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Performance Based Oversight (PBO)


What Is PBO? | Purpose Of PBO | Applicable Statute & Rules | PBO Planning Documents

What is Performance Based Oversight (PBO)?

As a regulatory agency, the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) is required to monitor system participants’ compliance with the Texas Workers’ Compensation Act and Rules and to take appropriate action to ensure compliance. Compliance objectives are achieved through Performance Based Oversight (PBO), data monitoring, complaint handling, audits, and when appropriate, enforcement actions.

As part of the overall compliance plan, Section 402.075 of the Texas Labor Code mandates the TDI-DWC to, at least biennially, assess the performance of insurance carriers and health care providers.

Based on the performance assessment, insurance carriers and health care providers will be placed into regulatory tiers:  poor performers, average performers, and consistently high performers. The TDI-DWC must then focus its regulatory oversight on the poor performers.

The insurance carriers will be assessed in even numbered years and the health care providers will be assessed in odd numbered years.

What is the purpose of Performance Based Oversight (PBO)?

"House Bill 7, 79th Legislature, 2005 (Regular Session)" requires establishment of a performance-based oversight system that includes development of key regulatory goals for assessing insurance carriers and health care providers, tiering of insurance carriers and health care providers based on performance, and development of regulatory incentives to promote compliance. The TDI-DWC's regulatory resources will be focused more strategically on overall compliance issues and history affecting an insurance carrier or a health care provider, placing emphasis on system participants with continuing compliance problems in the workers' compensation system.

The purpose of PBO is to:

  • Encourage and reward excellence and continuous improvement;
  • Foster improved and timely communications;
  • Establish performance objectives, measures and expectations; and
  • Focus on results rather than prescriptive requirements.

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Applicable Statute & Rules

Texas Labor Code §402.075 Incentives; Performance-Based Oversight
28 Texas Administrative Code (TAC) §180.19 Incentives

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PBO Planning Documents

PBO Key Regulatory Goals
· Key Regulatory Goals (pdf)

PBO Instruments
· Potential Assessment Measures Instrument (pdf)
· DWC Available Data (pdf)

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For more information, contact:

Last updated: 11/03/2017

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