WHAT'S NEW IN YOUR STATE?

Alabama	Colorado	Florida	Georgia	Iowa
Illinois	Indiana	Kansas	Kentucky	Louisiana
Maryland	Michigan	Minnesota	Missouri	Nebraska
New Jersey	New York	North Carolina	Ohio	Oklahoma
E. Pennsylvania	Tennessee	Texas	Vermont	Virginia
Washington DC	Wisconsin

Alabama

I wanted to update everyone about a new case which causes me concern with respect to employer authorized medical care. The case is Overnite Transportation v. McDuffie, 2005 Ala. Ct. Civ. App. Lexis 672. This case involves a situation that we have seen so many times before in handling claims. Here, the authorized treating physician, Dr. Hackman, completed his course of treatment and then referred the plaintiff to a pain management physician, Dr. Kelsey. The initial physician, Dr. Hackman, was chosen off a panel of four pursuant to § 25-5-77(a), Code of Alabama (1975), as amended. However, the employer did not authorize Dr. Kelsey and then directed the plaintiff to Dr. Moon for this treatment. This physician was clearly allowable under Alabama Administrative Code (Department of Industrial Relations) Rule 480-5-5-.12 which provides: The employer's authorized treating physician (other than emergency medical services) shall be the physician of record for attending or referral purposes. All referrals shall be pre-approved by the employer/agent. The employer/agent shall keep all interested parties involved in the compensable case informed of any authorized change of treating physicians. This administrative rule was adopted in 1996 as authorized by § 25-5-293, Code of Alabama (1975), as amended. This is a physician that I have advocated and recommended many times based on the authority of this administrative code section which was given statutory authority by the enabling legislation. However, the Alabama Court of Civil Appeals granted the employee's request to be treated by Dr. Kelsey and rejected the employer's claim that referral should be pre-approved under this rule. The court held that § 25-5-77(a) does not allow the employer to pre-approve referrals made by the authorized treating physician and, once such a referral has been made to a referral doctor, that physician becomes the authorized physician of record. The court did restrict this to reasonable and necessary care and also indicated that the employer could assert utilization review for medical necessity. See the situation applied in this case. I believe this is a terrible decision for employers since it gives the authorized treating physician unfettered discretion in selecting the referral doctor. This is a choice clearly within the employer's discretion, as it should be. This case is currently on appeal to the Alabama Supreme Court and I will continue to keep you advised of any developments at the appellate level. Please let me know if you would like a copy of this case or if you have any comments, thoughts, or questions. All are welcome.

Iowa

PEDDICORD, WHARTON, SPENCER and HOOK, LLP Date:     February 20, 2006 From:    Peddicord, Wharton, Spencer & Hook, LLP              Lee P. Hook              Mark A. Bosscher Re:        NWCDN Iowa Workers' Compensation Update www.peddicordwharton.com 1. Christopher J. Godfrey appointed as the new Iowa Workers' Compensation Commissioner. Iowa has recently changed Workers' Compensation Commissioners. Effective January 9, 2006 Mike Trier will no longer be the Worker's Compensation Commissioner, and will be replaced by Chris Godfrey. Chris is originally from Sioux City, Iowa and has lived in Des Moines for the past five years. After obtaining a B.A. and a J.D. from Drake University, he practiced primarily in the areas of employment discrimination and Workers' Compensation at Max Schott and Associates, P.C. His final approval to the post of Workers' Compensation Commissioner currently awaits the approval of the Iowa Senate. 2. Commission begins enforcement of new, increased fine for late reporting with compliance hearings in Des Moines Iowa Code 86.12 has been recently amended by the Iowa legislature. This code section empowers the Worker's Compensation Commission to require compliance with the reporting requirements placed on an employer and insurance carrier. Generally an insurance carrier or employer must file with the Commissioner a first report of injury for every injury suffered by an employee. In addition to this the insurance carrier must file periodic reports on the payment of benefits if such payments are made. The new amendment to Iowa Code 86.12 allows the Commissioner to require that the employer and insurance carrier appear for a hearing for failure to make the proper filings. From this hearing a finding of fact and an order shall be issued by the presiding hearing officer, a Deputy Worker's Compensation Commissioner. A finding that the proper filings have not been made may result in a $1,000 fine for each occurrence, which will be paid to the Second Injury Fund of Iowa. As always, in addition to the above fines, failing to file the necessary periodic reports will also toll any applicable statute of limitations. 3. Statutory changes to workers' compensation settlements enacted in new Iowa Code section 85.35 as of July 1, 2005 The Iowa legislature recently passed an amendment to Iowa Code §85.35, amending that section to become a new "catch all" section encompassing all types of workers' compensation settlements, along with the addition of several new types of settlements. The new law became effective July 1, 2005, and there remains some uncertainty about how portions of it will be interpreted upon judicial review. All settlements are now set out in section 85.35, including the previous Agreement for Settlement, Special Case Settlement, and several new settlement formats. Agreements for Settlement are now referenced in section 85.35(2), and are unchanged in their working. The prior Special Case Settlements are now referred to as Compromise Settlements, and are referenced in section 85.35(3). The requirement of a bona fide dispute as to compensability falling into one of eight specified categories has been removed, allowing a "closed file" in cases involving only a dispute as to amount of benefits due. Added to the mix are a Combination Settlement, referenced in section 85.35(4), and a Contingent Settlement, referenced in section 85.35(5). Situations appropriate for use of Combination Settlements are still relatively vague. Contingent Settlements allow for approval of a workers' compensation settlement to be made contingent upon the occurrence of another event within up to one year, and are intended primarily for use in situations involving the need for approval by the Center for Medicare Services of a Medicare Set-Aside. 4. Iowa Legislature passes apportionment statute for all injuries after September 7, 2004. The law in Iowa regarding apportionment of pre-existing disabilities changed significantly as a result of new legislation made effective September 7, 2004. In short, while past ability to apportion a pre-existing disability was limited at best, new Iowa Code Section 85.34 now allows differing levels of apportionment for subsequent injury situations based on several different criteria. While the technical application of this new apportionment statute remains relatively uncertain among workers' compensation practitioners, it is clear that the analysis will look to benefits actually paid in the past as a sort of credit against an employer's liability in the case of a subsequent injury to the same employee.

Louisiana

DEGAN, BLANCHARD & NASH A PROFESSIONAL LAW CORPORATION TEXACO CENTER 400 POYDRAS STREET, SUITE 2600 NEW ORLEANS, LOUISIANA 70130 SIDNEY W. DEGAN, III TELEPHONE (504) 529-3333 FACSIMILE (504) 529-3337 WRITER'S DIRECT E-MAIL SDEGAN@DEGAN.COM DATE: February 21, 2006 STATUTORY CHANGES TO LOUISIANA WORKERS' COMPENSATION ACT The Louisiana legislature has recently amended several sections of the Workers' Compensation Act. One of these changes is that now a mandatory pre-trial mediation conference must be held no fewer than thirty (30) days prior to trial. In second injury fund cases, the venue for appeals was changed to require all second injury fund claims to be filed in the 19th Judicial District Court for the Parish of East Baton Rouge. La. R.S. 23 §1101 D was repealed. The former statute provided that any suit against a third person to recover amounts paid under this Chapter or any intervention in an action against a third person involving an employee who has received benefits shall be tried before a district court judge only. In addition to the foregoing, the legislature amended La. R.S. 23:1310.3 E to broaden the jurisdiction of the worker's compensation judge. The amendment broadened the scope of the judge's authority to include group self-insurance indemnity contract disputes and concursus proceedings concerning entitlement to worker's compensation benefits, payment for medical treatment or attorney fees arising out of an injury subject to this Chapter. The legislature has also increased the attorney's fees paid by the employee to 20% for all amounts recovered. Sincerely, DEGAN, BLANCHARD & NASH Sidney W. Degan, III

Maryland

FRANKLIN & PROKOPIK A PROFESSIONAL CORPORATION ATTORNEYS AT LAW The B & O Building Two North Charles Street, Suite 600 Baltimore, Maryland 21201-3723 410-752-8700 Facsimile 410-752-6868 www.fandpnet.com Albert B. Randall, Jr. Direct Dial 410-230-3622 arandall@FandPnet.com 32 South Washington Street Easton, Maryland 21601 410-820-0600 Facsimile 410-820-0300 1101 Opal Court Hub Plaza, Second Floor Hagerstown, Maryland 21740 301-745-3900 Facsimile 301-766-4676 2325 Dulles Corner Boulevard, Suite 1150 Herndon, Virginia 20171 703-793-1800 Facsimile 703-793-0298 NWCDN MARYLAND WORKERS' COMPENSATION UPDATE Commissioner R. Karl Aumann Appointed as New Workers' Compensation Chairman         On October 19, 2005, Governor Robert Ehrlich appointed Commissioner Aumann to the position of Chairman. He began his 12 year appointment as a Commissioner on August 1, 2005. Prior to being placed on the Commission, Chairman Aumann was the Maryland Secretary of State for the Ehrlich administration from January of 2003 to August of 2005. Prior to entering public service, he worked in the firms of Bodie, Nagle, Dolina, Smith & Hobbs (current firm name) and Miles & Stockbridge. During his five years with those firms he specialized in the defense of toxic torts, product liability, and medical malpractice claims. New Maryland Benefit Rates         Effective January 1, 2006, the following are the maximum benefit rates for Maryland disability benefits: State Average Weekly Wage - $801 (which represents the cap on temporary total disability, permanent total disability, and vocational rehabilitation benefits) Permanent Disability Under 75 Weeks - $114/week Permanent Disability Between 75-249 Weeks - $267/week Permanent Disability for 250 or More Weeks - $601/week         If you would like benefit rate cards prepared by Franklin & Prokopik detailing Maryland's benefit rates from 2001-2006, please contact F&P principal, Bert Randall, at (410) 230-3622 or by email at arandall@FandPnet.com. COnline Change at the Commission         The Maryland Workers' Compensation Commission has made great efforts to improve its online services. In their most recent effort to provide more forms online, the Employee Claim (form C-1) form is now available as a Webform on the Commission's web site. This addition compliments all of the other forms that are already available online and which can be filed electronically. Any form that is filed electronically after 4:30 pm of the business day will be marked as filed the next day. The Commission's website is www.wcc.state.md.us. Undocumented Workers are Entitled to Workers' Compensation Benefits         Design Kitchen & Baths v. Lagos, 388 Md. 718 (2005)         On September 12, 2005, the Court of Appeals of Maryland answered the longstanding question as to whether or not illegal aliens were entitled to workers' compensation benefits. The answer is "yes," though questions still loom as to whether such workers would be entitled to vocational rehabilitation benefits designed to assist them in returning to work after an occupational injury or disease. A bill has already been pre-filed in the Maryland legislature which would seek to exclude undocumented workers from workers' compensation benefits. (Some) Guilty Claimants Are Entitled to Benefits         Kelly v. Consolidated Delivery, Co., No. 2588 (December 6, 2005)         The Court of Special Appeals recently overturned a Commission decision wherein a Claimant was denied the opportunity to pursue permanency benefits after the Claimant was found guilty of theft. Claimant fraudulently obtained workers' compensation disability benefits while he was working for another employer and was convicted of same. The Commission denied Claimant's attempt to seek permanent disability benefits following his theft conviction. The Court of Specials Appeals reversed the decision since the crime that Claimant was convicted of was not the crime outlined in §9-1106(a) of the Workers' Compensation Act, and therefore, the penalty provision that the Employer and Insurer was seeking under §9-1106(b) was not available. Maryland Workers' Compensation Payments Outpacing National Averages         To the business community's dismay, according to the National Academy of Social Insurance, Maryland's workers' compensation payments grew faster than the United States average in 2003. In Maryland, total workers' compensation cash benefits and medical care rose by 9.4 percent to $628.5 million for 2003. On the other hand, the national average for 2003 was 3.2 percent to 54.9 billion. The latest year for which data is available is 2003. For further inquiries regarding Maryland law contact Mr. Randall at (410) 230-3622 or at arandall@FandPnet.com. Texas Jane Lipscomb Stone STONE LOUGHLIN & SWANSON, L.L.P. 6836 Austin Center Blvd., Suite 280 P.O. Box 30111 Austin, Texas 78755 512/343-1300 512/343-1385 (FAX) www.slsaustin.com OVERVIEW OF CURRENT TEXAS WORKERS' COMPENSATION LAW Introduction Legislation effective September 1, 2005 made significant changes to the Texas workers' compensation system. This summary will provide a broad overview of the current law and procedures. The full text of the Workers Compensation Act and relevant administrative Rules can be found at http://www.tdi.state.tx.us/wc/indexwc.html. I. Structure A. Division of Workers Compensation House Bill 7, signed on June 1, 2005 and effective September 1, 2005, transferred oversight of the workers compensation system to the Texas Department of Insurance ("TDI"), abolishing the Texas Worker's Compensation Commission ("TWCC") and establishing the TDI Division of Workers Compensation. The current structure of the state agency governing workers compensation is attached as Exhibit A. TDI will investigate the conduct of the work of the Division, but it is for the most part autonomous. B. Commissioner The Division is now administered by a single Commissioner of workers compensation who will exercise all executive authority, including rule-making. The Commissioner may delegate any power or duty regarding workers' compensation to the Division; this includes authority to issue final orders and decisions. All powers previously exercised by the Commissioners and the executive director of the TWCC are now administered by the Commissioner, subject to the oversight of TDI. C. OIEC In addition, HB 7 created an agency independent of DWC, the Office of the Injured Employee Counsel ("OIEC"). This office represents the interests of workers' compensation claimants. The OEIC is administratively attached to TDI, but is independent of direction by the TDI, the Commissioner of Workers' Compensation, and the Commissioner of Insurance. The OIEC assists claimants, advocates on behalf of injured employees in regard to rule-making, assists claimants in presenting complaints, makes recommendations to the Division, recommends proposed legislation, and reports to the Governor in regard to its activities, identification of problems, and analysis of the system in regard to provide adequate, equitable and timely benefits to its claimants. The OIEC operates the ombudsman program to provide assistance to claimants. Staff attorneys will be assigned to supervise the work of the ombudsman and advise them in providing assistance to claimants and in preparing for informal and formal hearings. The OIEC will coordinate services provided by the ombudsman program with services provided by the Department of Assistive and Rehabilitative Services. II. Claims Process Chapter 409 of the Labor Codes sets forth claims and compensation procedures. A. Employees A worker must give notice of an injury or occupational disease to an employer within 30 days of the date of injury or the date the worker knew the disease was related to employment. Failure to notify the employer within 30 days relieves the employer and the employer's insurance carrier of liability unless the employer has actual knowledge, the injured worker has good cause for failing to timely report, or the carrier does not contest the claim. A worker must also file a claim with the Division within one year from the date of injury. In the case of an occupational disease, the worker must file within one year from the date he or she knew the disease was related to employment. Failure to timely file a claim relieves the employer and carrier from liability unless they do not contest it, or the claimant shows good cause. B. Employer The employer must report to the carrier no later than the eighth day after (1) an injury causes an employee to miss more than one day of work, or (2) the date the employer receives notice that an employee has contracted an occupational disease. C. Carrier The carrier must file a notice of injury with the Division no later than fifteen days after receiving the injury report and either begin payment of benefits or notify the Division and the employee of its refusal to pay. Failure to do so constitutes an administrative violation. If the carrier does not contest compensability of the injury within 60 days after it receives written notice of the injury, it waives the right to do so in most circumstances. The initiation of payments does not affect the carrier's right to continue to investigate or deny the claim. D. Subclaimants A person may file a claim as a subclaimant if the person has provided compensation, including health care to or for the employee, and has sought and been refused reimbursement from the carrier. III. Benefits Under the Act, injured workers are entitled to income benefits, medical benefits, death benefits, and burial benefits. Income benefits replace some of the income lost because of a work-related injury or illness. Medical benefits cover for the medical care necessary to treat a work-related injury or illness. Death benefits are paid to eligible family members of workers killed on the job and burial benefits help pay the funeral expenses of workers killed on the job. A. Income Benefits There are four types of income benefits: Temporary Income Benefits (TIBs), Income Impairment Benefits (IIBs), Supplemental Income Benefits (SIBs) and Lifetime Income Benefits (LIBs). An employee's eligibility for TIBs, IIBs, SIBs benefits terminates on the expiration of 401 weeks after the date of injury. In claims involving an occupational disease, eligibility for income benefits terminates on the expiration of 401 weeks after the date on which benefits began to accrue. Temporary Income Benefits are available to an injured employee who has disability for at least one week. Benefits begin to accrue on the eighth day of disability. If disability lasts longer than two weeks, compensation is computed from the date disability began. An employee is entitled to TIBs if the employee has disability, and has not reached maximum medical improvement ("MMI"). TIBs start when the carrier initiates benefits and continue until the employee reaches MMI. Income Impairment Benefits(IIBs) Once an employee reaches MMI, he may be entitled to IIBs for a period equal to 3 weeks for each percentage point of permanent impairment. If the carrier disputes the impairment rating, the carrier pays IIBs for a period based on the carrier's reasonable assessment of the correct impairment rating. Impairment must be based on objective clinical or laboratory findings. Supplemental Income Benefits (SIBs) An employee may be entitled to supplemental income benefits after IIBs have run out if the employee has an impairment rating of 15% or greater, the employee has not returned to work or has returned to work earning less than 80% of the employee's average weekly wage, has not commuted benefits, and has demonstrated an active effort to obtain employment. Labor Code § 408.1415 defines work search compliance standards for entitlement to SIBs. The recent legislation removed the "good faith" criteria and the Division will draft clear rules to establish SIBs eligibility. Claimants must demonstrate an active effort to obtain employment by showing evidence of:      (1)     "active participation" in a vocational rehabilitation program conducted by the Department of Assistive and                Rehabilitative Services or a private vocational provider,      (2)     "active participation" in work search efforts conducted through the Texas Workforce Commission, or      (3)     "active" work search efforts documented by job applications submitted by the Claimant. The legislature mandated that the commissioner adopt rules establishing the level of activity that the Claimant must have with the vocational rehabilitation program, the exact number of job applications required to be submitted, and allowing for the consideration of factors affecting the availability of employment (e.g. recognition of access to employment in rural areas, economic conditions, etc.)      Note: These bright-line rules favor Claimants. For example, if the rules say that the Claimant      need only submit 5 job applications, even if having no intention of actually obtaining those      jobs he/she will automatically entitled to SIBs as long as he/she submits 5 job applications. Entitlement to SIBs is determined on a quarterly basis, although benefits are paid monthly. SIBs continue until the employee earns wages equal to 80% of the average weekly wage, or until expiration of the 401-week period. If there is a finding of no entitlement for 12 consecutive months, the employee ceases to be entitled to further SIBs.      4. Lifetime Income Benefits (LIBs)          Lifetime income benefits are paid in the amount of 75% of the employee's average weekly           wage until the death of the employee for certain severe injuries specified in the statute,           such as total and permanent loss of sight in both eyes or paralysis of both arms or legs. B. Death Benefits Death benefits are paid to the employee's legal beneficiary in the amount of 75% of the employee's average weekly wage if a compensable injury results in the employee's death. An eligible spouse receives benefits until death or remarriage. An eligible child receives benefits until age 18, or until the child is no longer a full-time student. C. Medical Benefits 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. This includes health care that cures or relieves the effects naturally resulting from the injury, promotes recovery, or enhances the ability of the employee to return to work. All treatment must be approved or recommended by the employee's treating doctor, except in emergencies. The carrier's liability for medical benefits may not be limited or terminated by agreement or settlement. These "lifetime" medical benefits cannot be settled out. IV. Networks The most significant change made to workers' compensation law by the recent legislation is the creation of networks. "Medical networks" are defined as those certified under Chapter 1305 of the Insurance Code (the "Network Act") and rules of the Commissioner. Section 1305.302 prescribes network organization. Participation in such networks is discretionary for employers and carriers. If the carrier and employer choose to utilize a network, the network will be mandatory for employees living within the network. Treatment must be within the network, even if the injury occurred before the Act or the existence of the network. The Act provides for exceptions for emergency treatment, out-of-network referrals by a physician when medically necessary services are not available within the network, care approved by the carrier, and for the employee's prior physician under the employee's HMO. A. Network Providers. Providers apply to participate in the network. A network may reject an application if it determines that the network has contracted with a sufficient number of providers. Physical therapy, occupational therapy, and chiropractic services must be available within the network's service area. B. Treating Doctors. The employee is required to choose a treating doctor from a list of approved doctors (ADL) maintained by the Division. An employee who is unhappy with the treating doctor may request permission from the Division to change doctors. The carrier may oppose such a change. A change of treating doctor may not be for the purpose of securing a new impairment rating or medical report. Pursuant to HB 7, networks will determine the specialty or specialties of doctors who may serve as treating doctors. However, even if excluded from serving as treating doctors, specialists may serve as referral providers under the TD's supervision. C. Availability of Health Care Each network must ensure that services are sufficiently accessible in that the distance from any point in the network's service area to a point of service is not more than 30 miles in non-rural areas, and 60 miles in rural areas. D. Treatment Guidelines Networks must adopt Treatment guidelines, return to work guidelines, and individual treatment protocols. These can vary from network to network. E. Provider Reimbursement Reimbursement is determined by contract between the network and the provider. Carriers may not deny payment for pre-authorized services based on medical necessity. For out-of-network services, providers are reimbursed according to the Act and Division rules. Billing and reimbursement is subject to the Act not inconsistent with the network requirements. Carriers must notify network providers of any contest of compensability and may not deny payment for services prior to notification of the dispute. Carrier liability for services provided prior to notice, however, is limited to $7,000. F. Utilization and Retrospective Review. Section 1305.351 adopts the provisions of the Insurance Code that are currently applicable to utilization and retrospective review and mandates that screening criteria be consistent with the network's treatment guidelines. Preauthorization. i. Statutory preauthorization does not apply to in-network services. Rather, preauthorization will be governed by the network contract. The network's contract, however, must be consistent with the Texas Department of Insurance Code as it is applied to utilization review agents. Preauthorization may not be required for emergency medical treatment. Retrospective review. ii. Must be under the direction of a physician and be based on written screening criteria established by the network. This screening criteria must be periodically reviewed by the network. Notice requirements for utilization and retro-review. iii. The entity performing the utilization review or retrospective review must notify the Claimant or Claimant's representative (if any), and the provider of the determination. Notice of an adverse determination must include: (1) the principal reasons for the adverse determinations, (2) the clinical basis, (3) a description of the source of screening criteria, (4) a description of the procedure for reconsideration, and (5) notification of ability for independent review. Deadlines for Notification. iv. For preauthorization requests, the determination must be issued and transmitted not later than the third calendar day after the date the request is received. If the request is for preauthorization of concurrent hospitalization care, the utilization review agent shall transmit a determination within 24 hours of receipt of the request. If the proposed health care services involve "poststabilization treatment or a life threatening condition," the utilization review agent shall transmit a determination within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient, not to exceed one hour from receipt of the request. For life threatening conditions, the notification of adverse determination must include notification of the availability of independent review in the form prescribed by the Commissioner. Reconsideration of Adverse Determination. v. A utilization review agent shall maintain and make available a written description of the reconsideration procedures involving an adverse determination. The reconsideration procedures must be reasonable. Section 1305.354 describes what must be included in the written description. Independent Review of Adverse Determination. vi. Section 1305.355 describes the process a network is required to follow in regard to a request for an independent review of an adverse determination. The URA must permit the Claimant (and/or Claimant representative) and requesting provider whose reconsideration of an adverse determination is denied to seek review of that determination by an independent review organization. For health care requiring preauthorization or concurrent review, a request for independent review must be filed within 45 days after the date of denial of reconsideration. For a request for retrospective medical necessity, the request must be filed within 45 days after the denial of reconsideration. The Department shall assign the review request to an independent review organization and the Carrier must pay for the independent review. If independent review is sought, the URA must provide to the independent review organization relevant medical records, documents used by the utilization review agent in making the determination, a copy of the determination, and a list of providers who provided care to the Claimant within 3 business days after the date the utilization review agent receives notification of the assignment. A party may seek judicial review of the independent review organization's decision. If judicial review is not sought, the Carrier and network must comply with the independent review organization's determination, which is deemed to be a decision of the Division. G. Disclosures and Acknowledgments. Employers and carriers are required to post disclosures to workers, including posters containing network requirements and a written description of the terms and conditions for obtaining healthcare within the network. Employers must obtain written acknowledgments from current and future employees. Employees are not subject to network requirements until notified; however, after notice, the network requirements are mandatory whether the employee signs the acknowledgment or not. H. Network Regulation. Networks must be certified. Section 1305.052 of the Network Act describes the application process, section 1305.053 prescribes the contents of the application, and section 1305.053 describes Commissioner review, approval, and renewal of the network's certification. Network records shall be available for inspection and the Commissioner shall review the operations of networks to ensure compliance. Network management contracts must be approved by the Commissioner and there are certain requirements that network contracts must meet in order to be approved. Sections 305.501 to 1305.503 provide for evaluation of networks and a consumer report card. Sections 1305.551 to 1305.552 provide for investigation and disciplinary actions. Section 1305.302 prescribes standards for network accessibility and availability. Section 1305.303 mandates network quality of care requirements, including quality improvement programs. I. Carrier Monitoring of Network Performance. Carriers are required to monitor networks' performance and must notify the Commissioner of any network non-compliance or problems that are hazardous to Claimants. J. Complaint Process. Sections 1305.401 to 1305.4405 provide a complaint process allowing Claimants or Employers to file complaints against the network with the TDI. K. DD cannot be a member of the Claimant's network. A network doctor may not serve as a designated doctor if the Claimant is receiving care through that doctor's network. Prescription medication. Prescription medication cannot be delivered through a network. M. Networks as insurers. Networks may not become insurers. N. HMOs as networks. Section 843.101 of the Insurance Code allows HMOs to serve as a workers' compensation healthcare network. V. Medical Bills, Carrier Reimbursements, and Carrier Requests for Refund A. Electronic submission and processing. The Commissioner will adopt rules regarding electronic submission and processing of medical bills by health care providers to insurance carriers. On or after January 1, 2008, the Commissioner may adopt rules regarding electronic payment of medical bills to health care providers. B. 95-day deadline for submission of bill. A health care provider must submit its bill no later than the 95th day after service, or forfeit entitlement to payment. C. 45-day deadline for action on provider's bill. Carriers must pay, reduce, or deny the provider's bill by the 45th day after receipt. If the Carrier chooses to audit the services to determine whether the treatment is related to the injury, to determine the extent of the injury, or to determine medical necessity, it must pay 85% of either: (1) the fee guideline amount if non-network provided, or (2) the contract rate if network-provided. The Carrier must then pay the additional 15% by the 160th day if it determines the services were necessary and related. D. 15-day deadline to provide additional documentation. If the Carrier requests additional information, it must do so within the initial 45-day period. The provider must then provide the additional documentation within 15 days after receipt of the Carrier's request. E. Fee Guidelines and Treatment Guidelines. Retention of Medicare and Medicaid rates of reimbursement. The Division is still required to adopt the medical care reimbursement methodologies, models, and values used by Medicare and Medicaid, including applicable payment policies relating to coding, billing, and reporting. The Division shall adopt treatment and return-to-work guidelines that are evidence-based and outcome-focused and designed to reduce excessive or inappropriate medical care while safeguarding necessary medical care. a. "Evidence-based medicine" is defined as the use of current best quality scientific and medical evidence formulated from credible scientific studies, including peer-reviewed medical literature and other current scientifically-based tests, and treatment and practice guidelines in making decisions about the care of individual patients. b. "Health care reasonably required" is defined as health care that is clinically appropriate and considered effective for the employee's injury and provided in accordance with the best medical practices consistent with evidence-based medicine. If evidence-based medicine is not available, then generally-accepted standards of medical practice. Treatment may not be denied solely because it is not specifically addressed by the treatment guidelines. Reimbursement rates by contract. Carriers may contract with providers to pay amounts other than those indicated in the Division's fee schedule. (Reimbursement must be in accordance with the fee guidelines if the health care is not provided through a health care network or at a contracted rate.) The Division shall examine whether Claimants have 'reasonable access to surgically implanted, inserted, or otherwise applied devices or tissues and investigate whether reimbursement rates or other barriers exist that reduce the ability of the Claimant to access those medical needs." The Division shall recommend to the legislature any changes necessary to ensure appropriate access. Prescription medications. The Commissioner must adopt a fee schedule for all pharmacy and pharmaceutical services, to include a closed formulary for reimbursement of prescription medications. The rules must authorize pharmacies to use agents to process claims and act on behalf of pharmacies. F. No retrospective review of medical necessity for preauthorized services.      Section 413.014 specifically provides that if a Carrier preauthorizes a treatment, the Carrier may not later retrospectively review the necessity of that treatment. It can, however, deny payment for other reasons. G. Recovery of Healthcare Benefits on Determination of Non-compensability.      A carrier may recover from any insurer (or person otherwise liable) for healthcare benefits paid on a claim in the event that it prevails in a compensability dispute. H. Reimbursement by Health Care Provider.      Carriers must notify the health care provider in writing of any dispute regarding the appropriateness of health care services and must demand a refund. The provider may: (1) reimburse the Carrier for payments received by the Provider for inappropriate charges within 45 days after receipt of the Carrier's notice, or (2) appeal the Carrier's determination in regard to the appropriateness of the health care with the Carrier not later than the 45th day after the Carrier's request for refund. The Carrier must then act upon the appeal within 45 days. VI. Designated Doctors Pursuant to the recent legislation, the Division may appoint a designated doctor to address extent of injury, disability, return to work, and similar issues in addition to MMI and IR. 408.0041. The report of the designated doctor is entitled to presumptive weight, and the division must base its decision with on that report unless the preponderance of the other medical evidence is to the contrary. The employee may have the treating doctor attend the designated doctor exam, at the carrier's expense. If the carrier disagrees with the DD's opinion, it may request a required medical exam (RME). The carrier must still pay benefits according to the DD's report, even if it has been disputed. The carrier may suspend TIBs if a claimant fails to attend a DD appointment. A. Maximum Medical Improvement (MMI) Maximum medical improvement refers to the earlier of (a) the date when, based on reasonable medical probability, no further material recovery or improvement can be expected or (b)the expiration of 104 weeks from the date on which income benefits began to accrue. On application by the employee or the carrier, the Division may expand the 104-week period if the employee has had or been approved for spinal surgery within 12 weeks before the expiration of that period. The application may be disputed by the opposing party. If the first certification of MMI or assignment of IR is not disputed within 90 days of written notification, it becomes final. B. Impairment Rating (IR) Impairment rating refers to the percentage of permanent impairment of the whole body resulting from the compensable injury. Impairment rating must be assessed in accordance with the 4th edition of the AMA Guidelines. If the first certification of impairment rating is disputed, the employee may be sent to a designated doctor, whose report and assessment of impairment rating will have presumptive weight. C. Extent of Injury On request by the carrier, the Division will order the claimant to submit to a single exam by the treating doctor in order to define the compensable injury. The treating doctor will provide the carrier with a report detailing all injuries and diagnoses that are considered related to the compensable injury. The carrier may then accept or dispute the injuries. Any treatment for an injury or diagnosis that has been accepted may be reviewed only for medical necessity, but treatment for injuries or diagnoses that have not been accepted must be preauthorized. This section does not limit the carrier's right to request an RME or DD exam in regard to an extent of injury dispute. D. Required Medical Exam (RME) Carriers previously utilized RMEs to address questions of MMI, IR, diagnosis, appropriate treatment and ability to work. However, most of these functions will be performed by a designated doctor under the new legislation. Carriers may still request an RME to resolve questions on the appropriateness of health care. Carriers may no longer suspend temporary income benefits if a claimant fails to attend an RME. VII. Back-To-Work Initiatives. A. Mandatory early case management by case manager. Carriers shall evaluate any compensable injury in which the Claimant sustains an injury that could potentially result in lost time as early as practicable to determine if skilled case management is necessary. "Case managers who are appropriately licensed to practice in this state" shall be used to perform these evaluations. Carriers may not use adjusters to perform this function. "Case-management" is defined as "assessment of, planning, facilitation and advocacy for options to meet an individual's health needs to promote quality cost-effective outcomes." B. Strategic Management Plan. The commissioner will implement a strategic management plan that requires the Division to evaluate whether the statutory goals, legislative intent, and general workers' compensation mission of the Department, particularly the return-to-work goals, are being implemented. The strategic management plan must modify the organizational structure and programs of the Division as necessary to address shortfalls in the performance of the workers' compensation system. C. Pilot program for small employers. Employers with 2 to 50 employees may recoup up to $2,500 from the workers' compensation return-to-work account for workplace modifications to accommodate doctor-imposed work restrictions or modifications for Claimants, such as physical modifications to the worksite, equipment, devices, or tools, and other costs necessary for reasonable accommodation of restrictions. (The return-to-work account is funded from administrative penalties. Deposits into the account shall not exceed $100,000 annually.) D. Information to Employers and Employees. Information to Employers. The Division shall provide employers with information on methods to enhance the ability of a Claimant to return to work, such as access to information regarding return-to-work programs, and information regarding methods to appropriately assist a Claimant in obtaining access to doctors who provide quality healthcare and use effective occupational medicine treatment practices that lead to returning to work. Information to Employees. The Division shall provide Claimants with information regarding the benefits of early return to work. The information must include assistance in accessing high-quality medical care. E. Return-to-Work Goals and Assistance. Section 413.025 goes about defining some general goals for a return-to-work initiative. The Division shall assist Claimants receiving income benefits to return to work and shall train staff to respond to questions. The Division shall attempt to remove all barriers to successful employment, ensure that data is tracked among the Division, the TWC, the Department of Assistive and Rehabilitative Services and carriers, establish a mechanism of referring Claimants to the TWC and local workforce development centers, and develop a mechanism to promote employment success including post-referral contacts by the Division with Claimants. If the Division determines that a Claimant may never return to the workforce, the Division shall inform the Claimant of possible eligibility for other forms of benefits such as social security disability. VIII. Dispute Resolution The Act provides for administrative dispute resolution for disputes involving both income benefits and medical benefits. The Act grants the parties to income and medical disputes the right to judicial review, but requires that they first exhaust administrative remedies. Failure to do so will deprive the district court of jurisdiction. A. Income Benefits Disputes The Act provides for a multi-step dispute resolution process for disputes involving income benefits. Under recent amendments to the Act, the parties are required to show evidence of informal efforts to resolve the dispute. If the parties are unable to reach an agreement, either party may initiate dispute resolution proceedings by requesting a benefit review conference (BRC). Benefit Review Conference (BRC). This is an informal mediation with a trained Benefit Review Officer (BRO) where the parties will attempt to reach an agreement on the disputed issues. The parties may enter into a written agreement regarding any of the disputed issues. If the parties are unable to resolve things during the BRC, the BRO may schedule an additional BRC if he/she feels that additional information is needed (and a second BRC has not already been held), or set the dispute for a contested case hearing (CCH). The BRO will prepare a report detailing any issues that remain unresolved following the BRC. BRCs may now be conducted by telephone with the employee's consent. Contested Case Hearing (CCH). This is a formal hearing conducted by a hearing officer, who acts as the finder of fact. Prior to the hearing, the parties may conduct limited discovery, and are required to exchange all pertinent medical records, expert reports, witness statements, witness lists, photographs and any other documents that a party intends to offer as evidence at the hearing. Evidence that was not properly exchanged may be excluded. Hearings are recorded electronically and following the hearing, the hearing officer issues a written decision including findings of fact, conclusions of law, and a determination of whether benefits are due. The rules of evidence do not apply to these hearings. Appeals Panel A party dissatisfied with the decision of the hearing officer may file a request for review with the Division Appeals Panel within 15 days from the date the decision is received. The opposing party must file a response within 15 days from the date the request for review is served. The Appeals Panel reviews the record of the hearing, the request and the response and may affirm the decision, reverse the decision and render a new decision, or reverse the decision and remand the case to the hearing officer. The AP is required to issue a written decision on each reversed or remanded case. If the AP does not issue a decision within 45 days after the response is filed, the hearing officer's decision becomes final. The decision of the AP becomes final unless either party files a timely request for judicial review. Under HB 7, the Appeals Panel will also be required to issue and maintain a precedent manual composed of precedent-establishing decisions. Judicial Review A party aggrieved by the final decision of the Division may request judicial review in district court by filing suit no later than 40 days after the decision was filed with the Division. The suit must be filed in the county where the employee resided at the time of the injury of any county agreed to by the parties. The Division may intervene in any judicial proceeding under this subchapter. Judicial review is limited to issues decided by the AP and on which judicial review is sought. The party appealing has the burden of proof by preponderance of the evidence. B. Medical Dispute Resolution The procedures for payment and denial of medical bills are set out in Division Rule 133.304. There are two broad categories of medical disputes; medical fee disputes, and medical necessity disputes. A medical fee dispute involves a dispute over the amount of payment for health care that has been determined to be medically necessary to treat the compensable injury, such as where a provider disputes carrier reduction or denial of a medical bill. Medical necessity disputes involve a dispute over the necessity of requested treatment (prospective necessity) or treatment already rendered (retrospective necessity). Medical Fee Dispute Medical fee disputes are governed by Rule 133.307. A proper party to a medical fee dispute may file a request with the Medical Review Division for dispute resolution. The request must be filed within one year from the date of service at issue. Failure to timely file the request results in waiver of the right to medical dispute resolution. The Division will adjudicate the payment according to the relevant statutory provisions and Division rules. Prospective and Retrospective Medical Necessity Disputes Medical necessity disputes are governed by Rule 133.308. Where authorization or reimbursement has been denied based on medical necessity, a party may request review by an independent review organization (IRO). Request for review of retrospective necessity must be filed within 1 year from the date of service, while requests for review of prospective necessity must be filed within 45 days from the date the carrier the request for reconsideration of the preauthorization denial. The parties are required to submit all relevant documentation to the IRO within 7 days of the notice of assignment. In a prospective necessity or employee reimbursement dispute, the carrier is liable for the IRO fee. In disputes involving retrospective necessity, the requesting party is liable for the fee. IRO decisions must meet certain minimum requirements, such as a listing of all medical records reviewed by the IRO in reaching its decision, a description of the source and screening criteria or clinical basis in making the decision, an analysis of an explanation for the decision to include findings and conclusions, and a description of the reviewer's qualifications. The decision of an IRO is binding during the pendency of a dispute and Carriers must pay for the IRO win or lose. The Division is required to post IRO decisions on the agency's web site after confidential information is redacted. Appeal of Medical Dispute Resolution Decisions Prior to the adoption of HB 7, parties dissatisfied with the medical dispute resolution decision could appeal the decision to the State Office of Administrative Hearings (SOAH). However, the recent legislation provides that appeals of Medical Dispute Resolution decisions and orders must go directly to district court. SOAH discontinued accepting appeals effective September 1, 2005. A case may not be set for hearing if not pending before SOAH on or before August 31, 2005. Judicial Review of Medical Disputes Judicial review of a medical dispute resolution decision is conducted in the manner prescribed by Subchapter G, Chapter 2001, Government Code (the Administrative Procedure Act), and is governed by the substantial evidence rule, rather than de novo review. The Division and Department are not considered parties to the medical dispute in appeals to district court. This portion of the new statute will likely be found to be unconstitutional. C. Medical Disputes in the Network Context The terms of the network contract dictate network medical dispute resolution. The agency rules only apply if the service is out-of-network or non-network. IX. Compliance A. Single Point of Contact. Carriers are required to establish a single point of contact in the Carrier's office for an injured employee. Carriers are required to designate a representative in Austin to act as its agent before the Division. B. Performance-based Oversight. Sections 402.075, 402.076, 402.077, and 402.078 set up a system for monitoring the performance of carriers' and health care providers' compliance records and dispute and complaint resolution practices. The Division will assess the performance of carriers and health care providers at least biennially. Regulatory incentives and oversight based on tiers. There will be "poor," "average," and "high" performers; focus of this regulatory oversight will be on the "poor" performers. Participants who adversely impact the system will warrant "enhanced regulatory oversight." Incentives. There will be incentives for overall compliance in the workers' compensation system. Incentives to promote greater overall compliance may include modified penalties, self-audits, or flexibility based on performance. High-performing entities will be publicly recognized and may use their designation as a marketing tool. Carrier Accident Prevention Services. The Division will audit accident prevention services offered by Carriers based on comprehensive risk assessment. The Division may provide incentives for less regulation of Carriers based on performance. C. Exception to confidentiality of fraud investigation files. The Division's files on fraud investigation are confidential; however, Carriers are permitted to receive information if the investigation file relates directly to a felony regarding workers' compensation or a claim in which restitution is required to be paid to the carrier. X. Fines and Penalties A. "Willful or intentional" no longer required for administrative penalty. Sections 415.001, 415.002 and 415.003, which proscribe the types of administrative violations that can by assessed against carriers, Claimant representatives, and health care providers, remove the requirement that the carrier, carrier representative, or health care provider "willfully or intentionally" commit the offense. This will make it easier for an administrative violation to be assessed; unintentional errors and mistakes will not escape administrative penalty! Texas is infamous for the extraordinary amount of administrative penalties that are assessed against carriers. B. Denial of all future medical care is an administrative violation. It is now a specific administrative violation to "make a statement denying all future medical treatment for a compensable injury." Take care with all wording on PLN11 disputes to ensure that you are not denying all future medical treatment! C. Up to $25K per day for administrative violations. The Commissioner may assess up to $25,000 per day as penalty for any administrative violation, which is defined to include any violation or failure to comply with any provision of the Act and/or any rule, order, or decision of the Commissioner. Each day of noncompliance constitutes a separate violation. The Division must consider, among other factors, the economic benefit of the prohibited act. D. Sanctions for Peer Review Doctors. The Commissioner will adopt rules regarding peer review doctors. Such rules may include standards for peer reviews and other issues important to the quality of the peer review as determined by the Commissioner. The Commissioner may also adopt rules imposing sanctions on peer review doctors, such as restriction, suspension, or removal of the doctors' ability to perform peer reviews. A doctor who performs a peer review must be licensed in Texas. Design by Neterm.Net © 2007-2010 The National Workers' Compensation Defense Network  Contact NWCDN firms for advice and representation for all aspects of workers' compensation law.