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You are here: Home . bulletins . 2005 . b-0071-05
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COMMISSIONER'S BULLETIN # B-0071-05

December 07, 2005


To: WORKERS'COMPENSATION SYSTEM PARTICIPANTS


Re: Voluntary Networks or Informal Networks

The enactment of Chapter 1305, Insurance Code under Article 4 of House Bill (HB) 7 (79 th Legislature, Regular Session, 2005) requires the Texas Department of Insurance(Department) to certify workers´ compensation health care networks and allows insurance carriers (including insurance companies, certified self-insured employers, group self-insured employers and political subdivisions) to contract with or establish certified workers´ compensation health care networks (certified networks). Chapter 1305 further authorizes those certified networks to provide or arrange to provide medical services to injured employees.

Further, Section 1305.051, Insurance Code, states that a person cannot operate or perform the acts of a network unless the network is certified in accordance with Chapter 1305, Insurance Code and Department rules. "Network" or "workers compensation network" is defined broadly under Chapter 1305, Insurance Code, as an organization that is "(1) formed as a health care provider network to provide health care services to injured employees; (2) certified in accordance with Chapter 1305, Insurance Code, and rules of the Commissioner of Insurance; and (3) established by, or operates under contract with, an insurance carrier."

Additionally, in conjunction with the enactment of Chapter 1305, Insurance Code, HB 7 repealed Section 408.0223, Labor Code, which authorized insurance carriers to use voluntary networks or "informal networks" to provide medical services to injured employees.

The purpose of this bulletin is to remind insurance carriers and other system participants that the specific statutory requirement that any person operating or performing the acts of a network be certified by the Department, coupled with the broad definition of "network" in both the Labor Code and Insurance Code, and the repeal of Section 408.0223, Labor Code, must be read in conjunction with each other. Therefore, this bulletin serves as a reminder that voluntary networks or "informal networks" must be certified with the Department to continue providing or arranging to provide medical care to injured employees.

The Department also reminds insurance carriers and other system participants that with the enactment in HB 7 of Section 413.011(d), Labor Code, certain contracts for fee reimbursement in non-network settings are permitted if the contractual agreement does not attempt to manage the delivery of health care services. Specifically, Section 413.011(d), Labor Code, allows an insurance carrier to contract with a health care provider outside of a certified network for fees either above or below the Division of Workers´ Compensation´s medical fee guideline for the treatment of injured employees outside of certified networks as long as the contract includes a specific fee schedule. Contracts outside of a certified network for fees that are different than the Division´s medical fee guidelines and that are not between an insurance carrier and a health care provider are inconsistent with Section 413.011(d), Labor Code.

Additionally, any person operating or performing the acts of a network (including an "informal" network), as defined by the Insurance Code and Labor Code, and that has not applied to be certified as a workers´ compensation health care network with the Department, is subject to investigation by the Department and may be subject to disciplinary action under Chapter 1305, Insurance Code.

Questions regarding this bulletin should be directed to: Margaret Lazaretti, Deputy Commissioner, HMO Division, Texas Department of Insurance, at 512-322-4266, or Allen McDonald, Director of Medical Review, Division of Workers´ Compensation, Texas Department of Insurance, at 512-804-4803.



____________________________ Mike Geeslin Commissioner of Insurance __________________________________ Albert Betts Commissioner of Workers' Compensation



Last updated: 09/07/2014

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