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Advisory 96-11


Section 415.0035(a)(3) of the Texas Labor Code states it is a class C administrative violation (for which a penalty of up to $1,000.00 may be assessed) if a carrier "denies preauthorization in a manner that is not in accordance with rules adopted by the Commission under 413.014 [preauthorization]." Sections 415.002(a)(20) and 415.021(b) of the Texas Labor Code state that administrative sanctions, including a penalty of up to $10,000.00, may be assessed for repeated violations of rules of the Commission.

TWCC Rule 134.600(e) states:

"Within three working days of the treating doctor's request for preauthorization, the insurance carrier's delegated agent shall notify the treating doctor by telephone or transmission of a facsimile, of the insurance carrier's decision to grant or deny preauthorization. When the insurance carrier denies or approves preauthorization, the insurance carrier shall send written approval, or, if denying preauthorization, documentation identifying the reasons for denial. Notification shall be sent to the injured employee, injured employee's representative if known, and the treating doctor, or the treating doctor's designated representative, within 24 hours after notification of denial or approval."

If a treating doctor does not obtain preauthorization from the carrier for those services requiring preauthorization in TWCC Rule 134.600(h), and there is not a documented life threatening medical emergency or an order from the Commission, the treating doctor is not entitled to payment for those services even if medically reasonable and necessary. Accordingly, a carrier that does not respond to a preauthorization request within three days as required by TWCC Rule 134.600(e) has in fact denied the preauthorization request but not in accordance with TWCC Rule 134.600(e). Therefore, such a carrier has committed an administrative violation. Each day the carrier continues to fail to provide the required notification of approval or denial of the preauthorization request will be considered as an aggravating factor in assessing an appropriate penalty. Therefore, beginning August 1, 1996, TWCC will issue Notices of Administrative Violation pursuant to Section 415.0035(a)(3) and/or Sections 415.002(a)(20) and 415.021(b) against carriers that deny preauthorization requests by not responding to the preauthorization requests within three days as required by TWCC Rule 134.600(e).

Signed June 28, 1996.

Todd K. Brown, Executive Director