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You are here: www.tdi.texas.gov . pubs . wcreg . 4-2_special

TEXAS MONITOR, 4:2, Special Legislative Edition (Summer 1999)

Contents:


CHANGES TO THE TEXAS WORKERS' COMPENSATION SYSTEM FROM THE 76th LEGISLATURE

The 76th Legislative Session was significant for the Texas workers' compensation system, marking the ten year anniversary of the major system overhaul of 1989. With the exception of insurance reform measures addressed in the 1991 session, by and large, minimal changes have been made during the past decade in order to give the system time to mature. Though it did not come close to the magnitude of change witnessed ten years ago, the 1999 session saw more legislative activity in workers' compensation than any session since the reform.

Following is a synopsis of each bill with a workers' compensation component that became law. Some descriptions may not include every provision contained in the bill, and if a reader is interested in specific details, ROC staff recommends re viewing a copy of the final version of the bill in its entirety. The full text of each bill is available online from the Texas Legislature at http://www.capitol.state.tx.us.

Bills are presented in numerical order (House bills first), with bill authors/sponsors listed in bold. See Table 1 for an index by topic of workers' compensation-related bills passed by the 76th Legislature.

HB 51, Rep. Cuellar/Sen. Gallegos. Authorizes a person who is at least 65 years old, a person who is qualified to perform teaching services at a junior high or high school, or a qualified individual employed by a corporation or other business entity, to perform teaching services for a taxing unit (e.g., school district) in lieu of paying certain property taxes. The bill specifies, however, that a person providing such services is not an employee of the taxing unit, is not entitled to any benefit, including workers' compensation coverage, provided by the taxing unit to its employees, and is not entitled to indemnification from the taxing unit for injury or property damage the person sustains or liability the person incurs in performing services for the taxing unit (effective August 30, 1999).

HB 213, Rep. Hochberg/Sen. Nelson. This bill requires a health care provider who provides services under a health benefit plan-including a workers' compensation insurance policy-to bill for services no later than 11 months after the date the service is provided. A health care provider who does not comply with this requirement is barred from recovering payment or reimbursement for the services provided (effective September 1, 1999).

HB 542, Rep. Brimer/Sen. Fraser. Repeals the requirement that board members of the Texas Workers' Compensation Insurance Fund also be policyholders of the Fund. The Fund's policyholder base is decreasing due to increased competition among insurance carriers. This change will make it easier for the Governor to locate and recruit members for the Fund's board (effective June 19, 1999).

HB 729, Rep. Hochberg/Sen. Duncan. Requires insurance carriers to provide electronic funds transfer (EFT) at the request of an injured worker who is entitled to the payment of benefits for a "period of sufficient duration" as determined by Texas Workers' Compensation Commission (TWCC) rule (effective for workers' compensation benefits that become due on or after September 1, 2000). TWCC is required to adopt rules under this provision by December 1, 1999. The bill also defines what constitutes "timely" payment of benefits to an injured worker. Previously, insurance carriers had the option of issuing payments by check or electronic transfer (effective June 19, 1999).

HB 1184, Rep. Hilbert/Sen. Gallegos. Makes several revisions to the Staff Leasing Services Act. Provisions relating to workers' compensation include: 1) clarifying that a certificate of insurance coverage showing that a license holder maintains workers' compensation insurance constitutes proof of coverage for the license holder and the client company with respect to all employees of the license holder assigned to the client company; and 2) expanding the provisions that must be included in a contract between a license holder and a client company to specify those responsibilities that are shared with regard to assigned employers (e.g., the right of direction and control, the right to hire, fire, discipline and reassign employees). The bill also enumerates those responsibilities retained by a client company utilizing staff leasing services (effective September 1, 1999).

HB 1826, Rep. Hochberg/Sen. Duncan. Prohibits an insurance carrier from requesting a medical examination more than once a year for certain injured workers receiving Supplemental Income Benefits (SIBs). This limitation would only apply on or after the second anniversary of the date TWCC initially awards SIBs, and would only apply to those injured workers whose medical condition during the previous year had not improved. In the event of a dispute regarding the injured worker's medical condition, HB 1826 allows for examinations by a TWCC-selected designated doctor whose report is given presumptive weight (effective September 1, 1999).

HB 2434, Rep. Uher/Sen. Moncrief. Authorizes a development corporation, with the consent of the political subdivision through which the development corporation was created, to obtain insurance coverage, including workers' compensation insurance coverage. The bill allows workers' compensation benefits to be extended to the directors, employees and volunteers of the development corporation (effective August 30, 1999).

HB 2509, Rep. Dukes/Sen. Shapleigh. Addresses four issues applicable to the workers' compensation system for state employees (effective September 1, 1999).

  1. HB 2509 clarifies that if an injured state employee chooses to exercise the right to exhaust sick leave under the Workers' Compensation Act (Act), the employee may also choose to use some or all annual leave before receiving workers' compensation income benefit payments (not applicable to employees of the Texas Department of Transportation, the University of Texas System and the Texas A & M University System, who are governed by separate sections of the Texas Labor Code).
  2. HB 2509 clarifies that payments of medical and income benefits by the State Office of Risk Management (SORM) are subject to the provisions of the Act applicable to insurance companies, and not to payment provisions of the Government Code applicable to state agencies. 1
  3. HB 2509 deletes provisions of SORM's enabling statute that require the agency to establish an allocation program for financing state workers' compensation benefits.

    As outlined in the 1998 Biennial Report of the Research and Oversight Council on Workers' Compensation (ROC), SORM, with input from the ROC, will conduct a comprehensive review of the state's workers' compensation program during the interim, and will make recommendations to the 77th Legislature regarding program improvements.

  4. HB 2509 changes the requirement that SORM provide the Legislature with a detailed report on each state employee workers' compensation injury, by requiring the executive director to make this information available to members of the Legislature only upon request.

HB 2510, Rep. Dukes/Sen. Shapleigh. Makes 15 miscellaneous changes to the Texas workers' compensation system (effective September 1, 1999, unless otherwise noted).

  1. HB 2510 eliminated a potential conflict between the Act and the Penal Code with regard to the meaning of the word "intoxication" by removing the Act's specific reference to an alcohol concentration level of .10. Legislation was passed this session (Senate Bill 114) that amends the definition of "intoxication" in Section 49.01 of the Penal Code (changing legal intoxication level from .10 to .08).
  2. HB 2510 increases the interest rate applicable to provisions of the Act from the current Treasury Bill rate (which is currently between 4.5 and 5 percent) to the current Treasury Bill rate plus 3.5 percent to better approximate business interest rates (effective October 1, 1999). The bill also requires that interest on accrued but unpaid income benefits be paid, without an order from TWCC, at the time the accrued benefits are paid. Currently, a hearing must be held and an order regarding benefits issued before interest must be paid by an insurance carrier.
  3. HB 2510 clarifies that TWCC commissioners are entitled to reimbursement of lost wages for participation at TWCC public meetings and hearings (rather than just public meetings) and that lost annual leave, like actual lost wages, qualifies for reimbursement. Additionally, the bill reduces the maximum annual reimbursement that a commissioner may receive from $12,000 to $5,000.
  4. HB 2510 authorizes the Texas Workers' Compensation Insurance Fund to provide a grant to TWCC in order to "implement specific steps to control and lower medical costs in the workers' compensation system and to ensure the delivery of quality medical care." This grant is not to exceed $2.2 million between September 1, 1999, and September 1, 2003. This authorization creates an exception to the Government Code guidelines which generally limit the ability of a state agency to accept gifts or grants from entities with disputed claims pending before the agency. TWCC is required to publish notice of any grant to be received in the Texas Register, provide a description of the purpose and conditions of any grant, and provide a 20-day public comment period before accepting a grant under this new provision.
  5. HB 2510 extends confidentiality to all survey respondents in research projects conducted by the ROC. Prior to this change, the Act only protected information relating to specific workers' compensation claims, and some survey respondents were reluctant to participate in these research projects without an assurance of confidentiality.
  6. HB 2510 states that an injured worker is not entitled to Temporary Income Benefits (TIBs), and an insurance carrier may suspend payment of TIBs, if the worker fails, without good cause, to attend an insurance carrier Required Medical Exam (RME). This provision allows TWCC to order benefits paid if a worker has good cause for failing to attend an RME and addresses a concern that some injured workers could refuse to attend an RME thereby circumventing the efforts of a carrier to evaluate the injured worker's condition.
  7. HB 2510 requires an insurance carrier to continue paying TIBs to an injured worker for at least 14 days from the date the carrier notifies TWCC and the worker of the intent to suspend benefits based on a medical report arising out of a carrier RME. HB 2510 also requires TWCC to set a Benefit Review Conference (BRC) within 10 days of receiving notice of the carrier's intent to suspend to determine whether an interlocutory order to continue benefits should be entered. The bill also provides that if a BRC is not scheduled within 14 days, an interlocutory order, effective from the date of the report certifying maximum medical improvement, is automatically entered for the continuation of income benefits until TWCC holds a BRC (applicable to RMEs scheduled on or after January 1, 2000). This provision, along with recent administrative and court decisions, addresses a long-standing controversy as to whether an insurance carrier has the authority to suspend TIBs based on a carrier RME exam before a BRC is held. The new law will enable TWCC to decide if benefits will continue until a designated doctor can resolve the dispute between the treating doctor and the RME doctor.
  8. HB 2510 requires all health care providers (not just "facilities" required under a previous provision of the Act) to provide medical records to insurance carriers, injured workers, and attorneys representing injured workers upon request. The bill also clarifies that all health care providers may disclose information to the insurance carrier of an affected employer without authorization from an injured worker to determine entitlement and amount of payment.
  9. HB 2510 clarifies conflicting provisions in the Act by requiring that insurance carriers reimburse health care providers at the level allowed in TWCC's fee guidelines, rather than the amount billed by the health care provider.
  10. HB 2510 authorizes a worker or a legal beneficiary to request, and an insurance carrier to pay, income or death benefit payments monthly rather than weekly, with the agreement of the insurance carrier. It also allows a carrier to purchase an annuity to pay the benefits of a worker receiving Lifetime Income Benefits (LIBs), or a legal beneficiary receiving death benefits, subject to TWCC regulation. This change will ease the burden on severely injured workers receiving LIBs or other workers' compensation benefits, who might otherwise have to deposit or cash their benefit checks on a weekly basis. Authorizing the payment of benefits monthly, rather than weekly, will also ease the burden of processing benefit checks weekly for certain claims.
  11. HB 2510 provides TWCC with the flexibility, by rule, to move to the fourth edition of the American Medical Association's (AMA) Guides to the Evaluation of Permanent Impairment, for determining the existence and degree of an injured worker's impairment. This change will allow public input into the decision regarding which version of the Guides should be used in Texas, and allows TWCC to determine whether the decision to move the fourth edition should be postponed if the AMA indicates that a fifth edition will be published in the near future.
  12. HB 2510 increases the maximum burial benefit from $2,500 to $6,000 to more accurately reflect the average cost of a burial in Texas. According to the National Funeral Directors Association, the national average for the cost of a burial in 1997 was estimated to be $5,543.
  13. HB 2510 adds an insurance carrier representative to the TWCC's Medical Advisory Committee (MAC). Prior to this change, the MAC had no representative with expertise in insurance issues such as claims handling, medical utilization review, and cost trends.
  14. HB 2510 authorizes a political subdivision to provide volunteer fire fighters, police officers, or other specifically named emergency medical personnel, who are injured in the course of performing volunteer duties, with more than the minimum income benefits authorized by the Act (currently $80/week).
  15. HB 2510 eliminates the duplicative reporting requirement in the Insurance Code that requires insurance carriers to provide the Texas Department of Insurance with an audited annual report showing year end loss, expense, and unearned premium reserves. While the information contained in these reports is still used by regulators, it is available from other sources.

HB 2511, Rep. Giddings/Sen. Armbrister. Contains five provisions relating to the reporting and the transmission of information within the workers' compensation system (effective September 1, 1999, unless otherwise noted).

  1. HB 2511 requires TWCC to appoint a task force of workers' compensation system participants to develop a plan by October 1, 2000, that incorporates electronic reporting of information and financial exchanges into the workers' compensation system. The bill requires the plan "to describe options for the public to access nonconfidential statistical and reference information, including medical billing and payment information, reports, and fund transfer transactions, employer coverage and insurance carrier claim administration contact information, and other public access information and transaction information that is feasible for electronic access." The bill mandates that the plan be developed with the goal of reducing paper communication requirements in the workers' compensation system by 30 percent not later than January 1, 2002, and by an additional 30 percent not later than January 1, 2003. System participants have indicated that many of the current paperwork processing requirements are burdensome and costly; can cause confusion regarding the status of a claim; and can impede access to nonconfidential information.
  2. HB 2511 requires certified self-insurers and political subdivisions to provide TWCC with notice of coverage (i.e., whether the employer has a commercial workers' compensation policy or provides coverage through a pool or self-administered arrangement), and claim administration contact information (effective January 1, 2000). Commercial insurance carriers are already required to provide coverage information to TWCC.
  3. HB 2511 requires employers and insurance carriers to identify or confirm an employer's coverage status and claim administration contact information at TWCC's request. The bill makes noncompliance a Class C administrative violation. This change and the previous change will enable TWCC staff to more efficiently process disputes and inquiries regarding a claim and keep more accurate records.
  4. HB 2511 provides TWCC with the ability to contract with a data collection agent to fulfill the data collection requirements contained in the Act if deemed cost-effective in the planning/analysis phase, and to implement an electronic reporting and public information access program.
  5. HB 2511 clarifies that injury reports from employers should be sent to the appropriate insurance carrier and not TWCC to align the Act with electronic reporting requirements prescribed for carriers through previous legislation. Additionally, this change will help to eliminate delays that sometimes occur in the processing of a claim when an employer sends a report of injury to TWCC and the carrier is unaware that an injury has occurred in the workplace.

HB 2512, Rep. Giddings/Sen. West. Contains the following two provisions relating to the entry of interlocutory (i.e., temporary) orders by TWCC staff (effective September 1, 1999, for interlocutory orders or decisions issued on or after the effective date):

  1. HB 2512 clarifies that a Benefit Review Officer (BRO) and a Contested Case Hearing Officer can enter an interlocutory order for all or part of accrued and/or future medical or income benefits. Prior to this change, the Act only authorized BROs to enter interlocutory orders, and such orders were limited to require a carrier to either pay or not pay all benefits.
  2. HB 2512 authorizes the TWCC Executive Director to enter interlocutory orders for all or part of accrued and/or future medical benefits as allowed by rule. This new authority could be used by the Executive Director to order payment for past medical care or future medical care in those cases where an injured worker's medical treatment is denied pending resolution of a medical or compensability dispute but TWCC has reason to believe benefits should be paid.

HB 2513, Rep. Ritter/Sen. Armbrister. Contains the following seven provisions relating to return-to-work issues in the workers' compensation system (effective September 1, 1999 unless otherwise noted):

  1. HB 2513 authorizes TWCC to establish minimum qualifications and credentialing standards for private providers of vocational rehabilitation services within the workers' compensation system.
  2. HB 2513 requires TWCC to inform insurance carriers of those injured workers eligible to receive SIBs who are good candidates for vocational rehabilitation services. This change will facilitate the rehabilitative process necessary for successful return to work.
  3. HB 2513 requires TWCC to develop a guideline which outlines expected return-to-work time frames. Although the Act previously contained a requirement that TWCC adopt a "lost-time guideline," to date, a draft proposal has not been presented to the commissioners for consideration due to confusion regarding the meaning of "lost-time guideline." This change clarifies the intent of the Legislature that TWCC adopt guidelines to identify workers who need additional attention to speed medical recovery and return to work.
  4. HB 2513 requires TWCC to establish a program that encourages communication between employers and health care providers regarding the availability of modified duty to encourage more timely return to work of injured employees (TWCC must implement no later than January 1, 2000).
  5. HB 2513 provides TWCC with authority, at the request of an employer, an insurance carrier, or on its own initiative, to request a functional capacity report from an injured worker's treating or examining doctor to determine what ability, if any, an injured worker has to return to work.
  6. HB 2513 provides that an injured worker who refuses the services of (or who refuses to cooperate with) an insurance carrier-sponsored private vocational rehabilitation provider loses entitlement to Supplemental Income Benefits (SIBs). This is an expansion of existing law under which an injured worker loses entitlement to SIBs only for refusal of services or refusal to cooperate with rehabilitation services provided by the Texas Rehabilitation Commission.
  7. HB 2513 requires TWCC to provide information to employers regarding effective return-to-work programs though the agency's health and safety information and medical review outreach programs.

HB 2514, Rep. Ritter/Sen. Armbrister. Contains the following four provisions relating to safety issues within the workers' compensation system (effective September 1, 1999):

  1. HB 2514 clarifies that immunity for insurance carrier representatives who conduct workplace safety services (e.g., safety consultations or inspections) applies to "injuries" and "occupational diseases" as well as "accidents."
  2. HB 2514 limits application of TWCC's Extra Hazardous Employer Program to comply with a 1996 Third Court of Appeals ruling that provisions of the program that duplicated or regulated federal Occupational Safety and Health Act standards were preempted and, therefore, invalid. The program's identification, consultation, accident prevention and inspection provisions are still applicable to political subdivisions, while private employer participation is limited to the identification process. However, private employers may request safety and health consultation services from TWCC. Under this bill, federal employers and state agencies and institutions are not included in the program. State agencies are governed by special provisions of the Labor Code applicable to risk management and workers' compensation coverage for government employees.
  3. HB 2514 changes the name of the program from the "Extra Hazardous Employer Program" to the "Hazardous Employer Program."
  4. HB 2514 requires TWCC to re-inspect the accident prevention services of insurance carriers who fail an initial biennial inspection within 180 to 270 days, and to collect reasonable re-inspection costs from those insurance carriers.

HB 2706, Rep. Gallego/Sen. Gallegos. Provides workers' compensation medical coverage for volunteers in a state declared emergency. To qualify for coverage, the volunteer must be under the direction of an officer or employee of the state or a political subdivision, and medical attention for an injury must be sought from a doctor within 48 hours of the injury, or the date the person knew or should have known the injury occurred. Under this bill, employees of political subdivisions are entitled to medical coverage only if volunteer services are performed outside the jurisdiction of the employing political subdivision (effective June 16, 1999).

HB 2842, Rep. Brimer/Sen. Armbrister. Provides that an employer may continue to pay the salary of an employee who sustains disability from a compensable injury in lieu of paying Temporary Income Benefits (TIBs) and that such payments are considered payment of income benefits for determining the accrual date of any subsequent income benefits. HB 2842 further clarifies that payments made as salary continuation or supplementation do not affect the exclusive remedy provisions of the Act. The bill provides that an employer is not eligible for reimbursement for salary continuation benefits paid under a contractual obligation such as a collective bargaining agreement and that salary continuation made in lieu of TIBs may include "wage supplementation" only if: 1) the employer does not seek reimbursement out of the injured worker's Impairment Income Benefits (IIBs) from the carrier, and 2) the supplement does not affect an injured worker's eligibility for future income benefits (effective September 1, 1999).

HB 3697, Rep. Siebert/Sen. Sibley. Contains the following five provisions relating to the operation of the Texas Workers' Compensation Insurance Fund (Fund) (effective August 30, 1999):

  1. HB 3697 authorizes the Fund to establish multi-tiered premium systems to set prices for insurance policies in the Fund's programs. The bill also authorizes the Fund to provide lower premium payments based upon the category of risk in which an employer is assigned.
  2. HB 3697 eliminates the Fund's tax credit of 2 percent of the annual gross workers' compensation premiums written by the Fund.
  3. HB 3697 requires the Fund to be a member of the Texas Property and Casualty Insurance Guaranty Association. As a member, the Fund's policyholders will be protected with respect to claims that occurred on or after January 1, 2000, in the event the Fund becomes insolvent. Additionally, the Fund may be subject to assessments under the Texas Property and Casualty Insurance Guaranty Act for claims that occurred on or after January 1, 2000, in the event other workers' compensation insurance carriers become insolvent.
  4. HB 3697 refunds part of the Fund's surplus to policyholders who paid a maintenance tax surcharge between 1991 and 1996 (expires September 1, 2002).
  5. HB 3697 provides for a joint venture between the Fund and the ROC to conduct specific research studies to examine:
    1. methods to improve worker safety and facilitate return to work;
    2. the quality and cost-effectiveness of the current workers' compensation health care delivery system; and
    3. medical provider treatment patterns and insurance carrier utilization review practices. The bill requires the ROC, with the assistance of the Comptroller, to solicit proposals from private vendors to conduct the studies. Furthermore, the ROC is required to report the results of the studies and recommendations to the 77th Legislature by February 1, 2001.

SB 525, Sen. Luna/Rep. Uher. Defines members of the state's military forces as "state employees" for the purposes of providing workers' compensation coverage, effective for compensable injuries sustained on or after August 15, 1998. The bill also provides that although the average weekly wage (AWW) of a member of the state military forces may not exceed the state AWW for the purpose of calculating workers' compensation benefits, a member's AWW is equal to the sum of the member's regular civilian weekly wage and regular military weekly wage (effective September 1, 1999).

SB 556, Sen. Nelson/Rep. Hilderbran. Authorizes an occupational therapist to evaluate an individual's need for occupational therapy services and to provide such services with a referral from certain enumerated, licensed health care professionals, rather than with a referral exclusively from a physician (effective September 1, 1999).

SB 785, Sen. Wentworth/Rep. Turner. Requires an autopsy report to be released to an authorized person in connection with workers' compensation or insurance claims. The bill also authorizes a recipient of an autopsy report to disclose information contained in the report only to the extent consistent with the authorized purposes for which the information was obtained (effective September 1, 1999).

SB 1591, Sen. Zaffarini/Rep. Maxey. Contains several provisions relating to the implementation of national standards for the electronic processing of health care and health payment information and establishes a National Data Interchange Standards Task Force, which includes the executive director of TWCC, to develop a coordinated strategy for the state's implementation of the national data interchange standards adopted under HIPAA (effective June 18, 1999).

Legislative Wrap-Up

With session concluded, the agencies and entities involved in administering the workers' compensation system will begin to develop rules and regulations addressing the laws passed by the 76th Legislature and signed by Governor Bush. The ROC will monitor the implementation efforts of TWCC, TDI, SORM, the Fund, and other system participants as they work to translate legislative mandate into tangible system improvements.


INTERIM RESEARCH PROJECTS

Research plays a key role in both the development of policy and the implementation of new legislative and regulatory directives. For example, one of the major workers' compensation issues to emerge during the 76th Legislative Session- the cost and quality of medical care-arose out of a national study reporting the cost of providing medical care to injured workers in Texas was significantly higher than in other states. 2 Additional studies by the ROC supported these findings,. 3 yet there were insufficient data and no general agreement among system participants as to the extent or cause of the problem. Although several legislative changes were proposed to address the problem of high medical costs and lack of regulatory control over medical practices, these bills did not pass.. 4 The Legislature did, however, recognize the need for more and better information on the factors driving high medical costs in Texas, and passed legislation requiring that research be conducted in this area during the interim to assist policymakers during the 77th Legislative Session.

Following is a description of the legislatively-mandated research projects related to workers' compensation, along with existing ROC research agenda items that address the same issues.

Medical Studies

  1. HB 3697. Comprehensive Medical Cost Studies. HB 3697 requires that the ROC and the Fund enter into a joint venture to develop two research studies to identify factors that are driving higher than average medical costs in the Texas system.

    One of these research projects requires a comparison of the quality and cost-effectiveness of the Texas workers' compensation health care delivery system with other types of health care delivery systems (e.g., Medicare, managed care, group health, etc.) and other state workers' compensation health care delivery systems. ROC anticipates that a Request for Proposal (RFP) for this project will be issued this September with a contract awarded sometime in December-January 2000.

    The other research project requires an examination of medical provider treatment patterns and insurance carrier utilization review practices. ROC anticipates that an RFP for this project will also be issued this October with a contract awarded sometime in January 2000.

    The ROC is required to report the results of these two studies along with recommendations for regulatory or legislative change to the 77th Legislature by February 1, 2001. The ROC is already working with TWCC, the Fund, and other system participants, to develop the scope of these two major projects. The funding made available in this legislation will allow a more in-depth look at medical issues than would have otherwise been possible. The Texas Comptroller's Office will assist the ROC in developing the RFPs and contracts for these research studies.

  2. Medical Studies on ROC Research Agenda. Prior to the 76th Legislature, the ROC Board approved the Fiscal Year (FY) 1999 and FY 2000 Research Agendas, which contain several projects focusing on medical issues that closely parallel the major medical studies mandated by HB 3697:
    1. Treatment Guidelines. The ROC is currently conducting research on the usage of the TWCC treatment guidelines by health care providers and insurance carriers, as well as comparing the Texas guidelines with similar guidelines in other states. A follow-up treatment guideline project, scheduled for FY 2000, will analyze the impact of the guidelines on the cost of medical care and the frequency of medical disputes.
    2. Medical Dispute Resolution. The ROC is also currently in the process of completing research on the medical dispute resolution process to examine current trends in medical disputes and to identify ways the process can be improved.
    3. Comparison of Health Care Providers. In FY 2000, the ROC is also scheduled to conduct research examining the cost and quality of medical care received by injured workers from different types of health care providers.
    4. Change of Treating Doctor. Another study scheduled for FY 2000 will examine issues surrounding requests for change of treating doctor submitted by injured workers, including the number of injured workers who request changes and the impact of multiple changes on overall claim costs and return-to-work outcomes.
  3. Other Medical Projects.
    1. Multi-state Medical Cost/Quality Information Development Project. The ROC is also participating with six states and other research entities to obtain a grant from the Robert Wood Johnson Foundation which would allow Texas to participate in developing and testing a standardized interstate database for collecting and analyzing medical data. The project would require ROC collaboration with the National Institute of Occupational Safety and Health (NIOSH), the International Association of Industrial Accident Boards and Commissions (IAIABC), the Picker Institute, and various other state workers' compensation agencies.

      The project's objectives are: 1) to identify the knowledge base necessary for understanding the workers' compensation medical care process and outcomes of care; 2) to identify the key information elements to be collected in a survey, and to develop and test the survey; 3) to identify the key elements already available in administrative data and to determine the feasibility (including confidentiality and costs) of linking this data with survey data; and 4) to determine the options for establishing ongoing data collection and linkage of a publicly available medical outcomes database. The grant will be awarded in September with the proposed project beginning in October 1999 and ending in September 2001.

    2. Examination of the Cost-Effectiveness of the Workers' Compensation Medical Utilization Review Structure. A research recommendation proposed in the 1998 ROC Biennial Report would examine the role of utilization review agents in the system and their impact on the number of disputes, the delivery of health care, and overall system cost. The goal of this project would be to identify how the current medical management and monitoring mechanisms contained in the Act and rules could be modified to reduce cost and improve medical outcomes for injured workers.

Safety and Return-to-Work Studies

  1. HB 3697. Safety and Return-to-Work Study. HB 3697 also requires that the ROC and the Fund develop a study on methods to improve worker safety and facilitate an injured worker's return to productive employment following an injury. As with the medical studies required by HB 3697, the results of this study along with recommendations for legislative or regulatory change are due by February 1, 2001. The ROC will be working closely with the Fund, TWCC, and other system participants to develop this project. ROC anticipates that an RFP for this project will be issued this November with a contract awarded sometime in January 2000.
  2. Return-to-Work Study on ROC Research Agenda. In FY 2000, the ROC is also scheduled to review and analyze the services provided to injured workers by the Texas Rehabilitation Commission.

    In light of the research mandates contained in HB 3697, the ROC is currently reevaluating its FY 2000 medical cost and return-to-work studies for possible re-scoping or inclusion as part of the HB 3697 studies. Table 2 shows the research initiatives mandated by HB 3697 with related ROC research projects listed underneath. Table 2 also contains a list of other research projects currently on ROC's FY 2000 Research Agenda.

Interim Regulatory Reviews

In addition to the research initiatives outlined above, two interim programmatic reviews were included in legislation passed during the 76th Legislative Session.

  1. Grant Funding to Control and Lower Medical Costs and to Ensure Delivery of Quality Medical Care. HB 2510 contains provisions authorizing the Fund to award a grant to TWCC to implement specific steps to control and lower medical costs in the workers' compensation system and to ensure the delivery of quality medical care. The ROC will be working with the he Fund, TWCC and other system participants to help identify effective regulatory programs through which these goals can be accomplished.
  2. Electronic Information Exchange Task force. HB 2511 requires TWCC to establish a task force charged with developing a plan to incorporate electronic reporting of information between parties in the workers' compensation system by October 1, 2000. The ROC will work closely with TWCC and the task force to identify opportunities for improving access to and usage of data, and to make recommendations for system changes needed to take advantage of electronic reporting and exchange of information in the workers' compensation system.

The 1998 ROC Biennial Report also contained two regulatory review recommendations:

  1. TWCC Enforcement Regulatory Review (Task force). This project, recommended in the 1998 ROC Biennial Report, would involve TWCC establishing a task force of system participants to conduct a comprehensive review of TWCC's regulatory enforcement efforts. The goal of the task force would be to identify strengths and weaknesses of the statutory and regulatory mechanisms available to TWCC for enforcing the Act and rules, and to make recommendations for statutory changes and regulatory improvement.
  2. State Office of Risk Management (SORM) Regulatory Review. This proposed project, recommended in the 1998 ROC Biennial Report, would require a comprehensive review of the administration of the State's workers' compensation and risk management structure. The ROC further recommended that this review be completed by December 1999 so that recommendations could be considered by the 77th Legislature.

Conclusion

The ROC staff is looking forward to working with all system participants and other agencies within the workers' compensation system on these research and regulatory initiatives. While top priority will be given to legislatively-mandated projects that will have direct impact on near-term policy, all effort will be made to accomplish other planned projects. The ROC will be requesting input from system participants and agencies to help determine the best use of resources and expertise to achieve maximum benefit to the Texas workers' compensation system.


ERRATA

Due to a computer formatting problem, a portion of the note to Table 3 in the Summer 1999 Texas Monitor paper edition ( vol. 4, no. 2) was difficult to read. The note should read: "'+'" indicates that Guidelines are being developed in these states."

Also in the same edition, in the article, "Comparison of Medical Treatment Guidelines with Those of Other States," the term "myelography" was used. The proper term should be "myelopathy." We apologize for any confusion.


Footnotes:

  1. SORM is the state agency that administers the workers' compensation system for state employees.
  2. National Council on Compensation Insurance, Annual Statistical Bulletin, 1999. The average expected medical cost of a workers' compensation claim in Texas was estimated to be 78 percent higher than the national average.
  3. Research and Oversight Council on Workers' Compensation, Health Care Costs in the Texas Workers' Compensation System (March 1999) and Medical Cost Trend Analysis: Data from Three Workers' Compensation Insurance Carriers (May 1999).
  4. See HB 1778, HB 2505, HB 2506 and HB 2545 for legislation addressing medical cost and quality issues which did not pass.

This page was last updated on December 9, 2002.



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