X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

JUSTICE LEHRMANN delivered the opinion of the Court. This administrative appeal arises out of a medical fee dispute between a health care provider and a worker’s compensation insurance carrier over the proper amount of reimbursement for services rendered to a covered patient. The provider initiated a dispute resolution proceeding with the Texas Department of Insurance, Division of Workers’ Compensation (the Division), which determined that the provider was entitled to more than the carrier deemed due and ordered the carrier to pay the additional amount. Dissatisfied with the Division’s decision, the carrier requested a contested case hearing before the State Office of Administrative Hearings (SOAH), which reached the same conclusion as the Division. The issue presented here is whether the Administrative Law Judge (ALJ) who heard the case at SOAH erred in placing the burden of proof on the carrier at that hearing. The court of appeals agreed with the carrier that the burden belonged with the provider and remanded the case to SOAH for further proceedings. We disagree and hold that the ALJ properly applied the Division’s rules in allocating the burden of proof. Accordingly, we reverse the court of appeals’ judgment. Overview of Medical Fee Dispute Resolution The Texas Worker’s Compensation Act entitles an employee who sustains a compensable injury to all health care reasonably required by the nature of the injury as and when needed. TEX. LAB. CODE § 408.021(a). The Act tasks insurance carriers with making “appropriate payment of charges for medical services provided under [the Act]” and contains numerous requirements governing carriers’ payment of claims submitted by health care providers. Id. §§ 413.015(a); see also id. § 408.027. As relevant here, a health care provider who is “denied payment or paid a reduced amount for [a] medical service rendered” is entitled to a review of the service by the Division. Id. § 413.031(a)(1). The Division’s “role” in that context is to “resolv[e] disputes over the amount of payment due for services determined to be medically necessary and appropriate for treatment of a compensable injury” and to “adjudicate the payment given the relevant statutory provisions and commissioner rules.” Id. § 413.031(c). The Division’s administrative rules outline the medical fee dispute resolution (MFDR) prerequisites and procedures. The process is triggered when a request for MFDR is filed with the Division. 28 TEX. ADMIN. CODE § 133.307(c).[1] Both the requestor and the respondent then submit a plethora of information and documents to the Division. Id. § 133.307(c)(2), (d)(2). The Division “review[s] the completed request and response to determine appropriate MFDR action” and issues a decision. Id. § 133.307(f). If the dispute “remains unresolved” after the above-described review, a party may request a nonadversarial benefit review conference. TEX. LAB. CODE §§ 413.031(k), .0312(a)–(b); see also id. § 410.024. Barring a party’s timely request for such a conference, however, the Division’s MFDR decision is final. 28 TEX. ADMIN. CODE § 133.307(g). If the benefit review conference is unsuccessful, the party is entitled to a contested case hearing before SOAH, to be conducted pursuant to the Administrative Procedure Act. TEX. LAB. CODE § 413.0312(d), (e); see also 28 TEX. ADMIN. CODE § 133.307(g)(1) (requiring a party seeking review of an MFDR decision to request a benefit review conference), (g)(2) (following an unsuccessful benefit review conference, a party may “appeal the MFDR decision by requesting a contested case hearing”).[2] Finally, a “party who has exhausted all administrative remedies” and “is aggrieved by a final decision of [SOAH] may seek judicial review of the decision.” TEX. LAB. CODE § 413.031(k-1). The Division is not considered to be a party to the dispute for purposes of the contested case hearing and the judicial-review proceeding. Id. § 413.031(k-2). Factual and Procedural Background In 2009, Patients Medical Center requested preauthorization from Facility Insurance Corporation, a worker’s compensation insurance carrier, to perform surgery on a covered patient. Facility issued a preauthorization letter, and the surgery was performed on September 23, 2009. On September 30, Patients sent Facility a bill for its services in the amount of $94,640.48, identifying the corresponding billing codes. Facility determined that most of the billed charges exceeded the scope of the preauthorization. With respect to the remaining “allowable” charges, Facility determined that it was responsible for only 92% of those charges pursuant to an informal network contract (between Patients and another insurer) from which Facility was entitled to benefit. Based on those conclusions, Facility paid Patients a total of $2,354.75. Facility denied Patients’ request for reconsideration. See 28 TEX. ADMIN. CODE § 133.250(a) (allowing a health care provider “dissatisfied with the insurance carrier’s final action on a medical bill” to request that the carrier reconsider its action). On April 19, 2010, Patients sent Facility a “corrected bill” adjusting the billing codes. Facility denied any additional reimbursement on the ground that the second bill constituted an untimely claim for payment. See TEX. LAB. CODE § 408.027(a) (requiring claims for payment to be submitted to the carrier “not later than the 95th day after the date on which the health care services are provided to the injured employee”). On September 23, 2010, Patients submitted a request for MFDR to the Division. After reviewing the parties’ written submissions and documentation, the dispute resolution officer issued the Division’s “Findings and Decision.” The officer found that the services rendered were not subject to a contractual fee arrangement[3] and ultimately concluded that the total reimbursable amount for the preauthorized services under applicable Division rules and fee guidelines was $22,850.53, resulting in an additional reimbursement of $20,495.78 due to Patients. The Division notified the parties of their right to “appeal this decision by requesting a contested case hearing” at SOAH. Facility did so,[4] and each party was instructed to submit to SOAH a copy of all documents it had submitted to the dispute resolution officer along with “any other documents the party might offer into evidence.” After a hearing, the ALJ issued its decision, resolving three issues that Facility had raised in arguing its initial reimbursement amount was correct. First, Facility argued that Patients’ original timely claim for payment, which was the subject of the MFDR proceeding, did not qualify as a “complete medical bill”[5] under the Division’s rules and that Patients thus could not seek additional reimbursement from the Division. See 28 TEX. ADMIN. CODE § 133.240(a) (requiring a carrier to take timely final action “after conducting bill review on a complete medical bill”). The ALJ disagreed, concluding that the initial bill “was a complete medical bill that contained an incorrect procedure code” and that the Division thus “had authority to consider [Patients'] request for additional reimbursement.” Second, the ALJ concluded that Facility, the party that had requested the contested case hearing, bore the burden of proof at that hearing. Third, the ALJ held that the medical procedures Patients performed were within the scope of Facility’s preauthorization. The ALJ accordingly concluded that Facility “failed to carry its burden of proving that Patients Medical Center was not entitled to $20,495.78 in additional reimbursement” and ordered payment of that amount, plus interest.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now
April 08, 2025 - April 09, 2025
Chicago, IL

Join General Counsel and Senior Legal Leaders at the Premier Forum Designed For and by General Counsel from Fortune 1000 Companies


Learn More
November 27, 2024
London

Celebrating achievement, excellence, and innovation in the legal profession in the UK.


Learn More
December 02, 2024 - December 03, 2024
Scottsdale, AZ

Join the industry's top owners, investors, developers, brokers and financiers for the real estate healthcare event of the year!


Learn More

Experienced Insurance Defense Attorney.No in office requirement.Send resume to:


Apply Now ›

Prominent law firm seeks 2 associates to join our defense teams in our downtown New York City and Melville, NY offices.The Litigation Associ...


Apply Now ›

Description: Fox Rothschild has an opening for a Litigation Counsel in our Seattle office. Experience with insurance bad faith and coverage ...


Apply Now ›