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Medical Contested Case Hearing Decision Manual - Medical Fee Disputes

Table of Contents

Acronym List

Overview
An employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed. Texas Labor Code §408.021. The term "health care" includes all reasonable and necessary medical aid, medical examinations, medical treatments, medical diagnoses, medical evaluations, and medical services. Texas Labor Code §401.011(19).

28 Texas Administrative Code §133.305(a)(4) provides that a medical fee dispute involves an amount of payment for non-network health care rendered to an injured employee (IE) that has been determined to be medically necessary and appropriate for treatment of that employee's compensable injury. In order to obtain reimbursement from the insurance carrier (IC) for fees expended on health care, the health care at issue must have been provided to treat IE's compensable injury. See MCCH 11003.

The Division of Workers' Compensation (DWC) has jurisdiction to resolve fee disputes pursuant to Division rules, including Rule 133.307 (See Jurisdiction section, below).

Jurisdiction
Rule 133.307 ("MDR of Fee Disputes") applies to requests for dispute resolution involving medical fees for non-network health care or certain authorized out-of-network health care not subject to a contract.

DWC Does Not Have Jurisdiction To Resolve Dispute Over Fees For Treatment Provided Subject to Network Contract
The Division's Medical Fee Dispute Resolution (MFDR) section issued a decision finding that IC was liable for $400.56 of $769.32 sought by the Health Care Provider (HCP) for services rendered on June 30, 2004. The evidence presented in the MCCH revealed that the services at issue were provided pursuant to a network contractual agreement between IC and HCP. Consequently, the hearing officer (HO) found that the Division did not have jurisdiction to hear the dispute.
M4-05-3362-01.

In accordance with Rule 133.307(f)(2), a party to a medical fee dispute in which the amount of reimbursement sought by the requestor in its request for Medical Dispute Resolution (MDR) is equal to or less than $2,000.00 may request a medical contested case hearing (MCCH) conducted by a DWC hearing officer. For medical fee disputes involving reimbursement amounts more than $2,000.00, a party may seek a contested case hearing (CCH) before the State Office of Administrative Hearings (SOAH). See Rule 133.307(f)(1). 1

Pursuant to Rule 133.307(a)(2)(A) through 133.307(a)(2)(C), DWC has jurisdiction to resolve medical fee disputes requested under Rule 133.307(f) that were: pending for adjudication by the Division on September 1, 2007; remanded to the Division on or after September 1, 2007; or filed on or after September 1, 2007. In resolving non-network disputes regarding the amount of payment due for health care determined to be medically necessary and appropriate for treatment of a compensable injury, the role of the Division is to adjudicate the payment, given the relevant statutory provisions and Division rules. See Rule 133.307(a)(3).

Timeliness of Appeal to a DWC MCCH on Medical Fee Not Exceeding $2,000.00
In order to request a DWC MCCH, a written request must be filed with the Division's Chief Clerk no later than the later of the 20th day after the May 25, 2008 effective date of the section or the date on which the decision of MFDR is received by the appealing party. See Rule 133.307(f)(2)(A).

Example of Untimely Appeal of MFDR Decision
Among the issues raised at the MCCH was whether Claimant timely appealed the decision of MFDR. The MFDR decision was dated August 11, 2010 and, under Rule 102.5, Claimant was deemed to have received it five days later, on August 16, 2010. Claimant thus had 20 days from August 16, 2010, or until the deadline date of September 6, 2010, to appeal the MFDR decision by requesting an MCCH pursuant to Rule 133.307(f)(2)(A). HO determined, based on the evidence presented at the MCCH, that Claimant's faxed appeal of September 10, 2010 was not timely.
M4-10-2304-01.

Evidence at a MCCH on a Fee Dispute
At the MCCH, parties may submit supplemental documentation to support their claims that was not previously exchanged or presented to MFDR.

HCP provided therapy services to Claimant for his compensable injury. Reimbursement was denied by IC because HCP did not submit a copy of the pre-authorization letter with the bill. MFDR found that HCP was not entitled to reimbursement because the preauthorization letter was not submitted for review. At the MCCH, HCP presented a copy of the physical therapy visit summary and the preauthorization letter covering the requested dates of service. HO found that HCP was entitled to reimbursement in the amount of $191.61.
M4-08-5127-01.

Application of Medicare Guidelines
The commissioner is required to adopt the most current reimbursement methodologies, models, and values or weights used by the federal Centers for Medicare and Medicaid Services (CMS), including applicable payment policies relating to coding, billing, and reporting. See Texas Labor Code §413.011(a).

Pursuant to Rule 134.202(b), which applies to dates of service from August 1, 2003 through February 29, 2008, for coding, billing, reporting, and reimbursement of professional medical services, Texas Workers' Compensation system participants are required to apply the Medicare program reimbursement methodologies, models, and values or weights including its coding, billing, and reporting payment policies in effect on the date a service is provided with any additions or exceptions in this section. The applicable medical fee guidelines for dates of service on and after March 1, 2008 are Rules 134.203 and 134.204. Rule 134.203 applies to professional medical services provided in the Texas Workers' Compensation system. Subject to the exceptions in Rule 134.203(a)(1), Rule 134.203(b) requires Texas workers' compensation system participants to apply Medicare payment policies, with any additions or exceptions as provided in that section. Subject to the exceptions in Rule 134.204(a)(1)(A) - (E), Rule 134.204 applies to workers' compensation specific codes, services, and programs provided in the Texas workers' compensation system.

HCP's Submission of Bill to IC Pursuant to Medicare Guidelines Requires Coding of Primary Diagnosis, Not Secondary Diagnoses
The decision of MFDR found that HCP was entitled to reimbursement from IC in the amount of $649.86 plus applicable accrued interest under CPT Code 90806 for psychotherapy services rendered from February 27, 2007 through July 6, 2007. Claimant sustained a compensable injury to her knee and HCP billed for the psychotherapy services using the Medicare ICD-9 code of 717.9 (internal derangement of the knee). IC argued that Claimant's compensable injury did not include depression or psychological disorders, that the correct ICD-9 code should have been 309.0 for adjustment disorder, and that, since the bill from HCP was not properly coded, IC should not be liable for the reimbursement amount at issue. A witness for HCP testified in the MCCH that Claimant was referred to HCP's facility as a result of the knee injury and that all psychotherapy was a direct result of the compensable injury. The HO upheld the decision of MFDR because the evidence presented in the MCCH indicated that it was necessary for HCP to use the primary diagnosis (i.e., internal derangement of the knee) in submitting its bill pursuant to the Medicare guidelines, but that any secondary codes, such as adjustment disorder, were not required.
M4-08-1142-01.

HCP Not Entitled to Reimbursement for Use of CPT Code Modifiers Inconsistent with Medicare Payment Policies in Effect on Date of Service
HCP billed IC $418.26 twice for anesthesia services under CPT Code 01630 (anesthesia for open or surgical arthroscopic procedures on humeral head and neck, sternoclavicular joint, and shoulder joint not otherwise specified). In one request for reimbursement, HCP appended the CPT code with modifier "AD" for the date of service. HCP had also billed IC for the treatment under CPT Code 01630 with modifier "QX" for the date of service. The medical treatment at issue was provided at the direction of an anesthesiologist. IC denied the bill with the QX modifier, referring to "Medicare guidelines." According to the MFDR decision, the "AD" modifier entailed medical supervision by a physician, and, as the treatment at issue was directed by an anesthesiologist, the billing with the "AD" modifier was found to be in line with Medicare payment policies in effect on the date of service. The MFDR decision further indicated that, according to Medicare guidelines in effect on the date of service, the "QX" modifier referred to a service performed by a certified registered nurse anesthetist (CRNA), without medical direction by a physician. The decision of MFDR thus disallowed the $418.26 sought by HCP with appended modifier "QX" and HCP appealed to an MCCH. At the MCCH, HO upheld the decision of MFDR after HCP failed to rebut the basis of the MFDR decision by a preponderance of the evidence. M4-11-1568-01.

Specific provisions contained in the Texas Labor Code or in Division rules, however, take precedence over conflicting provisions adopted or utilized by CMS in administering the Medicare program. See Rule 134.203(a)(7).

Division Rule Trumps Differing Medicare Policy
The decision of MFDR found that HCP was not entitled to reimbursement in the amount of $70.43 for health care services rendered to Claimant on June 13, 2008. IC denied HCP's bill because, though it was signed by the physician who operated the clinic, the services in question were provided by a licensed nurse, whose signature was not included in the request. HCP argued in the MCCH that, according to Medicare policy, since the nurse was performing services "incident to" those of the physician who signed the bill, the nurse was not required to sign the CMS-1500 claim form. However, IC cited, among other things, Division Rule 133.20(e)(2), which mandates, in part, that a medical bill be submitted in the name of the licensed health care provider that provided the health care. Based on the evidence presented in the MCCH, HO upheld the decision of MFDR.
M4-09-2116-01.

Reimbursement Request by Health Care Provider (HCP)

95-Day Requirement for HCP to File the Claim From Date of Service
Texas Labor Code §408.027 requires HCPs to submit claims for payment to IC not later than the 95th day after the date on which the health care services are provided to IE. Exceptions to the 95-day requirement are found in Texas Labor Code §408.0272.

MFDR found that HCP was entitled to reimbursement in the amount of $1,793.13. IC appealed, citing untimeliness of filing. Health care services were provided between the date of injury and 6/25/07. §408.027 requires providers to submit bills within 95 days from the date of service or risk forfeiture of reimbursement. Evidence established that although HCP sent the bill to its "clearinghouse" within the 95-day period, IC did not receive the bill until 10/31/07, a date outside the 95-day period. HO reversed the decision of MFDR, and held that HCP was not entitled to reimbursement due to an untimely filing with IC by HCP.
M4-08-2909-01.

Complete Bill Required
The bill must be complete, with any corrections submitted during the 95-day period. M4-08-3413-01. There is no provision allowing for the resubmission of an incomplete or improperly submitted bill after the 95-day period. M4-09-1662-01.

HCP shall include correct billing codes from the applicable Division fee guidelines in effect on the date or dates of service when submitting medical bills. See Rule 133.20(c).

Incomplete Bill - Incorrectly Coded
MFDR found that HCP did not submit a timely request for reimbursement to IC. Although the first bill for $68.25 was submitted within 95 days from the date of service, it was incorrectly coded. Approximately six months after the date of service, HCP submitted a corrected bill which was properly coded. IC denied the bill, citing §408.027, and the fact that the corrected bill was not submitted within 95 days. HO affirmed the decision of MFDR that HCP failed to timely request reimbursement pursuant to §408.027.
M4-08-3413-01.

On and after May 23, 2008, the CMS requires the use of a National Provider Identifier (NPI) for both paper and electronic medical bills in the Medicare system. A billing lacking HCP's NPI is considered to be incomplete. See MCCH 10081.

Carrier Request for Additional Documentation
Section 408.027(b) provides that IC may request additional documentation to process a claim. Rule 133.210(d) states that:

... any request by the insurance carrier for additional documentation to process a medical bill shall 1) be in writing; 2) be specific to the bill or the bill's related episode of care; 3) describe with specificity the clinical and other information to be included in the response; 4) be relevant and necessary for the resolution of the bill; 5) be for information that is contained in or in the process of being incorporated into the injured employee's medical or billing record maintained by the health care provider; 6) indicate the specific reason for which the insurance carrier is requesting the information and; 7) include a copy of the medical bill for which the insurance carrier is requesting the additional documentation.

Request for Reconsideration (Rule 133.250)
In accordance with Rule 133.250(a), HCP may request that IC reconsider its final action on a medical bill. Such request for reconsideration must be submitted no later than 11 months from the date of service. See Rule 133.250(b). Rule 133.250(d) provides that the request for reconsideration shall:

(1) reference the original bill and include the same billing codes, date(s) of service, and dollar amounts as the original bill;
(2) include a copy of the original explanation of benefits, if received, or documentation that a request for an explanation of benefits was submitted to the insurance carrier;
(3) include any necessary and related documentation not submitted with the original medical bill to support the health care provider's position; and
(4) include a bill-specific, substantive explanation in accordance with [Division Rule] 133.3 . . . (relating to Communication Between Health Care Providers and Insurance Carriers) that provides a rational basis to modify the previous denial or payment.

Rule 133.250(h) allows for HCP to request Medical Dispute Resolution (MDR) in accordance with Rule 133.305 if it is dissatisfied with IC's final action on a medical bill after reconsideration.

Request for Reconsideration Must Include Same Billing Code As Original Bill
On December 31, 2007, Claimant's treating doctor (TD) performed an impairment rating evaluation. The CPT code billed was 99456 - a medical disability examination by someone other than the TD. It was submitted on January 2, 2008. IC denied the bill and provided an EOB. On April 13, 2008, HCP submitted a "corrected claim" using the same CPT code and two modifiers. The bill was again returned with an EOB. On May 9, 2008, HCP submitted another bill with the CPT code changed to 99455 - a medical disability examination performed by the TD, with the same modifiers. On June 16, 2008, IC denied the bill due to untimeliness, asserting that HCP had exceeded the 95-day time limit to submit completed claims. HCP filed a dispute with MFDR. MFDR issued a decision that HCP was entitled to reimbursement. IC appealed. Although the preamble to Rule 133.250(d)(1) indicates that reconsideration may include corrections relating to modifiers and/or number of units, Rule 133.250(d)(1) provides that requests for reconsideration of a bill shall reference the original bill and include the same billing codes, date(s) of service, and dollar amounts as the original bill. Because HCP submitted a bill with a new CPT code, it was considered a new bill, not a request for reconsideration. Thus, the new bill was subject to the 95-day deadline. The HO reversed the decision of MFDR and held that HCP was not entitled to reimbursement because the request was untimely filed.
M4-09-1662-01.

Reimbursement for Health Care Expenses Incurred by Injured Employee (IE) (Rule 133.270)
In accordance with Rule 133.270(a), IE may request reimbursement from IC when IE has paid for health care provided for a compensable injury, unless IE is liable for payment as specified in: (1) Texas Insurance Code §1305.451 (relating to "Workers' Compensation Health Care Networks"), or (2) Rule 134.504 (relating to "Pharmaceutical Expenses Incurred by the Injured Employee"). Such request for reimbursement must be legible and must include documentation or evidence (such as itemized receipts) of the amount the injured employee paid the health care provider. See Rule 133.270(b).

Rule 133.270(d) allows for IE to seek reimbursement for any payment made above the Division fee guideline or contract amount from HCP who received the overpayment.

MFDR found that Claimant was not entitled to additional reimbursement for out-of-pocket health care expenses for her compensable injury, including four office visits to her HCP between March 2, 2009 and July 27, 2009. Claimant sought the difference between what she paid to HCP for these office visits ($450.00) and the amount of reimbursement she received from IC ($218.36). Since the evidence presented in the MCCH indicated that IC reimbursed Claimant at the Division fee guideline rate of $54.59 per office visit, HO found that Claimant was not entitled to additional reimbursement from IC. However, HO cited Rule 133.270(d) as a possible remedy for Claimant to obtain reimbursement from HCP for its overpayment.
M4-10-2513-01.

Responsibility of IE's Treating Doctor (TD) (Rule 180.22(c)(1))
In accordance with Rule 180.22(c), the TD is the doctor primarily responsible for the efficient management of health care and for coordinating the health care for an IE's compensable injury. Rule 180.22(c)(1) provides, in part, that the TD shall:

except in the case of an emergency, approve or recommend all health care reasonably required that is to be rendered to the injured employee including, but not limited to, treatment or evaluation provided through referrals to consulting and referral doctors or other health care providers . . .

No Entitlement to Reimbursement from IC Where Claimant Fails to Obtain Referral From TD For Non-Emergency Health Care
Claimant sought reimbursement in the amount of $1,494.00 from IC for 30 sessions of spinal manipulation performed by a chiropractor outside the United States between February 1, 2008 and October 11, 2009. The decision of MFDR found, among other things, that Claimant was not entitled to the requested reimbursement because she had not obtained a referral for the care at issue from her TD. In the decision following the MCCH, HO cited Rule 180.22(c)(1) and Claimant's failure to obtain a referral from the TD as part of his rationale for upholding the decision of MFDR.
M4-10-2304-01.

Request for Medical Dispute Resolution (MDR) (Rule 133.307(c))
Rule 133.307(c) states that, "Requests for medical dispute resolution (MDR) shall be filed in the form and manner prescribed by the Division. Requestors shall file two legible copies of the request with the Division." Pursuant to Rule 133.307(c)(1), a requestor must file a timely request for dispute resolution with the Division's MDR Section or the requestor waives the right to MDR.

Requests for MDR that do not involve issues identified in Rule 133.307(c)(1)(B) must be filed no later than one year after the date or dates of service in dispute. See Rule 133.307(c)(1)(A). The one-year requirement found in Rule 133.307(c)(1)(A) also applies to requests for MDR brought by a Division-appointed designated doctor (DD). See MCCH 10128.

Rule 133.307(c)(1)(B) provides exceptions to the one-year requirement found in Rule 133.307(c)(1)(A). In particular, Rule 133.307(c)(1)(B) provides that,

A request may be filed later than one year after the date(s) of service if:
(i) a related compensability, extent of injury, or liability dispute under Labor Code Chapter 410 has been filed, the medical fee dispute shall be filed not later than 60 days after the date the requestor receives the final decision, inclusive of all appeals, on compensability, extent of injury, or liability;
(ii) a medical dispute regarding medical necessity has been filed, the medical fee dispute must be filed not later than 60 days after the date the requestor received the final decision on medical necessity, inclusive of all appeals, related to the health care in dispute and for which the carrier previously denied payment based on medical necessity; or
(iii) the dispute relates to a refund notice issued pursuant to a Division audit or review, the medical fee dispute must be filed not later than 60 days after the date of the receipt of a refund notice.

Request for MDR by HCP (Rule 133.307(c)(2))
In accordance with Rule 133.307(c)(2), HCP must complete the required sections of the request in the form and manner prescribed by the Division and must file the request with the MDR Section by any mail service or personal delivery. The request shall include:

(A) a copy of all medical bill(s), in a paper billing format using an appropriate DWC approved paper billing format, as originally submitted to the carrier and a copy of all medical bill(s) submitted to the carrier for reconsideration in accordance with [Division Rule] 133.250 . . . (relating to Reconsideration for Payment of Medical Bills);
(B) a copy of each explanation of benefits (EOB), in a paper explanation of benefits format, relevant to the fee dispute or, if no EOB was received, convincing documentation providing evidence of carrier receipt of the request for an EOB;
(C) the form DWC-60 table listing the specific disputed health care and charges in the form and manner prescribed by the Division;
(D) when applicable, a copy of the final decision regarding compensability, extent of injury, liability and/or medical necessity for the health care related to the dispute;
(E) a copy of all applicable medical records specific to the dates of service in dispute;
(F) a position statement of the disputed issue(s) that shall include:

(i) a description of the health care for which payment is in dispute,
(ii) the requestor's reasoning for why the disputed fees should be paid or refunded,
(iii) how the Labor Code, Division rules, and fee guidelines impact the disputed fee issues, and
(iv) how the submitted documentation supports the requestor position for each disputed fee issue.

Request for MDR by IE (Rule 133.307(c)(3))
Pursuant to Rule 133.307(c)(3), an IE who has paid for health care may request medical fee dispute resolution of a refund or reimbursement request that has been denied. Also in accordance with Rule 133.307(c)(3), IE's dispute request shall be sent to the Division's MDR Section by mail service, personal delivery or facsimile and the request shall include:

(A) the form DWC-60 table listing the specific disputed health care in the form and manner prescribed by the Division
(B) an explanation of the disputed amount that includes a description of the health care, why the disputed amount should be refunded or reimbursed, and how the submitted documentation supports the explanation for each disputed amount;
(C) proof of employee payment (including copies of receipts, provider billing statements, or similar documents); and
(D) a copy of IC's or HCP's denial of reimbursement or refund relevant to the dispute, or, if no denial was received, convincing evidence of the employee's attempt to obtain reimbursement or refund from the carrier or health care provider.

Documentation of Claimant's Out-of-Pocket Health Care Expenses Found Insufficient to Prove Entitlement to Reimbursement
Claimant claimed that she incurred $2,000.00 in out-of-pocket dental expenses for her compensable injury after she sought treatment from a dentist outside the United States. Claimant's request for reimbursement was initially denied by an MFDR reviewer, so Claimant appealed to an MCCH. In support of her claim for reimbursement, Claimant submitted a hand-written, Spanish-language receipt from her dentist indicating that she was charged $2,000.00 for dental work. Claimant also submitted a Spanish-language document certifying that Claimant was incapacitated for 10 days after her injury. In upholding the decision of the MFDR reviewer, HO cited Rule 133.307(c)(3)(B) and 133.307(c)(3)(C) and indicated that the evidence presented was not sufficient to establish Claimant's entitlement to reimbursement for the requested expenses.
M4-09-83496-01.

Timeliness of Response to Request for MDR (Rule 133.307(d)(1))
A response to a request for MDR shall be legible and submitted to the Division and to the requestor in the form and manner prescribed by the Division. See Rule 133.307(d). With regard to timeliness of the response, Rule 133.307(d)(1) provides that the response will be deemed timely if received by the Division via mail service, personal delivery, or facsimile within 14 calendar days after the date the respondent received the copy of the requestor's dispute. If the Division does not receive the response information within 14 calendar days of the dispute notification, then the Division may base its decision on the available information.

Carrier Response to Request for MDR (Rule 133.307(d)(2))
Upon receipt of a request for MDR, IC must complete the required sections of the request form and provide any missing information not provided by the requestor and known to the carrier. See Rule 133.307(d)(2). Rule 133.307(d)(2)(A)(i) through 133.307(d)(2)(A)(iv) includes information that IC is required to provide with its response. Rule 133.307(d)(2)(B) provides that:

the response shall address only those denial reasons presented to the requestor prior to the date the request for MDR was filed with the Division and the other party. Any new denial reasons or defenses raised shall not be considered in the review. If the response includes unresolved issues of compensability, extent of injury, liability, or medical necessity, the request for MDR will be dismissed in accordance with subsection (e)(3)(G) or (H) of this section.

New Defense Raised by IC During MDR Shall Not Be Considered
Claimant sought reimbursement in the amount of $850.00 from IC for expenses incurred as a result of home improvement projects, including bathroom modifications and the installation of a ramp to an outside doorway. The evidence presented in the MCCH indicated that IC initially denied Claimant's request in its response on the grounds that the injury was not compensable and that the expenses at issue were unrelated to a compensable injury. However, in its response to Claimant's request for MDR, IC raised the defense that Claimant failed to timely file his request for MDR within one year from the date of service. The decision of MFDR denied Claimant's request for reimbursement. Citing Rule 133.307(d)(2)(B), HO noted that IC was bound by its initial defense that the injury was not compensable and that the expenses at issue were not related to a compensable injury. In finding that the injury was compensable and the expenses at issue were related to the compensable injury, HO reversed the decision of MFDR and, consequently, IC was found to be liable to reimburse Claimant for the disputed expenses.
M4-09-B017-01.

Pharmaceuticals
The term "health care" in Texas Labor Code §408.021 includes a prescription drug, medicine, or other remedy. Texas Labor Code §401.011(19)(E).

Reimbursement of Pharmaceuticals Sought by HCP
The commissioner of the Division of Workers' Compensation is directed by statute to adopt a fee schedule for pharmacy and pharmaceutical services that will provide reimbursement rates that are fair and reasonable; assure adequate access to medications and services for injured workers; and minimize costs to employees and insurance carriers. Texas Labor Code §408.028(f). Insurance carriers must reimburse for pharmacy benefits and services using the fee schedule or at rates negotiated by contract. Texas Labor Code §408.028(g).

The commissioner of DWC has adopted reimbursement methodology to establish the maximum allowable reimbursement (MAR) for prescription drugs in Rule 134.503. Pursuant to Rule 134.503(a), the MAR for prescription drugs is the lesser of (1) the provider's usual and customary (U&C) charge for the same or similar service; (2) the fees established by formulas based on the average wholesale price (AWP) determined by utilizing a nationally recognized pharmaceutical reimbursement system (e.g. Redbook, First Data Bank Services) in effect on the day the prescription drug is dispensed; or (3) a negotiated or contract amount.

Pursuant to Rule 134.503(a)(2)(A), for generic drugs, the formula is AWP per unit multiplied by the number of units, multiplied by 1.25, plus a $4.00 dispensing fee. In accordance with Rule 134.503(a)(2)(B), for brand name drugs, the formula is AWP per unit multiplied by the number of units, multiplied by 1.09, plus a $4.00 dispensing fee. A compounding fee of $15 per compound shall be added for compound drugs, according to Rule 134.503(a)(2)(C).

Insufficient Evidence of HCP's U&C Charge for Same or Similar Service
MFDR found that HCP was not entitled to additional reimbursement in the amount of $50.29 for Lexapro 20MG Tablet and Hydrocodone - APAP 10-325 Tablet dispensed to Claimant for his compensable injury. The $50.29 amount reflected the difference between what HCP billed IC ($112.60 for the Lexapro and $79.89 for the Hydrocodone) and what IC reimbursed HCP ($93.17 for the Lexapro and $49.03 for the Hydrocodone) based on IC's computation of a reasonable fee for these medications. MFDR found that HCP had not provided sufficient evidence to determine HCP's U&C charge for the drugs at issue. HCP appealed to an MCCH and, at the MCCH, HCP argued that the amount charged to IC for the medications was calculated in accordance with the formulas found in Rule 134.503(a)(2). The evidence indicated that there was no contract between HCP and IC. HCP produced a document from a nationally recognized pharmaceutical reimbursement system that indicated the AWP for the medications at issue on the date they were dispensed to Claimant. HCP's business provides medications to Claimants in the workers' compensation system in all 50 states and the District of Columbia (D.C.), though a small part of its business involves non-workers' compensation cases. The evidence presented in the MCCH included the prices charged for the drugs at issue in each state. This evidence indicated that the price charged to Texas customers for the medications at issue was sometimes more and sometimes less than that charged to other consumers in the nation. The prices also varied in some states for non-workers' compensation customers, some of whom paid less for their drugs than workers' compensation customers in Texas. There was also evidence of a discounted price (AWP minus 10%) provided to customers who prepay in cash or by credit card for their medications. HO found that the evidence presented was insufficient to explain HCP's pricing variations, so that the U&C charge for the medications at issue could be determined. Consequently, the decision of MFDR denying additional reimbursement to HCP was upheld.
M4-09-3864-01.

Sufficient Evidence Found of HCP's U&C Charge for Same or Similar Service
The decision of MFDR found that HCP was not entitled to additional reimbursement in the amount of $385.56 for 120 units of Hydrocodone/APA 10/650 TAB dispensed to IE for his compensable injury. The rationale behind the MFDR decision was that HCP had not established its U&C charge for the medication at issue. HCP appealed to an MCCH. At the MCCH, HCP furnished evidence of the AWP for the medication through a record from a professional billing and pricing hardware and software program, which obtained this data from a nationally-recognized pharmaceutical reimbursement program. HCP also presented dispensing records of the medication at issue to other IEs to establish that its U&C charge for the medication was equal to the amount elicited from the Rule 134.503(a)(2)(A) formula calculation. The HO determined, based on the evidence presented, that HCP established its U&C charge for the medication and that such charge was equal to the MAR formula calculation. HCP found that a preponderance of the evidence was contrary to the decision of MFDR and, thus, HCP was entitled to additional reimbursement in the amount of $385.56.
M4-10-1463-01.

Reimbursement for Pharmaceutical Expenses Incurred by IE (Rule 134.504(b))
Pursuant to Rule 134.504(b), for prescription medications prescribed by HCP, IC is only liable to pay the price of a generic drug if an IE chooses a brand-name drug. An IE who opts to receive a brand-name drug is thus responsible for paying the difference between the brand-name drug and the generic drug and IC is not liable for reimbursement to IE for such out-of-pocket expenses. See Rule 134.504(b).

MFDR denied Claimant's request for reimbursement in the amount of $438.00 for out-of-pocket expenses incurred in obtaining brand-name prescriptions, Vicodin and Dilaudid, for his compensable injury. Claimant argued in the MCCH that he was entitled to reimbursement for the brand-name drugs at issue because he is allergic to the contents of the generic alternatives. HO cited Rule 134.504(b), which limits IC's financial liability to the cost of generic medication, in upholding the decision of MFDR. HO further noted that, pursuant to Rule 134.504(b), Claimant's choice to obtain brand-name medication is considered a final transaction between Claimant and the pharmacist, and is not subject to medical dispute resolution by the Division.
M4-09-9512-01.

Carrier Liability for Reimbursement of Designated Doctor (DD) Examination
Pursuant to Texas Labor Code §408.0041, DWC may appoint a designated doctor (DD) to examine an IE in order to resolve a dispute about a work-related injury or occupational disease. Texas Labor Code §408.0041(a) lists the following as questions that a DD may be appointed to resolve:

(1) the impairment caused by the compensable injury;
(2) the attainment of maximum medical improvement;
(3) the extent of the employee's compensable injury;
(4) whether the injured employee's disability is a direct result of the work-related injury;
(5) the ability of the employee to return to work;
(6) issues similar to those described by Subdivisions (1)-(5).

Where a DD is appointed by DWC in accordance with Texas Labor Code §408.0041(a), IC is liable to pay the cost of the examination. Texas Labor Code §408.0041(h). See MCCHs 10154, 10160, and 11139.

Subclaimant Status under Texas Labor Code §§409.009 and 409.0091
In accordance with Texas Labor Code Section 409.009, a person may file a written claim with DWC as a subclaimant if the person has: provided compensation, including health care provided by a health care insurer (HCI), directly or indirectly, to or for an IE or legal beneficiary; and sought and been refused reimbursement from IC.

Texas Labor Code Section 409.0091 allows an HCI or its authorized representative to assert subclaimant status in order to obtain reimbursement from ICs for health care provided to an IE for a compensable injury. Section 409.0091 was enacted as a result of the passage of House Bill (HB) 724 during the 80th regular session of the Texas Legislature and applies to compensable injuries sustained on or after September 1, 2007.

Section 10 of HB 724 provides that:

Chapter 408, Labor Code, as amended by this Act, applies only to a claim for workers' compensation benefits based on a compensable injury that occurs on or after the effective date of this Act. A claim based on a compensable injury that occurs before that date is governed by the law in effect on the date that the compensable injury occurred, and the former law is continued in effect for that purpose." (Acts 2007, 80th Leg., R.S., Ch. 1007 (HB 724) §10 effective September 1, 2007.)

Section 11 of HB 724 states that:

The change in law made by this Act applies only to a subclaim based on a compensable injury that occurred on or after September 1, 2007, and to reimbursement requests and subclaims pursuant to Section 409.0091(s), Labor Code, as added by this Act. The changes made by this Act apply only to subclaims based on an injury that has not been denied for compensability or that has been determined by the division to be compensable." (Acts 2007, 80th Leg., R.S., Ch. 1007 (HB 724) §11 effective September 1, 2007.)

For compensable injuries before September 1, 2007, Section 409.0091(s) provides that a HCI or its authorized representative may file no later than March 1, 2008, from information provided before January 1, 2007 through a Section 402.084(c-3) data match, a request for reimbursement with IC, if one had not been previously presented and denied by the carrier, or a subclaim with the division. A data match under Section 402.084(c-3) is required in order for a HCI or its authorized representative to assert subclaimant status under Section 409.0091 and its subsection, 409.0091(s). A party asserting subclaimant status under Section 409.0091(s) must provide sufficient evidence to establish the date of the data match from the division and such evidence may be obtained from the division. A party is not entitled to subclaimant status under Section 409.0091(s) if the data match occurred on or after January 1, 2007.

Insufficient Evidence of Required 409.0091(s) Data Match
HCI provided medical treatment for Claimant's compensable injury, which occurred before September 1, 2007. Petitioner is HCI's authorized representative and sought reimbursement for health care provided by the HCI to Claimant following the compensable injury. Petitioner argued that it met the Section 409.0091(s) data match requirement through an "Affidavit" of Petitioner and an attached e-mail from a person associated with Petitioner which indicated that a data match took place on July 9, 2007. The evidence presented did not establish the existence of a data match under Section 402.084(c-3). Petitioner's request for reimbursement was denied. The alleged July 9, 2007 data match date was also after the data match deadline ("before January 1, 2007") under Section 409.0091(s).
M4-10-1421-01.

1 Amendments to Texas Labor Code Sections 413.031(k), 413.0311(a), and 413.0312 were implemented by House Bill 2605 of the 82nd Regular Session of the 2011 Texas Legislature and such amendments went into effect on September 1, 2011. Changes affecting jurisdiction over medical fee disputes found in these sections will go into effect for disputes for which a review by the Division is conducted on or after June 1, 2012.



Last updated: 04/06/2016

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