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COMMISSIONER'S BULLETIN # B-0039-07

October 10, 2007


To: All Workers' Compensation System Participants


Re: Recent Workers' Compensation Legislation from the TexasLegislature (80th Session - 2007)

The purpose of this bulletin is to provide information and guidance, including a brief summary, on selected bills pertinent to workers' compensation enacted by the Texas Legislature (80th Session - 2007). Full texts of these bills are available from the Texas Legislature Online at http://www.capitol.state.tx.us/.

H.B. 34 This bill makes it an administrative violation for an insurance adjuster, case manager, or other person who has authority under the Texas Workers' Compensation Act to request performance of a service affecting the delivery of benefits to an injured employee or who actually performs such a service, including peer reviews, required medical examinations or case management, if the insurance adjuster, case manager, or other authorized person offers to pay, pays, solicits, or receives an improper inducement relating to the delivery of benefits to an injured employee; or improperly attempts to influence the delivery of benefits to an injured employee, including through the making of improper threats. H.B. 34 is effective for violations committed on or after September 1, 2007. The Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC) anticipates amending its Monitoring and Enforcement rules.

H.B. 472 This bill amends Texas Insurance Code Chapter 4151 and requires third party administrators (TPAs) performing administrative services in connection with workers' compensation benefits to obtain a certificate of authority from the Texas Department of Insurance (TDI). The bill amended the definition of administrator to include persons collecting premiums or adjusting or settling claims for workers' compensation benefits, and expands the regulatory requirements for administrators. The amended definition also adds delegated entities and workers' compensation networks that administer claims for an insurer. The law adds an exemption for affiliates that are acting as administrator on behalf of a certified self insurer. For additional information about H.B. 472, visit the "Frequently Asked Questions" page on the TDI website at http://www.tdi.state.tx.us/licensing/agent/hb472frequentl.html . Rules will be developed.

H.B. 473 This bill amends the Texas Labor Code to allow for deviation from fee guidelines by informal or voluntary network contracts and lists specific information that informal and voluntary networks are required to provide to the TDI-DWC. Further, the bill requires informal and voluntary networks be certified as workers' compensation health care networks under Texas Insurance Code Chapter 1305 no later than January 1, 2011. Attachment A provides guidance on how informal and voluntary networks may provide the information to the TDI-DWC. This information may also be viewed on the TDI website at http://www.tdi.state.tx.us/wc/hcprovider/documents/infnetwrk083007.pdf. The commissioner of insurance and the commissioner of workers' compensation may adopt rules as necessary to implement Texas Labor Code Section 413.011. The law takes effect September 1, 2007, except for the provision regarding all carriers and certified networks effective as of January 1. 2011

This bill also reinstates the authority of the benefit review officer who presides over a benefit review conference to consider a request for interlocutory order for the payment or suspension of benefits, allows the opposing party the opportunity to respond before issuance of an interlocutory order, and allows the benefit review officer to issue an interlocutory order if determined to be appropriate. System participants should also review the provisions of S.B. 1169 as this bill also addressed interlocutory orders. S.B 1169 amended the Labor Code to authorize a written or verbal request for an interlocutory order, and if an interlocutory order is determined appropriate, to issue the order not later than the third day after the receipt of the request. The law became effective September 1, 2007. Attachment B provides guidance on how a party may request an interlocutory order. S.B. 1169 also authorizes the Subsequent Insurance Fund (SIF) to reimburse carriers for the overpayment of benefits paid as a result of a designated doctor's opinion that is later reversed or modified. This memo is available on the TDI website at http://www.tdi.state.tx.us/wc/forms/legchanges1009.pdf

H.B. 724 This bill changed the process to allow parties in a medical necessity or medical fee dispute an opportunity to administratively appeal a medical dispute resolution decision to either a contested case hearing (CCH) or the State Office of Administrative Hearings (SOAH). An appeal to a CCH is allowed for retrospective medical necessity disputes where the amount billed does not exceed $3,000, medical fee disputes in which the amount of reimbursement sought does not exceed $2,000, and prospective and concurrent medical necessity disputes. An appeal to SOAH is appropriate for disputes where the dollar amounts in dispute exceed those allowed for CCH. This new appeal process applies to medical disputes that are currently pending for adjudication by the TDI-DWC; that may be remanded to the TDI-DWC; or that may arise on or after September 1, 2007. The law became effective September 1, 2007. Attachment B provides guidance on requesting a hearing and Attachment C is the Request for Medical Contested Case or SOAH Hearing form (DWC Form-045A) and instructions. This form is available on the TDI website at http://www.tdi.state.tx.us/forms/form20.html. Rules will be developed.

This bill also provides a reimbursement procedure for an accident or health insurer to recover amounts paid for health care services provided to an injured employee from the workers' compensation carrier in cases where an injury is determined to be compensable. Attachment B provides guidance on requesting reimbursement, and Attachment D is the Reimbursement Request for Payment Made by Healthcare Insurer form (DWC form-026) and instructions. This form is available on the TDI website at http://www.tdi.state.tx.us/forms/form20.html Accident or health insurers may access dispute resolution for disputes over a failure to respond to or a reduction or denial of a reimbursement request, rules will be proposed for this issue. The commissioner of workers' compensation will also develop rules specifying how an injured employee who has paid for health care services may seek reimbursement. The law is effective for compensable injuries that occur after September 1, 2007. Rules will be developed.

Further, the definition of "Legal Beneficiary," where there is a death of a covered employee, was amended to add an "eligible parent" to the list of legal beneficiaries eligible for death benefits where there are no other legal beneficiaries. This change applies to claims for compensable injuries that occur on or after September 1, 2007. Rules will be amended.

H.B. 886 This bill amends the Texas Labor Code small employer return-to-work pilot program. This bill provides small employers with the option of submitting a preauthorization plan for workplace modifications to accommodate an injured employee's return to work to the TDI-DWC. An approved modification plan guarantees that expenses incurred will be reimbursed to the small employer unless the modifications differ materially from the employer's proposal. Small employers may be financially compensated up to $2,500 for the cost of the workplace modifications. The law became effective May 15, 2007. Rules will be amended.

H.B. 888 This bill allows an Office of Injured Employee Counsel ombudsman to request and receive from a health care provider at no cost the medical records of an injured employee. The carrier must reimburse the health care provider for the cost of the medical records. The law became effective June 15, 2007.

H.B. 1003 This bill amends Texas Labor Code Section 413.031 and provides that, notwithstanding Texas Insurance Code Section 4202.002 relating to the independent review organization (IRO), an IRO that uses doctors to perform reviews of health care services provided under the Labor Code or Insurance Code Chapter 1305, may only use doctors licensed in Texas. The definition for an IRO as used in the Labor Code is the same as in Insurance Code Chapter 1305. The law is effective for reviews of health care services provided under a claim for workers' compensation benefits that are conducted on or after September 1, 2007.

H.B. 1005 This bill amends the Texas Labor Code to clarify that a healthcare provider who fails to submit a medical bill within 95 days after the services are provided to the injured employee does not forfeit the right to reimbursement if the provider submits proof that the bill was timely filed with a group accident and health insurer or an HMO that issues coverage under which the injured employee is covered or a workers' compensation insurance carrier other than the carrier liable for the reimbursement; or, the commissioner of workers' compensation determines that the failure to timely submit the medical bill resulted from a catastrophic event. The provider must submit the claim to the correct insurer within 95 days of being notified of the erroneous submission. This law applies to a claim for payment related to health care services rendered on or after September 1, 2007. Rules will be developed.

H.B. 1006 This bill amends the Texas Labor Code and the Texas Insurance Code to require that utilization review agents (URAs) and insurance carriers use doctors licensed in Texas for performing utilization review or review conducted under the Workers Compensation Act or Texas Insurance Code Chapter 1305. The bill provides that the definitions for "credentialing" and "retrospective review" in Texas Labor Code Chapter 401 are the same as in Texas Insurance Code Chapter 1305, and that the definitions for "utilization review" and "Utilization Review Agent" are the same as in Texas Insurance Code 4201. The law applies to reviews of workers' compensation benefits that are conducted on or after September 1, 2007.

H.B. 2004 This bill requires that doctors performing peer review, utilization review, independent review, required medical examination or as a designated doctor must be certified in the specialty appropriate to the care the injured employee is receiving. The bill further requires that providers reviewing dental or chiropractic services must be licensed in these specific areas. The bill also provides that a member of the medical quality review panel, other than a chiropractor, reviewing a workers' compensation case must also be certified in a specialty appropriate to the care the injured employee is receiving. The law became effective September 1, 2007 and applies only to reviews of health care service provided under a claim for workers' compensation benefits that are conducted on or after that effective date. Rules will be developed.

S.B. 458 This bill amends the definition of "health care" in Texas Labor Code Section 401.011 to include the fitting, training, change or repair of a "prosthetic" or "orthotic" device. "Prosthetic" and "orthotic" are defined terms in this bill. The bill also amends the Texas Insurance Code relating to workers' compensation health care networks to add a reference to the Labor Code definition of those devices. The law became effective September 1, 2007.

S.B. 471 This bill amends the Texas Insurance Code to require the commissioner of insurance to establish by rule the information and reporting requirements that must be reported on workers' compensation claims and removes provisions specifying such information and requirements. It also authorizes the commissioner to reduce or eliminate reporting requirements for insurance companies whose workers' compensation insurance business falls below a specific minimum premium volume established by the commissioner. The law became effective September 1, 2007.

S.B. 1627 This bill provides that a person who commits an offense of fraud under the Texas Labor Code Chapter 418 (Criminal Penalties) may be prosecuted under that chapter or any other applicable state law, including the Texas Penal Code. These changes became effective June 15, 2007.

If there are any questions regarding the information in this bulletin, please contact Norma Garcia, General Counsel, at (512) 804-4422 or email at Norma.Garcia@tdi.state.tx.us.

Albert Betts

Commissioner of Workers' Compensation

Texas Department of Insurance



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