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Texas Department of Insurance
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Advisory 98-03


Insurance carriers and carrier agents who retrospectively review claims services on the carrier's behalf frequently contact health care providers to obtain copies of required reports or other documentation that the health care provider has previously submitted to the carrier. In many cases, the provider submits the required documentation with the bill, and the carrier separates the documentation from the bill before forwarding the bill for audit. The carrier's auditors or agents then either deny the bill for lack of supporting documentation, or call the provider to request additional copies. This places an unnecessary administrative burden on the provider, and may create an unreasonable delay in processing the bill. This Advisory serves as a reminder to all parties that a provider is not required to resubmit information to a carrier's auditor or agent if the provider has previously submitted the information to the carrier.

According to Texas Workers' Compensation Commission (TWCC) Rule 133.106(b), "It is the obligation of the carrier to furnish its auditors, or fourth party reviewers, with any necessary or needed copies of the required medical reports in order to ascertain the level of treatment given and the treatments or procedures performed." Required medical reports and required documentation submitted with medical bills assist the carrier in determining income benefits, setting reserves, and determining whether a treatment or service was medically necessary. Carriers need to ensure that their processes do not prevent the adjuster or appropriate agent from having access to all information necessary to meet the carrier's obligations under the Texas Workers' Compensation Act (the Act) and TWCC rules.

Under the Act and TWCC rules, the action or inaction of any party used to provide a claims service on the carrier's behalf is the responsibility of the carrier. According to TWCC Rule 133.300, "an insurance carrier is responsible for the acts or omissions that violate the Texas Workers' Compensation Act (the Act) or commission rules committed in the performance of services for the insurance carrier by an audit company or auditor under contract with the carrier to review or monitor health care services." Therefore, when reviewing the timeliness and appropriateness of a carrier's actions, the Texas Workers' Compensation Commission makes no distinction between a carrier or a carrier's agent. The carrier is responsible for its own actions and the actions of its agents.

The carrier's obligation to timely and appropriately process a bill starts upon receipt of the bill. Failure to timely and appropriately pay or dispute properly completed medical bills violates the Act and TWCC rules. If a carrier denies or reduces a bill because the carrier did not forward to its medical bill processing section or appropriate agent the attached documentation that supported the reasonableness and medical necessity of the treatment, the Commission may consider that denial unreasonable. Texas Labor Code §415.021 allows the Commission to enter a cease and desist order, and assess an administrative penalty, not to exceed $10,000, against a carrier that commits repeated administrative violations, or that allows, as a business practice, repeated administrative violations to continue.

Signed this 17th day of April, 1998

Robert M. Marquette, Acting Executive Director

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