State News : Texas

STONE LOUGHLIN & SWANSON, LLP

May 2013 Workers' Compensation Update

Lawmakers approve 7 new comp bills this Legislative session

Late in the session, lawmakers approved seven new bills relating to workers' compensation. Senate Bill 381 by Sen. Leticia Van De Putte (D-San Antonio) adds new language to a Texas Labor Code provision (Tex. Lab. Code 419.002), a statute which bars deceptive use of the name, symbols, and/or logos of the Texas Department of Insurance or Division of Workers' Compensation and makes it illegal to impersonate these agencies. The new bill is aimed at preventing constitutional challenges to this statute. Commissioner Rod Bordelon told the Senate State Affairs Committee that the bill would protect the general public from believing that the Division had endorsed certain attorneys or health care providers. Bordelon said that the Division counted 24 violations of the statute since it was enacted in 2005.

House Bill 2645 by Representative Chris Turner (R-Arlington) would enumerate that the TDI may continue to regulate independent review organizations (IROs). House Bill 1762 by Representative Four Price (R-Amarillo) would clarify that temporary employees are covered under workers' compensation law. House Bill 581 by Representative Eddie Lucio (D-Harlingen) would enable nurses at public hospitals to sue their employer for violating state whistleblower laws. (The House and Senate approved different versions of this bill, and leaders may meet in committee to negotiate final wording of the bill.) House Bill 3152, relating to network contracting practices, would require administrators and managers of specialty networks to clearly identify themselves and network rates. The bill is expected to reduce confusion over key terms in the networks' contracts and assist the Division to create more accurate fee guidelines.

Senate Bill 801 by Representative John Carona (R-Dallas) would get rid of the requirement that insurers deposit $50,000 with the Department of Insurance, a regulation that was initially aimed at protecting against insolvency. Senate Bill 1322 by Senator Leticia Van De Putte (D-San Antonio) would allow for the formation of networks by home health care providers and DME providers.

Senate declines to vote on bill protecting communications between carrier attorneys and employers

Session is over, and the Senate did not act on House bill 1468 (Representative Kenneth Sheets, R-Dallas), although the House of Representatives had approved the bill. This bill would have allowed carriers to refuse to disclose communications between employers and insurance carrier attorneys in bad faith actions and other certain legal proceedings. These communications would have been considered within the realm of attorney-client privilege. Last summer, the Texas Supreme Court held that communications between an employer and a third party attorney for a workers compensation carrier were not privileged from discovery inIn Re XL Specialty Insurance Co. and Cambridge Integrated Services Group Inc.(Tex. June 29, 2012). The case has created a problem for carriers, leading many to place strict restrictions on communications between employers and carrier attorneys.

Report of skin abscesses from use of steroid injections

The FDA has received seven reports of illness in connection with steroid injections made by a Tennessee compounding pharmacy, Main Street Family Pharmacy (MSFP). At least one appears to be fungal in nature. Products from MSFP have reportedly been shipped to medical facilities in Texas, as well as Alabama, Arkansas, California, Florida, Kentucky, Louisiana, Mississippi, New Mexico, Illinois, North Carolina, and South Carolina. The injections contained methylprednisolone acetate, the same drug linked to a meningitis outbreak affecting over 700 individuals last year, including over 55 deaths. The FDA says its first priority is to ensure all products from MSFP are no longer in use. The pharmacy has launched a recall of all of its sterile products, and has also agreed to stop compounding sterile drugs for the duration of the investigation.

Raising the Bar for MMI/IR Exams

The Division has developed new examinations to test designated doctors and other doctors seeking certification to conduct MMI and IR exams in workers’ compensation cases. As of May 1, 2013, the new examinations will be the only examinations approved by the Division for certification or re-certification. The new tests will no longer be administered onsite following the certification training sessions. Rather, the Division has contracted with PSI Services LLC

(PSI) to administer examinations to test designated doctors and doctors seeking authorization to certify MMI/IR. PSI will provide the testing through a network of computer examination centers throughout Texas, and test-takers will be notified whether they have passed immediately following completion of the exam. The first day for administration of the new examinations was May 13, 2013. Stone Loughlin & Swanson, LLP welcomes this change and is hopeful that the new certification examinations will increase the quality of MMI/IR certifications system-wide.

Division hosts educational sessions on pharmacy closed formulary

The Division will hold educational sessions for system participants at its field offices throughout the month of June on the subject of the pharmacy closed formulary. The sessions will provide information on the initial applicability and results of the closed formulary rules, with special emphasis on the transition of legacy claims to the pharmacy closed formulary. Visit the Events and Training Calendar of the Division’s website for dates, locations, and times for these free sessions.

"ObamaCare" will collect medical records of workers’ compensation claimants

The data collection regulations of the Affordable Care Act (also known as "ObamaCare") will include provisions for the collection of medical information related to work injuries. Personal medical records, including electronic medical records, will be incorporated into the program. The database, which is the biggest and most expansive database of personalized medical information, will be administered by a newly-created unit, The Federal Data Services Hub, under the authority granted to the Internal Revenue Service (IRS). The IRS has requested funding for 1,954 full-time employees for its Affordable Care Act office in 2014.

It’s a bird . . . it’s a plane . . . it’s SuperForm! Division issues reminder to conform to DWC-32 requirements; form serves many functionsThe Division sent out a reminder to system participants, reminding them that the DWC Form-32 (Request for Designated Doctor Examination) is not just a document to be filed to request a DD exam; rather, the form serves a multitude of purposes, including providing the basis for

the selection of the DD, guidance for issues to be addressed by the DD in the narrative report, and guidance to the Division in issuing its notice forms. The Division reminded participants that accurate and complete information from the requestor is necessary in order to ensure that a qualified DD is selected to examine the injured worker. Complete and accurate information also provides the DD with information necessary to evaluate and to provide a clear answer regarding the issues he or she is being asked to address.

The Division requested that party participants provide full information regarding the injured worker’s treating doctor, the existence or non-existence of a network or political subdivision health plan, the injured employee’s current diagnosis or diagnoses and body part(s) affected by the injury, and (where applicable) the specific injuries determined to be compensable by the Division and/or accepted as compensable by the insurance carrier, and the diagnoses or conditions that are in dispute. The DWC-32 also requires the requestor include an accurate statutory date of MMI, since, in most cases, the DD cannot certify a date of MMI after the date of statutory MMI. The Division also reminded participants that due to the repeal of Rule 130.6(b)(5), multiple certifications are only to be issued where the DD is being asked to address MMI, IR, and extent of injury. Accordingly, system participants should only request multiple certifications where all three issues (MMI, IR, and extent) are being addressed by the DD. The Division warned that requests not meeting the requirements of the rule will be denied pursuant to Rule 127.1(b),(c) and (d).

Division changes email domain and agency web address

The Division has changed its domain from @tdi.state.tx.us to @tdi.texas.gov, which means that all personnel email addresses have also changed. Be sure to update your email contact list to reflect the new domain (e.g.Jane.Smith@tdi.texas.gov) prior to June 1, 2013. The Division has also revised a number of forms to reflect the new email domain and agency web address.

Recent enforcement actions against carriers and health care providers

The Division recently announced final disciplinary actions taken against insurance carriers and health care providers. Actions against carriers included orders citing violations of the Texas Labor Code and rules relating to timely payment of medical bills, timely payment of income benefits to workers' compensation claimants, and retrospective review of the medical necessity of preauthorized medical treatment. Fines assessed against carriers ranged from $2,000 to $23,500. Actions against health care providers included orders citing violations related to failure to timely file and accurately complete Division forms, reports, and records. Fines assessed against providers ranged from $3,500 to $4,000, and some providers were ordered to undergo compliance training, undergo monitoring and review of randomly-selected patient records, and/or submit their workers' compensation patients' records for Medical Quality review.