has been eliminated. To develop a data base that meets the 
requirements in the Texas Labor Code, sec.413.007 the use of one code for 
millions of dollars in supplies would not give the commission the specifics 
mandated by the statute. No data is available to support the use of 1.2 as a 
fair multiplier in reimbursing all supplies. One way to determine fair and 
reasonable would be invoice price plus a percentage that allows for a reasonable 
realized profit margin for the particular supplier considering handling, 
storage, service, etc. DME Ground Rules Section (IV) has been rewritten to 
state: 
 "This document does not contain a specific MAR for the DME items. The DME items 
should be billed at the usual and customary rate of the DME provider, and the 
insurance carrier shall reimburse the DME provider at an amount pre-negotiated 
between the provider and carrier or, if there is no pre-negotiated amount, the 
fair and reasonable rate for the item described. Use the miscellaneous HCPCS 
code, E1399, when no other HCPCS code is present for the DME or supplies 
provided to the injured worker. When using E1399, a description of the unlisted 
equipment/supply is required." 
 COMMENT: The commenter stated converting DME "D" codes' reimbursements to HCPCS 
would be very easy. The commenter objected to the commission not gathering 
charge data over the last four years to establish MAR rates for HCPCS codes. The 
commenter felt reimbursement by documentation of procedure (DOP) for DME rather 
than a maximum allowable rate (MAR) or a fee schedule is totally unacceptable. 
The Medical Fee Guideline of 1991 adds stability for the suppliers. Prior to the 
Medical Fee Guideline going into effect the supplier had to negotiate with each 
carrier and sometimes with adjusters from the same carrier. 
 RESPONSE: The commission disagrees. The 337 "D" codes developed by the 
commission and contained in the 1991 Medical Fee Guideline, are not 
comprehensive and do not all directly correlate with the over 2,100 more 
detailed and descriptive HCPCS codes. The "D" codes from the 1991 Medical Fee 
Guideline were created for the purpose of tracking DME. However, only a limited 
number of "D" codes were created to track specific items. Other "D" codes are 
general and include numerous items. As a result, the current TWCC data regarding 
DME codes is inadequate at this time for the purpose of setting MAR for 
DME/supplies. The use of HCPCS codes will allow the commission to develop a 
database of charges which can be used to set MAR at a future date. 
 COMMENT: Introduction. Concern was expressed that the Durable Medical Equipment 
(DME) Ground Rules refer to the "A", "E" and "K" HCPCS codes but do not mention 
use of the "L" codes. The commenter questioned whether DME providers are allowed 
to bill using the "L" codes. 
 RESPONSE: The commission agrees. DME providers routinely provide certain types 
of equipment and supplies contained within the "L" codes. The DME section 
introduction has been revised to include "L" codes. The DME Ground Rules 
introduction now states: 
 "This document is intended to establish ground rules regarding the provision of 
Durable Medical Equipment (DME) and supplies rendered for compensable work-
related injuries and illnesses. The coding system used is the HCPCS system. The 
specific HCPCS codes used in this section may include the "A" codes (A4190-
A4649), the "E" codes, the "K" codes and the "L" codes. No other coding 
methodology shall be accepted for this program." 
 COMMENT: (VIII). The commenter questioned whether code 99070 should be used 
when the billed supply code is not listed in the HCPCS codes when billing for 
Orthotic and Prosthetics (O & P) and/or DME. Another commenter was concerned 
that although using Medicare coding (HCPCS) for equipment and supplies will 
define equipment and expand the number of items, it will also delete one of the 
most commonly used groups of equipment-bathroom safety items. 
 RESPONSE: The commission disagrees. Section (VIII) in the Durable Medical 
Equipment Ground Rules specifies that HCPCS code E1399 shall be used when no 
other HCPCS code is present for the supplies provided to the injured worker. 
This is the appropriate code to identify bathroom safety items or any other 
specific items not included in the HCPCS codes. 
 COMMENT: (I). Commenters objected to DME section (I), Selection of DME 
Providers. One commenter contended that as long as a payor or a carrier provides 
the exact same piece of equipment the doctor has prescribed, then the payor 
should have the ability to utilize any negotiated discounts or agreements they 
may have with other providers. Most patients will obtain DME from the provider 
recommended by the doctor. Another commenter felt that allowing the carrier to 
interfere with the contract between the DME provider and the injured worker 
would amount to tortious interference and would result in more disputes. Another 
commenter suggested adding a requirement that the claimant sign a request 
agreeing to any change of DME provider. 
 RESPONSE: The commission disagrees that a change to section (I) is needed. The 
injured worker has the right to select any DME provider. There is no prohibition 
against carriers utilizing negotiated discounts or agreements with the 
restrictions of the guideline. The carrier has no authority to change the 
provider chosen by the injured worker and consequently requiring a claimant to 
sign an agreement to change the DME provider is inappropriate. The commission's 
intent, by allowing insurance carrier and HCP recommendations to be made, is 
simply to make the injured worker aware of their options when facing a complex 
medical decision, not to encourage interference with DME contracts. 
 COMMENT: (II) Note. The commenter suggested rewriting the note in DME section 
(II), to read: "Note: Durable medical equipment purchases in excess of $600 per 
item or monthly rentals in excess of $300 per item." Per the new 
Preauthorization Rule, the commenter recommended that the commission delete (I) 
(10) as written and defer to (I)(9). This would state exactly what DME items 
require preauthorization. 
 RESPONSE: The commission disagrees. The commission's Preauthorization Rule is 
in the process of revision. The provisions which will be adopted in the rule are 
not known. Including these specifics regarding the Preauthorization Rule could 
result in conflict between the rules. Preauthorization issues are appropriately 
dealt with in the Preauthorization Rule not in the Medical Fee Guideline. 
 COMMENT: (VI)(B). The commenter recommended deleting the phrase "unless 
otherwise specified" from section (VI)(B). 
 RESPONSE: The commission disagrees. Situations exist where monthly rentals are 
not warranted and this phrase gives the necessary flexibility to the rule to 
address these situations. 
 COMMENT: (VII). The commenter requested that the injured worker or carrier be 
given some responsibility to either assist the DME provider in obtaining the 
return of rental equipment no longer needed or exchanged or pay for the 
equipment purchase, possibly pro-rating certain rental payments toward the 
purchase price. Currently, the provider's ability to bill claimants is limited 
by law and many claimants object to returning items that help reduce pain. One 
commenter supported the idea of promoting warranties but pointed out that the 
manufacturer does not cover breakage due to neglect such as being dropped in a 
toilet and this leaves the DME provider with the cost. 
 RESPONSE: The commission agrees that promoting warranties does encourage 
providers to provide higher quality equipment. It is the insurance carrier's 
responsibility to pay for the reasonable and necessary medical benefits related 
to the compensable injury. However the commission disagrees that actively 
pursuing the return of equipment or paying for equipment that is not medically 
reasonable is part of this responsibility. Assumption of the business risk of 
unreturned equipment is part of the provider's costs and will be accounted for, 
along with other business costs, in the provider's usual, customary and 
reasonable (UCR) billing. Because DME equipment is to be reimbursed at a fair 
and reasonable rate these costs will be considered in the reimbursement. 
 COMMENT: The commenter suggested that a monthly MAR be set for DME supplies 
with a provision for requesting a greater than MAR reimbursement through 
documentation of procedure (DOP). 
 RESPONSE: The commission disagrees. At this time the commission is in a data 
collection stage to develop MARs for DME and no other reimbursements will be set 
until sufficient data is collected to accurately determine a reimbursement for 
DME. Until that time, DME providers should bill their usual and customary rate 
and will be reimbursed a fair and reasonable fee. Collection of data from actual 
billing will allow the commission to set statistically valid reimbursement rates 
that are Texas specific. Reliance on small samples of retail prices supplied by 
DME providers is not advisable because it could easily skew reimbursement rates 
either unfairly high or low. 
 COMMENT: (IX)(A). The commenter suggested that section (IX)(A) be rewritten as 
follows: "A prescription must accompany initial claims for the rental of DME. A 
statement of medical necessity and a prescription is necessary for the purchase 
of DME. Any verbal order given by the treating doctor is acceptable when 
accompanied by a statement of medical necessity when billing for the DME 
equipment." 
 RESPONSE: The commission disagrees with the suggestion to re-write Section 
(IX)(A) of the DME Ground Rules to drop the requirement for a statement of 
medical necessity for rental of DME. The statement of medical necessity ensures 
the health care provider (HCP) has documented the justification for rental of 
DME. 
 COMMENT: (IX)(A). The commenter objected to the wording in DME section (IX) 
(A), stating that it was biased toward licensed HCPs providing DME because they 
could do so without an immediate follow-up signed prescription from the ordering 
physician. 
 RESPONSE: The commission agrees. It is not the commission's intention to limit 
recommendation of equipment or supplies only to treating doctors. Not all DME 
requires a prescription, sometimes just an order is sufficient. DME Ground Rule 
section (IX)(A) has been rewritten to state: 
 "A statement of medical necessity, along with the order or prescription 
appropriate for the equipment/supplies shall accompany initial claims for the 
rental or purchase of DME. Any verbal order given by the doctor to the DME 
provider shall be followed by a written prescription or order prior to billing 
for the DME equipment/supplies." 
 COMMENT: (IX)(C). DME section (IX)(C) states that the information required to 
be provided by section (IX)(B) must be provided by the claimant or the 
claimant's representative. The commenter questioned whether a claimant can 
provide the medical information and suggested deleting (IX)(C). 
 RESPONSE: The commission agrees that the injured worker may in some 
circumstances, not have access to this information. Section (IX)(C) has been 
deleted and section (IX)(D) has been changed to (IX)(C). 
 COMMENT: (IX)(D). The commenters were concerned that having no MAR for supplies 
will result in suppliers having to negotiate prices for every item they rent or 
sell. Another commenter questioned who would determine what was "reasonable." 
Another commenter suggested that when the HCPCS code for a claim either does not 
appear on the Schedule of Maximum Allowances or is designated as documentation 
of procedure (DOP), the carrier should reimburse the DME provider the fair and 
reasonable rate for the item described. 
 RESPONSE: The commission disagrees that any provision contained in the Medical 
Fee Guideline requires suppliers to negotiate prices for every item they sell or 
rent. However, if the provider and carrier have a negotiated fee for an item, 
that fee should be the reimbursement. The Commission agrees that DME should be 
reimbursed at reasonable rates and recognizes the concerns of DME providers that 
without a MAR for DME items they cannot be sure that reimbursement will even 
cover their costs. To address this concern, the Commission has added a 
definition of fair and reasonable reimbursement for DME which establishes the 
reimbursement at the fees set for the "D" codes in the 1991 Medical Fee 
Guideline. This addition is an interim measure. The Commission has instructed 
its staff to present a recommendation for setting fair and reasonable rates for 
HCPCS codes on a cost-plus-a-percentage-of-cost basis for possible adoption 
until data is available to set MARs for individual HCPCS codes. Section (IX)(D) 
(now (IX)(C)) has been revised as follows: 
 "The provider shall use the HCFA-1500 Form for billing. Invoices should be 
billed at the provider's usual and customary rate. Reimbursement shall be an 
amount pre-negotiated between the provider and carrier or if there is no pre-
negotiated amount, the fair and reasonable rate. A fair and reasonable 
reimbursement shall be the same as the fees set for the "D" codes in the 1991 
Medical Fee Guideline." 
 COMMENT: (IX)(D)(2). The commenter rewrote the section, deleting (IX)(D)(2) of 
the DME Ground Rules. 
 RESPONSE: The commission disagrees. Section (IX)(D)(2) allows carriers to pay 
pre-negotiated rates. The Medical Fee Guideline does not restrict carriers from 
contracting with health care providers or suppliers because such contracts 
support the goal of cost control in accordance with the Texas Labor Code, 
sec.413.011. 
 COMMENT: (III). The commenter suggested modification of the Durable Medical 
Equipment (DME) Ground Rules to promote the elimination of low-cost, poor 
quality and ineffective devices and discourage their use on injured workers. 
Another commenter recommended revision of DME section (III) to read: 
 "The injured worker shall be provided the highest quality of supplies\equipment 
available for the treatment of the compensable work-related injuries and 
illnesses. All billings must state on the billing form, or stapled to the 
billing form, the manufacturer's name and the model or catalog number of the 
equipment provided." 
 RESPONSE: The commission disagrees. The DME Ground Rules as written do promote 
high quality DME for injured workers. A statement of medical necessity serves as 
the justification for DME/supplies dispensed by the DME provider. This is 
consistent with the language in the DME Ground Rules. DOP serves as the 
justification for doctors dispensing DME/supplies to the patient within their 
office. For consistency with (X)(A) and to prevent disputes as to what the 
highest quality equipment may be, section (III) "Quality" was rewritten to 
state: 
 "The reimbursement for DME in this guideline is based upon the presumption that 
the injured worker is being provided high quality supplies/equipment for the 
treatment of compensable work related injuries and illnesses." 
 This statement expresses the commission's belief that the provision of high 
quality DME is the mutual responsibility of all parties involved including the 
health care provider (HCP), the DME supplier and the carrier. In addition, the 
commission is not the appropriate authority to make determinations regarding 
equipment quality. The manufacturer's name and model number or catalog number is 
not necessary on the billing because the HCFA 1500 form combined with HCPCS 
codes will add all necessary information for claim processing. 
 COMMENT: (X)(A) and (III). A number of commenters expressed concerns regarding 
provisions dealing with the quality of TENS units. Another commenter felt that 
the DME Ground Rules section (X)(A) was impossible and impractical stating that: 
"lumping all electrical stimulator units together is like lumping all therapies 
together, all surgeries together, or all chiropractors together." One commenter 
recommended that the following language be substituted for section (X)(A) of the 
DME ground rules: 
 "Only billings for TENS devices which meet the following restrictions will be 
accepted for reimbursement. The unit must: 
 (a) follow all necessary FDA good manufacturing practices (GMP) and labeling 
requirements 
 (b) have a registered/approved 510K number 
 (c) comply with all applicable standards (Sections 1 through 4) as set forth by 
the Association for the Advancement of Medical Instrumentation (AAMI) and is 
registered/filed with the Texas Workers' Compensation Commission (TWCC) 
 (d) all units with supporting documentation (a, b, and c) must be on file and 
registered with the Texas Workers' Compensation Commission (TWCC) 
 (e) Texas Workers' Compensation Commission (TWCC) will provide a list of all 
companies that have complied with Section (X), (A)." 
 Concern was also expressed regarding the requirement that a 510K FDA number for 
TENS devices be provided with one concern being that manufacturers would not 
want to release the number if it included release of proprietary information 
regarding the device. Another commenter felt that provision of the 510K number 
was reasonable. One commenter pointed out that AAMI/ANSI sets standards for TENS 
units only and that the phrase "all electrical stimulation units-nerve, muscle, 
etc." should be deleted from (X)(A) and redrafted to refer to TENS only. 
Commenters supported the requirement that TENS units meet AAMI/ANSI standards, 
but one pointed out that some companies misrepresent compliance with standards. 
Another commenter stated AAMI/ANSI is a voluntary standard that can be used as a 
resource, but the ultimate decision as to product safety and efficacy must take 
into account the specifics of its utilization and, of course, cost-benefit 
considerations. 
 RESPONSE: The commission agrees that requiring a 510K number for TENS devices 
is not necessary. The 510K number does not release operational schematics or 
proprietary information needed for the subsequent copying and manufacture of 
TENS units as suggested by commenter. In addition, it is not an assurance of 
quality or effectiveness. A 510K number denotes that an application has been 
filed with the FDA and is necessary for product marketing within the United 
States. Because of these limitations, requiring the 510K number for TENS units 
does not provide useful quality assurance and this requirement has been deleted. 
The commission disagrees that TWCC should be involved with registering or 
maintaining documentation on TENS devices because the commission does not have 
the resources or expertise to perform such a function. 
 The commission agrees that AAMI/ANSI standards should be met by TENS units. 
Although manufacturers may misrepresent having met AAMI/ANSI standards, 
verification of compliance can be obtained by contacting the Health and Human 
Services, Small Devices and Radiological Health Division. The commission's 
ultimate goal is to ensure the provision of high quality TENS units. Commission 
research indicates that AAMI/ANSI standards are the standards adopted by the FDA 
in their approval process for TENS units. Given the information provided, 
AAMI/ANSI standards are the most viable method available at this time for 
assuring quality and safety. 
 The commission agrees with the commenter who suggested that section (X) should 
only apply to TENS. The inclusion of the statement "all electrical stimulation 
units" encompasses a wide range of devices that may not be applicable to 
AAMI/ANSI standards. Because of this information and information regarding 510K 
numbers and AAMI/ANSI standards, section (X)(A) has been rewritten to state: 
 "TENS Units. 
 TENS units should be of a high quality and should meet the standards 
established by the American National Standard Association for the Advancement of 
Medical Instrumentation." 
 For consistency and to prevent possible disputes as to what the highest quality 
equipment may be, section (III) has been rewritten to state: 
 "The reimbursement for DME in this fee guideline is based upon the presumption 
that the injured worker is being provided high quality supplies/equipment for 
the treatment of the compensable work-related injuries and illnesses." 
 COMMENT: (X) The commenters questioned whether the TENS unit must be purchased 
after a 30-day rental period or if the patient can rent for another 30 days and 
requested clarification. Another commenter objected to limiting the TENS rentals 
to one month. This requires preauthorization of every monthly rental and the 
purchase. In addition, it requires the prescribing doctor to re-evaluate the 
necessity and appropriateness of the continued use of the equipment only 30 days 
after ordering it. Another commenter suggested modification of section (X)(C)(1) 
to include referred doctors and to specify the type of documentation necessary 
and the type of "unit" referred to. 
 One commenter also suggested that the wording of DME section (X)(C)(2) be 
changed as follows: purchase price should include: unit, two sets of lead wires 
for a two channel unit, instruction booklet, warranty information, case, two 
rechargeable batteries and charger, (if rechargeable 9-volt batteries are 
required, only 8.4 volt batteries or better are acceptable), or if unit requires 
the use of only alkaline batteries, replace the recharger and two rechargeable 
batteries with sufficient alkaline high power batteries to power the unit for 
minimum of one month and notice to the carrier detailing the estimated number of 
alkaline batteries required for one month. The commenter felt that DME section 
(X)(C)(3) should be clarified to state: the first month's rent applies to the 
purchase price-if paid. 
 Two commenters felt it was unacceptable to place limits on items that are 
medically necessary. Electrodes on a TENS unit must be replaced approximately 
every ten days. If more electrodes than a normal month's usage are required, 
commenters suggested the medical necessity be documented and suggested using DOP 
for increased use of supplies. 
 RESPONSE: The commission agrees that the DME Ground Rules Section (X) requires 
clarification. Section (VI) should apply to all rentals including TENS. The 
specific limitation for TENS in Section (X)(B) is unnecessary and has been 
eliminated. Section (X)(C)(1) has been deleted also because it limited the 
rental period for TENS units. Some items suggested for inclusion in Section (X) 
were not incorporated into Section (X)(C)(2) because some of the items are 
accessories which do not affect quality and may not be included in all TENS 
purchases. Staff agrees that more electrodes may be necessary than what is 
recommended for reimbursement of TENS supplies, therefore additional 
reimbursement is allowed with documentation of medical necessity for additional 
electrodes. Section (X) of the DME Ground Rules has been rewritten to state: 
 "(X) TENS Units. 
 (A) TENS units, should be of a high quality and should meet the standards 
established by the American National Standard Association for the Advancement of 
Medical Instrumentation. 
 (B) Purchase: 
 The purchase price shall include: 
 (1) unit lead wires for a channel unit, 
 (2) instruction booklet, 
 (3) warranty information, 
 (4) two batteries (either replaceable or rechargeable), and 
 (5) a battery charger (for rechargeable batteries). 
 (C) All TENS supplies shall be billed with code E1399 and shall be itemized. 
Reimbursement shall not exceed the maximum allowable per month ($85) except in 
those unusual cases where additional supplies are medically necessary, adequate 
documentation describing the situation shall be provided. No additional supply 
codes shall be reimbursed in addition to E1399." 
 In addition, for consistency, Section (VI)(D) has been rewritten as follows and 
the second sentence has been deleted because only the first month's rental is 
applied to the purchase price. 
 "The first month's rent applies to the purchase price if the rental was 
reimbursed." 
 COMMENT: (IV), (VIII), (IX)(D) and (X). The commenter suggested adding a new 
section (X) of the DME Ground Rules to reimburse DME providers at each 
supplier's usual, customary and reasonable (UCR) charge. The intent would be to 
establish a history of true UCR billing as practiced by the supplier. The same 
commenter suggested with this rewrite, section (IX)(D) should be deleted. This 
commenter also suggested section (VIII) be revised to read: 
 COMMENT: (VI)(B). The commenter recommended deleting the phrase "unless 
otherwise specified" from section (VI)(B). 
 RESPONSE: The commission disagrees. Situations exist where monthly rentals are 
not warranted and this phrase gives the necessary flexibility to the rule to 
address these situations. 
 COMMENT: (VII). The commenter requested that the injured worker or carrier be 
given some responsibility to either assist the DME provider in obtaining the 
return of rental equipment no longer needed or exchanged or pay for the 
equipment purchase, possibly pro-rating certain rental payments toward the 
purchase price. Currently, the provider's ability to bill claimants is limited 
by law and many claimants object to returning items that help reduce pain. One 
commenter supported the idea of promoting warranties but pointed out that the 
manufacturer does not cover breakage due to neglect such as being dropped in a 
toilet and this leaves the DME provider with the cost. 
 RESPONSE: The commission agrees that promoting warranties does encourage 
providers to provide higher quality equipment. It is the insurance carrier's 
responsibility to pay for the reasonable and necessary medical benefits related 
to the compensable injury. However the commission disagrees that actively 
pursuing the return of equipment or paying for equipment that is not medically 
reasonable is part of this responsibility. Assumption of the business risk of 
unreturned equipment is part of the provider's costs and will be accounted for, 
along with other business costs, in the provider's usual, customary and 
reasonable (UCR) billing. Because DME equipment is to be reimbursed at a fair 
and reasonable rate these costs will be considered in the reimbursement. 
 COMMENT: The commenter suggested that a monthly MAR be set for DME supplies 
with a provision for requesting a greater than MAR reimbursement through 
documentation of procedure (DOP). 
 RESPONSE: The commission disagrees. At this time the commission is in a data 
collection stage to develop MARs for DME and no other reimbursements will be set 
until sufficient data is collected to accurately determine a reimbursement for 
DME. Until that time, DME providers should bill their usual and customary rate 
and will be reimbursed a fair and reasonable fee. Collection of data from actual 
billing will allow the commission to set statistically valid reimbursement rates 
that are Texas specific. Reliance on small samples of retail prices supplied by 
DME providers is not advisable because it could easily skew reimbursement rates 
either unfairly high or low. 
 COMMENT: (IX)(A). The commenter suggested that section (IX)(A) be rewritten as 
follows: "A prescription must accompany initial claims for the rental of DME. A 
statement of medical necessity and a prescription is necessary for the purchase 
of DME. Any verbal order given by the treating doctor is acceptable when 
accompanied by a statement of medical necessity when billing for the DME 
equipment." 
 RESPONSE: The commission disagrees with the suggestion to re-write Section 
(IX)(A) of the DME Ground Rules to drop the requirement for a statement of 
medical necessity for rental of DME. The statement of medical necessity ensures 
the health care provider (HCP) has documented the justification for rental of 
DME. 
 COMMENT: (IX)(A). The commenter objected to the wording in DME section (IX) 
(A), stating that it was biased toward licensed HCPs providing DME because they 
could do so without an immediate follow-up signed prescription from the ordering 
physician. 
 RESPONSE: The commission agrees. It is not the commission's intention to limit 
recommendation of equipment or supplies only to treating doctors. Not all DME 
requires a prescription, sometimes just an order is sufficient. DME Ground Rule 
section (IX)(A) has been rewritten to state: 
 "A statement of medical necessity, along with the order or prescription 
appropriate for the equipment/supplies shall accompany initial claims for the 
rental or purchase of DME. Any verbal order given by the doctor to the DME 
provider shall be followed by a written prescription or order prior to billing 
for the DME equipment/supplies." 
 COMMENT: (IX)(C). DME section (IX)(C) states that the information required to 
be provided by section (IX)(B) must be provided by the claimant or the 
claimant's representative. The commenter questioned whether a claimant can 
provide the medical information and suggested deleting (IX)(C). 
 RESPONSE: The commission agrees that the injured worker may in some 
circumstances, not have access to this information. Section (IX)(C) has been 
deleted and section (IX)(D) has been changed to (IX)(C). 
 COMMENT: (IX)(D). The commenters were concerned that having no MAR for supplies 
will result in suppliers having to negotiate prices for every item they rent or 
sell. Another commenter questioned who would determine what was "reasonable." 
Another commenter suggested that when the HCPCS code for a claim either does not 
appear on the Schedule of Maximum Allowances or is designated as documentation 
of procedure (DOP), the carrier should reimburse the DME provider the fair and 
reasonable rate for the item described. 
 RESPONSE: The commission disagrees that any provision contained in the Medical 
Fee Guideline requires suppliers to negotiate prices for every item they sell or 
rent. However, if the provider and carrier have a negotiated fee for an item, 
that fee should be the reimbursement. The Commission agrees that DME should be 
reimbursed at reasonable rates and recognizes the concerns of DME providers that 
without a MAR for DME items they cannot be sure that reimbursement will even 
cover their costs. To address this concern, the Commission has added a 
definition of fair and reasonable reimbursement for DME which establishes the 
reimbursement at the fees set for the "D" codes in the 1991 Medical Fee 
Guideline. This addition is an interim measure. The Commission has instructed 
its staff to present a recommendation for setting fair and reasonable rates for 
HCPCS codes on a cost-plus-a-percentage-of-cost basis for possible adoption 
until data is available to set MARs for individual HCPCS codes. Section (IX)(D) 
(now (IX)(C)) has been revised as follows: 
 "The provider shall use the HCFA-1500 Form for billing. Invoices should be 
billed at the provider's usual and customary rate. Reimbursement shall be an 
amount pre-negotiated between the provider and carrier or if there is no pre-
negotiated amount, the fair and reasonable rate. A fair and reasonable 
reimbursement shall be the same as the fees set for the "D" codes in the 1991 
Medical Fee Guideline." 
 COMMENT: (IX)(D)(2). The commenter rewrote the section, deleting (IX)(D)(2) of 
the DME Ground Rules. 
 RESPONSE: The commission disagrees. Section (IX)(D)(2) allows carriers to pay 
pre-negotiated rates. The Medical Fee Guideline does not restrict carriers from 
contracting with health care providers or suppliers because such contracts 
support the goal of cost control in accordance with the Texas Labor Code, 
sec.413.011. 
 COMMENT: (III). The commenter suggested modification of the Durable Medical 
Equipment (DME) Ground Rules to promote the elimination of low-cost, poor 
quality and ineffective devices and discourage their use on injured workers. 
Another commenter recommended revision of DME section (III) to read: 
 "The injured worker shall be provided the highest quality of supplies\equipment 
available for the treatment of the compensable work-related injuries and 
illnesses. All billings must state on the billing form, or stapled to the 
billing form, the manufacturer's name and the model or catalog number of the 
equipment provided." 
 RESPONSE: The commission disagrees. The DME Ground Rules as written do promote 
high quality DME for injured workers. A statement of medical necessity serves as 
the justification for DME/supplies dispensed by the DME provider. This is 
consistent with the language in the DME Ground Rules. DOP serves as the 
justification for doctors dispensing DME/supplies to the patient within their 
office. For consistency with (X)(A) and to prevent disputes as to what the 
highest quality equipment may be, section (III) "Quality" was rewritten to 
state: 
 "The reimbursement for DME in this guideline is based upon the presumption that 
the injured worker is being provided high quality supplies/equipment for the 
treatment of compensable work related injuries and illnesses." 
 This statement expresses the commission's belief that the provision of high 
quality DME is the mutual responsibility of all parties involved including the 
health care provider (HCP), the DME supplier and the carrier. In addition, the 
commission is not the appropriate authority to make determinations regarding 
equipment quality. The manufacturer's name and model number or catalog number is 
not necessary on the billing because the HCFA 1500 form combined with HCPCS 
codes will add all necessary information for claim processing. 
 COMMENT: (X)(A) and (III). A number of commenters expressed concerns regarding 
provisions dealing with the quality of TENS units. Another commenter felt that 
the DME Ground Rules section (X)(A) was impossible and impractical stating that: 
"lumping all electrical stimulator units together is like lumping all therapies 
together, all surgeries together, or all chiropractors together." One commenter 
recommended that the following language be substituted for section (X)(A) of the 
DME ground rules: 
 "Only billings for TENS devices which meet the following restrictions will be 
accepted for reimbursement. The unit must: 
 (a) follow all necessary FDA good manufacturing practices (GMP) and labeling 
requirements 
 (b) have a registered/approved 510K number 
 (c) comply with all applicable standards (Sections 1 through 4) as set forth by 
the Association for the Advancement of Medical Instrumentation (AAMI) and is 
registered/filed with the Texas Workers' Compensation Commission (TWCC) 
 (d) all units with supporting documentation (a, b, and c) must be on file and 
registered with the Texas Workers' Compensation Commission (TWCC) 
 (e) Texas Workers' Compensation Commission (TWCC) will provide a list of all 
companies that have complied with Section (X), (A)." 
 Concern was also expressed regarding the requirement that a 510K FDA number for 
TENS devices be provided with one concern being that manufacturers would not 
want to release the number if it included release of proprietary information 
regarding the device. Another commenter felt that provision of the 510K number 
was reasonable. One commenter pointed out that AAMI/ANSI sets standards for TENS 
units only and that the phrase "all electrical stimulation units-nerve, muscle, 
etc." should be deleted from (X)(A) and redrafted to refer to TENS only. 
Commenters supported the requirement that TENS units meet AAMI/ANSI standards, 
but one pointed out that some companies misrepresent compliance with standards. 
Another commenter stated AAMI/ANSI is a voluntary standard that can be used as a 
resource, but the ultimate decision as to product safety and efficacy must take 
into account the specifics of its utilization and, of course, cost-benefit 
considerations. 
 RESPONSE: The commission agrees that requiring a 510K number for TENS devices 
is not necessary. The 510K number does not release operational schematics or 
proprietary information needed for the subsequent copying and manufacture of 
TENS units as suggested by commenter. In addition, it is not an assurance of 
quality or effectiveness. A 510K number denotes that an application has been 
filed with the FDA and is necessary for product marketing within the United 
States. Because of these limitations, requiring the 510K number for TENS units 
does not provide useful quality assurance and this requirement has been deleted. 
The commission disagrees that TWCC should be involved with registering or 
maintaining documentation on TENS devices because the commission does not have 
the resources or expertise to perform such a function. 
 The commission agrees that AAMI/ANSI standards should be met by TENS units. 
Although manufacturers may misrepresent having met AAMI/ANSI standards, 
verification of compliance can be obtained by contacting the Health and Human 
Services, Small Devices and Radiological Health Division. The commission's 
ultimate goal is to ensure the provision of high quality TENS units. Commission 
research indicates that AAMI/ANSI standards are the standards adopted by the FDA 
in their approval process for TENS units. Given the information provided, 
AAMI/ANSI standards are the most viable method available at this time for 
assuring quality and safety. 
 The commission agrees with the commenter who suggested that section (X) should 
only apply to TENS. The inclusion of the statement "all electrical stimulation 
units" encompasses a wide range of devices that may not be applicable to 
AAMI/ANSI standards. Because of this information and information regarding 510K 
numbers and AAMI/ANSI standards, section (X)(A) has been rewritten to state: 
 "TENS Units. 
 TENS units should be of a high quality and should meet the standards 
established by the American National Standard Association for the Advancement of 
Medical Instrumentation." 
 For consistency and to prevent possible disputes as to what the highest quality 
equipment may be, section (III) has been rewritten to state: 
 "The reimbursement for DME in this fee guideline is based upon the presumption 
that the injured worker is being provided high quality supplies/equipment for 
the treatment of the compensable work-related injuries and illnesses." 
 COMMENT: (X) The commenters questioned whether the TENS unit must be purchased 
after a 30-day rental period or if the patient can rent for another 30 days and 
requested clarification. Another commenter objected to limiting the TENS rentals 
to one month. This requires preauthorization of every monthly rental and the 
purchase. In addition, it requires the prescribing doctor to re-evaluate the 
necessity and appropriateness of the continued use of the equipment only 30 days 
after ordering it. Another commenter suggested modification of section (X)(C)(1) 
to include referred doctors and to specify the type of documentation necessary 
and the type of "unit" referred to. 
 One commenter also suggested that the wording of DME section (X)(C)(2) be 
changed as follows: purchase price should include: unit, two sets of lead wires 
for a two channel unit, instruction booklet, warranty information, case, two 
rechargeable batteries and charger, (if rechargeable 9-volt batteries are 
required, only 8.4 volt batteries or better are acceptable), or if unit requires 
the use of only alkaline batteries, replace the recharger and two rechargeable 
batteries with sufficient alkaline high power batteries to power the unit for 
minimum of one month and notice to the carrier detailing the estimated number of 
alkaline batteries required for one month. The commenter felt that DME section 
(X)(C)(3) should be clarified to state: the first month's rent applies to the 
purchase price-if paid. 
 Two commenters felt it was unacceptable to place limits on items that are 
medically necessary. Electrodes on a TENS unit must be replaced approximately 
every ten days. If more electrodes than a normal month's usage are required, 
commenters suggested the medical necessity be documented and suggested using DOP 
for increased use of supplies. 
 RESPONSE: The commission agrees that the DME Ground Rules Section (X) requires 
clarification. Section (VI) should apply to all rentals including TENS. The 
specific limitation for TENS in Section (X)(B) is unnecessary and has been 
eliminated. Section (X)(C)(1) has been deleted also because it limited the 
rental period for TENS units. Some items suggested for inclusion in Section (X) 
were not incorporated into Section (X)(C)(2) because some of the items are 
accessories which do not affect quality and may not be included in all TENS 
purchases. Staff agrees that more electrodes may be necessary than what is 
recommended for reimbursement of TENS supplies, therefore additional 
reimbursement is allowed with documentation of medical necessity for additional 
electrodes. Section (X) of the DME Ground Rules has been rewritten to state: 
 "(X) TENS Units. 
 (A) TENS units, should be of a high quality and should meet the standards 
established by the American National Standard Association for the Advancement of 
Medical Instrumentation. 
 (B) Purchase: 
 The purchase price shall include: 
 (1) unit lead wires for a channel unit, 
 (2) instruction booklet, 
 (3) warranty information, 
 (4) two) batteries (either replaceable or rechargeable), and (5) a battery 
charger (for rechargeable batteries). 
 (C) All TENS supplies shall be billed with code E1399 and shall be itemized. 
Reimbursement shall not exceed the maximum allowable per month ($85) except in 
those unusual cases where additional supplies are medically necessary, adequate 
documentation describing the situation shall be provided. No additional supply 
codes shall be reimbursed in addition to E1399." 
 In addition, for consistency, Section (VI)(D) has been rewritten as follows and 
the second sentence has been deleted because only the first month's rental is 
applied to the purchase price. 
 "The first month's rent applies to the purchase price if the rental was 
reimbursed." 
 COMMENT: (IV), (VIII), (IX)(D) and (X). The commenter suggested adding a new 
section (X) of the DME Ground Rules to reimburse DME providers at each 
supplier's usual, customary and reasonable (UCR) charge. The intent would be to 
establish a history of true UCR billing as practiced by the supplier. The same 
commenter suggested with this rewrite, section (IX)(D) should be deleted. This 
commenter also suggested section (VIII) be revised to read: 
 "Reimbursement shall not exceed the usual and customary rate of the provider as 
established the billing history." 
 The same commenter suggested eliminating the reference to MARs in section (IV) 
and rewriting the section as follows: 
 "DME items shall be (not "should") billed at the usual and customary rate of 
the provider, and shall be reimbursed by the carrier the lesser of: the 
provider's usual and customary rate, as indicated by the previous 12 months 
billing of the provider for similar DME non-listed items and documentation of 
procedure (DOP) items, or, a negotiated amount between the provider and the 
carrier." 
 RESPONSE: The commission agrees in part. Reference to MARs, in sections (IV) 
and (VIII) have been deleted because there are no MARs set for DME. Section (IV) 
has been rewritten as follows: "This document does not contain a specific MAR 
for the DME items. The DME items should be billed at the usual and customary 
rate of the DME provider, and the insurance carrier shall reimburse the DME 
provider at an amount pre-negotiated between the provider and carrier or, if 
there is no pre-negotiated amount, the fair and reasonable rate for the item 
described. Use the miscellaneous HCPCS code, E1399, when no other HCPCS code is 
present for the DME or supplies provided to the injured worker. When using 
E1399, a description of the unlisted equipment/supply is required." and section 
(VIII) has been rewritten to state: 
 "Supplies shall be requested by, or on behalf of, the injured worker. DME 
supplies shall be itemized and billed under the appropriate HCPCS code. Use the 
miscellaneous HCPCS code, E1399, when no other HCPCS code is present for the 
supplies provided to the injured worker. Documentation for distribution of 
supplies shall be provided when requested by the Texas Workers' Compensation 
Commission (TWCC)." 
 The commission disagrees with the suggestion that an individual provider's 
history of billing should be used to establish the provider's reimbursement. To 
allow this method of determining a provider's reimbursement puts the provider in 
control of the amount to be reimbursed without consideration of what is fair and 
reasonable. Both standards must be included to achieve the goals of the Medical 
Fee Guideline. When there is enough data available to determine a MAR for DME, 
specific amounts can be included. No revisions to sections (X) or (IX)(D) are 
necessary as a result of this comment. 
 COMMENT: (V). The commenters suggested that section (V) be reworded to read: 
"Storage, shipping, handling, etc. are included in the MAR and will not be 
reimbursed separately." The other commenter suggested this wording to be: 
"Storage, shipping and handling, etc. shall be reimbursed according to usual and 
customary as evidenced by the history of the charges detailed in item (X) of the 
DME Ground Rules." 
 RESPONSE: The commission disagrees with including a reference to MAR in Section 
(V), because no MAR is being established for DME. The commission also disagrees 
that reimbursements should be based solely on the provider's usual and customary 
charge for the reasons discussed in the previous response. The commission agrees 
that clarification would be helpful and has rewritten Section (V) of the DME 
Ground Rules as follows: 
 "Storage, shipping, handling, etc. are included in the provider's usual and 
customary charge and shall not be reimbursed separately." 
 COMMENT: (II). The commenter expressed the opinion that stating "in a 
noninstitutional setting" in section (II) denies the use of DME or supplies to 
an inpatient at any facility. 
 RESPONSE: The commission agrees in part. This section has been rewritten to 
clarify when the DME provider can receive reimbursement for DME and supplies in 
an institutional setting. For consistency with a previous revision, the 
limitation of only the "treating" doctor has been deleted. DME Ground Rules 
section (II) has been rewritten to state: 
 "The carrier shall reimburse for the purchase or rental of DME and supplies 
provided that all such items are approved by the injured worker's doctor. The 
injured worker retains the right of choice of DME suppliers. In acute care 
hospitals, supplies/equipment are included in the per diem rate. In 
institutional settings not covered by a guideline, fair and reasonable rates 
apply." 
 COMMENT: (VI)(A) and (VI)(D). Commenter felt that subsection (VI)(D) nullified 
(A) especially if the DME item requires preauthorization. 
 RESPONSE: The commission agrees in part. The last sentence of Section (VI) (D) 
has been deleted as indicated previously. Section (VI)(A) pertains to required 
medical justification for extension of rental. 
 COMMENT: (VI)(A). The commenter suggested that section (VI) should allow the 
referred and\or ordering doctor to authorize rentals beyond 60 days, since it 
all must be approved by the treating physician anyway. 
 RESPONSE: The commission agrees. Section (VI)(A) has been revised to state: 
 "Rental fees are applicable for short-term utilization up to 60 days, unless 
the doctor provides medical justification for an extension beyond the initial 60 
days." 
 COMMENT: (VII)(B). The commenter suggested "all the DME purchased from the 
provider" be added to (VII)(B) to clarify that the carrier is responsible only 
for DME purchased (not rented) by the carrier. 
 RESPONSE: The commission agrees. Section (VII)(B) has been rewritten to state: 
 "The repair or maintenance of all DME purchased from the provider is the 
responsibility of the insurance carrier, subject to warranty provisions." 
 COMMENT: (X). The commenter objected to the requirement that the prescribing 
doctor document the need for purchase or continued use of DME, stating physical 
therapists and occupational therapists working with the claimant should be able 
to evaluate the patient's progress with TENS, etc. TENS is listed as a modality 
in their licensing and practice act. The questions listed in the guideline are 
basic, and do nothing to establish medical necessity, only adding to the 
excessive paperwork already burdening the physicians. 
 RESPONSE: The commission agrees that physical and occupational therapists are 
able to evaluate a patient's progress with a TENS unit. The commission disagrees 
that this evaluation can be used to justify continued use of TENS thereby 
justifying the purchase of the unit. Section (X)(C)(1) has been deleted as 
discussed previously, but sections (II) and (VI) require approval and 
justification of the doctor for purchase and/or rental of TENS. 
 COMMENT: (XI). The commenter suggested that provisions should be outlined for 
different types of continuous passive motion equipment. (e.g. the McKenzie type 
CPM table for the lumbar spine. It must be delivered by two men, case managed a 
minimum of once a week at the patient's home, and at the present rate of 
reimbursement the provider cannot maintain profitability.) 
 RESPONSE: The commission agrees. The maximum allowable rental per month has 
been removed for CPM equipment reimbursement. In order to collect more 
definitive data relative to the different types of CPM devices, the following 
modifiers have been added: -UE Upper Extremity; -LE Lower Extremity; -SP Spine. 
The optimal duration periods for use of such equipment in all operative 
scenarios has not been determined. The commission will be gathering this data to 
determine rental rates for individual types of CPM's in future revisions of the 
Medical Fee Guideline. The DME section (XI) has been rewritten to state: 
 "CPM equipment is rented on a daily basis and shall be billed using code E0935 
along with the appropriate modifier(s) denoting affected body area: -UE Upper 
Extremity; -LE Lower Extremity; -SP Spine. Only one set of soft goods shall be 
reimbursed per injured worker." 
 COMMENT: The commenter supported the decision to bill by documentation of 
procedure (DOP) as an interim way to collect "real world" billing data to be 
used to set rates in two years. 
 RESPONSE: The commission agrees. 
 COMMENT: HCPCS Code L0748. The commenter requested that HCPCS Code E0748 be 
added to the HCPCS codes listed under durable medical equipment, in section 
E0720-E0755. 
 RESPONSE: The commission agrees. HCPCS Code E0748 has been added to the HCPCS 
code list as follows: 
 "E0748 Osteogenesis stimulator (non-invasive)" 
 The following comments were received regarding the orthotics and prosthetics 
ground rules. 
 COMMENT: The commenter expressed concern that arbitrary changes, whether 
intentional or not, will leave an opportunity for fraud and abuse to occur 
within the O & P segment of health care. For example, L2770 is described by 
Health Care Finance Administration (HCFA) as "an addition to lower extremity 
orthosis stainless steel, per bar or joint". This singular change would allow 
any lower extremity orthosis with a knee joint or an ankle joint to be billed at 
a much higher rate, all in accordance with TWCC's guidelines. 
 RESPONSE: The commission disagrees that adopting the descriptors provided in 
standardized coding systems, such as HCPCS or CPT, is arbitrary or needs to be 
changed. HCPCS and CPT descriptors have not been changed by the commission. 
HCPCS and CPT coding is revised yearly, based upon developments in medical 
technology and product production. If experience indicates there is abuse 
occurring in any area, future revisions of the Medical Fee Guideline may require 
ground rule additions which address abusive situations. 
 COMMENT: Many concerns were expressed in reference to the Orthotics and 
Prosthetics (O & P) Section of the Medical Fee Guideline. The following is a 
list of commenters' concerns and recommendations: O & P profession does not 
provide services that are billable under CPT codes; recommended that TWCC 
specify CPT codes in the proposed O & P section; recommended withdrawal of the O 
& P section and remand to a work group; occupational therapists (OT) and 
physical therapists (PT) are not adequately trained in O & P and should not be 
allowed to provide the full realm of O & P services; C.O., Certified Orthotist, 
is a designation which can only be used by individuals certified by the American 
O & P Association-other orthotists cannot use the designation C.O.; commenter 
endorsed COPA practice classification levels; education and evaluation differs 
between PTs and OT's; allowing OTs and PTs, pediatrists, pharmacists, physician 
assistants, cast room technicians to perform O & P services is not a favorable 
idea; to allow pedorthists to independently bill for services under present O & 
P Ground Rules would severely compromise quality of O & P clarification of 
treating doctor and other qualified HCPs is needed; HCPCS do not afford 
flexibility to treat unique situations; HCPCS code L7500 should be deleted from 
the O & P ground rules; the exclusion of certified Pedorthists from the O & P 
Ground Rules is not warranted; billing instructions are not clear and it's 
unclear what documentation is required; concern regarding the requirement for 
medical necessity for minor repairs and adjustments is uncalled for; American 
Board for Certification in O & P (ABC) credentials should be required for all O 
& P care; suggestion that braces that are not custom filled should be billed 
according to the DME ground rules; O & P should be separate from DME codes; 
concern expressed about potential modifiers and where to place credentials in 
reference to box 31 on the HCFA 1500 billing form; concern expressed about those 
excluded from performing O & P services; concern about BOC orthotist not being 
mentioned in the O & P section; concern about the phrase "all braces"; concern 
HCPs would confuse which HCPCS should be used for DME, O & P and supply 
services; some commenters want pedorthists added to the definitions and 
modifiers; concern about the definition of a stock shoe and orthopedic shoes not 
being included; another commenter states K0001-K0118 and K0131-K0284 are not 
specific to O & P and K0112-K0117 are inaccurately identified. 
 RESPONSE: Due to the volume of public comment received about the O & P Ground 
Rules and the controversy surrounding credentials for O & P providers, this 
section has been removed from the Medical Fee Guideline. A workgroup will be 
established to advise the commission in the revision of this section. It is 
anticipated that an O & P section will be included in the next revision of the 
Medical Fee Guideline. A provision requiring O & P to be billed using HCPCS 
codes has been added to the DME Ground Rules as section (XII). The introductory 
paragraph of the Durable Medical Equipment (DME) Ground Rules has been rewritten 
to allow the billing of "L" codes under theses ground rules. This was necessary 
due to the addition of the Orthotics/Prosthetics section to these ground rules. 
By maintaining this aspect of the removed section, the commission continues the 
goal of developing a database of usual and customary charges to be utilized in 
future revisions of the Medical Fee Guideline. The new DME Ground Rules section 
(XII) will read as follows: 
 "XII. Orthotics/Prosthetics Ground Rules 
 The primary coding system to be used in the billing for Orthotics/Prosthetics 
services is the HCPCS system. The specific HCPCS codes used are the K codes and 
L codes. CPT codes shall be used only when the service rendered does not fit the 
descriptions/codes provided in the HCPCS system." 
 The following comments were received regarding the evaluation and management 
ground rules. 
 COMMENT: Some commenters felt the proposed reimbursement moderately to 
significantly reduced the reimbursement for those evaluation and management 
codes that are most often used at the primary care level. Some commenters felt 
that this will cause a tremendous escalation in the nonmedical costs to workers' 
compensation, and limit the access to the health care system. Another commenter 
requested reevaluation of the evaluation and management codes and the 
reimbursement for those evaluation and management codes, because they have been 
reduced by from four to thirty 30 percent for the primary care physicians. 
Another concern was the primary "gatekeeper's" decrease in reimbursement. In 
addition, another commenter stated that reimbursement for an office visit is 
less than in 1988. 
 RESPONSE: The commission agrees that an increase reimbursement for E/M services 
is warranted. Treating physicians within the workers' compensation system are 
responsible for maintaining administratively time consuming functions such as, 
researching compensability, establishing relationships with carriers, and 
evaluating return to work. Because of these added responsibilities in workers 
compensation, it is appropriate that the evaluation and management codes be 
upgraded to a higher level of reimbursement. Reimbursement for E/M codes under 
the proposal were set at the 30th percentile of billing distribution resulting 
in approximate 4.8% decrease in reimbursement from the 1991 Medical Fee 
Guideline. The new Medical Fee Guideline has been revised by setting 
reimbursement for E/M codes at the 40th percentile which represents an 
approximate 5.5% increase in reimbursement for the E/M codes from the 1991 
Medical Fee Guideline. 
 COMMENT: (V)(B) and (XVIII)(C). The commenter suggested that there is a direct 
conflict between Evaluation and Management Ground Rule section (V)(B) and 
(XVIII)(C) referring to billing for multiple physician services because, one 
says that reimbursement for the office visit will include all connected services 
and the other implies that telephone calls are reimbursable. 
 RESPONSE: The commission disagrees that a conflict exists between these two 
sections. The language in sections (V)(B) and (XVIII)(C) is consistent with the 
American Medical Association's Physicians' Current Procedural Terminology (CPT) 
1995 manual. Telephone calls that are not part of, or a result of the patient 
encounter are reimbursable separately from the office visit. 
 COMMENT: (IV)(C)(3)(a)(ii). The commenter questioned whether the term "non-
face-to-face time" should be considered part of the office visit reimbursement 
and whether TWCC has interpolated this, as a result of their physician surveys. 
 RESPONSE: The commission disagrees that clarification is warranted. The 
physician surveys referenced in the guideline are not TWCC conducted surveys. 
These surveys were used by the AMA in the preparation of the 1995 CPT manual. 
Non-face-to-face time is considered part of the office visit reimbursement as 
described in Evaluation and Management Ground Rules section (IV)(C)(3)(a). The 
language of this section is consistent with the language of the 1995 CPT 
manual's Evaluation and Management Service Guidelines. 
 COMMENT: (V). The commenters objected to the guideline's lack of reimbursement 
for coordination of care where no patient encounter occurs. The commenters felt 
that a significant amount of time is spent on care coordination and that the 
lack of reimbursement for these service will force HCPs to schedule office 
visits for all matters, driving up costs. 
 RESPONSE: The commission disagrees. This part of the fee guideline prohibits 
billing for services for coordination of care on a day when a patient encounter 
has occurred. This language is consistent with the American Medical 
Association's Physicians' Current Procedural Terminology (CPT) 1995 manual's 
Evaluation and Management code descriptors. This section of the fee guideline 
simply gives an example of calling the pharmacist with a prescription. More 
complex services may be reimbursable as stated in Evaluation and Management 
section (V) Coordination of Care. Reimbursement for coordination of care is 
allowed when a referral doctor is calling a treating doctor as to a change in 
treatment plan as long as a patient encounter has not occurred on that day. 
According to the CPT code descriptor, coordination of care is a component of the 
office visit. 
 COMMENT: References General Instructions (X). The commenters expressed the 
opinion that a consulting doctor should be able to initiate more than just 
diagnostic and/or therapeutic services and asked whether the treating doctor 
could designate the consulting physician as the designated patient 
representative. 
 RESPONSE: The commission disagrees. Texas Labor Code sec.408.021(c) provides 
that except in an emergency all health care must be approved or recommended by 
the employee's treating doctor. General Instructions Section (X) states "when a 
consulting doctor initiates health care treatments at the request of the 
treating doctor, the consulting doctor then becomes a referral doctor; however 
the referral doctor should only initiate treatment if approved or recommended by 
the treating doctor". Although the doctor should be an advocate for the 
successful treatment of a patient, there is no provision for the doctor to be 
designated as a patient representative. This role requires an individual 
separate from employees interests or medical interests to assist in forming 
impartial decisions. 
 COMMENT: (X). The commenter felt that with regard to the practice of pain 
management, the limitation of reimbursement to one telephone call or written 
report every 30 days was unreasonable because the treatment of chronic pain 
patients is extremely complex and requires a great deal of coordination among 
involved physicians and specialists. Another commenter was concerned because 
there is no information in the Evaluation and Management Ground Rules section 
(X) about which CPT code is to be used and the amount of the charge for written 
reports to the treating doctor. 
 RESPONSE: The commission agrees. Because the reports section (General 
Instructions Ground Rules section (IV)) has been deleted, the last two sentences 
of section (X) in the E&M; Ground Rules have been deleted because they refer to 
reports. Provisions for reporting and reimbursement for reports remain in 
sec.133.100 of this title (relating to Required Medical Reports) and sec. 
sec.133.102-133.106 of this title (relating to Subsequent Medical Report; 
Specific Medical Reports; Consultant Medical Reports; Physical or Occupational 
Therapy Report; and Fair and Reasonable Fees for Required Reports and Records, 
respectively) at the present time. Therefore, questions regarding this section 
are a moot point. Evaluation and Management Ground Rules section (X) has been 
rewritten as follows: 
 "When a consulting doctor initiates health care treatments at the request of 
the treating doctor, the consulting doctor then becomes a referral doctor; 
however, the referral doctor shall only initiate treatment if approved or 
recommended by the treating doctor. Once the referral doctor initiates 
treatment, communication shall continue between the treating doctor and the 
referral doctor." 
 COMMENT: (XVIII)(B). The commenter recommended that the wording of section 
(XVIII)(B) be changed to make it clear that it is the doctor who is taking the 
time to coordinate the interdisciplinary team meeting to bill for such services. 
 RESPONSE: The commission agrees that this section is in need of clarification. 
This E/M Ground Rule Section (XVIII)(B) has been modified to state: 
 "Team Conferences (99361-99362): A conference coordinated by the doctor with an 
interdisciplinary team outside of an interdisciplinary program to assist in the 
development of treatment plans and coordinate activities of patient care. Only 
the coordinating doctor may bill for team conferences." 
 COMMENT: The commenter suggested that the prohibition of reimbursement for case 
management services when they occur on the same day that a patient encounter 
occurs should be deleted because the need for team conferences and/or phone 
calls concerning a patient case occur most commonly after a patient has been 
seen and may in fact occur on the same day. In addition, the commenter pointed 
out the AMA CPT codes, in their language, do not include this restriction. 
 RESPONSE: The commission disagrees. The CPT code descriptors for an office 
visit include a component of counseling and/or coordination of care. However in 
a case where unusually complex services occur on the same day of a patient 
encounter, the HCP has the option of billing for a higher level office visit if 
the documentation justifies this level of service. 
 The following comments were received regarding the Evaluation/Management Ground 
Rules. 
 COMMENT: (XXII). A commenter stated that the section dealing with treating 
doctor is very well written and believes it should be enacted as proposed. 
 RESPONSE: The commission agrees. 
 COMMENT: (XXII) compared to (XXIII) and (XXIV). The commenter felt a treating 
doctor should receive the same reimbursement as a non-treating doctor for an 
impairment rating. 
 RESPONSE: The commission disagrees. The greater reimbursement for the 
designated doctor and RME doctor is justified due to the amount of time required 
to familiarize him/herself with the medical history of the injured worker in 
addition to the physical examination. The treating doctor should already be 
familiar with the injured worker's history and the determination of MMI would 
fall within the category of an established patient office visit. 
 COMMENT: (XXII)(D)(2). A commenter suggested that reimbursement for an 
impairment rating performed by a doctor that has had very limited contact with 
the patient should be greater than the reimbursement a treating doctor would 
receive for an IR. 
 RESPONSE: The commission disagrees. A referral doctor that has previously 
treated the injured worker should be reimbursed for an IR at the treating doctor 
level because the referral doctor has already reviewed the history of the 
medical treatment, medical records, etc. and should already be familiar with the 
case. 
 COMMENT: (XXII)(C), (XXIII)(D) and (XXIV)(D). Many commenters suggested that 
additional body areas be considered in reimbursement of MMI/IR examinations. 
Commenters made suggestions for division of body areas including; the upper 
extremities being divided into left and right; the back being four areas; and 
the hand and shoulder being separate areas. 
 RESPONSE: The commission disagrees. The body area segmentation (spine/pelvis, 
upper extremities/hands, and lower extremities) has specifically been delineated 
to match the majority of the injuries and the divisions within the AMA Guides. 
Some patients require minimal examination and testing while some patients 
require more extensive examination. The reimbursement methodology accounts for 
economies associated with like skill, knowledge and testing required to assess 
and assign an IR for bilateral extremities or multi-levels of the spine. 
 COMMENT: (XXIII)(C)(3) and (E)(5), (XXIV)(C)(3) and (E)(5). The commenter was 
confused about where to place modifiers L1, L2, and L3 when other modifiers, 
such as -26, -27, or -WP are used. 
 RESPONSE: The commission disagrees that clarification is needed for billing 
instructions because the HCFA-1500 billing form allows multiple modifiers and 
thus, a CPT code would be billed with either the L1, L2, L3, L4, or L5 modifier 
as applicable, and a -26, -27 or -WP modifier. The current TWCC adopted HCFA-
1500 form and instructions provide for modifiers to be placed in box 24D. 
 COMMENT: (XXIII)(D) and (XXIV)(D). Commenters pointed out that different areas 
of the guideline allow reimbursement for four areas while others specify three. 
The commenters suggested this be consistent. 
 RESPONSE: The commission agrees. The introductory sentence of Sections 
(XXII)(C) and (XXIII)(D) Evaluation/Management Ground Rules should be repeated 
at (XXIV)(D). The revised sections (XXII)(C), (XXIII)(D) and (XXIV)(D) should 
read as follows: 
 "Area Reimbursement. The HCP shall indicate the number of areas rated in the 
units column of the billing form with a maximum of four areas (three body areas 
and one specialty area)." 
 COMMENT: (XXIII)(E)(2) and (XXIV)(E)(2). Commenters recommend the reimbursement 
to providers for MMI patients be similar or equal to reimbursement for non-MMI 
patients. 
 RESPONSE: The commission agrees that an adjustment of reimbursement should be 
made for non-MMI cases. An adequate consistent fee for both designated doctors 
and RME doctors for examinations where MMI is not found will help to ensure that 
the objectivity in assessing MMI is not jeopardized. The language in Section 
(XXIII)(E)(2) has been deleted and rewritten to state: 
 "(2) When the result of the evaluation is that maximum medical improvement has 
not been reached, the reimbursement allowed is $350. This fee is inclusive of 
all services listed in (A) except those unique to assigning an impairment 
rating." 
 For consistency and clarification, section (XXIV)(E)(2) has been deleted and 
rewritten to state: 
 "(2) When the result of the evaluation is that maximum medical improvement has 
not been reached, the reimbursement allowed is $350. This fee is inclusive of 
all services listed in (A) except those unique to assigning an impairment 
rating." 
 This reimbursement is consistent with the spinal surgery second opinion 
reimbursement where services including examination and reporting requirements 
are required to evaluate the medical status and condition of the patient. Three 
hundred and fifty dollars takes into account the complex consultations and 
demand on doctors to document and report findings to multiple parties within the 
workers' compensation system. This reimbursement amount will be reevaluated 
during the next revision of the Medical Fee Guideline. 
 COMMENT: (XXIII) compared to (XXIV). Commenter suggested that the designated 
doctors be paid more because they have more responsibility in that their 
opinions have presumptive weight. 
 RESPONSE: The commission agrees. The base level reimbursement for designated 
doctors is greater than that for RME doctors which reflects the additional 
responsibility and qualifications required of DDs. 
 COMMENT: (XXII), (XXIII) and (XXIV). A commenter referred to subsection (r) (3) 
of sec.130.6 of this title (relating to Designated Doctor: General Provisions) 
which states that the designated doctor's charge for services should correlate 
with the actual time and level of service involved for each patient 
reimbursement from the carrier and should be the lesser of the charge amount or 
the fees as set out in the rule. Commenter felt this provision should apply also 
to the treating doctor, and the required medical examination doctor. 
 RESPONSE: The commission agrees that this goal should apply to reimbursements 
for all doctors doing IRs. The reimbursement methodology contained in the 
Medical Fee Guideline for treating doctors and RME doctors performing IRs is 
designed to address both time (from date of injury) which accounts for the 
complexity of the case and review time of the doctor, and level of service which 
is addressed through area reimbursement. 
 COMMENT: (XXII)(C)(2), (XXIII)(D)(2), and (XXIV)(D)(2). One commenter pointed 
out there was no mention made for the rating of injuries to the pulmonary or 
cardiac system, or for the brain. Another commenter felt that getting paid $50 
for obtaining all of the reports and reviewing the records is too little 
reimbursement for determining an impairment rating. 
 RESPONSE: The commission agrees. "Specialty areas" such as pulmonary or cardiac 
system or the brain are addressed in the Medical Fee Guideline when additional 
testing is required by a specialist. The specialist will bill his/her UCR for 
testing using CPT codes and the RME doctor or DD can bill $50 for incorporating 
the test results into the final impairment rating. In addition, when a doctor is 
reviewing a case with a specialty area only, sufficient reimbursement to meet 
the minimum exam amount cannot be attained, therefore, the E/M Ground Rule 
Section (XXIII)(D)(2) has been rewritten to state: 
 "(2) Specialty Areas Reimbursement. The reimbursement for specialty areas that 
shall be rated where referred testing is required (e.g., audiologic or 
ophthalmologic testing) is $50 for incorporating one or more specialists' report 
information into the final impairment rating. This reimbursement shall be 
allowed once per examination. The referred specialist shall be reimbursed 
separately from the fees outlined in this section. When the designated doctor 
selected must only rate one or more specialty area(s), reimbursement shall be 
$450 for base and area." 
 For consistency and clarification, section (XXIV)(D)(2) has been rewritten to 
state: "(2) Specialty Areas Reimbursement. The reimbursement for specialty areas 
that shall be rated where referred testing is required (e.g., audiologic or 
ophthalmologic testing) is $50 for incorporating one or more specialists' report 
information into the final impairment rating. This reimbursement shall be 
allowed once per examination. The referred specialist shall be reimbursed 
separately from the fees outlined in this section. When the RME doctor selected 
must only rate one or more specialty area(s), reimbursement shall be $350 for 
base and area." 
 COMMENT: (XXIII) compared to (XXIV). Commenters objected to the difference in 
reimbursement for designated doctors and RME doctors because they involve the 
same work and education. 
 RESPONSE: The commission disagrees. Base reimbursement for designated doctors 
is higher because of the additional duties, responsibilities, qualifications, 
and training required to serve as a designated doctor and perform designated 
doctor examinations. 
 There were a number of comments received regarding requirements and 
qualifications for designated doctors. Although these comments do not relate to 
the provisions in the Medical Fee Guideline, the commission has prepared 
responses to provide additional information to the public. The provisions which 
deal with designated doctors in the Medical Fee Guideline address the fees for 
designated doctor services and these fee provisions replace the fee provisions 
contained in sec.130.6(r) of this title. All other provisions of sec.130.6 
remain in effect. 
 COMMENT: Section 126.10. Commenters felt that the three year active practice 
requirement in sec.126.10 of this title (relating to Commission Approved List of 
Designated Doctors) eliminated many physicians who are qualified to perform 
impairment ratings. Commenters recommended the elimination of this requirement. 
 RESPONSE: The subject of this comment does not address issues contained in the 
Medical Fee Guideline, however, the commission disagrees that the active 
practice requirement should be deleted. An active practice allows Designated 
Doctors (DDs) to be up-to-date on the latest medical developments, have a 
working knowledge of medical treatments and diagnosis, and to have similar 
qualifications as the treating doctors. This will ensure that DDs understand the 
issues relating to maximum medical improvement (MMI) and the treatment options 
available and necessary to attain MMI. 
 COMMENT: Section 126.10. All commenters recommended 30 hours of continuing 
education for designated doctors with at least 15 hours in disability 
evaluations. 
 RESPONSE: The subject of this comment does not address issues contained in the 
Medical Fee Guideline, however, the commission agrees, that ongoing training is 
important for DDs and has included in sec.126.10 of this title a requirement 
that DDs receive continuing education. The commission has established a core 
curriculum. This course is required every two years to ensure that DDs have the 
latest information on TWCC policies and Appeals Panel landmark decisions and to 
ensure that DDs are kept up-to-date on assessment of MMI and assignment of 
Impairment Ratings (IRs). 
 COMMENT: Section 126.10. One commenter related his background as an orthopedic 
surgeon who cannot continue to practice surgery due to a stroke but feels 
qualified to perform impairment evaluations. Another commenter stated that he 
will not qualify as a designated doctor under the new Designated Doctor Rule. 
 RESPONSE: The subject of this comment does not address issues contained in the 
Medical Fee Guideline. However, the commission agrees that an exception to the 
active practice requirement for DDs should be considered. The commission has 
enacted on an emergency basis an amendment to sec.126.10 which allows an 
exception to the active practice requirement for doctors who: establish that a 
disability has forced the doctor to cease active practice with routine office 
hours; have had an active practice for three consecutive years immediately prior 
to the disability; and continue to actively assist other doctors in the care and 
treatment of their patients through consultations. This amendment to sec.126.10 
has simultaneously been proposed for adoption. The proposed amendment and 
identical amendment adopted on an emergency basis were published in the January 
19, 1996, issue of the Texas Register (proposed-21 TexReg 497; emergency 
adoption-21 TexReg 475). The amendment adopted on an emergency basis went into 
effect on January 12, 1996, and will expire May 12, 1996. 
 COMMENT: Section 130.6. The commenter wanted a 10 to 12 day time frame for 
forwarding reports. 
 RESPONSE: The commission disagrees. The timeframe for completing the reports as 
established in sec.130.1 of this title (relating to Reports of Medical 
Evaluation: Maximum Medical Improvement and Permanent Impairment) is necessary 
to ensure timely resolution of the injured worker's dispute. 
 COMMENT: Section 130.6(r). Commenter disagreed with the hourly fee imposed by 
this rule and believed the established ways of measuring time is adequate. 
 RESPONSE: The commission disagrees. The base reimbursement amounts have been 
established to simplify the reimbursement process and to appropriately reimburse 
doctors for the amount of work required to review the medical records and 
history of the injured worker. 
 The following comments were received regarding the pathology ground rules. 
 COMMENT: (I)(A)(1) and (2). The commenter objected to the Pathology Ground 
Rules which state that if the collecting office is doing the billing for 
laboratory testing then the collecting office should only charge what the 
reference lab charges. A doctor's office must have some markup to offset their 
billing and collecting costs associated with the charge. 
 RESPONSE: The commission disagrees. Providers are instructed to charge their 
UCR fee, because this billing data allows the commission to build an accurate 
data base from which to make revisions to the Medical Fee Guideline. To allow 
physician offices to randomly mark up reference laboratory charges, distorts the 
data collected in those practices that routinely bill reference laboratory 
charges. The Pathology Ground Rule, Section (I)(A)(1) and (2) allows the 
collecting office to bill 99000 or 99001 as a handling charge. 
 COMMENT: (I)(C). The commenter questioned why billing for panel tests under 
Pathology Ground Rules section (I)(C) of the Pathology Ground Rules must include 
documentation listing the tests in the panel and suggested that this was 
unnecessary paperwork because the tests included are set out in the CPT book. 
 RESPONSE: The commission agrees. The requirement for submission of additional 
documentation has been deleted by removing two sentences of section (I)(C) of 
the Pathology Ground Rule section. The section now reads: 
 "Panel Tests. When billing for panel tests (80050-80092), use the code number 
corresponding to the appropriate panel test. These tests shall not be reimbursed 
separately. Any tests in addition to a particular panel or a second panel of 
tests shall be billed separately." 
 The following comments were received regarding the radiology ground rules. 
 COMMENT: (I)(D). The commenter suggested that the Medical Fee Guideline allow 
additional services to be added to a procedure if they will increase the safety 
and benefit margin for a patient. The same commenter felt that there would be 
cost savings if the examining or treating physician provides such services. An 
example would be an epidural steroid injection by clinical feel of loss of air 
resistance versus the confirmation of localization by the use of fluoroscopy. 
 RESPONSE: The commission agrees that a revision to the Medical Fee Guideline is 
needed. The Medical Fee Guideline does not limit the HCP's professional 
judgement in using videofluoroscopy when performing an injection, such as an 
ESI, but videofluoroscopy is not medically necessary when performing an 
injection, such as an ESI and will not be reimbursed. A HCP who is properly 
trained in performing injections is able to find the appropriate area to inject 
without placing the patient at any medical risk. Radiology Ground Rules (I)(D) 
has been rewritten to state: 
 "Videofluoroscopy is considered to be part of a myelogram and discogram. 
Therefore, when billing for either a myelogram, discogram, or injections, 
videofluoroscopy shall not be billed separately." 
 COMMENT: (VII)(B). The commenter suggested that imaging centers and radiologic 
centers be defined separately from the non-ambulatory surgical center' as is 
described in section (VII)(B) of the General Instruction Ground Rules. The 
commenter also questioned what reimbursement would be received. 
 RESPONSE: The commission disagrees with the need to separately define imaging 
and radiologic procedures from other procedures performed in doctors' offices. 
However, Section (VII)(B) in the General Instruction Ground Rules has been 
revised and moved to the Surgery Ground Rules to ensure it is clear that the 
section only applies to surgical procedures performed in physician's offices. 
 COMMENT: (II)(A) and SURGERY (I)(E)(4)(d). The commenter objected to the 
definition of multiple injection procedures as "introducing additional materials 
through the same puncture site." These ground rules indicate reimbursement of 
contrast injection for CAT scans, but prior ground rules prohibit a contrast 
injection reimbursement in conjunction with other injection procedures. If 
contrast is injected with a definite purpose, it appears that a physician should 
be entitled to reimbursement. The current Medical Fee Guideline indicates how to 
bill and be reimbursed for injection of contrast. This guideline does not 
address this issue. 
 RESPONSE: The commission disagrees. The Medical Fee Guideline does not provide 
for separate reimbursement for multiple punctures when only a single puncture 
site is used; however it does allow for materials to be reimbursement separately 
even if used at the same puncture site. The Medical Fee Guideline provides for 
reimbursement of non-ionic contrast materials based upon volume and states that 
"Injection codes are listed separately in the appropriate sections and should be 
billed accordingly." 
 COMMENT: The commenters questioned the differences in reimbursement for codes 
with contrast as opposed to without. 
 RESPONSE: The commission agrees that reimbursement for radiology codes which 
use contrast should be higher than radiology codes without contrast. 
Reimbursement for CAT scan CPT codes which involve the use of contrast fell just 
inside the allowable 25% window selected for radiology. Reimbursement for these 
codes were therefore reduced and set at the reimbursement calculated using the 
new methodology. Reimbursement for radiology codes which do not involve the use 
of contrast fell just outside the allowable window and were therefore set at 25% 
above the reimbursement calculated using the new methodology. The inconsistency 
in the reimbursement resulted from moving the reimbursements either up or down 
according to the basic methodology. Because the calculated reimbursements were 
so close, but coincidentally one fell within and one outside the 25% window, the 
methodology resulted in inappropriate valuation of these codes. To correct this 
inconsistency, this group of radiology codes has been set at 25% above the 
percentile selected for radiology. The reimbursements for this area have been 
modified as follows: 
 "72125 and 72131 $580 PC = $150 TC = $430 72126 and 72132 $671 PC = $268 TC = 
$402." 
 COMMENT: (II)(A)(2) and (3). The commenter suggested that a definite pricing in 
the Medical Fee Guideline for contrast does not allow for price variation in the 
future and so contrast should be treated the same as HCPCS codes. 
 RESPONSE: The commission agrees that reimbursements for all HCPCS codes should 
be handled in a consistent manner. The commission lacks sufficient data to 
establish reimbursement rates for contrast materials. The use of charge data 
along with HCPCS codes, which are very specific, will allow the commission to 
develop a database of charges which can be used to set MAR for HCPCS codes at a 
future date. Radiology/Nuclear Ground Rules Section (II)(A)(2) and (3) have been 
rewritten to state: 
 "(2) Non-ionic contrast material for radiological procedure(s) shall be billed 
using the following codes: 
 (a) A4644: Supply of low osmolar contrast material (100-199 mgs of iodine) 
 (b) A4645: Supply of low osmolar contrast material (200-299 mgs of iodine) 
 (c) A4646: Supply of low osmolar contrast material (300-399 mgs of iodine) 
 (3) Contrast for MRI procedures shall be billed using HCPCS code A4647 when use 
of contrast is medically necessary." 
 The following comments were received regarding the medicine ground rules. 
 COMMENT: CPT 97770. The commenter was pleased to see development of cognitive 
skills (97770), included, as this is a crucial service for persons suffering 
traumatic brain injuries. 
 RESPONSE: The commission agrees. 
 COMMENT: CPT 97770. The commenter pointed out that there is a new CPT code-
development of cognitive skills 97770, which is used to code for intensive one 
on one training for remediation of brain injuries. This is a code utilized by 
neuropsychologist and was not in the CPT book when the Mental Health Treatment 
Guideline (MHTG) was developed in 1993. It is therefore not listed as an 
acceptable code for qualified mental health providers in the MHTG. 
 RESPONSE: The commission disagrees. The most current edition of the American 
Medical Association's Current Procedural Terminology (CPT) is used in the 
development of any treatment guideline. Because the code 97770 was not in 
existence at the time the MHTG was written it is not included in that guideline; 
however, as new codes and treatments are developed, HCP's may use them. For 
example, even though a code is not listed in the MHTG, if it is listed in the 
new Medical Fee Guideline the mental health professional may use this code for 
reimbursement of the service. 
 COMMENT: CPT CODES 90801-90911. The commenters questioned some time driven 
reimbursements. One commenter felt that codes set at $2.00 or $3.00 per minute, 
while adequate in terms of reimbursement, increased the complexity of reporting 
and suggested that a fee per service would be less confusing. 
 RESPONSE: The commission disagrees. The relative value for select mental health 
services as published in the 1995 edition of McGraw Hill Relative Value for 
Physicians is based upon "per minute" charges. These relative values constitute 
a vital ingredient in the determination of MAR for all CPT codes. For the 
commission to deviate from this process for mental health services would be 
inconsistent with the process used to set reimbursement for other CPT codes. The 
commission acknowledges the billing of time by minutes is possibly more 
burdensome, but this is the standard practice for the billing of 
psychotherapeutic services and is consistent with McGraw Hill Relative Values 
for Physicians. 
 COMMENT: CPT CODES 90800-90999. The commenter pointed out that few health care 
providers are currently including actual time spent on services in their bills. 
The Medical Fee Guideline requires per minute billing for many psychological 
services (CPT codes 90800-90999). Therefore, there will be a need for education 
of health care providers so that reimbursement will not be denied. 
 RESPONSE: The commission agrees that many of the CPT codes in the psychiatric 
section of the Medical Fee Guideline have a relative value established by McGraw 
Hill and are based upon per minute increments of time. As MARs are determined in 
part by using McGraw Hill data, reimbursement is determined by the length of 
time involved in performing these psychiatric codes. Billing for these codes 
shall include the actual time. As such reimbursement is contingent upon billing 
these CPT codes including the actual time on their bills. 
 COMMENT: (II). The commenter recommended adopting biofeedback as a multi-
disciplinary treatment model not limited to mental disorders and advocated its 
establishment as a medical entity of its own. 
 RESPONSE: The commission disagrees. The Medical Fee Guideline does not restrict 
biofeedback utilization. The commission acknowledges that biofeedback may be 
used within a multi-disciplinary program. However it is outside the scope of 
this document to establish biofeedback as a medical entity. 
 COMMENT: (II). The commenter objected to the exclusion from the Medical Fee 
Guideline of reimbursement for commissioning conferences that are done by HCPs, 
qualified mental health providers, dieticians, etc., who come together to 
evaluate the patient and the individual plan of care. 
 RESPONSE: The commission disagrees. Commissioning conferences are an integral 
part of the daily planning and operations of an interdisciplinary program and as 
such are not reimbursed separately. Commissioning conferences are not reimbursed 
as an additional service to interdisciplinary programs but are included in the 
hourly reimbursement for interdisciplinary programs. 
 COMMENT: old (I)(B)(3), new (III). The commenter expressed the opinion that 
osteopathic manipulative treatment should not be placed under physical medicine. 
Another commenter suggested that paragraph 3 under manipulation/ reimbursement 
be deleted and replaced with a new section entitled "osteopathic manipulative 
treatment", which would read exactly as printed in the 1995 physicians' current 
procedural terminology. The commenter also suggested the reimbursement for codes 
98925 through 98929 are reimbursed too low. The commenter suggested modifying 
the section as follows: 
 "-MP Manipulation: This modifier will be added to the E/M code when the first 
manipulation for the visit is performed. This modifier does not need to be added 
when the osteopathic manipulation treatment codes (98925 through 98929) are used 
with an E/M code." 
 RESPONSE: The commission agrees that osteopathic manipulation, which is not 
included in the Physical Medicine Section of the 1995 CPT manual, be moved to a 
separate section (Section III) under the Medicine Ground Rules. The commission 
also agrees that reimbursement for osteopathic manipulation requires adjustment 
for equity by allowing an E/M code to be billed in addition to manipulation 
codes. Osteopathic Medical Specialists performing solely manipulative treatments 
during an office visit will use the appropriate E/M code, or code 99212 for 
established office visits. The section on osteopathic manipulation has been 
moved and rewritten to state: 
 "(III) Osteopathic Manipulation. When manipulation is provided by a doctor of 
osteopathy codes 98925 through 98929 shall be utilized. The doctor of osteopathy 
may bill 99212 for an established patient office visit in addition to the 
appropriate manipulation code and add modifier -MP to the office visit. If 
office visit includes separate and identifiable E/M services, use the 
appropriate E/M code." 
 Previous Section (III)-Nerve Studies in the Medicine Ground Rules has become 
Section (IV). 
 The commission disagrees with the suggestion that modifier -MP be added to the 
E/M manipulation code section for the first manipulation for the office visit 
only. In order to collect data on office visits billed solely for manipulative 
treatment, the commission has required the addition of modifier -MP for all 
office visits billed solely for manipulative treatment. Established patient 
office visits that include separate and identifiable services other than 
manipulation should be billed using the appropriate E/M code and do not require 
the addition of modifier -MP. 
 Section (I)(B)(3) in the Medicine Ground Rules has been deleted because 
Osteopathic Manipulation is now a subsection. 
 COMMENT: (I)(C)(1)(r). The commenter noted phonophoresis has been omitted from 
the 1995 American Medical Association's Current Procedural Terminology (CPT) 
modalities that require constant attendance. 
 RESPONSE: The commission agrees. The code for phonophoresis has been eliminated 
from the 1995 American Medical Association's Current Procedural Terminology 
(CPT). Because this modality is still in use, however, billing for phonophoresis 
is addressed in Medicine Ground Rule section (I)(C)(1)(r) which instructs 
providers to use code 97139 -PH for this procedure. 
 COMMENT: (I)(E)(3)(a) and (b). The commenter suggested that isokinetic and 
isometric testing be billed by planes of motion or specific tasks which is more 
reasonable and more common than billing by area. 
 RESPONSE: The commission disagrees. To maintain consistency with the American 
Medical Association's Guides to the Evaluation of Permanent Impairment, Third 
Edition, Second Printing testing by body area is the method of billing specified 
in the Medical Fee Guideline. To specify testing by planes or axis would 
replicate testing done for physical capacity and functional capacity 
examinations. 
 COMMENT: CPT Code 97750. The commenter questioned the reimbursement for CPT 
code 97750 because it does not differentiate for the wide variety of testing 
equipment used. 
 RESPONSE: The commission disagrees. The description for CPT code 97750 was 
adopted directly from the AMA's Current Procedural Terminology (CPT), 1995 
Edition and is now the only code available for physical performance testing or 
measurement. Code 97752, computerized muscle testing, has been deleted from the 
1995 CPT manual. Reimbursement is based upon the results of the measurement, not 
upon the method used to obtain the measurement. 
 COMMENT: (I)(C)(6). A commenter suggested the deletion of "are both utilized 
for the purpose of pain relief; therefore, both" in the Medicine section 
(I)(C)(6) because iontophoresis is used for purposes other than pain relief. 
Another commenter suggested that in (I)(C)(6) iontophoresis supplies should be 
reimbursed at $15 rather than $12.50 because $12.50 does not cover the cost of 
the supply. Another commenter pointed out that the reimbursement rate for 
phonophoresis supplies has been decreased $7.00. With the cost of supplies 
increasing with each passing year, how can the rate of reimbursement be reduced. 
 RESPONSE: The commission agrees. Due to additional information received from 
MAC members on the cost of these supplies the reimbursements warrant increase. 
Information on these supplies show $7.00 is reasonable for phonophoresis and $15 
is reasonable for iontophoresis. The commission acknowledges that both 
modalities can be used for the reduction of pain. However, the primary benefit 
of iontophoresis is for the reduction of inflammation with a secondary benefit 
of reduction of pain. Therefore the phrase, "are both utilized for the purpose 
of pain relief; therefore, both" has been removed. In Medicine section 
(I)(C)(6), text has been revised to state: 
 "Phonophoresis supplies shall be billed using code 99070 and shall be 
reimbursed at $7.00; iontophoresis supplies shall be billed using code 99070 and 
shall be reimbursed at $15. Phonophoresis and iontophoresis shall not be 
reimbursed for the same area on the same day." 
 COMMENT: (I)(C)(1)(a). The commenter suggested that Medicine Ground Rules 
(I)(C)(1)(q), TENS application for trial basis, should not include supplies and 
training. The supplies and training for the trial application of a TENS unit 
must be reimbursed to the HCP especially when the HCP is issuing the TENS 
provided by an independent or outside supplier. The present rules allow $12 per 
pair for reimbursement. This could be increased to $14 per pair, a five-pair 
maximum for an eighth-electrode placement on the injured worker. 
 RESPONSE: The commission disagrees. This edition of the Medical Fee Guideline 
does not address maximum reimbursement for supplies for a TENS application on a 
trial basis. Medicine Ground Rules Section (I)(C)(1)(q) 97139-TN is to be used 
for the initial application of TENS for a trial basis including supplies and 
training. As with all 97139 CPT codes, DOP is required and this would be the 
appropriate place to justify the level of training and supplies billed. 
 COMMENT: (I)(B). A commenter questioned whether physical therapists should 
assume that codes 97260 and 97261 are the appropriate codes for billing 
manipulation. (Jeanette Winfree) 
 RESPONSE: The commission disagrees that any revision to this section is 
necessary. CPT codes 97260 and 97261 are the appropriate CPT codes for billing 
physical medicine manipulations performed by any HCP other than an Osteopathic 
Medical Specialists who use codes, 98925 through 98929. 
 COMMENT: (I)(A)(10). The commenter felt section (I)(A)(10) mixes fee issues 
with medical treatment judgment. The commenter felt it was inconsistent with the 
treatment guidelines and should be eliminated. The commenter felt that beyond 
the acute phase of the injury the potential need for five to seven hours of 
exercise per day is not allowed by the Medical Fee Guideline. 
 RESPONSE: The commission disagrees. Upon review, no conflict between Medicine 
Ground Rules (I)(A)(10) and the treatment guidelines was found. The purpose of 
the treatment guidelines is to establish normative courses of treatment, while 
fee guidelines set limits for reimbursement and utilization. When the needs of 
the injured worker exceed the three hour limit and meet the criteria for single 
or interdisciplinary programs, the provider should bill using the appropriate 
CPT codes 99545 -WH, WC; 99546 -WH, WC; 97799 -CP; or 97799 -MR. Single and 
interdisciplinary programs allow greater time than two to three hours. CPT codes 
for single and interdisciplinary programs are not included in the three hour 
time limitation. If five to seven hours of exercise are required a work 
conditioning program would be appropriate. 
 COMMENT: (I)(A)(10). The commenter suggested that the Medical Fee Guideline 
contain a limit or ceiling on the maximum allowable reimbursement (MAR) per day 
for physical medicine. 
 RESPONSE: The commission disagrees. A per diem amount is not warranted. 
Reimbursement for physical medicine is based on reasonable and necessary 
services rendered to ensure essential care is provided. Time limits on physical 
medicine are currently based on recommendation of the Medical Advisory Committee 
and are based on the number of treatments and length of treatments deemed 
necessary by the provider. A per diem limit could jeopardize quality of or 
access to care. It would be inconsistent to implement per diem caps solely for 
physical medicine and not for all medical services. Data analysis of TWCC data 
for physical medicine modalities shows that providers bill the maximum 
utilization level 3.0% of the time. Clearly per diem limits are unnecessary as 
present utilization controls are seldom reached. 
 COMMENT: (I)(A)(8). The commenter felt therapist re-evaluations are better 
defined in the proposed Medical Fee Guideline and are more equitable. 
 RESPONSE: The commission agrees. 
 COMMENT: (I)(A)(10)(a). The commenter was concerned that if a HCP had one hour 
of reconditioning therapy procedures in the plan of care and utilized this code 
four times in one session, that would constitute the maximum allowed for that 
office visit. 
 RESPONSE: The commission disagrees. CPT code 97150 which is not a timed 
procedure would be billed once for reconditioning therapy procedures since 
reconditioning does not require one-to-one direct patient contact. Physical 
medicine is limited to a maximum of four different modalities, procedures, 
training and/or activities. 
 COMMENT: (I)(A)(10) and (II)(G). The commenter objected to section (I)(A) (10) 
in the Medicine Ground Rules section stating that this section does not make 
sense and creates disincentives for exercise treatment objectives. The commenter 
felt that "physical medicine session" was not appropriately defined and should 
be deleted, leaving only the independent terms a) modalities, b) procedures, c) 
training. Another commenter recommends in the medicine section (I)(A)(10)(a), 
(b), and (c)-procedures and training should be separated and distinct from 
physical medicine procedures. Another commenter felt that the limitation of 
physical medicine sections to two hours (or possibly three by documentation of 
procedure (DOP)) is not appropriate for procedure/training and this limitation 
should be revised. Another commenter felt such a restriction would curtail the 
most effective treatment for musculoskeletal chronic pain. 
 RESPONSE: The commission disagrees. The purpose of defining a "physical 
medicine session" is to control utilization while still allowing providers to 
determine appropriate treatment. The definition of physical medicine sessions 
allows providers to combine the most appropriate modalities, procedures, and 
training to achieve a beneficial course of treatment for the injured worker. At 
the same time, the limit of three-hours for a physical therapy session controls 
costs and allows appropriate time for necessary treatment. The time limit was 
supported by the Medical Advisory Committee which includes experts in physical 
therapy, occupational therapy, chiropractic, osteopathy and medicine. Procedures 
and training should not be separated from the Physical Medicine Section because 
these codes are in the 1995 CPT manual under the Physical Therapy Medicine 
Section and constitute valid physical medicine therapy. Patients in need of 
extended periods of therapy for musculoskeletal chronic pain should be 
considered for chronic pain management programs as described in Medicine Ground 
Rules sections (II)(G). However, The commission recognizes that providers may 
perform one or more treatments not to exceed four per session and has added "up 
to" in the first sentence. 
 COMMENT: (I)(A)(11)(a). The commenter suggested rewording section (I)(A)(11) 
(a) to clarify that free weights are not an example of manual resistance. 
Another commenter felt that the definition of Therapeutic Procedures (97110) in 
section (I)(A)(11)(a) Physical Medicine is completely different from what the 
code book says this procedure includes. The commenter suggested that (97110) use 
AMA language and then perhaps the TWCC should make up its own new code to 
reflect this service and description. Another commenter suggested clarifying 
language 11, a. Line 2 by adding 'to' after resistance and deleting parentheses 
from free weights, deleting "to" and inserting "and". Rationale -free weights 
are not an example of manual resistance. Another commenter stated it also 
implies that a facility must have isokinetic, isometric, or isoinertial 
equipment in order to be able to use this code. 
 RESPONSE: The commission agrees. The Medicine Ground Rule section (I)(A)(11) 
(a) has been rewritten to be consistent with AMA CPT manual while clarifying 
that the last sentence is an example. With the revision it is now clear that 
manual resistance, isokinetic, isometric, and isoinertial equipment are only 
examples of therapeutic procedures and it is not mandatory that a facility have 
isokinetic, isometric, and isoinertial equipment in order to bill CPT code 
(97110). Section (I)(A)(11)(a) of the Medicine Ground Section has been rewritten 
to state: 
 "Therapeutic procedures (97110) is defined as therapeutic exercises used to 
develop strength and endurance, range of motion and flexibility. Examples 
include the use of graded resistance ranging from manual resistance to a variety 
of equipment including isokinetic, isometric, or isoinertial in one or more 
planes." 
 COMMENT: (I)(A)(9(b) and (I)(A)(11)(a). The commenter felt the definition of 
"supervision" for physical medicine activities and training, and the definitions 
for therapeutic procedures (97110) and kinetic therapy are much better after 
adopting the AMA's revision this past summer. 
 RESPONSE: The commission agrees. 
 COMMENT: (I)(A)(8). The commenter recommended that code 99215 be added at the 
end of line one in section (I)(A)(8) of the Medicine Ground Rules because a 
comprehensive, time consuming initial evaluation does not suggest that the 
reevaluation can be less comprehensive. 
 RESPONSE: The commission disagrees. CPT code 99215 is the highest, most complex 
billing code set for established patients. It requires a comprehensive history 
and examination, medical decision making of high complexity, and medical 
problems of moderate to high severity. While initial occupational and physical 
therapy evaluations may be of such complexity to warrant billing at higher 
rates, reevaluations are generally expected to be less comprehensive in nature, 
and thus should be billed consistent with the level of complexity described by 
CPT code 99213. 
 COMMENT: (I)(E)(2). The commenter supported the provision regarding functional 
capacity evaluation (FCE) which now requires the start and end time and there is 
better coordination among muscle testing, physical capacity assessments, and 
FCE's. This is helpful. 
 RESPONSE: The commission agrees. 
 COMMENT: (II)(G). The commenter felt that if the chronic pain management 
physician is limited in his ability to make an appropriate review of the often 
extensive medical records, evaluate his medical regimens by direct contact with 
his pharmacies and is denied his ability to encounter and discuss the patient's 
case more often than once per month, he is not going to benefit from the multi-
disciplinary algorithm which has been proven to be effective nationally by 
multiple evaluators. In particular, when therapeutic procedures are performed at 
a follow-up visit, these must not be bundled to previous evaluations if 
appropriate distinction and documentation is made based on the patient's 
physical condition. 
 RESPONSE: The commission disagrees that the Medical Fee Guideline limits a 
physician's ability to evaluate and treat patients. The commission disagrees 
that the Ground Rules limit the referral physician in the manner described. In 
the Evaluation and Management Ground Rule Section (X), Referred Doctor, the time 
limit of 30 days has been removed. Section 133.100 of this title and sec. 
sec.133.102-133.106 of this title shall continue to be in effect regarding 
reimbursement for reporting. Section (V) Coordination of Care and Section 
(XVIII) Case Management gives further instruction on appropriate codes for use 
under the commenter's examples as long as it is not part of a chronic pain 
management program. Additional reimbursement for a therapeutic procedure 
performed at a follow-up office visit would be reasonable, as long as the 
patient is not involved in a singular or multi-disciplinary program at the same 
time. 
 COMMENT: old (III)(B)(2)(d), new(IV)(B)(2)(d). The commenter questioned the 
wording of Medicine Ground Rule section (III)(B)(2)(d) which states "bilateral 
testing for 'H' studies will always be allowed for the lower extremities." The 
"H" wave is a valid test in many cases, but per the interpretation of that code, 
95935, bilateral studies would not always be indicated for reimbursement. 
 RESPONSE: The commission agrees this section requires clarification. Medicine 
Ground Rule (III)(B)(2)(d) states that bilateral testing for "H" studies will 
always be allowed for lower extremities. After consultation with the AMA, it was 
determined that bilateral testing is always allowed, but bilateral testing must 
be performed to be reimbursed. Medicine Ground Rule Section (IV)(B)(2)(d) has 
been rewritten to state: 
 "'H' studies on lower extremities may be billed bilaterally when performed. " 
 COMMENT: old (III)(B)(2)(c), new (IV)(B)(2)(c). The commenter felt that "H" 
wave studies should be permitted for the upper extremity. 
 RESPONSE: The commission disagrees. Although the commission acknowledges that 
certain specially trained providers obtain and interpret "H" waves in the upper 
extremity, review of the American Medical Association reveals that there is a 
high error rate in interpreting results. As a result, the ground rules disallow 
reimbursement for "H" wave studies billed for upper extremities. 
 COMMENT: The commenters stated that surface electromyography can be critically 
important to guide diagnosis and treatment of musculoskeletal pain. Its use 
should not be limited. 
 RESPONSE: The commission agrees. Surface EMGs can be a useful diagnostic tool 
when appropriately administered and interpreted. The Medical Fee Guideline does 
not limit the use of surface EMGs. 
 COMMENT: CPT Code 95925. The commenter has received bills of up to $2,000 for 
SSEPs (95925) and is asking for clarification regarding whether $175 is the 
maximum allowable reimbursement for this service. 
 RESPONSE: The commission agrees that in the example cited by the commenter, the 
maximum allowable reimbursement would be $175 regardless of the number of nerves 
involved. The rationale for this is based on CPT descriptors which changed for 
code 95925 in 1994. The current descriptor for CPT code 95925 indicates one or 
more nerves. Innervation Technology data used to establish reimbursement was 
consistent with this descriptor. The reimbursement is 100% of the MAR or the 
billed amount, whichever is less, for that particular code regardless of number 
of nerves tested. 
 COMMENT: (I)(C)(1)(q). The commenter expressed concern that TENS units are not 
mentioned in the Medicine Ground Rules section. 
 RESPONSE: The commission disagrees. TENS units are addressed in section (I) 
(C)(1)(q) under CPT code 97139-TN which is used to bill for TENS application. 
(In addition the DME Ground Rules contain additional information regarding TENS 
units.) 
 COMMENT: CPT Codes 97220, 97221, 97240, 97241, 97530, 97531. The commenter 
noted that several CPT codes in the 97220-97541 range have been eliminated-97220 
and 97221 hubbard tank and CPT codes 97240 and 97241 aquatic therapy were 
deleted. The description for CPT code 97530 has changed from kinetic to 
therapeutic activities and CPT code 97531 (additional 15 minutes) was deleted. 
 RESPONSE: The commission agrees that these were eliminated and changed and 
disagrees that the proposed text should be revised. The 1995 edition of the 
American Medical Association CPT code manual has eliminated these codes and 
changed the general description of 97530. The adopted new Medical Fee Guideline 
has incorporated these changes. 
 COMMENT: The commenter felt that overall the reimbursement for "Psychiatry" 
(mental health) CPT codes is acceptable and more closely in line with usual and 
customary charges. 
 RESPONSE: The commission agrees. 
 COMMENT: (II). The commenters supported the concept of a hourly MAR rate for 
interdisciplinary programs. Another commenter added that the rate must be 
equitable and fair. 
 RESPONSE: The commission disagrees with the commenter's suggestion to establish 
a MAR for chronic pain management and outpatient medical rehabilitation services 
due to a lack of data on which to base a fair and equitable reimbursement rate. 
The section does specify providers shall bill on a per hour basis for each day. 
The commission is currently in a data collection phase for chronic pain 
management and outpatient medical rehabilitation services. HCPs should bill 
their usual and customary rates for such services and submit documentation of 
procedure (DOP). Reimbursement will be at a fair and reasonable rate. 
 COMMENT: (II)(C). The commenters suggested that a grace period be allowed for 
CARF certification because it is a lengthy process to achieve accreditation. 
 RESPONSE: The commission disagrees. Accreditation is not mandated therefore 
there is no need for a grace period. Those facilities that elect not to seek 
CARF accreditation will still receive a significant increase in reimbursement 
over what was allowed by the 1991 Medical Fee Guideline. 
 COMMENT: (II)(C). The commenter expressed the concern that many smaller 
facilities or clinics do not have the manpower or the financial resources to go 
through the CARF accreditation process and the "TWCC approved equivalent" is not 
defined in these ground rules. Another commenter questioned whether the 
Commission would publish a list of "equivalent accrediting bodies" prior to the 
adoption of the proposed medical fee guidelines. Another commenter stated that 
it costs more money to operate a true work hardening program than a work 
conditioning or reconditioning program. These programs should be allowed to 
receive the maximum reimbursement for these services if they adhere to the 
definition and standards set forth in the ground rules of the Medical Fee 
Guideline. Several commenters expressed concern regarding the language in 
Medicine Ground Rules section (II)(C). Although CARF accreditation is not 
required, some commenters felt the language implies Commission endorsement of 
CARF. Other commenters suggested that only "TWCC approved accrediting body" be 
referred to in the guideline. Some commenters objected to requiring CARF 
accreditation because CARF has an unproven track record in improving the quality 
of care. Another commenter recommended deleting the accreditation requirement 
altogether. 
 RESPONSE: The commission disagrees that programs that adhere to the definitions 
and standards set forth in the Medical Fee Guideline should receive the maximum 
reimbursement. Accreditation standards are much more comprehensive than those 
set forth in the Ground Rules of the Medical Fee Guideline. Rehabilitation 
facilities are not required to have or be in the process of obtaining CARF 
accreditation. However, there is an additional financial incentive for those 
facilities that have obtained this accreditation. Facilities that elect not to 
seek CARF accreditation, will still receive a significant increase in 
reimbursement over what was allowed by the 1991 Medical Fee Guideline. CARF is a 
nationally recognized accrediting body for rehabilitation programs and is the 
accrediting standard for a number of other states workers' compensation 
programs. The Commission has determined that it is not equipped to assume the 
task of determining "equivalent accrediting bodies" at this time and has 
therefore removed this language from Section (II) (C) of the Medicine Ground 
Rule this section now states: 
 "Accreditation: Accreditation by CARF is recommended, but not required, for all 
interdisciplinary programs. If the program is accredited, then the modifier "-
AP" shall be used in addition to the other modifiers designated for the listed 
interdisciplinary programs. If the interdisciplinary program is not accredited, 
then the hourly reimbursement for the program shall be reduced 20% below the 
maximum allowed reimbursement, if the MAR is listed in the ground rules, or 20% 
below the usual and customary reimbursement for that program. This ground rule 
applies to the interdisciplinary programs which are Work Hardening, Outpatient 
Medical Rehabilitation, and Chronic Pain Management." 
 For consistency, modifier -AP in the Medicine modifiers has been rewritten to 
state: 
 "-AP Accredited programs: This modifier shall be used when a CARF approved 
facility is used for interdisciplinary programs." 
 COMMENT: (II)(C). Commenters objected to CARF accreditation being rewarded with 
a financial incentive. One commenter felt that reducing reimbursement to non-
CARF accredited facilities was not fair, reasonable or practical and encouraged 
the commission to consider other means of accreditation. Another commenter 
stated for a program to become CARF accredited, they've got to invest an 
enormous amount of time, money and effort into doing that. The commenter 
believes they need to be rewarded by having their fees raised 20% over the fees 
in the proposed 1995 Medical Fee Guideline. 
 RESPONSE: The commission disagrees that a financial incentive for CARF 
accreditation is inappropriate. The financial and time investment necessary for 
a health care provider to meet CARF accreditation standards justifies an 
incentive for the effort and investment. Accredited programs warrant additional 
reimbursement to offset financial expenditure needed to meet the standards 
required for accreditation. CARF assures program content which fosters an 
environment and creates a program which increases the quality of rehabilitation 
services. The commission agrees with the other comment that additional 
reimbursement for accreditation is reasonable. Single and interdisciplinary 
programs which are not accredited have received a 10% increase over the 1991 
Medical Fee Guideline. Accredited programs have received an additional 30% 
increase over previous Guideline reimbursements. 
 COMMENT: (II)(C). The commenter supported CARF certification as desirable to 
increase the chances of quality of care being rendered to the injured worker. A 
number of other states either require certification or utilize CARF standards of 
quality to reimburse services for workers' compensation rehabilitation, or 
reimburse at a higher level if CARF certification is held by the billing party. 
 RESPONSE: The commission agrees. 
 COMMENT: (II)(C). The commenter advocated TWCC approval of pain management 
programs whose medical director is certified by the American Board of Medical 
Specialists. The commenter also stated that there are some self-proclaimed 
"certifying bodies" that should not be TWCC approved. 
 RESPONSE: The commission agrees that all accrediting bodies may not meet the 
standards that TWCC wishes to achieve. The commission disagrees that specifying 
the credentials of the medical director is sufficient to ensure quality of care. 
CARF accreditation standards go far beyond specifying the credentials of the 
medical director. As the program directors credentials is only one of the many 
essential elements, that are necessary for quality rehabilitation programming. 
CARF is recognized as a nationally accepted accreditation for rehabilitation 
programs and is the accrediting standard for a number of other states workers' 
compensation programs. 
 COMMENT: (II)(C). The commenter recommended that practitioners in the field of 
pain management be required to be board certified by one of the two recognized 
boards and that they practice in a dedicated pain management facility. 
 RESPONSE: The commission disagrees. The commission has been moving toward 
facility accreditation. The accrediting process assures that facility staff are 
certified by their respective boards. To specify individual board certified 
practitioners may conflict with future commission guideline initiatives relative 
to program content needed for accreditation. Pain management professionals 
practice in a wide variety of health care settings and need not be located in a 
dedicated pain management facility to provide quality care. The commission 
prefers to leave identification of appropriate credentials to the appropriate 
accreditation body. 
 COMMENT: (II)(F)(7) and (II)(G)(7). The commenter recommended that references 
to specific types of medical specialists supervising interdisciplinary programs 
be deleted because the person who needs to be directing the program is really 
determined by the clinical emphasis of the program. It could be different types 
of health care providers. 
 RESPONSE: The commission agrees to delete references to specific types of 
medical specialist supervising medical programs. Other specialists may 
appropriately supervise these types of interdisciplinary programs. The Medicine 
Ground Rules sections (II)(F)(7) and (G)(7) have been revised to state: 
 "(F)(7) Program supervision is provided by a doctor who is trained and 
experienced in the treatment of severely impaired patients. The program 
supervisor shall: ... 
 (G)(7) Program supervision is provided by a doctor who is trained and 
experienced in the treatment of patients with chronic pain syndrome as described 
earlier in this section. The program supervisor shall: ..." 
 COMMENT: (II)(F)(3)(b) and (II)(G)(3)(b). The commenter expressed the concern 
that the wording of sections (F)(3)(b) and (G)(3)(b) in the Medicine Ground 
Rules implies that an injured worker cannot receive individual psychotherapy 
services outside of a program and suggested a change in the language of the 
section. 
 RESPONSE: The commission agrees. The second sentence of section (II)(F)(3) (b) 
and (II)(G)(3)(b) of the Medicine Ground Rules have been revised to state: 
 "(II)(F)(3)(b) Due to the intensity of the program, both group and individual 
therapy may be part of the Outpatient Medical Rehabilitation program. If the 
program includes individual psychotherapy, it shall be billed as part of the 
program and not separately. If the program does not include psychotherapy 
services, such services may be billed separately, subject to applicable 
preauthorization requirements and the mental health treatment guideline (MHTG). 
 (II)(G)(3)(b) Due to the intensity of the program, both group and individual 
therapy may be part of the Chronic Pain Management program. If the program 
includes individual psychotherapy, it shall be billed as part of the program and 
not separately. If the program does not include psychotherapy services, such 
services may be billed separately, subject to applicable preauthorization 
requirements and the mental health treatment guideline (MHTG). " 
 COMMENT: (II)(C). The commenters agreed with establishing minimum standards but 
advocated TWCC being the determiner of facility or program certification. CARF 
or other agencies should only be an optional part of the process with TWCC 
having the final word. 
 RESPONSE: The commission disagrees. The commission lacks the experience and 
resources to develop, administer and monitor an accreditation process. The 
process would be administratively burdensome and best left to organizations that 
specialize in quality assurance initiatives. 
 COMMENT: (II)(E)(4). A commenter felt that there is no logical reason to use a 
"-WH" modifier when the CPT description is work hardening. Will carriers take 
this to mean that by billing 97545-WH for the first two hours they are only 
required to pay $64 rather than $128. 
 RESPONSE: The commission disagrees. Work hardening (WH) and work conditioning 
(WC) are both billed using CPT codes 97545 and 97546. The modifiers "-WH" and "-
WC" were developed to create a way of tracking and billing the service 
performed. CPT code 97545 is for two full hours of service and the standard 
reimbursement of $64 per hour applies to work hardening which is CARF accredited 
as stated in Medicine Ground Rule (II)(E)(4) and (5). 
 COMMENT: (II)(C). The commenter was very gratified and wished to reinforce the 
guidelines efforts to connect accreditation to compensation. 
 RESPONSE: The commission agrees that accreditation should be encouraged by 
allowing greater reimbursement to accredited facilities. 
 The following comments were received regarding the general instructions. 
 COMMENT: (III). The commenter was concerned about the proposal to reimburse 
interdisciplinary programs, such as pain management programs, on a "description 
of procedure" (DOP) basis. Under the proposed guidelines there are no criteria 
to define proper description of procedure, therefore leaving enormous room for 
individual interpretations for reimbursement by adjustors, managed care 
companies and cost review companies. 
 RESPONSE: The commission disagrees. Elements of documentation of procedure 
(DOP) are listed in the General Instruction Ground Rules, section (III) and 
provide adequate criteria to define proper documentation of procedure (DOP). 
 COMMENT: (V) The commenter questioned why a documentation of procedure (DOP) is 
still required when a HCPCS code is used for a supply. 
 RESPONSE: The commission agrees that DOP is not warranted for billing of all 
HCPCS codes and has removed the following from this requirement. A statement of 
medical necessity serves as the justification for DME/supplies dispensed by the 
DME provider. This is consistent with the language in the DME Ground Rules. DOP 
serves as the justification for doctors dispensing DME/supplies to the patient 
within their office. All HCPCS and 99070 codes that are charged at or less than 
$50 will be exempt from requiring documentation of procedure (DOP) because this 
small monetary value does not justify the time involved in completing and 
reviewing documentation of procedure. General Instructions Ground Rules Section 
(V), (now section (IV)) has been rewritten to state: 
 "Supplies and materials provided over and above those usually included in the 
office visit and in excess of a cumulative total of $5.00 for that date of 
service may be billed separately using the Health Care Financing Administration 
Procedure Coding System (HCPCS) codes listed in this guideline. If no HCPCS code 
is available for the supplies and materials code 99070 shall be used for those 
supplies otherwise not coded and a description shall be included. Documentation 
of procedure (DOP)/Supplies is required for any single supply that is billed at 
$50 or greater." 
 COMMENT: Introduction. The commenter supported the mandatory on-site 
supervision as it is described in the Medical Fee Guideline and felt that this 
may help curb some of the current abuses within the system. 
 RESPONSE: The commission agrees. 
 COMMENT: Introduction. The commenter expressed concerns regarding the 
definition of on-site supervision contained in the first paragraph of General 
Instruction and felt that it cannot be applied to all specialties. Radiologists 
that read films long after the patient has gone home cannot possibly see and 
speak to the patient. Pathologists fall in the same category. The commenter 
recommended that the definition end after the word "rendered". 
 RESPONSE: The commission agrees that clarification of this section is 
necessary. The purpose of this ground rule is to ensure that a licensed HCP is 
present when a patient is receiving treatment or technical services from a non-
licensed individual. However, the ground rule does not require the patient be 
present when the professional services are being performed such as, in the cases 
of radiologist or pathologists, reading and/or interpreting diagnostics. The 
General Instructions introductory paragraph has been rewritten to state: 
 "The Texas Workers Compensation Commission Medical Fee Guideline 1996, shall be 
effective for all medical services rendered by Health Care Providers (HCP) on or 
after April 1, 1996. The Medical Fee Guideline does not supersede scope of 
practice limitations for HCP specialties. The listed maximum allowable 
reimbursements (MAR) only apply when a licensed HCP is performing those services 
within the scope of practice for which the provider is licensed, or when a non-
licensed individual is rendering care under the direct on-site supervision of a 
licensed HCP. For the purposes of this guideline, on-site supervision is defined 
as the presence of the licensed HCP at the location where the services are being 
rendered by a non-licensed individual and direct visual and verbal contact with 
the patient at scheduled intervals during the period of time for which treatment 
is being provided by a non-licensed individual at that site." 
 COMMENT: Introduction. The commenter agrees that it is very important that as 
described on page one of the Medical Fee Guideline, the maximum allowable 
reimbursement should apply only when a licensed HCP is providing those services 
within the scope of practice for which the provider is licensed. 
 RESPONSE: The commission agrees. 
 COMMENT: The commenter felt that the use of new modifiers as tracking or 
monitoring indicators was contrary to accepted general carrier practice, does 
nothing to promote uniformity of coding and billing and will result in 
additional cost to the compensation program. 
 RESPONSE: The commission disagrees. Modifiers provide additional information 
regarding a CPT code and its usage that otherwise would not be available. In 
this regard, they significantly enhance and explain the CPT codes reported. The 
Texas Labor Code,  sec.413.007(a) and (b) state: "(a) The division shall 
maintain a statewide data base of medical charges, actual payments, and 
treatment protocols that may be used by: (1) the commission in adopting the 
medical policies and fee guidelines; and (2) the division in administering the 
medical policies, fee guidelines, or rules. (b) The division shall ensure that 
the data base: (1) contains information necessary to detect practices and 
patterns in medical charges, actual payments, and treatment protocols; and (2) 
can be used in a meaningful way to allow the commission to control medical costs 
as provided by this subtitle. This statutory mandate supports the use of 
modifiers to allow the commission to obtain the most accurate information 
available which can be used in future revisions of the Medical Fee Guideline. 
Accurate information benefits the entire workers' compensation system." 
 COMMENT: (VII)(A). The commenter felt that section (VII)(A), of the General 
Instruction Ground Rules for reimbursement, is ambiguous. 
 RESPONSE: The commission agrees that section (VII)(A), now section (VI)(A), 
should be clarified. "Usual and customary" was replaced with "billed". The 
section was also modified to clarify that ultimately it is the Commission that 
will determine what constitutes fair and reasonable reimbursement in the event 
of a dispute. Other changes were made to be consistent with other revisions. 
General Instructions Ground Rule section (VI)(A) is revised to read: 
 "An MAR is listed for each code excluding documentation of procedure (DOP) 
codes and HCPCS codes. HCPs shall bill their usual and customary charges. The 
insurance carrier will reimburse the lesser of the billed charge, or the MAR. 
CPT codes for which no reimbursement is listed (DOP) shall be reimbursed at the 
fair and reasonable rate. HCPCS codes shall be reimbursed as provided in the DME 
Ground Rules. In the event of a dispute, fair and reasonable shall be determined 
by the Commission in accordance with the Texas Workers' Compensation Act and 
Commission rules and procedures." 
 COMMENT: (VII)(A). The commenter pointed out that it is an accounting and 
tracking nightmare to bill usual and customary charges so that certain 
participants can capture the total dollar savings. 
 RESPONSE: The commission disagrees. Although it may be more burdensome, it is 
in the best interest of the workers' compensation system that HCPs bill their 
usual, customary and reasonable charges. The Texas Labor Code, sec.413. 007 
mandates that the division maintain a statewide database of medical charges, 
actual payments, and treatment protocols that may be used by the commission in 
adopting the medical policies and fee guidelines. The collection of data on 
usual and customary charges will aid in establishing fair and reasonable rates 
in future revisions of the Medical Fee Guideline. 
 COMMENT: (VIII). The commenter suggested that General Instructions section 
(VIII), "Broken or Missed Appointments" needs to be specific regarding the 
amount of reimbursement for these appointments. The reimbursement for missed 
appointments is covered in other areas but not here. 
 RESPONSE: The commission agrees with the need to include a reference to the 
sections addressing reimbursement for "Broken or Missed Appointments" where 
there are commission or carrier required appointments. Billing for broken or 
missed appointments is outlined in section (XXI)(A)(2) and (B)(2), (XXIII)(E) 
(3) and (XXIV)(E)(3) in the Evaluation and Management (E/M) Ground Rules. 
Reimbursement is not provided for other types of missed appointments. The places 
with specific reimbursement amounts are now referenced in General Instructions 
Ground Rules section (VIII). Section (VIII) of the General Instructions has been 
clarified and rewritten to state: 
 " Broken or missed appointments shall not be reimbursed unless the appointment 
was scheduled by the commission or the insurance carrier and less than 24 hours 
notice of cancellation was given. Billing for reimbursable appointments is 
outlined in the Evaluation and Management (E/M) Ground Rules section (XXI)(A)(2) 
and (B)(2) regarding spinal surgery second opinion appointments, (XXIII)(E)(3) 
regarding designated doctor appointments and (XXIV) (E)(3) regarding required 
medical examination appointments." 
 COMMENT: Modifier-MP. The commenter felt that inconsistencies appear in the 
ground rules from section to section and with CPT definitions in the application 
of modifiers. For example the CPT "-57" modifier has been deleted from the list 
of surgical modifiers. The "-WP" modifier for non-purchased diagnostic tests has 
a different connotation in the general instruction section than in the 
radiology/pathology sections and requires in the evaluation/management section 
the use of an additional code to identify this service when performed during an 
office or hospital visit. 
 RESPONSE: The commission disagrees. Modifiers selected for incorporation into 
the Medical Fee Guideline are based upon the frequency of the service, the value 
of the information it imparts, and the need for additional information during 
bill processing and/or commission data collection efforts. Because modifier "-
57" does not meet this criteria it was not included in the list of modifiers 
contained within the proposed Medical Fee Guideline published in the October 20, 
1995, issue of the Texas Register, or the adopted Medical Fee Guideline 1996. 
The intent of the modifier "-WP" Whole Procedure, is to denote services or 
procedure that are completed or performed by one individual. In radiology and 
pathology, professional and technical components of a particular CPT code, 
performed by a singular individual warrants modifier "-WP." As listed in 
evaluation and management, the completion of all testing components, including 
any specialty testing for systemic impairment, performed by one individual, 
warrants modifier "-WP." 
 COMMENT: (VII)(B), SURGERY (V). The commenters expressed concern about the fee 
of $75 stated in General Instructions section (VII)(B)(2)(a) and (b) and that it 
might be interpreted as the facility fee. Another commenter objected to the 
facility fee reimbursement of $150 because it is insufficient to cover costs of 
the service. Another commenter was concerned that a certified ambulatory 
surgical facility would be subject to these reimbursements. Still another 
commenter suggested that imaging centers and radiologic centers be defined 
separately from "non-ambulatory surgical centers." 
 RESPONSE: The commission agrees that language in this section needs 
clarification to reduce confusion with procedures performed in licensed 
ambulatory surgical centers and confusion regarding what represents "facility 
charges". The title of the section has been changed to "Surgical Procedures 
Performed in a doctor's office" to clarify that the section applies only to 
procedures performed in a Doctor's office. Ambulatory surgical centers are a 
specific defined facility licensed by Texas Department of Health, this section 
does not address procedures performed in such centers. Fees related to such a 
center's facility charge are reimbursed at a fair and reasonable rate. By 
deleting the word "facility" the commission acknowledges that this guideline 
only addresses service performed and supplies used by a doctors office, and does 
not address the "facility" charge. Facility charges for licensed and non-
licensed ambulatory surgical centers will be addressed in an upcoming guideline. 
Specific reimbursements were deleted because the setting of a singular 
reimbursement to cover the wide range of services/supplies utilized in 
ambulatory surgical centers may seriously undervalue or overvalue certain 
services/supplies. Instead, documentation of procedure is now required for 
services/supplies which are billed at $50 or greater. Imaging and radiologic 
centers not performing surgical procedures (e.g. diagnostic injections) would 
not be included in this section because it applies to surgical procedures 
performed. General Instructions Ground Rules section (VII)(B) has been revised 
and moved to the Surgery Ground Rules as new section (V). This is a more 
appropriate place for this section because it applies to situations where 
surgery is being performed. The new section has been rewritten to state: 
 "(V) Surgical Procedures Performed in a Doctor's Office. 
 (A) In order for the doctor's office to qualify for facility reimbursement for 
surgical procedures performed in a doctor's office, the office shall meet the 
following requirements: 
 (1) a complete and routinely checked crash cart; 
 (2) a registered nurse, CRNA, or doctor dedicated to the "facility" room; 
 (3) a separate observation or recovery room; 
 (4) patient monitoring equipment, including EKG and pulse oximetry equipment; 
and 
 (5) support staff and equipment to ensure that the care received by the patient 
is the same as that which would have been received in an ambulatory surgical 
center or in the outpatient surgical ward of a hospital. 
 (B) If the above listed requirements are met, the only reimbursements allowed 
for facility charges are the following: 
 (1) Sterile trays (which include all supplies, gloves, utensils, needles, 
suture material, etc., needed to perform the procedure). These are billed using 
99070-ST. Reimbursement is the lesser of the doctor's usual charge or fair and 
reasonable reimbursement. DOP is required if charges are $50 or greater. 
 (2) Anesthesia supplies which include the administration of the sedative, the 
IV solution, the catheter/tubing, and drugs. No additional charges are allowed 
for equipment or staffing. If the services require the use of complex or 
prolonged anesthesia or the need for an anesthesiologist or CRNA, the service 
shall be performed in a hospital or ambulatory surgical center. This service is 
billed using code 99070-AS. Reimbursement is the lesser of the doctor's usual 
charge or fair and reasonable reimbursement. DOP is required if charges are $50 
or greater. 
 (3) Postoperative monitoring which is reimbursed hourly. This service is billed 
using code 99499-RR, and includes the facility, staffing and monitoring 
equipment. No separate charges shall be allowed for HCP stand-by. The maximum 
amount of time allowed for postoperative monitoring is four hours and DOP is 
required." 
 Because of this change, section (VII)(B), now (VI)(B), of the General 
Instructions Ground Rules has been deleted. 
 COMMENT: (IV). There were many comments regarding section (IV) of the General 
Instructions Ground Rules which relates to documentation and reporting. Comments 
were as follows: commenters asked that the requirement that operative reports be 
submitted with surgery bills be deleted; that the title be revised to read 
"General Ground Rules for Medical Reports"; that the TWCC-64 be included in the 
rule; that all doctors who examine a patient and generate a TWCC-69 be 
reimbursed; that documentation submitted in response to TWCC treatment 
guidelines also be reimbursed; that fees for reports should be raised to $25-
$30; that voluntary submission of office progress notes should be reimbursed; 
that the requirement that consultation reports be submitted to the carrier be 
deleted; that the requirement that office dictation or notes be submitted to the 
carrier be deleted; that a time limit of two days be added to section (B)(3); 
that section (B)(5) be clarified to distinguish an initial evaluation from a 
reevaluation; that the fees for medical records be adjusted for cost of living 
adjustment; and that the standards for reporting be better communicated to 
providers to avoid denial of reimbursement for failure to comply with the ground 
rules. One commenter felt that time spent in procedures the contributory portion 
of each surgeon will need to be determined by the evaluation and management 
service should be specified. 
 RESPONSE: The commission agrees that revisions should be made to this section. 
General Instructions Ground Rules section (IV) (due to a clerical error this 
section number was transposed) entitled "Documentation and Reporting 
Reimbursement Guidelines" has been deleted and will be reviewed and reproposed 
at a later date. It is anticipated that a section containing General Ground 
Rules for Medical Reports will be included in the next revision of the Medical 
Fee Guideline. Section 133.100 of this title and sec.sec.133. 102-133.106 of 
this title shall continue in effect regarding reimbursement for reporting. 
 The following comments were received regarding the surgery ground rules. 
 COMMENT: Modifier -51. The commenters questioned the use of the "-51" modifier. 
Should the provider reduce the fee by 50% or use the "-51" modifier and leave 
the charge at the provider's usual and customary fee. One commenter indicated 
that the AMA CPT guidelines are more specific in this instance. 
 RESPONSE: The commission agrees to clarify the confusion on this issue. It is 
in the best interest of the workers' compensation system that usual and 
customary be billed by HCPs. In this regard the provider shall also continue to 
bill according to the same method, and use of appropriate modifiers as he or she 
would bill any other payor. If the provider's usual and customary way of billing 
surgeries is cutting the charges with modifier "-51" by 50%, the provider should 
bill that way. If the provider normally bills surgery services with modifier "-
51" at 100%, the provider should bill that way. 
 COMMENT: Modifier -20. The commenter questioned the use of Clinic modifier -20, 
microsurgery use of operating microscope. Commenter expressed appreciation for 
the additional reimbursement, but felt it makes no sense to pay an additional 
fee for using a tool that makes your job safer and easier. 
 RESPONSE: The commission disagrees. An operating microscope can be an integral 
assistive device to surgeons performing delicate surgical procedures. With this 
understanding, reasonable reimbursement to ensure such devices are available for 
patient safety are used are justified. 
 COMMENT: Modifiers -62 and -65. The commenter felt surgery modifiers "-62" "two 
surgeons" and "-65" "co-surgeons" are unclear as to what the reimbursement 
percentages will be and if the reimbursement will be at 100% of the total 
procedure(s) performed. Another commenter asked for clarification on the working 
of modifier "-62," indicating two surgeons, as in a situation where a 
neurosurgeon performs a laminectomy followed by an orthopaedic surgeon 
performing a fusion on the same patient. This is not clear, is each surgeon paid 
as a primary procedure, or is there a discount spread among the two surgeons? 
Another commenter stated that when an operative procedure extends over a long 
period of time it is common to have more than one surgeon involved. The 
reimbursement schedule does not allow payment in excess of 100% of the 
designated fee. Obviously this is not important under most circumstances but 
when multiple surgeons are required with trauma surgery especially 
reconstruction, they are only compensated at 75% of their customary 
reimbursement when using modifier "-65." This ignores the fact that the 
liability is shared by all surgeons involved and there is no exception allowed 
for extenuating circumstances and particularly difficult type procedures. 
 RESPONSE: The commission disagrees there may be some confusion when using 
modifiers "-62" and "-65." Due to the wide range of surgical procedures the 
contributory portion of each surgeon will need to be determined by the 
participating surgeons, not to exceed 100% when using modifier "-62." Under 
modifier "-65" each surgeon is reimbursed their charge or 75% of the MAR, 
whichever is less, for the procedure performed. Since modifier -65 is used only 
when co-surgeons are operating through the same incision, the reimbursement 
received for the two procedures is identical to the amount received if one 
surgeon was performing both procedures. In the 1991 Medical Fee Guideline, 
modifier -62 would be used for both co-surgeon and two surgeon situations. 
Splitting this into two modifiers simplifies auditing of the bills and should 
decrease disputes. An example of the use of co-surgeon would be when a 
neurosurgeon performs a laminectomy followed by an orthopaedic surgeon who 
performs a fusion. The commission acknowledges in certain situations protracted 
surgical procedures may justify additional reimbursement. In these situations, 
modifier "-22" be used accompanied by documentation of procedure (DOP). Under 
certain circumstances the skill of two surgeons (usually with different skills) 
may be required in the management of a specific surgical procedure. 
 COMMENT: (II)(B)(2)(a), (b) and (d). In the Surgery Ground Rules section 
(II)(B)(2)(a), (b), and (d), a commenter suggested that the commission remove 
the requirement to submit documentation and a separate code (99025) to 
substantiate the level of service given when a starred procedure is carried out 
at the time of an initial office visit or emergency room visit and the procedure 
constitutes the major service at that visit. In addition, a commenter 
recommended that the Medical Fee Guideline require the use of CPT modifier "-25" 
to identify the significant separately identifiable service or visit by using 
the modifier the visit is explained and additional information should not be 
required for unusual circumstances. 
 RESPONSE: The commission disagrees. Surgery Ground Rule section (II)(B)(2) (a) 
lists no requirement for DOP, only the use of code 99025. The requirement to use 
code 99025 in this situation is consistent with 1995 McGraw Hill Relative Values 
for Physicians. The use of modifier "-25" would be redundant in this situation 
where a specific code is identified. The commission disagrees with the 
suggestion to remove the requirement for DOP from Surgery Ground Rule section 
(II)(B)(2)(b) and (d). It is necessary to substantiate the level of service 
provided during hospital admissions for a starred procedure. Starred procedures 
include variable pre-operative and post-operative services. Because of the 
variable nature of these services, DOP is justified. 
 COMMENT: (I)(D)(4). Many commenters advocated inclusion of all board certified 
physician assistants, including those Certified Orthopedic Physician's 
Assistants and inclusion of reimbursement as appropriate. 
 RESPONSE: The commission disagrees with the addition of Certified Orthopedic 
Physician Assistants or Orthopedic Physician Assistants in the definition of 
certified physicians assistants. Certified Orthopedic Physician Assistants or 
Orthopedic Physician Assistants do not meet the licensure standards of physician 
assistants programs accredited by the American Medical Association's Committee 
on Allied Health Education, or a person who has passed the certifying 
examination administered by the National Commission on Certification of 
Physician Assistants, and who is licensed by the Physician Assistant Advisory 
Council. Certified Orthopedic Physician Assistants and Orthopedic Physician 
Assistants certifications are not presently recognized within this guideline for 
reimbursement. 
 COMMENT: The commenter felt the proposed Medical Fee Guideline contained better 
surgical ground rules overall, particularly noting clarification of epidural 
steroid injections, and all paraspinal and paravertebral injections. The 
commenter indicated that his company has for some time followed these protocols, 
and that this should avoid much contention. 
 RESPONSE: The commission agrees. 
 COMMENT: (I)(A)(1)(b). The commenter recommended that the Medicare program's 
global fee concept be adopted because it is very clear regarding what is 
included in the global surgical fee and is universally understood and accepted 
by the medical community. 
 RESPONSE: The commission agrees. Medicare's Global Fee concept is standard for 
the industry. This section has been rewritten to include "Included in the global 
period for surgery are all preoperative visits beginning with the day prior to 
surgery." Section (I)(A)(1)(b) has been added and previous section (I) (A)(1)(b) 
has been redesignated as (c)). They now read: 
 "b. Included in the global period for surgery are all preoperative visits 
beginning with the day prior to surgery. 
 c. The number of consecutive post-operative follow-up days allowed is listed in 
the column titled FUD adjacent to the MAR column for the specific surgical code. 
The number of follow-up days allowed is the FUD for the primary procedure." 
 COMMENT: (I)(B). The commenter objected to section (I)(B) in the Surgery Ground 
Rules. Section (I)(B)(1)(a) states that "doctors should not charge an emergency 
room visit in addition to surgery resulting from that visit unless surgery is 
the starred procedure." This is unfair. When a patient presents in the emergency 
room, time spent examining, evaluating and treating the patient is much longer. 
The assessment and treatment of the patient is more complex and involved. 
Because emergency room staff are not trained to deal with workers' compensation 
issues it takes the surgeon longer to arrange for surgery than if arrangements 
were made through the doctor's office. A physician should be entitled to bill 
for the initial emergency room evaluation and subsequent report. 
 RESPONSE: The commission agrees. Surgery Ground Rules section (I)(B) stipulates 
under what circumstances immediate pre-operative visits and other services by 
the surgeon warrant additional compensation. Under this section (I) (B)(1), the 
surgeon may charge if the pre-operative visit is the initial visit which 
requires prolonged detention or evaluation in order to prepare the patient 
and/or to establish the need for a particular type of surgery. The language in 
section (I)(B)(1)(a) has been clarified as follows: 
 "Doctors shall not charge an emergency room visit in addition to a surgery 
resulting from that visit unless the requirements stipulated in (B)(1) shall be 
met or the surgery is a starred procedure, in which case, code 99025 is 
appropriate." 
 In the situation described by the commenter, additional reimbursement for the 
initial workup and evaluation performed may be warranted. 
 COMMENT: (I)(D)(2). The commenter believes that CPT codes 64443, 64901, 64902 
are additional level codes and will always be used in conjunction with a primary 
procedures and will never be used as a primary procedure and because of this 
fact these CPT codes should be added to the multiple surgical procedure box. CPT 
codes 20974, 20975 are commonly used as secondary procedures but upon occasion 
can be used as primary procedures and CPT code 44950 is a primary procedure most 
of the time and these three CPT codes should be deleted from the box used to for 
procedures valued at 100%. 
 RESPONSE: The commission agrees that there has been significant revision in 
this section of the guideline, and that 64443, 64901 and 64902 should be added 
to the full value for multiple procedure box. CPT codes 20974, 20975, 44950 are 
identified in the 1995 edition of McGraw Hill Relative Value for Physicians as 
codes for which "multiple procedure guidelines for reduction do not apply". CPT 
codes 20974, 20975 and 44950 were already listed in the multiple procedure box 
and CPT codes 64443, 64901 and 64902 were added. 
 COMMENT: (I)(D)(3) NOTE. The commenter felt that the note in section (I)(D) (3) 
appears to be created by the staff. There is no other comparable rule in McGraw 
Hill or CPT that we are aware of that limits the ability of any surgeon to 
assist any other surgeon and be compensated for the assisting. Either co-surgeon 
could bring in another assistant which would be reimbursable. 
 RESPONSE: The commission agrees that the note in section (I)(D)(3) was created 
by the commission, but disagrees that it limits surgeons from bringing in an 
appropriate assistant surgeon, surgical team, one of two surgeons or co-
surgeons. This note does not prevent any of these surgeons from receiving 
reimbursement. The note prevents participating surgeons from billing for more 
than one of these modifiers per surgery. For clarification, the note has been 
rewritten as follows: 
 "Note: A doctor who acts as a member of a "surgical team", modifier "-66", as 
"one of two surgeons", modifier "-62", or as a "co-surgeon", modifier "-65", may 
also bill using modifier "-80 assistant surgeon" only for those procedures in 
which assistance rendered is medically necessary." 
 COMMENT: (I)(D)(1). The commenter stated that certain procedures such as 
anterior/posterior fusions, may have to be done on different days for patient 
medical reasons (obesity, blood loss, complicating medical factors, etc.). 
Because the workload is not decreased (and is in fact increased) the commenter 
felt that a reduction in payment is not warranted. In addition, commenter felt 
that there should not be a reduction when these procedures are done on the same 
day. The McGraw Hill formula allows reimbursement at 70% on the second primary 
procedure, which is more reasonable than the proposed rule allows. 
 RESPONSE: The commission agrees that when procedures are performed on different 
days, reimbursement should not be reduced. The NOTE following section (I)(D) of 
the Surgery Ground Rules has been deleted. However, staged procedures still 
require documentation of medical necessity justifying a staged procedure and if 
procedures are performed on the same day the multiple procedure rule applies. 
The note in section (I)(D) of the Surgery Ground Rules has been deleted. 
 The commission agrees that the multiple procedure rule should not be enforced 
for second primary procedure in anterior/posterior fusions. After reviewing 
standards in coding and current AMA CPT coding guidelines, the instrumentation 
codes has been listed as primary procedures as described in Surgery Ground Rule 
(E)(1). 
 COMMENT: (I)(D)(1)(a) and (I)(E)(7). One commenter suggested that the words 
"major procedure" need to be defined to give some clarification and direction. 
Another commenter asked for clarification regarding how to determine if a 
procedure is deemed separate or incidental. 
 RESPONSE: The commission agrees to add clarification regarding what constitutes 
a major or primary procedure consistent with McGraw Hill's definition. Surgery 
Ground Rule section (I)(D)(1)(a) has been rewritten to state: 
 "100% of the MAR for the primary procedure, (major procedure reflecting the 
greatest value)." 
 COMMENT: (I)(E)(1), (2), and (3). The commenters objected to the creation of 
one CPT code for identification of combination anterior/posterior spinal 
procedures (360s). The commenters preferred the use of one CPT code for each of 
the two surgeries involved, but suggested that if one code was to be used 
reimbursement should be divided into three, maybe as many as six, levels. 
 RESPONSE: The commission agrees. The Surgery Ground Rules Section (I)(E) and 
specified coding do not allow for consistent billing and reimbursement. The 
Surgery Ground Rules have been revised to allow for all the prescribed codes to 
be billed in lieu of one bundled unlisted code. The multiple codes staff 
outlined are derived from standards in coding, current AMA CPT coding guidelines 
and research of commenters suggestions. These codes will have an established 
MAR. The Surgery Ground Rules Section (I)(E) has been rewritten to state: 
 "(1) Posterior or anterior instrumentation (codes 22840-22845) is listed 
separately in addition to the code(s) for fracture, dislocation or arthrodesis 
of the spine (codes 22305-22812). The instrumentation code(s) should be listed 
as a secondary procedure, without further reduction. Reimbursement shall be 
allowed posteriorly or anteriorly for the placement of the fixation devices. 
Instrumentation is performed on a spine that is unstable, and usually multiple 
levels are involved. 
 (2) Arthrodesis: 
 (a) All arthrodesis procedures include those vertebral graft preparations, such 
as diskectomy, necessary to accomplish the arthrodesis. 
 (b) When vertebral procedures (e.g. laminectomy) are followed by arthrodesis, 
the arthrodesis is billed with modifier -51 and the multiple procedure rule 
applies to anterior and/or posterior arthrodesis. 
 (c) Combination Anterior/Posterior Spinal Procedures shall be billed using the 
codes for both anterior and posterior arthrodesis with TWCC Alpha Modifier "-AP" 
on both codes. The multiple procedure rule does not apply when no vertebral 
procedure is performed. 
 (d) When anterior arthrodesis approach is performed by a different surgeon, 
both surgeons bill using the anterior arthrodesis CPT code with modifier-65. 
 (3) Bilateral Procedures 
 (a) Unless otherwise identified in the CPT descriptor, bilateral procedures 
that are performed at the same operative session shall be identified by the 
appropriate five digit code describing the first procedure. The second 
(bilateral) procedure is identified by adding modifier -50 to the procedure. 
 (b) Fusions, instrumentations, and/or nerve decompression procedures are 
considered bilateral, therefore, no additional reimbursement shall be allowed. 
 The second definition of modifier -50 was deleted due to the deletion of 
Surgery Ground Rule section (I)(E)(3). 
 For consistency, the surgery modifier -AP has been revised as follows: 
 "-AP Combination Anterior/Posterior Spinal Procedures: This modifier shall be 
billed for all surgical procedures performed to complete the combination 
anterior/posterior surgical procedure." 
 COMMENT: (I)(E)(3)(a). The commenter expressed concern in relation to bilateral 
procedures under Surgery Ground Rules section (I)(E)(3)(a) which states that 
"For spinal surgeries requiring bilateral procedures through the same incision, 
modifier 50 must be used with the appropriate CPT code. An additional $370 will 
be reimbursed for each bilateral procedure". And then it says, "The multiple 
procedure rule does not apply." In section (I)(E)(3)(b) it says "Fusions and/or 
instrumentations are considered bilateral therefore no additional reimbursement 
is allowed." Does that mean it refers to (a)? 
 RESPONSE: The commission agrees that this section is unclear. Due to the lack 
of data needed to support the additional allowance of $370 for bilateral 
procedures, as well as to maintain consistency with customary coding practice. 
Surgery Ground Rules Section (I)(E)(3)(a) has been rewritten as indicated in the 
response to the previous comment. 
 COMMENT: (I)(E)(4). Commenters expressed the opinion that in section (I)(E) 
(4), surgical injections points (b), (c) and (d) both contradict (a). Section 
(I)(E)(4)(a) says surgical injections delineated as per injection by CPT 
descriptor and the nomenclature warrant additional reimbursement per injection 
subject to the multiple procedure rule within the same body part warrants 
reimbursement and (b) states injections delineated as per level by CPT 
descriptor and nomenclature are considered bilateral. Each additional level is 
exempt from the multiple procedure rule. Every injection procedure performed by 
a physician, whether through the same puncture site or not, is a separate 
injection and should be reimbursed as such. In referring to surgical injections, 
another commenter expressed concern regarding the multiple procedure rule and 
CPT code 20550, trigger point and ligament injections. The proposed guidelines 
result in a greater than 50% reduction from the commenter's customary fees in 
the situation where multiple injections are necessary. Three commenters objected 
to Surgery Ground Rules section (I)(E)(4) (c) which limits epidural steroid 
injections (ESI) to one single billing code 62289. One commenter indicated that 
techniques and outcomes for epidural steroid injections can be different. 
 RESPONSE: The commission disagrees that in the Surgery Ground Rule section 
(I)(E)(4), subsection (a) contradicts subsection (b), (c) and (d). Subsection 
(c) pertains only to epidural steroid injections and subsection (d) pertains to 
introduction of materials through the same puncture site. Neither (c) nor (d) 
have any relation to (a) or (b). Subsections (a) and (b) attempt to delineate 
reimbursement differences when the CPT descriptor specifies the injection is per 
injection (a) or per level (b). The multiple procedure rule is a standard coding 
practice and not unique to TWCC. The intent is to clarify that those surgical 
injections within the same body area that are by CPT code descriptor identified 
as per injection are subject to the multiple procedure rule. The multiple 
procedure rule results in the first injection being reimbursed at 100% of MAR 
and subsequent injections being reimbursed at 50% per the multiple procedure 
rule. If injections are needed in an additional body area, the first injection 
is reimbursed at 100% with subsequent injections in the same body area subjected 
to the multiple procedure rule. The commission does allow for multiple materials 
to be reimbursed separately at the same puncture site, but when only one 
puncture is performed only reimbursement for one puncture is needed. The 
professional expertise needed to perform an injection is in the puncture and 
placement of the needle. The purpose of this Ground Rule is to limit 
reimbursement to only one puncture, when multiple punctures are unnecessary. 
There is insufficient justification to substantiate the allowance for 
reimbursement for multiple punctures when only a single puncture site is used. 
Injection codes are very specific with regard to the type of material injected 
as well as the site of the injection. Code 62289 is specifically used only for 
the injection of steroids in the epidural area. There are other injection codes 
which pertain to anesthetics, neurolytic and injection of contrast. There is no 
need for injection codes to differentiate epidural steroid injection. 
 In order to clarify that each additional level of surgical injection is exempt 
from the multiple procedure rule and reimbursed at full value, the Surgery 
Ground Rule Section (I)(E)(4)(b) has been rewritten to state: 
 "Injections delineated as per level by CPT descriptor and nomenclature are 
considered bilateral; each additional level is exempt from the multiple 
procedure rule and shall be reimbursed at full value." 
 The following comments were received regarding the guideline in general. 
 COMMENT: The commenter made a statement about the Preauthorization Rule leading 
to delays in getting the services to the injured worker. 
 RESPONSE: This comment pertains to sec.134.600 of this title (relating to 
Procedure for Requesting Pre-Authorization of Specific Treatments and Services) 
and does not pertain to the Medical Fee Guideline. 
 COMMENT: The commenter was glad to see the proposed increase in reimbursement 
for pulse generator placement and drug infusion pumps and felt the reimbursement 
now approached satisfactory levels. 
 RESPONSE: The commission agrees. 
 COMMENT: The commenter suggested the creation of an abuse investigation 
department within TWCC to attempt resolution of problems without resorting to 
formal dispute. 
 RESPONSE: This issue is outside the purview of the Medical Fee Guideline. 
 COMMENT: The commenter suggested that the changes to the Medical Fee Guideline 
be reviewed on an annual basis rather than every five years. 
 RESPONSE: The commission agrees. The Texas Labor Code,  sec.413.102 states that 
medical policies and guidelines be reviewed at least every two years. The 
commission intends to review and revise the guidelines on a regular basis. 
 COMMENT: The commenter supported the recommendations of T-Bones and urged that 
they be given consideration. 
 RESPONSE: The commission has given due and equal consideration to all comments 
submitted during public comment period and public hearing. 
 COMMENT: The commenter advocated that the guidelines restrict billing and 
collecting for fees for tests such as EMG's, NCV's, surface EMG's and dermatomal 
SSER's to those physicians who are trained in the performance and interpretation 
of such tests. 
 RESPONSE: The commission disagrees that this guideline should restrict billing 
and collection of fees for tests such as EMGs, NCVs, surface EMGs, and SSEPs. 
The Medical Fee Guideline is not a treatment guideline, it is therefore 
inappropriate for it to instruct regarding diagnosis, patient care or treatment 
outcomes. It has been the policy of the commission not to supersede the 
restrictions of professional licensing boards. It is the role of a licensing 
board to establish parameters within its trade which define the roles and 
responsibilities of the care providers. In the introduction to the General 
Instructions Section of the Medical Fee Guideline reimbursement is limited to 
HCPs performing services within the scope of practice for which the provider is 
licensed. 
 COMMENT: The commenter requested that the workman's compensation commission 
instruct their computer programmers to move up to the 1994-1995 CPT codes. 
 RESPONSE: The commission agrees. The 1995 CPT codes were used for the Medical 
Fee Guideline. Reimbursement is directly derived from TWCC billing data, 1995 
McGraw Hill Relative Value for Physicians, as well as 1994 and 1995 Texas 
specific, fee-for-service billing data from Innervation Technology Corporation. 
 COMMENT: A number of commenters expressed general support for the Medical Fee 
Guideline and complimented Texas Workers' Compensation Commission (TWCC) staff 
for the enormous amount of work undertaken in dealing with complex matters. Some 
commenters expressed the view that the proposed Medical Fee Guideline was a 
great improvement over the current fee guideline. One commenter expressed the 
methodology is sound. 
 RESPONSE: The commission agrees. 
 COMMENT: The commenter recommended listing the conversion factor for maximum 
allowable reimbursement (MAR), professional components (PCS), and technical 
components (TCS) in the Medical Fee Guideline. 
 RESPONSE: The commission disagrees with the recommendation to list conversion 
factors. The commission is moving away from listing conversion factors and 
relative value units. The commission is moving toward a system where the 
reimbursement for services is based on their fair market value. In addition, the 
commission is not authorized to publish the relative values obtained from McGraw 
Hill, or the conversion factors obtained from Innervation Technologies 
Corporation. This information is copyrighted. The information is available for 
inspection at the Texas Workers' Compensation central office in Austin. 
 COMMENT: A commenter was concerned about the misconception of what constitutes 
usual and customary (U & C) and the definition for usual and customary and how 
usual and customary will be used to determine MARs. Another commenter suggested 
that the Medical Fee Guideline establish specific definitions for abbreviations 
used. U & C, R & C and MAR and also explain the criteria used for establishing 
the value. 
 RESPONSE: The commission agrees that some terms are confusing but disagrees 
that definitions of all these terms is necessary in the Medical Fee Guideline. 
Usual and customary (U & C) represents the standard fee a HCP charges for 
services. Statewide U & C is the conglomerate of these standard fees for HCPs 
who bill for the same service, as identified by CPT coding throughout the state. 
This information provides the distribution of charges for like procedures and is 
representative of the economics of supply and demand as well as healthcare cost 
drivers, inflation, labor, liability, etc. How this information is used to 
determine MARs is explained in detail at the beginning of the preamble. 
Reasonable and customary (R & C) is used most often to describe the 
reimbursement afforded by carriers for the provision of medical services or 
equipment. This term is not used in the Medical Fee Guideline. The Medical Fee 
Guideline contains a section entitled "Acronyms" in the back which explains 
abbreviations. The preamble to the proposed Medical Fee Guideline explains in 
detail the methodology used to establish reimbursements. 
 COMMENT: Four commenters felt that the time allowed for review of the proposed 
Medical Fee Guideline was too short. 
 RESPONSE: The commission disagrees. The commission has ensured that public 
comment was solicited in accordance with the Administrative Procedure Act. The 
commission proposed the new sec.134.201 on October 12, 1995, the rule was 
published in the Texas Register on October 20, 1995, and the public comment 
period closed on November 20, 1995. A five-hour public hearing was held on 
November 9, 1995 where over 35 commenters gave oral comments on the proposed 
rule. Approximately 185 written comments were received. Additional input was 
solicited through the commission's Medical Advisory Committee (MAC) who have 
consulted their respective associations and specialists throughout the last 18 
months. Final presentation of the proposed Medical Fee Guideline to the MAC was 
made on September 15, 1995. 
 COMMENT: The commenter suggested changing the provider's "usual fees and 
charges" to "published usual fees and charges" when describing the maximum 
allowable payment. 
 RESPONSE: The commission disagrees that the addition is necessary. There is no 
explanation by the commenter as to where usual fees and charges would be 
published. It would be administratively burdensome for the commission to track 
thousands of fees for over 40,000 individual providers. The Medical Fee 
Guideline clearly instructs providers to bill U & C charges if a HCP published 
price list contains their U & C then it is within the guidelines provisions. In 
addition it is the commission's intent to reflect an industry wide UCR instead 
of individual provider's U & C. 
 COMMENT: The commenter stated that he also provides mental health services 
related to pain associated with compensable injuries and suggested that the 
proposed fees will allow continuance of such services to injured workers. 
 RESPONSE: The commission agrees. 
 COMMENT: Two commenters challenged statements that HCPs were being paid at 91% 
of the private pay insurance market. 
 RESPONSE: The subject of the commenters' concern is not contained in the 
Medical Fee Guideline. The Workers' Compensation Research Institute's (WCRI) 
independent research has shown that the 1991 Medical Fee Guideline reimburses 
91% of private indemnity. This may mistakenly be interpreted as meaning 91% of 
the private pay insurance market, or 91% of reasonable and customary rates. This 
concept has confused some commenters, but subsequent telephone conversations 
with the WCRI staff has confirmed the percentage cited is relative to private 
indemnity claims. 
 COMMENT: The commenter stated that he has been told by TWCC personnel that HCPs 
should bill the amount in the fee schedule or lower, or else it would be 
considered overbilling. The commenter also stated that memos are sent to 
carriers clarifying TWCC rules and regulations, procedures etc., that other 
participants in the workers' compensation system are not being informed about. 
This is devastating and costing the commission great sums of money and manpower 
forcing an overloading of the already overloaded dispute resolution section. 
 RESPONSE: The commission disagrees. The commission has always stated HCPs 
should bill their usual and customary fee. The commission acknowledges that many 
providers may wish to bill at the Medical Fee Guideline to simplify bookkeeping, 
but this practice prevents the commission from developing a database as mandated 
in the Texas Workers' Compensation Act, sec.413.007. Advisories are widely 
distributed to clarify workers' compensation issues to program participants. 
 The following comments were received regarding the methodology. 
 COMMENT: The commenter felt that it was arbitrarily determined that 160 most 
commonly coded billing services in some way shape of form represent over-
utilization and pointed out that a survey of 30 states with comprehensive 
worker's compensation systems, including Texas, at least show that the first 100 
top billing items by code are similar. 
 RESPONSE: The commission agrees in part. The top 200 codes within workers' 
compensation represent approximately 84% of the paid amounts, once we extract 
all CPT codes that do not have a RVU established by McGraw Hill, approximately 
160 CPT codes are retained, accounting for approximately 79% of paid amounts. 
These codes do not represent over-utilization. They do, however, represent 
statistical significance. These CPT codes represent a significant influence in 
the charges and costs to the system. It would be contrary to statistically 
accepted methodology to set fees by using a greater number of codes that have 
far less significant or influence upon the outcome. 
 COMMENT: The commenter stated that the Workers' Compensation Research Institute 
Study (WCRI) which showed Texas fees to be above the median for some other 
states is outdated and irrelevant because it reflects guidelines in existence 
before 1994 and at least 11 of those state guidelines have been revised since 
that time. The commenter also expressed the view that fees should be based on 
what is fair and reasonable in Texas and not other states. 
 RESPONSE: The commission disagrees that the WCRI study is outdated and 
irrelevant. The WCRI study, although published in 1994, is still the most 
current evaluation of various workers' compensation fee schedules. Numerous fee 
guidelines have been revised. However, no comparative studies regarding these 
fee schedules have been published. The commission agrees that fees should be 
based on Texas data. Texas specific data was purchased from Innervation 
Technology Corporation and used in the rate setting methodology. Fee guidelines 
from other states were reviewed as part of the research for this Medical Fee 
Guideline to analyze Texas fees as compared to other states. Workers' 
compensation costs are a significant factor in economic development and the 
overall effect of such costs on Texas' ability to remain competitive must be 
considered. 
 COMMENT: The commenter supports the general idea of phasing in changes to avoid 
market disruption only under the consideration that further fee changes will be 
undertaken in the near future. The commenter suggested that the Medical Fee 
Guideline be increased every year by an amount equal to the increase in the PPI 
for physician services and that an adjustment of relative values be accomplished 
in two years. 
 RESPONSE: The commission agrees that this Medical Fee Guideline is a 
transitional step to a market based system. The commission's intent is to review 
and revise this guideline on a regular basis. During that review, all fees will 
be reevaluated. 
 COMMENT: The commenters felt the recommended reimbursement system would result 
in increased patient loads trying to make up the reduction in reimbursement and 
therefore, a reduction in the quality of care. One commenter felt the 
reimbursement recommended is an inappropriate, inequitable means for maintaining 
quality and access to services and such methodology should be re-evaluated. 
Another commenter felt that the standard of care will be jeopardized by any 
reduction in various components of the fee guidelines. The commenter stated the 
fees currently in place, when compared with other sources of remuneration, are 
not excessive and that no reduction in fact is truly justified. 
 RESPONSE: The commission disagrees that the recommended reimbursement system 
will result is a reduction in the quality of care provided to injured workers. 
While not anticipating reductions in the quality of care on a global basis, 
patterns of practice will be monitored to detect specific instances of declining 
quality. Although an increase in patient volume does generate an increase in 
reimbursement, it does not necessarily equate to a more profitable practice due 
to potential increase in fixed and variable costs. As a result, it is not 
anticipated that providers will increase patient loads to a degree which will 
affect quality of care. In addition, not all reimbursements are reduced. Some 
are increased. Decrease in reimbursements are based on a methodology which 
adjusts reimbursement based on a gradual transition to a market value system to 
avoid a sudden drastic effect on providers. Payers and purchasers of medical 
services are increasingly demanding quality controls implemented and subsequent 
outcome monitoring. The issue of quality is reflective upon the competency and 
dedication of these providers to undertake such initiatives. Global volume 
within workers' compensation is driven by injury/incident rates. Control of 
volume, patient mix and representative payers is greater outside the workers' 
compensation arena. Quality indicators (such as successful outcomes), have shown 
the implementation of strict utilization control, assessment, review mechanisms 
and quality control initiatives to be efficacious. All of this has occurred 
while medical services in general have undergone monetary devaluation. Current 
reimbursement rates are reflective of market driven health care economics and do 
not suppress access to care. 
 COMMENT: The commenter requested that non-workers' compensation arrangements 
between providers and insurance carriers, in particular the level of 
reimbursement in capitated fee arrangements traditionally used in managed care 
networks, be considered in setting reimbursement in the Medical Fee Guideline. 
In addition, the commenter suggested that the impact of deductibles and co-
payments in non-workers' compensation systems be considered. The commenter 
pointed out that this is consistent with the statutory requirement in Texas 
Labor Code, sec.413.011(b) that the fee guidelines do not allow payment of a fee 
in excess of the fee paid in non-workers' compensation cases and that the 
commission consider the increased security of payment in establishing the fee 
guidelines. 
 RESPONSE: The commission disagrees that it would be appropriate to use the data 
representative of managed care as it is not an accurate reflection of workers' 
compensation. Managed care programs include deductibles, co-insurance, co-pay or 
other forms of utilization control or risk sharing mechanisms. Current workers' 
compensation reimbursement most closely resembles the UCR billing distributions 
as it exists in a fee-for-service environment. For this reason, the commission 
chose the Innervation Technology Corporation's database as the basis for its 
model for creating the new fee schedule. Texas Labor Code, sec.413.011 requires 
fee guidelines to be established taking into consideration the fees charged and 
paid for specific medical services. Since capitated programs within managed care 
reimburse providers under a per patient per month basis and do not take into 
account the specific services rendered, capitated data would be inappropriate. 
 COMMENT: The commenters expressed the view that the proposed reimbursements 
appear to have a more severe impact on physician versus non-physician HCPs. For 
example physical medicine codes show a substantial increase, while surgery has 
remained about the same and radiology has show a significant increase. One 
commenter suggested that the physicians are under-represented in this 
undertaking. Another commenter expressed the opinion that the relative unit 
value methodology is being complicated by using RVUs to set both physician and 
non-physician reimbursement. The same commenter suggested that non-physicians be 
separated out and the system reassessed to determine whether the Medical Fee 
Guideline is proposing to pay non-physicians more than what the market relative 
position would indicate. 
 RESPONSE: The commission disagrees. In order to develop reimbursement for 
medical specialties that are physician driven, i.e. surgery, a comparison was 
made using TWCC medical billing data and the Innervation Technology Corporation 
(ITC) database to look at the billing distribution of surgery data. Medical 
specialties that are non-physician driven, i.e. physical medicine, were compared 
to the billing distributions of physical medicine data. Data analysis showed 
that physical medicine reimbursements contained in the 1991 Medical Fee 
Guideline were significantly under valued in comparison to UCR fee-for-service 
billing. This level of devaluation is not reflected in a similar comparison of 
reimbursement for surgical specialties and radiology. With this type of 
comparison, the specialties are reflective of billing distribution of physicians 
and non-physicians separately. While RVUs are based upon physician involvement, 
ITC billing distribution is based upon all HCPs within a fee-for-service billing 
distribution. A rudimentary separation already exists by the very nature of the 
medical specialties. The reduction of reimbursement in surgery results from 
these codes being identified as outliers from UCR fee for service billing data. 
Radiology was reduced because it fell above the 90th percentile of UCR fee-for-
service billing. As a result, simply adjusting fees for inflation does not 
address these artificially high or low reimbursements and would perpetuate these 
unjustified variations. 
 COMMENT: The commenter recommends a physician panel be enacted to contribute to 
the physician portion of the reimbursement schedule. 
 RESPONSE: The commission disagrees that such a physician panel should be 
created. The commission established reimbursement utilizing TWCC data and a 
database of Texas specific UCR billing data. The commission will not negotiate 
individual CPT code reimbursement rates. Texas Labor Code, sec.413.005(b) 
establishes an advisory panel to the commission called the Medical Advisory 
Committee (MAC). The medical advisory committee is composed of members appointed 
by the commission as follows: (1) a representative of a public health care 
facility; (2) a representative of a private health care facility; (3) a doctor 
of medicine; (4) a doctor of osteopathic medicine; (5) a chiropractor; (6) a 
dentist; (7) a physical therapist; (8) a pharmacist; (9) a podiatrist; (10) an 
occupational therapist; (11) a medical equipment supplier; (12) a registered 
nurse; (13) a representative of employers; (14) a representative of employees; 
and (15) two representatives of the general public. One of the purposes of the 
Medical Advisory Committee is to advise the Medical Review division in 
developing and administering fee guidelines. By including multiple disciplines 
of health care when listing the members of the MAC, the legislature has provided 
for more than just physician input on medical policies and guidelines. There is 
also a concern that to create a separate panel of medical doctors to address 
reimbursement rates solely for physicians would defeat the intent of the 
legislature in creating a broad-based MAC. 
 COMMENT: The commenter felt that there was not representation from all parties 
in the drafting of the Medical Fee Guideline. In particular the commenter was 
concerned about carrier representation. 
 RESPONSE: The commission disagrees. This guideline has been developed using the 
highest ideals of open government. During the initial development stages input 
was sought from a wide variety of interested parties including: Medical Advisory 
Committee (MAC) members and HCPs independent of the advisory committee. The 
commission has ensured that public comment was solicited in accordance with the 
Administrative Procedure Act. The commission proposed the new sec.134.201 on 
October 12, 1995, the rule was published in the Texas Register on October 20, 
1995, and the public comment period closed on November 20, 1995. A five-hour 
public hearing was held on November 9, 1995 where over 35 commenters gave oral 
comments on the proposed rule. Approximately 185 written comments were received. 
Additional input was solicited through the commission's Medical Advisory 
Committee (MAC) who have consulted their respective associations and specialists 
throughout the last 18 months. Commenters were received from all segments of the 
workers' compensation system. 
 COMMENT: The commenters felt that reimbursement rates in the proposed Medical 
Fee Guideline do not reflect the greater time, expertise and cost of providing 
treatment for occupational injuries and illnesses as compared to private, 
managed care, indemnity or federal systems. One commenter suggested that 
workers' compensation should be reimbursed at a higher rate, not equal to, 
statewide usual and customary. 
 RESPONSE: The commission disagrees that the cost of providing medical care 
under workers' compensation for occupational injuries and illnesses is greater 
than non-occupational injuries or illnesses. The commission agrees that the 
administrative time involved in processing a workers' compensation injury is 
often greater than for a non-workers' compensation injury. Reimbursement for the 
evaluation and management codes was increased from the 30th to the 40th 
percentile of the Innervation Technology Corporation (ITC) data in recognition 
of administrative costs associated with workers' compensation claims. ITC data, 
which is based on private fee-for-service billing data, sets the baseline at a 
higher level of reimbursement than managed care or government reimbursement 
systems. Lack of deductibles, security of payments and availability of dispute 
resolutions are additional incentives for HCPs to participate in workers 
compensation. 
 COMMENT: The commenters felt that the relative value unit methodology and the 
phase-in strategies are a proper step and will be an improvement with respect to 
how this the commission arranges and provides for the purchase of services. One 
commenter expressed support for the market-based methodology because it reflects 
the differences in practice costs and training. 
 RESPONSE: The commission agrees. 
 COMMENT: A number of commenters requested that the commission revise the ground 
rules, MARs, and methodology for the Medical Fee Guideline. Suggestions 
included: use a uniform percentile rate of reimbursement for all medical 
services, perhaps the 50th or 70th percentile; discard the entire proposed 
scheduled and revise it using the proper CPT codes and a more rational 
evaluation; maintain the present fee guidelines until such time that a meeting 
can be held with representatives from all parties; use the McGraw Hill Relative 
Values for Physicians, most recent edition with separate set of rules modifying 
the McGraw Hill relative values for physicians as may be necessary for 
implementation of the workers' compensation system in the state of Texas; 
discard the entire proposed schedule and revising it using the proper CPT codes 
and a more rational evaluation such as the PMIC and/or the Lewin; reevaluate the 
ground rules and MARs for physical medicine; follow the lead of the Medicare 
RBVS system and adjust the relative value units for the lumbar fusion; add 
carefully worded supplemental ground rules; stage or stair-step or make more 
gradual decreases, maybe five percent, until you reach the reimbursable amount; 
add a supplement with current AMA/CPT codes; adopt AMA CPT just as it is with 
the items that are specific to workers' compensation addressed in a supplement. 
 RESPONSE: The commission disagrees. The suggestion that all medical specialties 
be reimbursed at a single percentile gives the appearance of being the most 
equitable method for determining a fair reimbursement rate among the various 
medical specialties. However, the analysis of the commission data indicated that 
reimbursement for the various medical specialties was in some cases 
significantly above and in other significantly below any single percentile. For 
further discussion of the reasons why use of a single percentile would be 
inappropriate, see the discussion of methodology earlier in this preamble. 
 The commission has considered all submitted alternatives to the proposed 
Medical Fee Guideline and it has been determined that the proposed Medical Fee 
Guideline as it has been revised, best exemplifies the direction of the 
commission of gradually moving to a market driven system, while attempting to 
remain cost neutral to assure access to quality health care. To immediately 
implement a market based methodology could cause destabilization of the system 
and limit access to care for injured workers. For further discussion of why the 
methodology is appropriate, see the discussion of the methodology earlier in 
this preamble. 
 The new Medical Fee Guideline, including the ground rules, enhances the clarity 
and addresses utilization issues. The commission's decision to normalize 
reimbursements at the percentile by specialty that caused the least system 
impact also causes the least destabilization of individual practitioners. Ground 
rule development has focused on the clarification of issues not resolved by 
previous guidelines. Many of the McGraw Hill Relative Value Unit's and 1995 CPT 
coding guidelines have been implemented in the Medical Fee Guideline, but they 
do not specifically address utilization trends in occupational medicine and 
concerns relative to workers compensation such as the need for additional 
modifiers. The foreword of the 1995 CPT manual states that this is a listing of 
descriptive and identifying codes for reporting medical services and procedures 
performed by physicians. 
 Many models were tested. The methodology chosen by the commission for the 
Medical Fee Guideline reflects the goal of cost neutrality while adjusting 
reimbursements to a single percentile for each medical specialty section. For 
further discussion of why the methodology is appropriate, see the discussion of 
the methodology earlier for this preamble. In development of the Medical Fee 
Guideline the most recent CPT coding book manual was used, 1995. 
 Input was solicited from different parties within the workers' compensation 
system in developing the Medical Fee Guideline. The commission proposed the new 
sec.134.201 on October 12, 1995, the rule was published in the Texas Register  
on October 20, 1995, and the public comment period closed on November 20, 1995. 
A five-hour public hearing was held on November 9, 1995. Approximately 185 
written comments were received. Additional input was solicited through the 
commission's Medical Advisory Committee (MAC) who have consulted their 
respective associations and specialists throughout the last 18 months. 
 Practice Management Information Corporation (PMIC) and/or Lewin are not more 
rational to use for the Medical Fee Guideline. The development of the other two 
systems include statistical methodology which is comparative to products used 
when developing the methodology for the Medical Fee Guideline. Considering this 
fact, the methodology used to develop the Medical Fee Guideline is as valid as 
the methodology used in developing PMIC and Lewin's systems of reimbursement. 
The 1991 Medical Fee Guideline was developed without an overall strategy for all 
of the reimbursements. Because of this fact the commission has to bring fees 
back in line from the out of line starting point. For further discussion of why 
the methodology is appropriate, see the discussion of the methodology earlier 
for this preamble. 
 All of the Ground Rules for physical medicine have been reevaluated and some 
sections have been rewritten, but the overall concept of the physical medicine 
ground rules was considered valid. There is not a direct comparison available 
between the McGraw Hill data and HCFA RBRVS as the components rated differ. 
 COMMENT: One commenter stated his understanding that the cost of caring for a 
workers' compensation patient has dramatically decreased since 1991, however, 
insurance premiums have stayed at their previous levels or gone up. The 
commenters also questioned whether this increased the profit for carriers. Other 
commenters believed with this decrease, reimbursement at the 70th percentile 
would be reasonable and only incur a 3.0% increase to the system. 
 RESPONSE: The commission disagrees. The commission's duty is not to determine 
the adequacy of rates but instead is to set reasonable reimbursement for 
workers' compensation medical care. The goal is to gradually move toward a 
totally market-based reimbursement system. Insurance premiums have been reduced 
from the 1991 bench mark rates. The exact amount and the amount of profit 
generated is subject to review and control by the Commissioner of Insurance. 
Texas Department of Insurance data regarding costs and premiums does not 
substantiate the accuracy of commenters' data. 
 COMMENT: The commenters expressed support in going to a singular percentile for 
all specialties. 
 RESPONSE: The commission disagrees. The suggestion that all medical specialties 
be reimbursed at a single percentile gives the appearance of being the most 
equitable method for determining a fair reimbursement rate among the various 
medical specialties. However, the analysis of commission data indicated that 
reimbursement for the various medical specialties was significantly above and 
below any single percentile. Therefore the Medical Fee Guideline sets MARs at 
the percentile by specialty that caused the least system impact also causes the 
least destabilization of individual practitioners. 
 COMMENT: The commenters objected to reimbursements being decreased when their 
costs of doing business continues to increase. Another commenter recommended 
that a greater effort be made to see that payments are received by physicians in 
a timely manner and that the upgrading of fees follow the Consumer Price Index 
(CPI). In addition, the commenter recommended that electronic billing be 
implemented to accelerate payment. 
 RESPONSE: The commission disagrees. The issue of inflation is only one of the 
economic conditions that drive healthcare economics. Consumer behavior, consumer 
expectation, focus on acute care versus preventative medicine, excess hospital 
capacity, medical litigation and defensive medical practice, etc. are all 
factors that have a profound financial effect upon healthcare and its' delivery. 
Inflation (CPI) is often singled out as it is an economic condition that, if 
adjusted for restores the perception of equity and is only one of the economic 
conditions that drive healthcare economics. However, it is not equitable to 
select only those economic conditions that weigh in favor of increasing 
reimbursement for services and costs to the system. The UCR billing data 
representing fee-for-service billing inherently encompasses all of the various 
healthcare economic conditions including inflation, without selecting one 
condition over the other. Fees in the 1991 Medical Fee Guideline were not 
established using a consistent methodology which resulted in fee variations both 
higher and lower than market based fees. As a result, simply adjusting fees for 
inflation does not address these artificially high or low reimbursements and 
would perpetrate these unjustified variations. Timeliness of payment is 
addressed in sec.133.300(h) of this title (relating to Carrier Payment of Bills 
From Healthcare Providers). The statute requires insurance carriers to make 
payment in 45 days. TWCC data shows that an average workers' compensation bill 
is paid within 26 days. Electronic billing is not controlled by the Medical Fee 
Guideline. However, commission staff is currently exploring options for allowing 
electronic billing for HCPs. 
 COMMENT: A commenter expressed concern that any tendency to increase 
utilization based on new fees or new ground rules was not considered. This 
commenter's concern was that some changes will lead to increased utilization of 
some codes and thus to increased costs, and another commenter felt that the 
effect of the Medical Fee Guideline will not be cost neutral, but cost negative. 
A commenter expressed the opinion that the proposed fee guideline will change 
utilization of services, therefore the data collected in 1993 and 1994 is not 
reflective of the guidelines effect in the future. Another commenter requested 
that the rule provide a mechanism for active review for the change in 
utilization under the new guideline with prompt recommendation for action to 
correct any problems. Another commenter acknowledged that because the new rule 
will change application of procedures, the cost may be different than initially 
expected. 
 RESPONSE: The commission disagrees. A revenue neutral methodology was chosen as 
the basis for revision of the Medical Fee Guideline because it is the most 
representative of the historical baseline upon which gradual change could be 
implemented. It allows transition to a market driven system while minimizing the 
potential for market destabilization. In capturing 1993 through 1994 data, the 
commission has captured utilization of service for that time period. Utilization 
of services in future years may be different; however, as past behavior is the 
best predictor of future behavior, it is reasonable to use these utilization 
trends as a basis for Medical Fee Guideline revision. Analysis of reports of the 
medical billing database to date reveals steady trends in code utilization. 
However, the commission intends to conduct regular reviews of medical data to 
detect any unanticipated changes in code utilization trends that may occur with 
the new Medical Fee Guideline. These trends will be taken into consideration in 
the future guideline revisions. 
 COMMENT: A commenter supported the approach of making guidelines "expenditure 
neutral" for the employers of Texas who ultimately pay the bill for this system. 
Another commenter agrees with the underlying assumption that the revised 
guideline should be cost neutral, bringing fees up or down to continue our 
gradual alignment with the national norm. This commenter felt if a fee for a 
particular code is raised, a decrease should occur in another code to ensure 
that we do not increase costs. 
 RESPONSE: The commission agrees that the expenditure neutral philosophy is a 
reasonable starting point for setting MARs because it allows a more gradual 
transition to a market-based system and maintains access to quality health care. 
Expenditure neutral philosophy did not dictate individual fees and in fact the 
expenditure neutral goal was not attained. The commission projects a financial 
system increase of approximately $25 million. Part of keeping the system 
balanced is keeping Texas competitive with other states. Fees have not been 
adjusted up or down to align with a national norm. Rather, adjustments have been 
based on Texas specific fee for service data distributions. Reimbursement 
increases or decreases are the result of the adjustment of reimbursements to 
reflect a move toward a single percentile specific to each specialty section in 
the Medical Fee Guideline. 
 COMMENT: A commenter recommended that we move toward a reasonable and customary 
type of situation as opposed to keeping expenditure-neutral. Other commenters 
questioned whether an expenditure neutral basis for the Medical Fee Guideline 
would comply with the commission's mandate to review and revise the guidelines 
to reflect a fair and reasonable reimbursement and if this is the most equitable 
reimbursement system, particularly when the guideline being modified represents 
fees set as fair and reasonable in 1991 or before. Another commenter believes 
the assumption of budget neutrality is fatally flawed if only because the newly 
imposed utilization controls are designed to decrease total cost to the system. 
Another commenter disagreed with using cost neutrality as a basis for the 
Medical Fee Guideline. 
 RESPONSE: The commission agrees in part. The revised Medical Fee Guideline is 
an attempt to move toward a market based reimbursement system. The reimbursement 
rates contained within the 1991 Medical Fee Guideline are significantly above or 
below the prevailing reimbursement rates of other payers. Although the market 
place is probably the most accurate indicator of what is a fair and reasonable 
reimbursement, the particular circumstances of a Medical Fee Guideline revision 
should also be considered. This Medical Fee Guideline revision involves revising 
reimbursements which were established in 1991 under a relative value 
methodology. Changing to a market-based methodology results in radical changes 
in some reimbursements because the 1991 Medical Fee Guideline did not reflect 
market values. An immediate transition to a market-based reimbursement 
methodology could result in destabilization of the entire system. Therefore, in 
this situation, an immediate transition would not result in fair and reasonable 
reimbursements. This revision of the Medical Fee Guideline had a goal of cost 
neutrality and to keep Texas toward the median state's workers' compensation 
reimbursement rates. Total system impact is predicted to be less than 5.0%. A 
gradual phase-in process was considered the best method for implementing any 
change that directly affects HCP reimbursement, as any rapid changes could 
create financial destabilization within individual and group medical practice, 
and within medical specialties. Gradually adjusting reimbursement for services 
to better reflect market economics, while using expenditure neutrality as a 
starting point to avoid destabilization of the system and maintaining access to 
care and implementing cost containment, fulfills the mandate of the statute. In 
addition, a rapid and significant change in reimbursement could affect the 
injured workers' access to care. The commission, by using UCR billing data 
representing fee-for-service as a primary ingredient in the development of the 
Medical Fee Guideline, causes this system to inherently encompass all of the 
various healthcare economic conditions without selecting one condition over the 
others. The commission has considered all submitted alternatives to the proposed 
Medical Fee Guideline and has determined that the adopted Medical Fee Guideline 
best exemplifies the direction of the commission to gradually move to a market 
driven system, attempting to remain cost neutral and normalizing reimbursement 
while ensuring access to care. 
 The following comments were received regarding the valuation of I Codes. 
 COMMENT: Many commenters objected to the decrease in reimbursement for certain 
CPT codes. These codes were considered by commenters to be under valued 15755, 
17242, 20331, 20610, 20808, 20816, 22214, 22220, 22222, 22224, 22506, 22556, 
22612, 22625, 22830, 22842, 22845, 22850, 23130, 23412, 23420, 24410, 26350, 
26410, 28296, 28351, 29826, 62273, 62275, 62276, 62289, 63005, 63030, 63650, 
63655, 63658, 63660, 63675, 63685, 63688, 63690, 63691, 63740, 63750, 63780, 
64420, 64440, 64442, 64443, 64445, 64510, 6 4520, 95860, 95861, 95863, 95864, 
95880, 95881, 95882, 95883, 97032, 98925, 98926, 98927, 98928, and 98929. Other 
commenters pointed out that in some cases the reimbursement appeared to have no 
relation to the difficulty or complexity of the procedure and in some cases the 
same procedure was reimbursed less when coupled with additional procedures. 
Other commenters saw inequality in what they felt was arbitrary reduction of up 
to 70% from the current guideline. Some commenters viewed the reduction as an 
attempt to curtail these procedures and predicted that the proposed fees would 
effectively stop the practice of pain management. One commenter pointed out that 
some of these codes listed were listed as I codes in McGraw Hill Physicians 
Relative Value. 
 RESPONSE: The commission disagrees that changes in reimbursements for these CPT 
codes is warranted. The codes referred to by the commenters have been reduced 
from the 1991 Medical Fee Guideline to bring them more in line with a selected 
percentile within that codes medical specialty group. As the 1991 Medical Fee 
Guideline did not involve the degree of data collection, financial modeling, and 
UCR analysis as the proposed fee guideline, many codes we're set artificially 
high. Many of the codes mentioned a re designated by McGraw Hill as "I" codes. 
The commission acknowledges that the creation of the proposed Medical Fee 
Guideline, in part uses the relative values as listed in the 1995 edition of 
Relative Value for Physicians and contains relative values units (RVU's) that 
are designated as "I" (interim) codes. Codes designated as "I" codes do not meet 
the highest level of confidence required by McGraw Hill, however they do meet an 
appropriate level of confidence needed to establish the relative value of the 
service. Codes that did not meet an acceptable level of confidence to establish 
a relative value are identified as RNE (relativity not established) codes. The 
commission acknowledges that all methods used in the development of RVU's 
involve statistical modeling. Common among all developers of RVU's is the issue 
of varying confidence levels, as it is an inherent characteristic of statistical 
modeling. McGraw Hill is seen as a respected information source regarding 
relative values because they do acknowledge and fully disclose that these 
conditions exist. A full explanation of the methodology used in determining fees 
in the Medical Fee Guideline is contained previously in the preamble. 
 The following changes were made by the commission for consistency and 
clarification, or to correct typographical or grammatical errors. 
 After review of the guideline it was determined that modifier -56 should be 
used when billing for pre-operative history and a physical is performed by a 
healthcare provider (HCP) other than the doctor who performed the surgery. In 
addition, due to the deletion of the ground rule using the modifier -OR, the 
reference to this modifier has been deleted. Therefore Surgery Ground Rule 
Section (I)(A)(1)(a) has been rewritten to state: 
 "If the pre-operative history and physical is performed by a HCP other than the 
doctor performing the surgery, then it shall be billed using modifier -56. " 
 Throughout the Medical Fee Guideline the words "should", "will", and "must" 
have been changed to "shall" for consistency in situations where the provision 
is a requirement. This change also occurred in sections taken directly from the 
American Medical Association (AMA) CPT manual for consistency throughout the 
Medical Fee Guideline. 
 Although modifier -MP is mentioned in the Medicine Ground Rules this modifier 
has been added to the E/M modifiers because -MP is only used with E/M codes. 
 In Medicine Ground Rules Section (I)(A)(10)(d) the last phrase referring to the 
Orthotics/Prosthetics Ground Rules has been deleted due to the deletion of the 
O/P Ground Rules. Subsection (d) now reads: 
 "The codes for orthotics (97500-97501) and prosthetics (97520-97521) training 
shall be used for instruction and training. The HCPCS codes shall be used for 
the custom fabrication of the orthosis or prosthesis." 
 In the General Instructions Ground Rules introduction, the phrase referring to 
the O/P Ground Rules has been deleted due to the deletion of the O/P Ground 
Rules. 
 In the Medicine Ground Rules, section (II)(A) has been rewritten to clarify 
what is covered under interdisciplinary program reimbursement and to define the 
term "HCP" in an interdisciplinary program environment. 
 "Introduction: The commission recognizes the need for injured workers to 
participate in established programs in order to restore function and reduce 
pain. In order to qualify for reimbursement, the available programs shall meet 
the criteria of one of the four programs described below except for catastrophic 
head injury programs. Please refer to the applicable treatment guidelines and 
the preauthorization rule for additional requirements. All services performed by 
the interdisciplinary core team and other services as part of the program shall 
be inclusive in the reimbursement of the program. Whenever HCP is used in the 
description of the services of the program, it is a licensed HCP." 
 The fees for twelve CPT codes were calculated using incorrect RVUs due to 
clerical error. The corrected values for these CPT codes are as follows: CPT 
code 15792, $506; CPT code 73225 S, $160 (professional component); CPT code 
86340, $30 (technical component); CPT code 95951, $547; CPT code 98925, $39; CPT 
code 98926, $45; CPT code 98927, $52; CPT code 98928, $58; CPT code 98929, $64; 
CPT code 99000, $19; CPT code 99001, $10; and CPT code 99002, $10. 
 To clarify that modifier -52 could be used for surgical procedures, this 
modifier was added to the list of modifiers in the Surgical Ground Rules. This 
was rewritten as follows: 
 "-52 Reduced Services: Under certain circumstances, a service or procedure is 
partially reduced or eliminated at the HCP's election. Under these 
circumstances, the service provided can be identified by its procedure code with 
the addition of modifier "-52". DOP is required." 
 The following publications and interviews comprise a bibliography for the this 
preamble and the Medical Fee Guideline 1996: Publications -Benchmarks for 
Designing Workers' Compensation Medical Fee Schedules, Workers' Compensation 
Research Institute, December 1993; A Physician's Guide to the Complete Nation 
Medicare Fee Schedule, 1993 Edition; Relative Values for Physicians, McGraw-
Hill, 19 94 and 1995 editions; Conversion Factor Report, McGraw-Hill, 1994-95; 
Managed Care Today, Peter R. Korgstredt, 1994; Making Managed Care Work, Peter 
Borland, 1993; Health Insurance and Answers, John Reynolds and Robin Bischoff, 
1990; Economics of Healthcare, Phillip Jacobs, 1991; Social Insurance and 
Economic Security, George E. Rejeda, 1988; and Essentials of Healthcare, William 
O. Clevenly, 1992; and Interviews-Texas 
 Department of Insurance, Professional Liability Section; University of Texas, 
Economic Research and Analysis Division; University of Texas, Bureau of Business 
Research Department; Florida Medical Association, Department of Medical 
Economics; Florida Medical Association, Physician Reimbursement Section; Florida 
Department of Labor and Employment Security, Department of Research and 
Education; and North Dakota Workers' Compensation Bureau, Department of Research 
and Analysis. 
 The new section is adopted pursuant to the Texas Labor Code, sec.402.061, which 
requires the commission to adopt rules necessary for the implementation and 
enforcement of the Texas Workers Compensation Act; the Texas Labor Code, 
sec.408.021, which entitles injured employees to all health care reasonably 
required by the nature of the injury as and when needed; the Texas Labor Code, 
sec.413.007, which requires the commission to maintain a statewide database of 
medical charges, actual payments, and treatment protocols; the Texas Labor Code, 
sec.413.011, which mandates that the commission by rule establish medical 
policies and guidelines, and the Texas Labor Code, sec.413.012, which requires 
review and revision of the medical policies and fee guidelines at least every 
two years. 
 
 
  sec.134.201. Medical Fee Guideline For Medical Treatments and Services 
Provided Under the Texas Workers' Compensation Act. 
 
  (a) The commission adopts by reference herein, the  Texas Workers' 
Compensation Commission Medical Fee Guideline 1996. The Guideline  shall be 
effective for all medical treatments, services, durable medical equipment and 
pharmaceuticals provided on or after April 1, 1996. Medical treatments, 
services, and durable medical equipment provided prior to April 1, 1996 shall be 
subject to the 1991 Texas Workers' Compensation Commission Medical Fee Guideline 
(December 1991 Version). Pharmaceuticals provided prior to April 1, 1996 shall 
be subject to sec.134.501 of this title (relating to the Pharmaceutical Fee 
Guideline). Copies of both guidelines may be obtained from the Publication 
Department of the Texas Workers' Compensation Commission, 4000 South IH-35, 
Southfield Building, Austin, Texas 78704. 
   
  (b) An insurance carrier or health care provider which willfully or 
intentionally violates the provisions of this rule commits an administrative 
violation under Texas Labor Code,  sec.415.002 or sec.415.003 and may be 
assessed a penalty. In addition, an insurance carrier or health care provider 
which repeatedly violates these statutory provisions may be assessed a penalty 
not to exceed $10,000 under the Texas Labor Code,  sec.415.021, and may be 
subject to the sanctions specified in the Texas Labor Code, sec.415.023 
including, but not limited to, restriction or revocation of the right to receive 
reimbursement under the Texas Workers' Compensation Act. 
 
  This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority. 
 Issued in Austin, Texas, on March 4, 1996. 
 TRD-9602987 
  Susan Cory 
 General Counsel 
 Texas Workers' Compensation Commission 
    Effective date: April 1, 1996 
 Proposal publication date: October 20, 1995 
 For further information, please call: (512) 440-3700 
         
                 Part III. Texas Certified Self-Insurer Guaranty Association 
  Chapter 181. By-laws 
  
  28 TAC sec.181.1 
 
  The Texas Certified Self-Insurer Guaranty Association adopts an amendment to 
sec.181.1, concerning the By-laws of the Association, without changes to the 
proposed text as published in the November 17, 1995, issue of the Texas Register  
(20 TexReg 9534). 
 The amendment allows the Annual Meeting of the Association to be called in any 
month of the year, allows directors to be elected at times other than the Annual 
Meeting, revises the membership of the Board of Directors and extend the date 
upon which the Trust Fund must be funded to conform with recent legislation 
(House Bill 1089, 74th Legislature, 1995), provide that excess assessments for 
an impaired certified self-insurer shall be used for the benefit of the 
Association, require that the Trust Fund be paid to the Texas Workers' 
Compensation Commission on termination, and deletes obsolete language. 
 The amendment will conform the By-Laws of the Association with statutory 
provisions, provide greater flexibility in calling annual meetings of the 
Association, assure that the assessments for an impaired certified self-insurer 
shall be used for the benefit of the Association, and assure that the Trust Fund 
will be paid to the Texas Workers' Compensation Commission on termination. 
 No comments were received regarding adoption of the amendment. 
 The amendment was finally adopted by the Board of Directors of the Association 
and approved by the Texas Workers' Compensation Commission on February 15, 1996. 
After adoption by the Board, the amendments were ratified by a majority vote of 
the members of the Association by mail-in ballot. 
 The amendment is adopted under the Labor Code, Chapter 407, Subchapter G, 
sec.407.123, which authorizes the Board of Directors of the Association, subject 
to the approval of the Texas Workers' Compensation Commission, to adopt rules 
necessary to operate the Association. 
 
  This agency hereby certifies that the adoption has been review by legal 
counsel and found to be within the agency's authority to adopt. 
 Issued in Austin, Texas, on March 12, 1996. 
 TRD-9603489 
  Judy Roach 
 Executive Director 
 Texas Certified Self-Insurer Guaranty Association 
    Effective date: April 2, 1996 
 Proposal publication date: November 17, 1995 
 For further information, please call: (512) 322-2514 
         
             
  TITLE 30. ENVIRONMENTAL QUALITY 
 Part I. Texas Natural Resource Conservation Commission 
  Chapter 324. Used Oil 
  
  Subchapter A. Used Oil Recycling 
 
  30 TAC sec.sec.324.1-324.21 
 
  The Texas Natural Resource Conservation Commission (commission) adopts new 
sec.sec.324.1-324.21, concerning used oil recycling. Sections 324.2, 324.3, 
324.5, 324.6, 324.7, 324.11, 324.12, 324.13, 324.14, 324.15, 324.18, and 324. 21 
are adopted with changes to the proposed text as published in the October 31, 
1995, issue of the Texas Register (20 TexReg 8970). Sections 324.1, 324.4, 
324.8, 324.9, 324.10, 324.16, 324.17, 324.19, and 324.20 are adopted without 
changes and will not be republished. Subchapter B, sec.sec.324.50-324.54 is 
withdrawn from consideration for adoption, while the staff considers other 
options. 
 The new chapter is primarily adopted to conform with the new United States 
Environmental Protection Agency (EPA) 40 Code of Federal Regulations (CFR) Part 
279, Standards for the Management of Used Oil. 
 The new 40 CFR Part 279 extends the EPA's regulation to all nonhazardous used 
oil, used oil made characteristically hazardous by use (rather than by mixing), 
used oil recycled by means other than burning for energy recovery (in addition 
to used oil burned for energy recovery), and used oil generated by municipal or 
industrial generators. It also regulates do-it-yourself (DIY) changer used oil 
(household used oil) after collection. The portion of 40 CFR Part 279 addressing 
the burning of used oil for energy recovery was effective March 8, 1993. The 
remainder of 40 CFR Part 279 becomes effective in Texas with the adoption of 
this implementing rule. Senate Bill 1683, 74th Texas Legislature, 1995, made 
statutory changes to Texas Health and Safety Code, Chapter 371, Used Oil 
Collection, Management, and Recycling, to make implementation of 40 CFR Part 279 
possible. Texas Health and Safety Code, sec.371.028 now states: "Unless 
otherwise required by federal or state law, the rules, standards, and procedures 
implemented by the commission must be consistent with and not more stringent 
than the federal used oil management standards." 
 The commission has prepared a Takings Impact Assessment for the used oil rules 
pursuant to Texas Government Code Annotated sec.2007.043. The following is a 
summary of that assessment: The purpose of the new rule, old rule sections 
repeal, and rule amendments is to fully implement 40 CFR Part 279, Standards for 
the Management of Used Oil. The new rule, old rule sections repeal, and rule 
amendments substantially advance this specific purpose by providing a state rule 
to implement the federally mandated rule. Promulgation and enforcement of these 
rules will not affect private real property because the rules only apply to used 
oil management activities that do not affect property values. When new, more 
stringent Federal requirements are promulgated or enacted, such as 40 CFR Part 
279, the State must adopt equivalent rule requirements (57 FedReg 41604, 
September 10, 1992). 
 A public hearing was held on November 14, 1995 in Austin. Texas Utilities 
Services, Inc. provided comments at the hearing (later confirmed in writing). 
There were no other commenters at the hearing. 
 The comment period closed December 4, 1995. Written comments were received 
from: Arter & Hadden; Brown Mc Carroll & Oaks Hartline; Central & South West 
Services; City Public Service; City of Wichita Falls; Entergy Services for Gulf 
States Utilities Co.; Exxon Co.; Gross Associates; Houston Lighting & Power; 
Murphy Chev-Olds-Pont; Nortex Regional Planning Commission; Patton Boggs, 
L.L.P., for the Waste Oil Heating Manufacturers Assoc.; Pennzoil Co.; 
Southwestern Public Service Co.; Syd Litteken Design Concepts; Texas Chemical 
Council; Texas Legacy Co.; Texas Mid-Continent Oil & Gas Assoc.; Texas Utilities 
Services; Used Oil Grant Program Advisory Committee; and commission staff. 
 With regard to sec.324.2 on definitions, City Public Service noted that the 
definition of "Used oil transfer facility" in 40 CFR sec.279.1 includes the 
statement: "Transfer facilities that store used oil for more than 35 days are 
subject to regulation under Subpart F of this part." Subpart F contains the 
requirements for used oil processors and rerefiners. The commenter asked that 
this part of the federal definition be deleted. The commission cannot make the 
state rule less stringent than the federal rule. No change could be made in 
response to this comment. 
 A definition of "Burning for energy recovery" was included in the proposal. 
Brown Mc Carroll & Oaks Hartline, Exxon, Southwestern Public Service, Texas 
Chemical Council, and Texas Mid-continent Oil & Gas Association objected to 
inclusion of this definition in the rule. The commission is deleting this 
definition from the adopted rule. 
 A definition of "Impervious to used oil" was added to the rule proposal for 
clarification. Central & South West Services, City Public Service, Exxon, Gulf 
States Utilities, Houston Lighting & Power, Texas Mid-continent Oil & Gas 
Association, and Texas Utilities felt that the commission was attempting to be 
more stringent than the federal rule through the definition because the 
definition did not include the word "sufficiently" from the internal rule 
language. Because it was not the commission's intent to make the rule more 
stringent through the definition, the word "Sufficiently" has been added to the 
definition title. 
 A definition of "Secondary containment" was also included in the rule proposal. 
Central & South West Services, City Public Service, Exxon, Gulf States 
Utilities, Southwestern Public Service, Texas Chemical Council, Texas Mid-
continent Oil & Gas Associates, Texas Utilities, and the Used Oil Grant Program 
Advisory Committee felt that the commission was attempting to be more stringent 
than the federal rule language because "or equivalent" secondary containment and 
"sufficiently" impervious were in the rule language and not added to the 
definition. The allowance of "equivalent" secondary containment was added in a 
change to 40 CFR Part 279 (58 FedReg 26426, May 3. 1993). Because it was not the 
commission's intent to be more stringent than the federal rule through the 
definitions, the words "or equivalent secondary containment" and "sufficiently" 
have been added to the definition. 
 On sec.324.3, Central & South West Services, Gulf States Utilities, Houston 
Lighting & Power, and Texas Utilities recommended that an exemption from 
transporter registration be added for transport of spilled used oil in an 
emergency. The commission is not at liberty to be less stringent than the 
federal rule, so no change was made. 
 Also on sec.324.3, the Texas Chemical Council and Texas Mid-continent Oil & Gas 
Association asked that the commission justify the need for all of the proposed 
provisions of this section. Based on those comments, the commission will delete 
the proposed sec.324.3(1) and the remaining paragraphs of this section will be 
renumbered in the adopted version, although this provision does represent an 
accurate description of how the EPA interprets their rule with regard to burning 
sorbents for energy recovery. The commission will retain the provision in 
proposed sec.324.3(2) to fill a hole in the EPA rule; there is no way to 
properly manifest used oil made hazardous by mixing with listed hazardous wastes 
without an EPA hazardous waste number and 40 CFR Part 279 does not provide one. 
With regard to sec.324.3(3), the Texas Legacy Company requested that the 
commission further clarify the language on mixture of hazardous wastes with used 
oil. The commission has retained sec.324.3(3), because it is particularly 
difficult to understand how EPA intended the mixing provisions of 40 CFR Part 
279.10(b) (relating to Mixtures of used oil and hazardous waste) to be 
interpreted, and this agency has attempted to further clarify the provisions of 
sec.324.3(3) as requested by the commenter. The commission will retain the 
clarification in the proposed sec.324.3(4) because the federal rule language on 
this point is particularly prone to a misinterpretation that would be more 
stringent than what EPA intends. For example, the rule states: "Used oil 
generators shall not store used oil in units other than tanks, containers, or 
units subject to regulation under parts 264 or 265 of this chapter." It is easy 
to misinterpret that such rule provisions require "all" used oil tanks and 
containers to meet 40 CFR Part 264 or 265 requirements. EPA intends these 
provisions to allow storage in used oil tanks and containers not subject to 40 
CFR Part 264 or 265, too. A statement further clarifying this point has been 
added. In response to a comment from Texas Utilities, a new paragraph has been 
added to clarify that 40 CFR Part 279 and this chapter do not apply to used oil 
until it is a spent material, i. e., any material that has been used and as a 
result of contamination can no longer serve the purpose for which it is intended 
without processing. 
 On sec.324.4(2)(B), the Texas Legacy Company questioned the commission's 
authority to add the words "other than sorbents without free-flowing oil" to the 
prohibition against mixing used oil with waste going to a landfill (derived from 
Texas Health and Safety Code, sec.371.041(b)(2)). The commission acknowledges 
that certain used oil sorbents cannot be burned for energy recovery or recycled. 
Even though the commission was only seeking to clarify intent, this language 
will be deleted from this section in favor of the language of the Texas Health 
and Safety Code. 
 On sec.324.4(4), Arter & Hadden stated that a clarification was added under 
Senate Bill 1683 to make clear that a used oil filter cannot be placed in or 
accepted for disposal in a landfill and recommended adding this sentence: "For 
purposes of this subsection, a used oil filter is not an item of scrap, used or 
obsolete metal." As proposed, this paragraph of the section contains the exact 
wording of Texas Health and Safety Code, Chapter 371 sec.371.041(d), as modified 
by Senate Bill 1683. The commission will not make an unauthorized addition to 
the state statute language in the rule that could possibly make the rule more 
stringent than state law. Commission rules are already in place to prevent used 
oil filters from going into municipal landfills. 
 On sec.324.5(b), a mail code was added to the commission address and throughout 
the rule where a commission address appears. 
 On the proposed sec.324.6, the Texas Legacy Company said that the commission 
should add a provision making it a violation for a generator not to give his 
used oil to a registered entity. The commission points out that the rule can be 
no more stringent than the federal rule, and the federal rule (which has been 
adopted by reference) already states in 40 CFR sec.279.24 that "generators must 
ensure that their used oil is transported only by transporters who have obtained 
EPA identification numbers." No change was made in response to this comment. 
 With regard to proposed sec.324.6(1), the City of Wichita Falls, Gross 
Associates, Murphy Chev-Olds-Pont, Nortex Regional Planning Commission, Syd 
Litteken Design Concepts, and Waste Oil Heating Manufacturers Association 
objected to inclusion of the requirement for a space heater to meet the air 
requirements of Chapter 116 (relating to Control of Air Pollution by Permits for 
New Construction or Modification). Some commenters alleged that this air 
requirement violated the statutory prohibition against the rule exceeding 
federal requirements in 40 CFR Part 279. However, the statutory prohibition in 
Texas Health and Safety Code, sec.371.028 begins: "Unless otherwise required by 
federal law or state law..." The air requirement was inserted into this section 
as a reminder of its existence; it has existed since the Texas Clean Air Act was 
amended in 1971. However, in response to these comments, this reminder of the 
air requirements was deleted from the adopted Chapter 324; and an air standard 
exemption for used oil space heaters will be developed to make compliance with 
Chapter 116 less burdensome. 
 On proposed sec.324.6(2) (now incorporated into sec.324.6 due to the previous 
deletion), Central & South West Services and Texas Utilities requested that the 
provision be deleted that a person who changes used oil at a customer's home or 
business and removes the oil from the site is a generator. These utilities do 
not want to become the generators of large quantities of used oil removed from 
customer's electrical transformers. This was originally placed in the rule in 
the interest of small service businesses that change and transport small 
quantities of used oil. Some small businesses would find it economically 
disastrous to become subject to transfer facility requirements; and EPA guidance 
allows for other entities to assume the role of generator. A generator does not 
have an accumulation time limit under the federal rule and would therefore not 
become a transfer facility by storing used oil for greater than 35 days to 
accumulate a recyclable quantity. This provision of the commission rule is 
amended to make it optional for such a used oil changer that removes the oil 
from the site to become the generator instead of the site owner or operator. 
 On sec.324.7, the Texas Legacy Company requested that the commission 
standardize the sign that must be posted by collection centers and that the 
exemption from the fee on the first sale of automotive oil for collection 
centers (Texas Health and Safety Code, sec.371.062(a)(2)(C)) be extended to 
other entities responsible for the recycling of large amounts of used oil. The 
sign to be posted by collection centers will be standardized by the commission. 
It is beyond the authority of the commission to modify the Texas Health and 
Safety Code fee exemption provisions. 
 On sec.324.7(1)(B)(i) and sec.324.7(2)(B)(i), Houston Lighting & Power said 
that the biennial registration requirement for collection facilities was too 
burdensome, noting that the federal rule only requires one time registration. 
Texas Health and Safety Code, sec.371.024(b)(1) specifically requires biennial 
registration for collection facilities of used oil. The commission cannot be 
less stringent than state law, so no change was made to the biennial 
registration requirement. However, collection center registration requirements 
were clarified at the request of another commenter. 
 On sec.324.7(1)(D) and sec.324.7(2)(D), the provisions were revised to make 
them consistent with each other on the report due date and to add that a report 
form will be provided by the commission. The only efficient way to review, 
store, and retrieve reported information is to have it reported on a form in a 
consistent format and location. 
 With regard to sec.324.11, the Texas Legacy Company noted that Texas is a 
border state and commented that the commission should clarify its policy on the 
transportation of used oil leaving and arriving in Texas. In response to this 
comment, the commission points out that 40 CFR sec.279.40(b) states: 
"Transporters who import used oil from abroad or export used oil outside of the 
United States are subject to the requirements of this subpart from the time the 
used oil enters and until the time it exits the United States." The commission 
feels that this requirement, adopted by reference, sufficiently clarifies our 
regulatory position on transportation of used oil into and out of the United 
States across the Texas border. 
 On sec.324.11(2), City Public Service, Houston Lighting & Power, and 
Southwestern Public Service commented that the biennial registration requirement 
for transporters and transfer facilities was more stringent than the federal 
requirement for one time registration. Texas Health and Safety Code, 
sec.371.026(a)(1) specifically requires the biennial registration. The 
commission cannot be less stringent than state law, so no change can be made in 
response to this comment. However, the registration requirements were clarified 
and the clarifications preclude some registration duplication. The Texas Legacy 
Company suggested requiring the name of the company to be clearly, legibly, and 
permanently affixed to all registered vehicles. This commenter's suggestion 
could not be incorporated because the commission is prohibited from being more 
stringent than the federal rule by state law. The same commenter recommended 
that transporters which are common carriers be exempt from the registration 
provisions if the vehicle derives 80 percent of its revenue from transport of 
materials other than used oil and that railroads and waterborne transporters be 
exempt from registration. These comments could not be incorporated because the 
commission is not allowed to be less stringent than the federal rule. The same 
commenter stated that it is important that it be a violation of these rules if 
used oil is stored at an unregistered site for over 24 hours. Transporters that 
store used oil for longer than 24 hours are already required to register as 
transfer facilities per 40 CFR sec.279.45(a) and sec.279.42. Therefore, no 
change was required in response to this comment. The same commenter asked if 
out-of-sate transporters are required to register with the commission or if the 
commission will accept the EPA registration. The commission will accept the 
validity of out of state transporter registrations with the EPA; however, out of 
state transporters will also have to register with the commission. The same 
commenter suggested that the commission have one registration number for each 
site. The commission has been working toward this goal and will continue to do 
so. 
 On sec.324.11(3), comments were received from Central & South West Services, 
City Public Service, Gulf States Utilities, Houston Lighting & Power, 
Southwestern Public Service Company, Texas Mid-continent Oil & Gas Association, 
Texas Utilities, and the Used Oil Grant Program Advisory Committee. In response 
to the comments received, the commission has decided to delete this portion of 
the rule requirements from the adoption package to allow staff to consider 
additional financial responsibility options. The commission acknowledges that 
demonstration of financial responsibility is a statutory requirement. The 
commission will form a workgroup to continue the process of developing financial 
responsibility rule requirements, and the commission intends to adopt such rule 
requirements at a future date. In the meantime, the commission will enforce the 
40 CFR Part 279 requirement, adopted by reference, to clean up a used oil 
release upon detection. 
 On sec.324.11(4) (now renumbered as sec.324.11(3)), Houston Lighting & Power 
commented that a single annual report should be allowed from a single company. 
The commission agrees with this comment and has added such an amendment to all 
sections with reporting requirements, except sec.324.7 on collection centers 
where the commission feels an annual report on each collection site is needed to 
assure each site is still active and collecting household used oil. The Texas 
Legacy Company recommended adding requirements for out of state shipment 
receipts to be included in the required reports for the receiving entity. The 
federal rule already requires that receivers record the address of the 
transporters and generators providing shipments to them; the address will 
indicate which of these shipments are coming from out of state. The commission 
believes there is no need to make a change in response to this comment. 
 The same commenter felt that the 40 CFR Part 279 tracking system that utilizes 
records to track used oil shipments was inadequate. The commission could not 
respond to this comment by incorporating a more stringent tracking system, such 
as manifesting, because the state law does not allow the commission to be more 
stringent than the federal rule. 
 On sec.324.12, Texas Utilities suggested that facilities that are considered 
processors for the sole reason of storing used oil for more than 35 days be 
excluded from being processors as specified in 40 CFR Part 279. This suggestion 
could not be incorporated because the commission is not allowed to be less 
stringent than the federal rule. The Texas Legacy Company said that a used oil 
transfer facility should have the name and address of the facility clearly 
identified by the use of a sign which is easily read from the opposite side of 
the road right of way. The commission could not incorporate this requirement 
because it is prohibited by state law from being more stringent than the federal 
rule. 
 On sec.324.12(2), the Texas Legacy Company said that the physical address of 
the processing facility or rerefinery should be included on the registration 
forms. The registration forms will include the physical address. Also, City 
Public Service, Houston Lighting & Power, and Southwestern Public Service 
Company commented that the biennial registration requirement for processors and 
rerefiners was more stringent than the federal requirement for one time 
registration. Texas Health and Safety Code, sec.371.026(a)(1) specifically 
requires biennial registration. The commission cannot be less stringent than 
state law, so no change can be made in response to this comment. However, the 
registration requirements were clarified and the clarifications eliminate some 
duplication. 
 On sec.324.12(3), Central & South West Services and Texas Utilities requested 
that the word "adulterated" in the last sentence be replaced by the word 
"contaminated". This change has been made. Southwestern Public Service Company 
felt that an analysis plan should not be required at a facility that became a 
processor by exceeding the 35 day storage time limit and was only storing its 
own used oil. Wording has been added that a facility that only processes its own 
oil and uses adequate process knowledge instead of analysis to prove it meets 
rule requirements need not prepare an analysis plan. 
 In response to a previously mentioned comment, sec.324.12(4) has also been 
amended to allow a single company to submit a single report summarizing each 
type of used oil activity, other than collection center activity. 
 On sec.324.13(2), Houston Lighting & Power and the Texas Chemical Council 
commented that the biennial registration requirement for burners of off-
specification used oil was more stringent than the federal requirement for one 
time registration. Texas Health and Safety Code, sec.371.026(a)(1) specifically 
requires biennial registration. The commission cannot be less stringent than 
state law, so no change can be made in response to this comment. However, some 
clarifying changes have been made and these changes should eliminate some 
duplication. 
 With regard to proposed sec.324.13(3), the City of Wichita Falls, Gross 
Associates, Murphy Chev-Olds-Pont, Nortex Regional Planning Commission, Syd 
Litteken Design Concepts, and Waste Oil Heating Manufacturers Association 
objected to inclusion of the requirement for a space heater to meet the air 
requirements of Chapter 116 (relating to Control of Air Pollution by Permits for 
New Construction or Modification). Some commenters alleged that this air 
requirement violated the statutory prohibition against the rule exceeding 
federal requirements in 40 CFR Part 279. However, the statutory prohibition in 
Texas Health and Safety Code, sec.371.028 begins: "Unless otherwise required by 
federal law or state law..." The air requirement was inserted into this section 
as a reminder of its existence; it has existed since the Texas Clean Air Act was 
amended in 1971. However, in response to these comments, this reminder of the 
air requirements was deleted from the adopted Chapter 324; and an air standard 
exemption for used oil space heaters will be developed to make compliance with 
Chapter 116 less burdensome. 
 The Texas Chemical Council objected to the requirement for burners to submit an 
annual report per proposed sec.324.13(4) (now renumbered to sec.324. 13(3) due 
to the previous deletion). The annual reporting is specifically required per 
Texas Health and Safety Code, sec.371.026(a)(2), and the commission cannot be 
less stringent than state law. No change could be made in response to this 
comment. 
 On sec.324.14, the Texas Legacy Company suggested that marketers be required to 
obtain an independent laboratory analysis of the used oil that they accept. This 
comment could not be incorporated because the commission is not allowed by state 
law to be more stringent than the federal rule. Also, City Public Service 
commented that the biennial registration requirement for marketers was more 
stringent than the federal requirement for one time registration. Texas Health 
and Safety Code, sec.371.026(a)(1) specifically requires biennial registration. 
The commission cannot be less stringent than state law, so no change can be made 
in response to this comment. However, the commission did clarify the 
registration requirements and the clarification will eliminate some potential 
duplication. 
 With regard to sec.324.15, Central & South West Services, Exxon, and Texas Mid-
continent Oil & Gas Association felt that the requirement to make sure that 
adequate quantities of sorbent materials are available on site at all times and 
are used to contain used oil spills or leaks during normal activities was just 
common sense and would be included in any existing spill response plans. 
Therefore, the commission is deleting the first sentence of the section as 
proposed by the commenters. Also, City Public Service, Central & South West 
Services, Exxon, Gulf States Utilities, Houston Lighting & Power, Southwestern 
Public Service Company, Texas Chemical Council, Texas Mid-continent Oil & Gas 
Association, Texas Utilities, and the Used Oil Grant Program Advisory Committee 
questioned the 25 gallon reporting quantity, favored a historical Texas 210 
gallon spill reporting requirement for crude oil in another proposed general 
spill rule, and/or questioned why used oil was different from crude oil. Used 
oil is different from crude oil in that it contains additional additives for its 
lubrication function and, when used in internal combustion engines, it picks up 
additional contaminants that tend to make it toxicity characteristic (TC) 
hazardous. EPA indicates that it has been a significant environmental problem in 
the past (56 FedReg 48033-48034, September 23, 1991). To encourage recycling, 
the new federal rule allows toxicity characteristic hazardous used oil to be 
managed in the same manner as nonhazardous used oil. The federal rule, 40 CFR 
Part 279, also reaffirms that used oil storage in underground tanks is subject 
to 40 CFR Part 280. 40 CFR sec.280.53(a)(1) and 30 TAC sec.334.75(1) set a 
general used oil spill reporting requirement for underground storage tanks of 25 
gallons. Further research into the derivation of the 25 gallon spill reporting 
requirement in 40 CFR Part 280 indicates that it was specifically developed by 
EPA for used oil spills (April 17, 1987, 52 FedReg 12752). In response to the 
comments received, the commission has revised sec.324.15 of the rule to make the 
25 gallon reporting requirement only applicable to the automotive used oil 
spills at do-it-yourselfer used oil collection centers that may not know how to 
properly react to such spills and to used oil stored in underground storage 
tanks, as required by the federal and state rules. The commenters also thought 
that the reporting requirements would be burdensome. Therefore, the reporting 
requirements have been further clarified as a notification requirement, where 
notification can be made by telephone, in person, or by any other method 
approved by the commission. The overall language was also revised to make it 
more compatible with current spill reporting practice and the general spill rule 
proposed by the commission as a separate rulemaking (a new Chapter 327). 
 On sec.324.17(b), Southwestern Public Service Company felt that the $20,000 
fine limit for repeat offenses under the criminal penalty provisions was too 
high. This fine value was derived from Texas Health and Safety Code, sec.371. 
042. The commission requirements cannot be less stringent than state law, so no 
change was made in response to this comment. 
 On sec.324.18, the Texas Legacy Company stated that as an incentive for local 
governments to pursue civil penalties for violations under this section, the 
fines recovered in a suit brought by the local government should be retained by 
the local government. However, if the state brings suit within the jurisdiction 
of a local government, and the local government aids in the preparation and 
prosecution of the violation, then the state and the local government should 
divide the recovered penalty. In response to this comment, the commission points 
out that Texas Health and Safety Code, sec.371.043(b) already addresses how the 
state and local governments shall divide civil penalties recovered and 
sec.324.18(b) of the commission rule is derived from that statutory provision. 
The commission has no statutory authority to broaden that penalty sharing 
provision, so no change was made in response to this comment. 
 On sec.324.18(c), a deletion was made to correct a cross-referencing error. 
 On proposed sec.324.21, due to the comments received, the commission has 
decided to delete this rule section while a workgroup considers additional 
closure options. The commission acknowledges that demonstration of financial 
responsibility is a statutory requirement, and that the commission's workgroup 
will continue to develop financial responsibility requirements for future 
adoption. In the meantime, the commission will enforce the requirement of 40 CFR 
Part 279, adopted by reference, to clean up used oil releases upon detection. 
 Proposed sec.324.22 (now renumbered to be sec.324.21 due to a previous section 
deletion) contains provisions for suspension or revocation of registrations if 
necessary. Central & South West Services,City Public Service, Gulf States 
Utilities, Southwestern Public Service Company, and Texas Utilities either 
opposed these requirements entirely, questioning the commission's authority to 
impose registration suspension and revocation requirements, or recommended that 
they be scaled down. The Texas Legacy Company supported the requirement as 
proposed. The Texas Health and Safety Code, sec.371.026 states that the 
commission shall adopt rules governing registration. The commission feels that 
this statutory provision provides authority to adopt rule provisions covering 
both registration and registration suspension and revocation for just cause. The 
commission would point out that the rule allows a suspension or revocation of 
registration to be appealed. A registration is suspended for a period of one 
year; however, depending upon the seriousness of the offense(s), the time of 
suspension may be increased or decreased. The holder of a used oil registration 
that has been revoked by the commission may reapply for registration as if 
applying for the first time, after a period of at least one year from the date 
of revocation. If a registration is revoked by the commission a second time, the 
revocation shall be permanent. The commission feels that the registration 
suspension and revocation rule provisions are within its statutory authority and 
are fair to the regulated community. Therefore, no changes were made in response 
to these comments. 
 Subchapter B, Financial Assurance for Closure, sec.sec.324.50-324.54, were 
derived for the purpose of applying this subchapter to various recycling 
facilities which must comply with financial assurance requirements. In response 
to the comments received from City Public Service, Gulf States Utilities, 
Pennzoil, Southwestern Public Service Company, Texas Utilities, and the Used Oil 
Grant Program Advisory Committee, the commission has decided to delete the 
Subchapter B and continue consideration of adoption of Chapter 324, Subchapter B 
to March 27, 1996 while the staff considers additional options. The commission 
acknowledges that demonstration of financial responsibility is a statutory 
requirement and that the commission is continuing the process of developing 
rules regarding financial responsibility and intends to adopt such rules at a 
future date. 
 The new sections are adopted under Texas Water Code, sec. sec.5.103, 5.105, and 
26.011, which provides the commission the authority to adopt rules necessary to 
carry out its powers, duties, and policies and to protect water quality in the 
state. The new chapter is also adopted under the Solid Waste Disposal Act,  
sec.361.017, which provides the commission the authority to regulate industrial 
solid wastes and hazardous municipal wastes; sec.361.024, which allows the 
commission to adopt rules consistent with the general intent and purposes of the 
Act; and Chapter 371 relating to Used Oil Collection, Management and Recycling. 
 
 
  sec.324.2. Definitions.  The following words and terms, when used in this 
chapter, shall have the following meanings, except when the context clearly 
indicates otherwise. Terms defined in 40 CFR sec.279.1 shall have the same 
meaning when used in this rule, except as specifically defined in this section. 
   
     Aboveground tank -A tank used to store or process used oil that is not an 
underground storage tank as defined in 30 TAC Chapter 334 of this title 
(relating to Underground and Aboveground Storage Tanks). 
   
     Administrator or Regional Administrator-These terms in 40 CFR Part 279 
requirements should be replaced with the "State Administrator, the Executive 
Director of the Texas Natural Resource Conservation Commission or his 
representative." 
   
     Commission-The Texas Natural Resource Conservation Commission (Commission) 
or its successor. 
   
     Environmental Protection Agency (EPA)-This term in 40 CFR Part 279 
requirements should be replaced with "commission." 
   
     Recycling- 
 
  (A) Preparing used oil for reuse as a petroleum product by rerefining, 
reclaiming, or other means; 
   
  (B) Using used oil as a lubricant or petroleum product instead of using a 
petroleum product made from new oil; or 
   
  (C) Burning used oil for energy recovery. 
     
     Re-refining-Applying processes to material composed primarily of used oil 
to produce high-quality base stocks for lubricants or other petroleum products, 
including settling, filtering, catalytic conversion, fractional/vacuum 
distillation, hydro treating, or polishing. 
   
     Secondary containment -Structures (dikes, berms, and/or retaining walls) or 
equivalent secondary containment systems that are made of a material(s) that is 
sufficiently impervious to used oil and capable of containing all potential 
spills and releases of used oil from the tanks or containers, plus run-on water, 
until the facility owner or operator can take measures to clean up the released 
used oil and the run-on water. 
   
     Sufficiently impervious to used oil-Capable of containing all potential 
spills and releases of used oil to soil, surface water, and ground water from 
containers and tanks until the facility owner or operator can take measures to 
clean up the released used oil. 
   
     Synthetic oils -Oils not derived from crude oil, including those derived 
from coal, shale, or a polymer-based starting material; and non-polymeric 
synthetic fluids which are used as hydraulic fluids and heat transfer fluids, 
such as those based on phosphate esters, diphenyl oxide or alkylated benzenes. 
Synthetic oils are generally used for the same purpose as crude oil derived 
oils, are usually mixed and managed in the same manner, and present relatively 
the same level of hazard after use. 
 
   
  sec.324.3. Applicability.  Applicability and exemptions from applicability 
will be as in 40 CFR Part 279, Subpart B, and as clarified herein. 
 
  (1) A used oil that has been determined to be listed hazardous must be handled 
in accordance with hazardous waste rules. EPA Hazardous Waste Number "F002" 
shall be used on used oil that is listed hazardous due to halogenated 
contaminants, because the EPA has not provided a Hazardous Waste Number to 
properly manifest such listed hazardous waste. 
   
  (2) The requirement in 40 CFR Part 279 that refers to compliance with Parts 
264 or 265, Subpart K, on used oil storage applies to used oil stored in surface 
impoundments. Storage of used oil in lagoons, pits, or surface impoundments is 
prohibited, unless the generator is storing only wastewater containing de 
minimis quantities of used oil, or unless the unit is in full compliance with 40 
CFR Part 264/265, Subpart K. Used oil can be stored in tanks and containers not 
subject to 40 CFR Part 264 or 265. 
   
  (3) Requirements applicable to mixing hazardous waste with used oil are in 40 
CFR sec.279.10 (b) (relating to Mixtures of Used Oil and Hazardous Waste). 
Mixing of hazardous waste with used oil, by other than generators, in tanks and 
containers within their applicable accumulation time limit, requires a hazardous 
waste permit per 30 TAC sec.335.2 of this title (relating to Permit Required). A 
waste that is characteristically hazardous for "ignitability only" can be mixed 
with used oil, but the resultant mixture cannot exhibit the hazardous 
characteristic of ignitability if it is to be managed under this chapter and 40 
CFR Part 279. The resultant mixture formed from mixing used oil and a 
characteristically hazardous waste, other than solely ignitable waste, must be 
tested for all likely hazardous characteristics; the resultant mixture will be a 
hazardous waste rather than used oil if it retains a hazardous characteristic, 
even if the hazardous characteristic is derived from the used oil. Anyone who 
mixes used oil with another solid waste to produce from used oil, or to make 
used oil more amenable for production of fuel oils, lubricants, or other used 
oil derived products is also a processor subject to 40 CFR Part 279, Subpart F 
(relating to Standards for Used Oil Processors and Re-refiners) and sec.324.12 
of this chapter (relating to Processors and Rerefiners). 
   
  (4) A used oil shall not be regulated under this chapter and 40 CFR Part 279 
until it is a spent material as defined in 40 CFR sec.261.1(c)(1) and 30 TAC 
sec.335.17 of this title (relating to Special Definitions for Recyclable 
Materials and Nonhazardous Recyclable Materials). 
 
     
  sec.324.5. Notice by Retail Dealer. 
 
  (a) A retail dealer who annually sells directly to the public more than 500 
gallons of automotive oil annually in containers for use off-premises shall post 
in a prominent place a sign provided by the commission: 
 
  (1) informing the public that improper disposal of used oil is prohibited by 
law; 
   
  (2) informing the public that used oil filters cannot be disposed of in 
municipal landfills or waste going to municipal landfills; 
   
  (3) prominently displaying the toll-free telephone number of the state used 
oil information center. 
     
  (b) Written requests for signs should be sent to the Texas Natural Resource 
Conservation Commission, Municipal Solid Waste Division, Automotive Waste 
Management Section, MC 125, P.O. Box 13087, Austin, Texas 78711-3087. 
 
     
  sec.324.6. Generators.  Standards for used oil generators shall be as in 40 
CFR Part 279, Subpart C. A person or entity that services equipment involving 
removal of used oil or changes used oil at a customer's home or business and 
transports the used oil from the site in quantities less than or equal to 55 
gallons may opt to be the generator of the used oil. If the service company 
removing the used oil from equipment does not assume generator responsibility, 
the site owner or operator where the used oil is removed will remain the 
generator. 
 
   
  sec.324.7. Collection Centers.  Standards for do-it-yourselfer used oil 
collection centers and used oil collection centers shall be as in 40 CFR Part 
279, Subpart D and as specified herein. All appropriate businesses and 
government agencies are encouraged to serve as do-it-yourselfer used oil 
collection centers or used oil collection centers. All collection centers 
collecting used oil from households will be publicized by the commission. 
 
  (1) Do-it yourselfer used oil collection center: 
 
  (A) must post and maintain a durable and legible sign identifying the site as 
a household used oil collection center. 
   
  (B) registration requirements: 
 
  (i) must register biennially, by no later than January 25 following the close 
of the biennial year, with the Texas Natural Resource Conservation Commission, 
Municipal Solid Waste Division, Automotive Waste Management Section, MC 125, 
P.O. Box 13087, Austin, Texas 78711-3087, utilizing a form provided by the 
commission. Registrations will expire on December 31 in even numbered years. 
Collection centers that have already registered their used oil activities prior 
to the effective date of this rule do not need to register again until their 
registrations have expired on December 1 of an even numbered year. New 
collection centers shall register within 30 days of initial operation; 
   
  (ii) must collect used oil from households during business hours at each 
location to be exempt from the fee on first sale of automotive oil; 
     
  (C) must notify the commission in writing within 30 days following abandonment 
or closure of the collection center or the cessation of accepting household used 
oil from private citizens; 
   
  (D) shall annually report the amount of household used oil collected by 
January 25 of each year on a form provided by the commission; 
   
  (E) is not subject to the rebuttable presumption. 
     
  (2) Used Oil Collection Center: 
 
  (A) must post and maintain a durable and legible sign identifying the site as 
a household used oil collection center. 
   
  (B) registration requirements: 
 
  (i) must register biennially, by no later than January 25 following the close 
of the biennial year, with the Texas Natural Resource Conservation Commission, 
Municipal Solid Waste Division, Automotive Waste Management Section, MC 125, 
P.O. Box 13087, Austin, Texas 78711-3087, utilizing a form provided by the 
commission. Registrations will expire on December 31 in even numbered years. 
Collection centers that have already registered their used oil activities prior 
to the effective date of this rule do not need to register again until their 
registrations have expired on December 1 of an even numbered year. New 
collection centers shall register within 30 days of initial operation; 
   
  (ii) must collect used oil from households during business hours at each 
location to be exempt from the fee on first sale of automotive oil; 
     
  (C) must notify the commission in writing within 30 days following abandonment 
or closure of the collection center or the cessation of accepting household used 
oil from private citizens; 
   
  (D) shall report annually the amount of household and non-household used oil 
collected by January 25 of each year on a form provided by the commission. 
Mixtures of household used oil and non-household used oil shall be considered 
non-household used oil; 
   
  (E) is not subject to the rebuttable presumption on household used oil if it 
is not mixed with non-household used oil. 
 
       
  sec.324.11. Transporters and Transfer Facilities. Standards for used oil 
transporters and transfer facilities shall be as in 40 CFR Part 279, Subpart E 
and as specified in this section. 
 
  (1) Underground storage tanks (USTs). Underground storage tanks that contain 
used oil are subject to the UST standards in 30 TAC Chapter 334 of this title 
(relating to Underground and Aboveground Storage Tanks) in addition to those in 
40 CFR Part 279. 
   
  (2) Registration. Transporters must register with the EPA one time on their 
used oil activities and with the commission biennially by January 25 of the year 
following the end of the biennial year. Transporters must register their used 
oil activities within 90 days of initiation under this rule if they have not 
previously registered their specific used oil activities with the commission and 
the EPA prior to the effective date of this rule. Transporters must register, 
through the commission, using EPA Form 8700-12 (one time) and a form provided by 
the commission (biennially). Registration forms should be mailed to the Texas 
Natural Resource Conservation Commission, Municipal Solid Waste Division, 
Automotive Waste Management Section, MC 125, P.O. Box 13087, Austin, Texas 
78711-3087. 
   
  (3) Annual report. Report annually, by January 25 of the year following the 
report year, the sources of used oil handled during the preceding year, the 
quantity of used oil received, the date of receipt, and the destination or end 
use of the used oil. A single consolidated report may be submitted for each 
company summarizing each type of used oil activity, i.e. generator, transporter, 
transfer facility, re-refiner, processor, marketer, burner. 
 
     
  sec.324.12. Processors and Rerefiners. Standards for used oil processors and 
rerefiners shall be as in 40 CFR Part 279, Subpart F and as specified in this 
section. 
 
  (1) Underground storage tanks. Section 324.11(1) of this title (relating to 
Transporters and Transfer Facilities) applies. 
   
  (2) Registration. Processors and rerefiners must register with the EPA one 
time on their used oil activities and with the commission biennially by January 
25 of the year following the end of the biennial year. Processors and rerefiners 
must register their used oil activities within 90 days of initiation under this 
rule if they have not previously registered their specific used oil activities 
with the commission and the EPA prior to the effective date of this rule. 
Processors and rerefiners must register, through the commission, using EPA Form 
8700-12 (one time) and a form provided by the commission (biennially). 
Registration forms should be mailed to the Texas Natural Resource Conservation 
Commission, Municipal Solid Waste Division, Automotive Waste Management Section, 
MC 125, P.O. Box 13087, Austin, Texas 78711-3087. 
   
  (3) Analysis plan. Each facility must prepare an analysis plan which a 
facility will follow when performing sampling and analysis, keeping records, and 
when complying with analytical requirements for documenting that used oil is not 
listed hazardous and/or the used oil fuel specification has been met. This plan 
must specify the frequency of sampling and analysis, procedures and analysis (to 
assure listed hazardous wastes are not mixed with the used oil received), and 
procedures for handling a shipment of contaminated used oil. A facility that 
only processes its own used oil and uses adequate process knowledge instead of 
analysis to prove that the used oil meets rule requirements need not prepare an 
analysis plan. 
   
  (4) Annual report. The processor/rerefiner biennial report information 
required by 40 CFR sec.279.57(b) shall be provided to the commission annually by 
January 25 of the following year. A single consolidated report may be submitted 
for each company summarizing each type of used oil activity, i.e. generator, 
transporter, transfer facility, re-refiner, processor, marketer, burner. The 
information shall be entered on a commission-prescribed form and forwarded to 
the commission. Mail the report form to the Texas Natural Resource Conservation 
Commission, Municipal Solid Waste Division, Automotive Waste Management Section, 
MC 125, P.O. Box 13087, Austin, Texas 78711-3087. 
 
     
  sec.324.13. Burners of Off-specification Used Oil for Energy Recovery.  
Standards for burners of off-specification used oil for energy recovery shall be 
as in 40 CFR Part 279, Subpart G and as specified in this section. 
 
  (1) Underground storage tanks. Section 324.11(1) of this title (relating to 
Transporters and Transfer Facilities) applies. 
   
  (2) Registration. Burners of off-specification used oil for energy recovery 
must register with the EPA one time on their used oil activities and with the 
commission biennially by January 25 of the year following the end of the 
biennial year. Burners must register their used oil activities within 90 days of 
initiation under this rule if they have not previously registered their specific 
used oil activities with the commission and the EPA prior to the effective date 
of this rule. Burners must register, through the commission, using EPA Form 
8700-12 (one time) and a form provided by the commission (biennially). 
Registration forms should be mailed to the Texas Natural Resource Conservation 
Commission, Municipal Solid Waste Division, Automotive Waste Management Section, 
MC 125, P.O. Box 13087, Austin, Texas 78711-3087. 
   
  (3) Annual report. Report annually, by January 25 of the year following the 
report year, the sources of used oil handled during the preceding year, the 
quantity of used oil received, and the date of receipt. A single consolidated 
report may be submitted for each company summarizing each type of used oil 
activity, i.e. generator, transporter, transfer facility, re-refiner, processor, 
marketer, burner. 
 
     
  sec.324.14. Marketers of Used Oil Fuel. Standards for marketers of used oil 
which will be burned for energy recovery shall be as in 40 CFR Part 279, Subpart 
H, and this subchapter. Marketers of used oil which will be burned for energy 
recovery must register with the EPA one time on their used oil activities and 
the commission biennially by January 25 of the year following the end of the 
biennial year. Marketers must register their used oil activities within 90 days 
of initiation under this rule if they have not previously registered their 
specific used oil activities with the commission and the EPA prior to the 
effective date of this rule. Marketers must register, through the commission, 
using EPA Form 8700-12 (one time) and a form provided by the commission 
(biennially). Registration forms should be mailed to the Texas Natural Resource 
Conservation Commission, Municipal Solid Waste Division, Automotive Waste 
Management Section, MC 125, P.O. Box 13087, Austin, Texas 78711-3087. 
 
   
  sec.324.15. Spills.  Whenever there is a catastrophic release or discharge of 
used oil and used oil reaches the environment, corrective measures must be 
immediately taken by the responsible person to adequately protect human health 
and the environment from potential damages. A spill of used oil in an amount 
sufficient to cause a sheen on water or a spill of automotive engine used oil or 
a mixture of automotive used oil and other used oil of 25 gallons or more that 
goes into the environment at a do-it-yourselfer used oil collection center 
should be reported to the commission as soon as possible and not later than 24 
hours after discovery. (See 40 CFR sec.279.43(c) for discharges during 
transport.) A spill or overfill of used oil at an underground storage tank that 
results in a release to the environment that exceeds 25 gallons, or that causes 
a sheen on nearby surface water shall be reported and handled as in 30 TAC 
Chapter 334, sec.334.75 of this title (relating to Reporting and Cleanup of 
Surface Spills and Overfills). All other used oil spills must be reported in 
accordance with other applicable commission requirements and agreements. The 
responsible person may notify the commission in any reasonable manner including 
by telephone, in person, or by any other method approved by the commission. 
 
  (1) During normal business hours, the responsible person may notify the 
regional office for the commission region in which the discharge or spill 
occurred; or 
   
  (2) After normal business hours, the responsible person may call the 
commission Emergency Response Unit 24-hour number at (512) 239-2507 or the State 
toll-free Spill Reporting Hotline at (800) 832-8224. 
 
     
  sec.324.18. Civil Penalty. 
 
  (a) Except as provided by subsection (c) of this section, a person who 
violates this chapter or a rule or order adopted under this chapter is liable 
for a civil penalty of not less than $100 or more than $500 for each act of 
violation and for each day of violation. 
   
  (b) A civil penalty recovered in a suit brought by a local government under 
this section shall be divided equally between the state and the local government 
that brought the suit. The state shall deposit its recovery to the credit of the 
used oil recycling fund. 
   
  (c) The penalty imposed by this section does not apply to failure to file a 
report under sec.324.7 of this title (relating to Collection Centers). 
   
  (d) The commission, a local government in whose jurisdiction the violation 
occurs, or the state may bring suit to recover a penalty under this section. 
 
     
  sec.324.21. Suspension or Revocation of Registration. 
 
  (a) The commission may suspend or revoke a registration for: 
 
  (1) failure to maintain complete and accurate records; 
   
  (2) alteration of any record maintained or received by the registrant, outside 
of justified and documented corrections; 
   
  (3) delivery of used oil to an entity not registered with the commission; 
   
  (4) failure to comply with this rule or an order issued by the commission; 
   
  (5) failure to submit annual reports as required; 
   
  (6) failure to maintain financial assurance as required; or 
   
  (7) failure to reasonably perform the used oil activities for which the 
registration was issued. 
     
  (b) A registration shall be suspended for a period of one year; however, 
depending upon the seriousness of the offense(s), the time of suspension may be 
increased or decreased. A registration is revoked automatically upon a second 
suspension. If the registration is suspended or revoked a facility shall not 
possess or accept used oil regulated under this rule. 
   
  (c) The holder of a used oil registration that has been revoked by the 
commission may reapply for registration pursuant to this rule as if applying for 
the first time, after a period of at least one year from the date of revocation. 
If a registration is revoked by the commission a second time, the revocation 
shall be permanent. 
   
  (d) Appeal of a suspension or revocation of registration procedures are as 
follows: 
 
  (1) An opportunity for a formal hearing on the suspension or revocation of 
registration may be requested in writing by the applicant by certified mail, 
return receipt requested, provided the request is postmarked within 20 days 
after a notice of proposed suspension or revocation of registration has been 
sent from the executive director to the last known address of the applicant. 
   
  (2) An opportunity for a formal hearing may be requested in writing by the 
applicant by certified mail, return receipt requested, provided the request is 
postmarked within 20 days after a notice of denial of registration suspension or 
revocation has been sent from the executive director to the last known address 
listed on the application. If the registration is denied, a person shall not 
possess used oil regulated under this rule. 
   
  (3) The formal hearing under this paragraph shall be in accordance with the 
requirements of the Administrative Procedure Act, Texas Government Code, Chapter 
2002 (Vernon 1992), the Texas Solid Waste Disposal Act, Texas Health, and Safety 
Code, Chapters 361 and 371 (Vernon 1992), and the rules of the commission. 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 13, 1996. 
 TRD-9603520 
  Kevin McCalla 
 Director, Legal Division 
 Texas Natural Resource Conservation Commission 
    Effective date: March 6, 1996 
 Proposal publication date: October 31, 1995 
 For further information, please call: (512) 239-6087 
         
                 Chapter 330. Municipal Solid Waste 
  
  The Texas Natural Resource Conservation Commission (commission) adopts the 
repeals of sec.sec.330.1141-330.1152, and sec. sec.330.1170-330.1174, Subchapter 
Z (Waste Minimization and Recyclable Materials), concerning do-it-yourself (DIY) 
changer, used motor vehicle oil recycling and used oil collection center 
reimbursement. Sections 330.1141-330.1152 and sec.sec.330.1170-330.1174 are 
adopted without changes to the proposed text as published in the October 31, 
1995, issue of the Texas Register (20 TexReg 8982) and will not be republished. 
 The United States Environmental Protection Agency (EPA) has published a new 40 
Code of Federal Regulations (CFR) Part 279, Standards for the Management of Used 
Oil. 
 This new rule extends the EPA's regulation to all nonhazardous used oil, used 
oil made characteristically hazardous by use (rather than by mixing), used oil 
recycled by means other than burning for energy recovery (in addition to used 
oil burned for energy recovery), and used oil generated by municipal or 
industrial generators. It also regulates DIY changer used oil (household used 
oil) after collection. 
 The repeals are adopted to delete DIY changer and used motor vehicle oil 
recycling requirements from Chapter 330, Subchapter Z (Waste Minimization and 
Recyclable Materials) for replacement by a new 40 CFR Part 279 implementing rule 
in Chapter 324, Used Oil. 
 The commission has prepared a Takings Impact Assessment for the used oil rules 
pursuant to Texas Government Code Annotated sec.2007.043. The following is a 
summary of that assessment: The Purpose of the new rule, old rule sections 
repeal, and rule amendments are to fully implement 40 CFR Part 279, Standards 
for the Management of Used oil. The new rule, old rule sections repeal, and rule 
amendments substantially advance the stated purpose by providing a state rule to 
implement the federally mandated rule. The rule has no effect on private real 
property because the rules only apply to used oil management activities that do 
not affect property values. When new, more stringent Federal requirements are 
promulgated, such as 40 CFR Part 279, the state must adopt equivalent rule 
requirements (57 FedReg 41604, September 10, 1992). 
 A public hearing was held on November 14, 1995 in Austin. No comments were 
received on this repeal. 
 The comment period closed December 4, 1995. No written comments were received 
on this repeal. 
 Sections 330.1141-330.1152 on DIY changer, used motor vehicle oil recycling are 
repealed for replacement by 30 TAC Chapter 324, Subchapter A, Used Oil 
Recycling. 
 Sections 330.1170-330.1174 on reimbursement of DIY changer, used motor vehicle 
oil collection centers for disposal of used oil contaminated with hazardous 
wastes/hazardous substances are repealed for replacement by 30 TAC Chapter 324, 
Subchapter A, Used Oil Recycling. 
   
  Subchapter Z. Waste Minimization and Recyclable Materials 
 
  30 TAC sec.sec.330.1141-330.1152 
 
  The repeals are adopted under Texas Water Code, sec.sec.5.103, 5.105, and 26. 
011, which provide the commission the authority to adopt rules necessary to 
carry out its powers, duties, and policies and to protect water quality in the 
state. 
 These repeals are also adopted under the Texas Health and Safety Code, Chapter 
371, Used Oil Collection, Management and Recycling Act. 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 13, 1996. 
 TRD-9603522 
  Kevin McCalla 
 Director, Legal Division 
 Texas Natural Resource Conservation Commission 
    Effective date: March 6, 1996 
 Proposal publication date: October 31, 1995 
 For further information, please call: (512) 239-6087 
         
       
  30 TAC sec.sec.30.1170-330.1174 
 
  The repeals are adopted under Texas Water Code, sec.sec.5.103, 5.105, and 26. 
011, which provide the commission the authority to adopt rules necessary to 
carry out its powers, duties, and policies and to protect water quality in the 
state. 
 These repeals are also adopted under the Health and Safety Code, Chapter 371, 
Texas Used Oil Collection, Management and Recycling Act. 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 13, 1996. 
 TRD-9603523 
  Kevin McCalla 
 Director, Legal Division 
 Texas Natural Resource Conservation Commission 
    Effective date: March 6, 1996 
 Proposal publication date: October 31, 1995 
 For further information, please call: (512) 239-6087 
         
           Chapter 335. Industrial Solid Waste and Municipal Hazardous Waste 
  
  The Texas Natural Resource Conservation Commission (commission) adopts 
amendments to sec.sec.335.1, 335.6, Subchapter A; sec.335.41, Subchapter B; 
sec.335. 78, Subchapter C; sec.335.221, Subchapter H; and sec.335.504, 
Subchapter R, concerning used oil management. Sections 335.1, 335.6, 335.78, 
335.221 and 335. 504 are adopted with changes to the proposed text as published 
in the October 27, 1995, issue of the Texas Register (20TexReg 8894). Section 
335.41 is adopted without changes and will not be republished. 
 The United States Environmental Protection Agency (EPA) has published a new 40 
Code of Federal Regulations (CFR) Part 279, Standards for the Management of Used 
Oil. 
 The commission has prepared a Takings Impact Assessment for the used oil rules 
pursuant to Texas Government Code Annotated sec.2007.043. The following is a 
summary of that assessment: The Purpose of the new rule, old rule sections 
repeal, and rule amendments are to fully implement 40 CFR Part 279, Standards 
for the Management of Used oil. The new rule, old rule sections repeal, and rule 
amendments substantially advance the state purpose by providing a state rule to 
implement the federally mandated rule. The rule has no effect on private real 
property because the rules only apply to used oil management activities that do 
not affect property values. When new, more stringent Federal requirements are 
promulgated or enacted, such as 40 CFR Part 279, the State must adopt equivalent 
rule requirements (57 Fed. Reg. 41604, September 10, 1992). 
 These amendments are adopted to remove appropriate used oil requirements from 
30 Texas Administrative Code (TAC) Chapter 335 for placement in a new 30 TAC 
Chapter 324, Used Oil, which implements 40 CFR Part 279. 
 A public hearing was held on November 14, 1995, in Austin. No comments were 
provided at the hearing on the proposed amendments to Chapter 335. 
 The proposal comment period closed December 4, 1995. Comments were received 
from the Texas Chemical Council and Texas Utilities Services, Inc. 
 On the sec.335.1 definition of "Used Oil", the Chapter 324 cross-reference was 
corrected from the subchapter to the chapter. 
 On sec.335.6(c), (d), and (i)(4) cross references were corrected. 
 On the new sec.335.6(j), the wording was corrected to indicate that both 
notification and regulation of the used oil described would be under Chapter 324 
and to indicate that only used oil that is recycled is regulated under Chapter 
324. 
 Section 335.78(j) was corrected to indicate that it only applies to used oil 
that is going to recycling and to correct the Chapter 324 cross-reference from 
the subchapter to the chapter. 
 On sec.335.221(b)(1), the Chapter 324 cross-reference was corrected from the 
subchapter to the chapter. 
 On sec.335.501, Texas Utilities recommended adding this statement: "After the 
determination has been made that a product is used oil, the used oil shall be 
managed per Chapter 324 of this title." Because sec.335.501 was not proposed to 
be amended, no change could be made to this section. Texas Utilities 
subsequently clarified that their concern was that used oil removed from 
electrical equipment that would be reused not be subject to 30 TAC Chapter 324 
used oil requirements. In response to this, a new paragraph was added to 30 TAC 
sec.324.3 to clarify that 40 CFR Part 279 and 30 TAC Chapter 324 do not apply to 
used oil until it is a spent material, i.e., any material that has been used and 
as a result of contamination can no longer serve the purpose for which it is 
intended without processing. In regard to sec.335.504(1), Texas Utilities 
suggested that 40 Code of Federal Regulations sec.261.6 be referenced in 
association with determining if a material is excluded from being a solid waste 
or hazardous waste. Because sec.261.6 addresses hazardous wastes that are not 
regulated as hazardous wastes when recycled, the commission feels this 
additional reference should not be added to this section of the rules. 
 With regard to sec.335.504(2), the Texas Chemical Council suggested removal of 
the language that was intended to clarify listed hazardous waste. According to 
the commenter, the additional language does not provide clarification. The 
commenter also stated that "In order to be consistent with federal regulatory 
language, commission should not change the wording." The commission agrees that 
the language regarding listed hazardous waste is not identical to that found in 
the 40 Code of Federal Regulations. However, it has been our experience that 
many individuals are not aware of the fact that if a non-listed waste is mixed 
with a listed hazardous waste, the resulting mixture is considered a listed 
hazardous waste, as explained in 40 Code of Federal Regulations sec.261.3 
(Definition of hazardous waste). Therefore, the commission believes it is 
important to reiterate this in the hazardous waste determination protocol. 
 In regard to sec.335.504(3)(B), the Texas Chemical Council suggested that the 
commission was"narrowing the scope of process knowledge as allowed by the EPA." 
The commenter went on to provide an example of how the commenter felt the 
proposed wording might prohibit a generator from using up-stream information in 
making a hazardous waste determination. The commenter noted that the proposed 
language was not identical to the language of the 40 Code of Federal Regulations 
and might be confusing. The commission agrees that the wording found in this 
section is not identical to that found in the 40 Code of Federal Regulations. 
However, the commission does not feel that by adding the words "to generate the 
waste" it is limiting a company's use of process knowledge. The proposed section 
states that persons can use knowledge of "materials and/or process used to 
generate the waste" when making a hazardous waste determination. In the example 
provided by the commenter, the upstream operation is a part of the "process" or 
history of the waste which came into existence; therefore, upstream information 
can and should be considered in the hazardous waste determination. The process 
used "to generate the waste" merely clarifies that the process steps must be 
part of the overall process that generates the waste and thereby helps avoid 
possible confusion. Therefore, no change was made in response to this comment. 
 On sec.335.504(4), Texas Utilities suggested deletion of this section's 
provision that used oil which was made hazardous by mixing with hazardous waste 
is to be regulated as hazardous waste. Instead, the commenter proposed that any 
material that is determined to be used oil shall be managed under Chapter 324 of 
this title. This suggestion includes deletion of 40 CFR  sec.261. 3(a)(2)(v) 
which states that used oil containing more than 1,000 ppm (parts per million) 
total halogens is presumed to be a hazardous waste because it has been mixed 
with halogenated hazardous waste listed in Subpart D of Part 261. 40 CFR 
sec.279.21(b) makes this presumption that used oil containing more than 1,000 
ppm total halogens is listed hazardous applicable to used oil generators. This 
means that a used oil generator must make a total halogens determination to 
prove that his used oil does not contain more than 1,000 ppm total halogens or 
demonstrate that his/her used oil could not have been mixed with a listed 
hazardous waste by process knowledge. He/she could demonstrate this by 
documenting that they have no listed hazardous wastes on site or that they have 
adequate procedural and/or physical controls to prevent listed hazardous waste 
from being mixed with their used oil. 40 CFR sec.261.6(a)(4) further states that 
used oil that is recycled and is also a hazardous waste solely because it 
exhibits a hazardous characteristic is not subject to hazardous waste 
regulations but is regulated under 40 CFR Part 279. At Least one generator has 
already misinterpreted this provision as a complete exemption from making a 
hazardous waste determination on used oil. This exemption from hazardous waste 
regulation applies to used oil that is characteristically hazardous by use and 
does not apply to used oil made characteristically or listed hazardous by 
mixing. It also does not apply to used oil that is not recycled. A change was 
made to sec.335.504(4) to make this clearer. The commenter's suggested change 
would not be in agreement with the federal rules applicable to used oil, and the 
commission cannot adopt a rule amendment that would be less stringent than the 
federal rules. Reference in the commission rules to 40 CFR sec.261.3(a)(2)(v) is 
required for EPA authorization of the Texas used oil program. Therefore, this 
commenter's suggested change could not be made. 
   
  Subchapter A. Industrial Solid Waste and Municipal Hazardous Waste in General 
 
  30 TAC sec.335.1, sec.335.6 
 
  The amendments are adopted under Texas Water Code, sec. sec.5.103, 5.105, and 
26.011, which provides the commission the authority to adopt rules necessary to 
carry out its powers, duties, and policies and to protect water quality in the 
state. These amendments are also adopted under the Solid Waste Disposal Act, 
sec.361.017, which provides the commission the authority to regulate industrial 
solid wastes and hazardous municipal wastes; sec.361.024, which allows the 
commission to adopt rules consistent with the general intent and purposes of the 
Act; and Chapter 371 relating to Texas Used Oil Collection, Management and 
Recycling Act. 
 
 
  sec.335.1. Definitions.  The following words and terms, when used in this 
chapter, shall have the following meanings, unless the context clearly requires 
otherwise. 
   
     Used oil-Any oil that has been refined from crude oil, or any synthetic 
oil, that has been used, and, as a result of such use, is contaminated by 
physical or chemical impurities. Used oil fuel includes any fuel produced from 
used oil by processing, blending, or other treatment. Rules applicable to 
nonhazardous used oil, oil characteristically hazardous from use versus mixing, 
Conditionally Exempt Small Quantity Generator (CESQG) hazardous used oil, and 
household used oil after collection that will be recycled are found in 30 TAC 
Chapter 324 (relating to Used Oil) and 40 CFR Part 279 (relating to Standards 
for Management of Used Oil.) 
 
   
  sec.335.6. Notification Requirements. 
 
  (a)-(b) (No change.) 
   
  (c) Any person who generates municipal hazardous waste in quantities equal to 
or greater than 1,000 kilograms in a calendar month or quantities of acute 
municipal hazardous waste in excess of quantities specified in  335.78 of this 
title (relating to Special Requirements for Hazardous Waste Generated by 
Conditionally Exempt Small Quantity Generators) in a calendar month, or 
generates quantities of hazardous industrial solid waste or non-hazardous 
industrial solid waste equal to or greater than 100 kilograms in a calendar 
month, or quantities of acute hazardous waste in excess of quantities specified 
in sec.335.78 of this title (relating to Special Requirements for Hazardous 
Waste Generated by Conditionally Exempt Small Quantity Generators) shall notify 
the executive director of such activity on forms furnished or approved by the 
executive director. Such person shall also submit to the executive director upon 
request such information as may reasonably be required to enable the executive 
director to determine whether the storage, processing, or disposal is compliant 
with the terms of this chapter. Notifications submitted pursuant to this section 
shall be in addition to information provided in any permit applications required 
by sec.335.2 of this title (relating to Permit Required), or any reports 
required by  sec.335.9 of this title (relating to Record keeping and Annual 
Reporting Procedures Applicable to Generators), sec.335.10 of this title 
(relating to Shipping and Reporting Procedures Applicable to Generators of 
Hazardous Waste or Class I Waste and Primary Exporters of Hazardous Waste), and 
sec.335.13 of this title (relating to Recordkeeping and Reporting Procedures 
Applicable to Generators Shipping Hazardous Waste or Class I Waste and Primary 
Exporters of Hazardous Waste). Any person who provides notification pursuant to 
this subsection shall have the continuing obligation to immediately document any 
changes or additional information with respect to such notification and within 
90 days of the occurrence of such change or of becoming aware of such additional 
information, provide written notice to the executive director of any such 
changes or additional information, to that reported previously. If waste is 
recycled on-site or managed pursuant to sec.335.2(d) of this title (relating to 
Permit Required), the generator must also comply with the notification 
requirements specified in sub-section (h) of this section. The information 
submitted pursuant to the notification requirements of this subchapter and to 
the additional requirements of sec.335.503 and sec.335.513 of this title 
(relating to Waste Classification and Waste Coding Required, and Documentation 
Required) shall include, but is not limited to: 
 
  (1)-(5) (No change.) 
     
  (d) Persons generating more than 100 kilograms but less than 1000 kilograms of 
hazardous municipal waste in any calendar month shall notify the executive 
director of such activity on forms provided by the executive director. Such 
person shall also submit to the executive director upon request such information 
as may be reasonably required to enable the executive director to determine 
whether the storage, processing, or disposal of such waste is compliant with the 
terms of these sections. Notifications submitted pursuant to this section shall 
be in addition to any information provided on any permit application required by  
sec.335.2 of this title (relating to Permit Required), or any reports required 
by sec.335.9 of this title (relating to Record Keeping and Annual Reporting 
Procedures Applicable to Generators), sec.335.10 of this title (relating to 
Shipping and Reporting Procedures Applicable to Generators of Hazardous Waste or 
Class I Waste and Primary Exporters of Hazardous Waste), and sec.335.13 of this 
title (relating to Recordkeeping and Reporting Procedures Applicable to 
Generators Shipping Hazardous Waste or Class I Waste and Primary Exporters of 
Hazardous Waste). Any person who provides notification pursuant to this 
subsection shall have the continuing obligation to immediately document any 
changes or additional information with respect to such notification and within 
90 days of the occurrence of any such change or of becoming aware of such new 
information provide written notice to the executive director of any such changes 
or additional information to that reported previously. 
   
  (e)-(h) (No change.) 
   
  (i) The owner or operator of a facility qualifying for the small quantity 
burner exemption under 40 Code of Federal Regulations (CFR) sec.266. 108 must 
provide a one-time signed, written notification to the United States 
Environmental Protection Agency and to the executive director indicating the 
following: 
 
  (1) The combustion unit is operating as a small quantity burner of hazardous 
waste; 
   
  (2) The owner and operator are in compliance with the requirements of 40 CFR 
sec.266.108, sec.335.221(a)(19) of this title (relating to Applicability and 
Standards) and this subsection; and 
   
  (3) The maximum quantity of hazardous waste that the facility may burn as 
provided by 40 CFR sec.266.108(a)(1). 
     
  (j) Notification and regulation requirements on nonhazardous used oil, oil 
made characteristically hazardous by use (instead of mixing), CESQG hazardous 
used oil, and household used oil after collection that will be recycled are 
found in Chapter 324 (relating to Used Oil). 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 13, 1996. 
 TRD-9603524 
  Kevin McCalla 
 Director, Legal Division 
 Texas Natural Resource Conservation Commission 
    Effective date: March 6, 1996 
 Proposal publication date: October 27, 1995 
 For further information, please call: (512) 239-6087 
         
             
  Subchapter B. Hazardous Waste Management General Provisions 
 
  30 TAC sec.335.41 
 
  The amendment is adopted under Texas Water Code, sec.5.103, and the Texas 
Solid Waste Disposal Act, sec.361.024(a), which provide the Texas Natural 
Resource Conservation Commission with the authority to adopt any rules necessary 
to carry out its powers and duties under the provisions of the Texas Water Code, 
the Texas Solid Waste Disposal Act, and other laws of this state. 
 The amendment is also adopted under the Solid Waste Disposal Act, sec.361. 017, 
which provides the commission the authority to regulate industrial solid wastes 
and hazardous municipal wastes; sec.361.024, which allows the commission to 
adopt rules consistent with the general intent and purposes of the Act; and 
Chapter 371 relating to Texas Used Oil Collection, Management and Recycling Act. 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 13, 1996. 
 TRD-9603525 
  Kevin McCalla 
 Director, Legal Division 
 Texas Natural Resource Conservation Commission 
    Effective date: March 6, 1996 
 Proposal publication date: October 27, 1995 
 For further information, please call: (512) 239-6087 
         
         
  Subchapter C. Standards Applicable to Generators of Hazardous Waste 
 
  30 TAC sec.335.78 
 
  The amendment is adopted under Texas Water Code, sec. sec.5.103, 5.105, and 
26. 011, which provides the Texas Natural Resource Conservation Commission 
(commission) the authority to adopt rules necessary to carry out its powers, 
duties, and policies and to protect water quality in the state. 
 The amendment is also adopted under the Solid Waste Disposal Act, sec.361. 017, 
which provides the commission the authority to regulate industrial solid wastes 
and hazardous municipal wastes; sec.361.024, which allows the commission to 
adopt rules consistent with the general intent and purposes of the Act; and 
Chapter 371 relating to Used Oil Collection, Management and Recycling. 
 
 
  sec.335.78. Special Requirements for Hazardous Waste Generated By 
Conditionally Exempt Small Quantity Generators. 
 
  (a)-(i) (No change.) 
   
  (j) If a conditionally exempt small quantity generator's wastes are mixed with 
used oil and the mixture is going to recycling, the mixture is subject to 
Chapter 324 of this title (relating to Used Oil ) and 40 Code of Federal 
Regulations Part 279. 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 13, 1996. 
 TRD-9603526 
  Kevin McCalla 
 Director, Legal Division 
 Texas Natural Resource Conservation Commission 
    Effective date: March 6, 1996 
 Proposal publication date: October 27, 1995 
 For further information, please call: (512) 239-6087 
         
             
  Subchapter H. Standards for the Management of Specific Wastes and Specific 
Types of Facilities-Hazardous Waste Burned for Energy Recovery 
 
  30 TAC sec.335.221 
 
  The amendment is adopted under Texas Water Code, sec. sec.5.103, 5.105, and 
26. 011, which provides the Texas Natural Resource Conservation Commission 
(commission) the authority to adopt rules necessary to carry out its powers, 
duties, and policies and to protect water quality in the state. 
 The amendment is also adopted under the Solid Waste Disposal Act, sec.361. 017, 
which provides the commission the authority to regulate industrial solid wastes 
and hazardous municipal wastes; sec.361.024,which allows the commission to adopt 
rules consistent with the general intent and purposes of the Act; and Chapter 
371 relating to Texas Used Oil Collection, Management and Recycling Act. 
 
 
  sec.335.221. Applicability and Standards. 
 
  (a) (No change.) 
   
  (b) The following hazardous wastes and facilities are not regulated under 
sec.sec.335.221-335.229 of this title (relating to Hazardous Waste Burned in 
Boilers and Industrial Furnaces): 
 
  (1) used oil burned for energy recovery that is also a hazardous waste solely 
because it exhibits a characteristic of hazardous waste identified in 40 Code of 
Federal Regulations Part 261, Subpart C, from use versus mixing. Such used oil 
is subject to regulation by the United States Environmental Protection Agency 
under 40 Code of Federal Regulations Part 279 and Chapter 324 of this title 
(relating to Used Oil). This exception does not apply if the used oil has been 
made hazardous by mixing with characteristic or listed hazardous waste other 
than by a CESQG or household generator; 
   
  (2)-(4) (No change.) 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 13, 1996. 
 TRD-9603527 
  Kevin McCalla 
 Director, Legal Division 
 Texas Natural Resource Conservation Commission 
    Effective date: March 6, 1996 
 Proposal publication date: October 27, 1995 
 For further information, please call: (512) 239-6087 
         
               
  Subchapter R. Waste Classification 
 
  30 TAC sec.335.504 
 
  The amendment is adopted under Texas Water Code, sec.5.103 and sec.26.011, 
which authorizes the Texas Natural Resource Conservation Commission to 
promulgate rules necessary to carry out its power and duty to protect water 
quality in the state. 
 The amendment is also adopted under Texas Health and Safety Code, sec.361.017 
and sec.361.024, which authorizes the Texas Natural Resource Conservation 
Commission to promulgate rules necessary to manage industrial solid and 
municipal hazardous wastes; and Chapter 371 relating to Texas Used Oil 
collection, Management and Recycling Act. 
 
 
  sec.335.504. Hazardous Waste Determination. A person who generates a solid 
waste must determine if that waste is hazardous using the following method: 
 
  (1) Determine if the material is excluded from being a solid waste or 
hazardous waste per 40 Code of Federal Regulations sec.sec.261.2, 261.3, or 
261.4. 
   
  (2) If your material is a waste, determine if the waste is listed as, or mixed 
with, or derived from a listed hazardous waste identified in 40 Code of Federal 
Regulations (CFR) Part 261,Subpart D. 
   
  (3) For purposes of complying with 40 CFR Part 268 or if the waste is not 
listed as a hazardous waste in 40 CFR Part 261, Subpart D, he or she must then 
determine whether the waste exhibits any characteristics of a hazardous waste as 
is identified in 40 CFR Part 261, Subpart C, by either: 
 
  (A) Testing the waste according to methods set forth in 40 CFR Part 261, 
Subpart C, or according to an equivalent method approved by the administrator 
under 40 CFR sec.260.21; or 
   
  (B) Applying knowledge of the hazardous characteristic of the waste in light 
of the materials and/or process used to generate the waste, pursuant to 
sec.335.511 of this title (relating to Use of Process Knowledge). 
     
  (4) For purposes of complying with Chapter 324 of this title (relating to Used 
Oil), if the waste is a used oil, determine whether used oil is a listed 
hazardous waste per 40 Code of Federal Regulations sec.261.3(a)(2)(v). Used oil 
made hazardous by mixing with listed or characteristically hazardous waste is 
regulated as hazardous waste under this chapter. Other used oil that is to be 
recycled is managed per Chapter 324 of this title. 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 13, 1996. 
 TRD-9603528 
  Kevin McCalla 
 Director, Legal Division 
 Texas Natural Resource Conservation Commission 
    Effective date: March 6, 1996 
 Proposal publication date: October 27, 1995 
 For further information, please call: (512) 239-6087 
         
                   
  TITLE 34. PUBLIC FINANCE 
 Part I. Comptroller of Public Accounts 
  Chapter 1. Central Administration 
  
  Subchapter A. Practice and Procedure 
 
  34 TAC sec.1.13 
 
  The Comptroller of Public Accounts adopts new sec.1.13, concerning initiation 
of an expedited hearing process, without changes to the proposed text as 
published in the November 24, 1995, issue of the Texas Register  (20 TexReg 88). 
 The new section gives a taxpayer the option of choosing an expedited hearing by 
complying with the requirements of subsection (b). Use of this process will 
permit the agency to issue a taxpayer a final decision within 105 to 135 days 
from the date a compliant request for expedited hearing is received. 
 No comments were received regarding adoption of the new section. 
 The new section is adopted under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2. 
 The new section implements the Tax Code, sec.111.009 and sec.111.105. 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 12, 1996. 
 TRD-9603454 
  Martin Cherry 
 Chief, General Law 
 Comptroller of Public Accounts 
    Effective date: April 2, 1996 
 Proposal publication date: November 24, 1995 
 For further information, please call: (512) 463-4028 
         
               
  TITLE 40. SOCIAL SERVICES AND ASSISTANCE 
 Part I. Texas Department of Human Services 
  Chapter 48. Community Care for Aged and Disabled 
  
  Eligibility 
 
  40 TAC sec.48.2912, sec.48.2928 
 
  The Texas Department of Human Services (DHS) adopts amendments to sec.48. 2912 
and sec.48.2928, without changes to the proposed text as published in the 
February 6, 1996, issue of the  Texas Register (21 TexReg 838). 
 The justification for the amendments is to increase the functional eligibility 
score for home-delivered meals and emergency response services so that the most 
needy clients are served. The changes are the result of a DHS Board directive to 
address the funding shortfall in CCAD for fiscal year 1996. 
 The amendments will function by providing a positive impact on the CCAD funding 
shortfall while still providing services to the most needy clients. 
 No comments were received regarding adoption of the amendments. 
 The amendments are adopted under the Human Resources Code, Title 2, Chapter 22, 
which provides the department with the authority to administer public assistance 
programs. 
 The amendments implement sec.sec.22.001-22.024 of the Human Resources Code. 
 
  This agency hereby certifies that the rule as adopted has been reviewed by 
legal counsel and found to be a valid exercise of the agency's authority. 
 Issued in Austin, Texas, on March 12, 1996. 
 TRD-9603456 
  Glenn Scott 
 General Counsel 
 Texas Department of Human Services 
    Effective date: April 15, 1996 
 Proposal publication date: February 6, 1996 
 For further information, please call: (512) 438-3765 
         
             Part X. Texas Employment Commission 
  Chapter 301. Unemployment Insurance 
  
  40 TAC sec.301.20 
 
  The Texas Employment Commission adopts an amendment to  sec.301.20, concerning 
claims for unemployment insurance benefits, without changes to the proposed text 
as published in the December 26, 1995, issue of the Texas Register  (20 TexReg 
11115). The amendment will allow individuals who receive unemployment insurance 
to have an amount withheld for income tax purposes pursuant to recent state and 
federal law amendments. 
 Unemployment insurance benefits have been subject to federal income tax 
regulations since 1986. In 1994, the United States Congress passed legislation 
which requires that all states offer unemployed individuals an option to have 
federal income tax withheld from any unemployment insurance benefits they may 
receive beginning January 1, 1997. The 74th session of the Texas Legislature 
passed legislation which amended Chapter 207, Texas Labor Code, by adding a new 
subchapter F which conforms to the federal legislation and permits unemployed 
individuals to elect to have the agency withhold federal income tax from any 
unemployment insurance benefits. This legislation became effective August 28, 
1995; however, actual withholding may not begin before January 1, 1997. 
 The Commission has adopted this rule which specifies that unemployed 
individuals will be informed at the time they file a new claim that unemployment 
insurance benefits are taxable, that they can elect to have federal income tax 
withheld from their benefits, and that they may be required to make estimated 
tax payments if they choose not to have any Federal income tax withheld. 
Unemployed individuals will be informed at the same time that they may change 
their initial withholding election once while filing claims. This information 
will be incorporated into any written informational materials and oral 
instructions they are provided. The rule also specifies that any withheld funds 
will remain in the unemployment insurance trust fund until transferred to the 
Internal Revenue Service, that the agency shall follow all procedures specified 
by the United States Department of Labor and the federal Internal Revenue 
Service pertaining to the deducting and withholding of income tax, and that any 
withholding for income tax shall come after all other types of deductions from 
unemployment insurance benefits that are required by state law, interstate 
agreements and court orders. 
 No comments were received regarding adoption of the amendment. 
 The amendment is adopted under Texas Labor Code, Title 4, Subtitle B, which 
provides the Texas Employment Commission with the authority to adopt rules 
necessary to promote the purpose of the Act. 
 
  This agency hereby certifies that the adoption has been review by legal 
counsel and found to be within the agency's authority to adopt. 
 Issued in Austin, Texas, on March 12, 1996. 
 TRD-9603487 
  J. Ferris Duhon 
 Legal Counsel 
 Texas Employment Commission 
    Effective Date: January 1, 1997 
 Proposal publication date: December 26, 1995 
 For further information, please call : (512) 463-2291