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In a development that we salute, last month DWC ordered Memorial Hermann Health
System - Southeast Hospital in Dallas to pay an administrative penalty due to
the hospital’s failure to refund a payment after an insurance carrier requested
it. Consent Order 2024-8987, dated 12/03/24, highlights a tool that insurance
carriers have but seldom use to its full effect.
Specifically, Labor Code section 408.0271 and DWC Rule 133.260 allow an
insurance carrier to request a refund of a payment to a health care provider
when the carrier determines the payment was (1) an overpayment or (2) payment
for an inappropriate service. Upon receipt of the request, the health care
provider must refund the payment or file an appeal with the carrier within 45
days. If the provider appeals the carrier’s determination and the carrier
denies the appeal, the provider must refund the payment within 45 days of
notice of the denied appeal. Importantly, even if the provider requests dispute
resolution from DWC, the provider still must refund the payment to the carrier
while it pursues that remedy.
We at SLS regularly file complaints with DWC against health care providers that
have failed to refund a payment on request by our carrier clients. Our
experience has been that DWC diligently investigates such complaints and, more
often than not, providers agree to refund the payments when they learn that DWC
has opened an investigation into their refusal to do so.
Copyright 2025, Stone
Loughlin & Swanson, LLP