Skip to Top Main Navigation Skip to Left Navigation Skip to Content Area Skip to Footer
Texas Department of Insurance
Topics:   A B C D E F G H I J K L M N O P Q R S T U V W X Y Z All

Performance Based Oversight (PBO) - General Information

Helpful Links: IC PBO Info | HCP PBO Info
PBO Assessment Results | PBO-Home Page


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 (DWC) is required to monitor system participants’ compliance with Texas Workers’ Compensation Act and DWC 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 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. 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.

Back to top

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

House Bill 7, 79th Legislature (2005) 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. 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.

Back to top

Applicable Statute & Rules

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

Back to top

PBO Planning Documents

Key Regulatory Goals (pdf)
Summary of Potential Assessment Measures (pdf) 

Insurance carrier
Current Insurance Carrier PBO Methodology Paper (pdf)

Health care provider
2023 Health Care Provider Methodology Paper (pdf) | memo 7/26/22


Back to top

For more information, contact:

Last updated: 11/30/2022