HBA-DMD C.S.H.B. 2545 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2545 By: Brimer Business & Industry 4/16/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, the criteria used by the Texas Workers' Compensation Commission (commission) when determining whether to approve or deny an injured worker's request for a change of the treating doctor is ambiguous. As a result, the commission routinely allows the first change to be made without detailed scrutiny even though a change of doctors is prohibited by the Workers' Compensation Act if the change is used to circumvent the prohibition against changing doctors for the purpose of securing a new impairment rating or medical report. Currently, an insurance carrier is required to pay the fee for services provided by a health care provider (provider) within 45 days after receiving the charge, unless the insurance carrier disputes the charge, in which case the insurance carrier is required to pay 50 percent of the fee within 45 days after receiving the charge. The commission's fee guidelines have not been reviewed since 1996, although the commission is required to review the guidelines every two years. Also, providers are currently prohibited from pursuing a private claim against a workers' compensation claimant for a health care service provided to the claimant, but a collection agency is not prohibited from doing so. C.S.H.B. 2545 requires the commission to determine whether an independent medical consultation would be beneficial when deciding whether changing an employee's doctor is medically necessary and to notify the employee, within 10 days, of the commission's decision pertaining to the change of the employee's doctor. This bill requires the insurance carrier to pay the fee which is charged for a service rendered no later than 31 days after receiving the charge, unless the amount is disputed, in which case the insurance carrier is required to pay 50 percent of the amount within 31 days. It prohibits a provider or any other person from pursuing a private claim against a workers' compensation claimant for the cost of a health care service provided to the claimant, with exceptions. This bill also establishes a medical quality review panel to assist in or direct the review of treatment, evaluation, utilization to review practices, and regulation of medical service providers and reviewers. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Workers' Compensation Commission in SECTION 2 (Section 408.023, Labor Code) and that rulemaking authority previously delegated to the Texas Workers' Compensation Commission is modified in SECTION 5 (Section 413.013, Labor Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 408.022(b), Labor Code, as follows: (b) Authorizes an employee to select an alternate doctor, if the employee is dissatisfied with the initial choice of a doctor from the list approved by the Texas Workers' Compensation Commission (commission), after a written application to and being granted approval by the commission, rather than authorizing the employee to notify the commission and request authority, to select a second treating doctor, rather than an alternate doctor. Provides that the employee's application for a second treating doctor must be made for a good cause, as provided by this section and rules adopted by the commission, and the applicant is prohibited from being made to secure a new impairment rating or medical report. Provides that evidence that the initial treating doctor has certified that the employee has reached maximum medical improvement or has cleared the employee to return to work creates a presumption that the employee's application for a second treating doctor is not made for good cause. Authorizes a third or subsequent change of treating doctor to be granted by the commission only in exceptional circumstances unless the doctor is agreed upon by the employee and the insurance carrier. Makes conforming and nonsubstantive changes. (f) Authorizes an employer or an employer's designee to offer an employee the option of selecting a doctor from a list developed by the employer or the employer's designee for treatment of a work-related compensable injury. Authorizes an employer or an employer's designee to offer an incentive to an employee to choose a medical provider from the identified list. Requires the employer to notify the employee in writing of the right to select a doctor at the time the employer notifies the employee of the provisions of this subsection. SECTION 2. Amends Section 408.023, Labor Code, as follows: (b) Provides that each doctor performing functions under this subtitle (Texas Workers' Compensation Act), including required medical examinations under Section 408.004, (Required Medical Examinations; Administrative Violation), Labor Code, and medical utilization review evaluations for insurance carriers, must be on the list of approved doctors to perform services under this subtitle or to receive payment for services. (c) Authorizes the commission to grant exceptions to the requirement imposed under Subsection (b) as necessary to ensure that employees have access to medical care. Authorizes the commission to allow an out-of-state doctor to perform utilization review services on behalf of an insurance carrier if the doctor or insurance carrier agrees to make the doctor available for civil or administrative proceedings as if the doctor were a resident of this state. (d) Requires the commission, before January 1, 2000, to complete an inventory of doctors on the list of approved doctors and identify doctors who elect to remain on the list. Requires the commission to allow a doctor in good standing to reapply to be on the list. Requires the commission to make available to doctors on the list information relating to reimbursement for services, required medical utilization monitoring, and required education and training necessary to conduct certain medical services under this subtitle. Requires the commission to update the list of approved doctors as necessary. (e) Requires the commission to establish criteria for imposing sanctions on a doctor as provided by this section as a condition of continued approved doctor practice privileges, which is authorized to include a sanction by the Medicare or Medicaid program for any other noncompliance with that program in professional practice or billing. Authorizes the criteria to include evidence from the commission's medical records that the doctor's evaluations or impairment ratings are unjustifiably, rather than substantially, different from those the commission finds to be fair and unreasonable. Authorizes the criteria to include professional failure to practice medicine in an acceptable manner, an administrative or criminal conviction, referrals made in violation of Section 413.041 (Disclosure), Labor Code, and other relevant factors as identified by the executive director of the commission (executive director) in consultation with the medical quality review panel (review panel) as provided by Section 413.013. Redesignated from Subsection (b). (f) Requires the executive director of the commission to delete a doctor from the approved doctor list if the doctor is deceased, retired from practice, requested deletion, or is no longer allowed to practice because of suspension or revocation of the doctor's license, notwithstanding Section 402.072 (Sanctions), Labor Code. (g) Authorizes the executive director, on a recommendation by the review panel provided by Section 413.013 and after notice and the opportunity for a hearing, to impose sanctions on a health care provider or an insurance carrier utilization review agent. Specifies the sanctions that the executive director is authorized to impose on a health care provider or on an insurance carrier. (h) Provides that the required monitoring imposed under Subsection (g) must be reasonably related to the severity of the conduct and is prohibited from being punitive in nature. (i) Authorizes the findings of fact and conclusions of law of a court, the State Office of Administrative Hearings, or a licensing or regulatory authority to be used as the basis for action under this section. Requires the commission, by rule, to establish procedures under which a doctor is authorized to apply for reinstatement to the list or for restoration of privileges removed based on sanctions. (j) Provides that the commission action under this section is binding during any appeal of an act by the commission, the State Office of Administrative Hearings, a court, or a licensing or regulatory authority. SECTION 3. Amends Section 408.027, Labor Code, by amending Subsections (a) and (b), as follows: (a) Requires an insurance carrier to pay the fee which is charged for a service rendered by a health care provider (provider) no later than 30, rather than 45, days after the insurance carrier receives the charge unless the amount of the payment or the entitlement to payment is disputed. (b) Requires an insurance carrier, if the insurance carrier disputes the amount charged by a provider and requests an audit of the services rendered, to pay 50 percent of the lesser of the allowed fee or the fee charged, rather than to pay 50 percent of the amount charged by the provider, no later than 30, rather than 45, days after the insurance carrier receives the statement of charge. SECTION 4. Amends Section 413.012, Labor Code, to require the fees provided in the guideline be increased by three percent each year, if the medical policies and fee guidelines are not received within the required two-year period for review and revision of medical policies and fee guidelines, until the medical policy or fee guideline is revised, readopted, or repealed. SECTION 5. Amends Section 413.013, Labor Code, as follows: Sec. 413.013. New Title: COMMISSION MEDICAL QUALITY REVIEWS REQUIRED; PANELISTS; ACTIVITIES; IMMUNITY FOR GOOD FAITH ACTIONS. (a) Requires the commission, with advice from the Research and Oversight Council on Workers' Compensation, to appoint a seven-member review panel, independent of the medical advisory committee created under Section 413.005 (Medical Advisory Committee), Labor Code, to assist in or direct the review of treatment, evaluation, utilization to review practices, and regulation of medical service providers and reviewers under this subtitle. (b) Sets forth the composition of the review panel. (c) Authorizes the medical advisor to the commission to cast the deciding vote in the event of a tie among the members of the review panel. (d) Provides that each doctor of the review panel must possess recognized experience in treatment of patients and as a peer reviewer of medical services. (e) Authorizes the review panel to consult with other specialty providers as necessary to support reviews of medical issues. (f) Requires the commission to contract with persons with certain recognized expertise to accomplish the requirements of this Section. (g) Authorizes the commission, in consultation with the review panel, to employ reasonable sampling techniques to accomplish practice pattern identification and monitoring functions required under this subtitle. (h) Specifies the measurement factors that the commission is authorized to use for the identification and monitoring of medical treatment, required medical examinations, designated doctor opinions, and insurance carrier utilization review services. (i) Requires the review panel to review and recommend to the executive director appropriate action to add, restrict, or remove doctors from the list of approved doctors and the list of designated doctors. Authorizes the review panel to also review and investigate complaints and recommend to the executive director appropriate regulatory action for health care providers. Requires the review panel to consult with the person under review regarding the review findings, and the person who is reviewed is authorized to provide a written response for inclusion in the findings of the commission. Authorizes the review panel to also identify and recommend that certain health care providers with acceptable practice patterns and self-monitoring mechanisms be granted waivers of certain utilization review controls that apply to health care providers generally under commission treatment guidelines and rules including preauthorization, documentation of procedure filing requirements, or similar regulatory requirements. (j) Requires the commission to report to the legislature by February 1 and August 31 of each year, describing the activity of the review panel. Specifies the provisions to be included in the report. (k) Requires the commission to also provide timely notices to the regulated community regarding changes in health care provider status. (l) Authorizes any person, including an employer, insurance carrier, health care provider, employee, or an association, who has knowledge and evidence of a pattern of prohibited or inappropriate medical or utilization review conduct under this subtitle to petition the commission for a review under this section. (m) Authorizes a person to petition the commission for permission to bring a direct or joint action to remove a doctor from the approved doctor list in the manner provided for a contested case under Chapter 2001 (Administrative Procedure), Government Code and Section 402.073 (Cooperation with the State Office of Administrative Hearings), Labor Code, if supported by prima facie evidence of grounds for removal or restriction of the doctor. (n) Provides that a person acting in good faith and without gross negligence who files a complaint or petitions for an administrative action to either remove a doctor from the list or approved doctors or to impose restrictions on practices, or who cooperates with the commission in a review of medical treatments or services, is immune from any civil or criminal liability that might otherwise be imposed. (o) Authorizes the commission to disclose confidential information to appropriate licensing or regulatory authorities and appropriate enforcement authorities, notwithstanding confidentiality provisions under this subtitle or other law. Provides that the information remains confidential by law, and prohibits the receiving agency from disclosing the information. (p) Requires the commission and appropriate licensing or regulatory authorities, to adopted interagency investigative information and confidentiality agreements in order to ensure adequate coordination of investigative and disciplinary actions regarding health care providers and confidentiality of information that is confidential by law. (q) Specifies the exceptions to the prohibition against confidential information being disclosed. (r) Provides that confidential information developed by the commission is not subject to discovery or court subpoena in any other action other than to enforce the provisions of this subtitle by the commission, the appropriate licensing or regulatory agency, or the appropriate enforcement authority, or in a criminal proceeding. (s) Provides that an action by the commission under this section does not constitute utilization review and is not subject to Article 21.58A, Insurance Code. Deletes program requirements established by the commission. SECTION 6. Amends Section 413.019, Labor Code, to provide that interest on an unpaid fee or charge that is consistent with the fee guidelines accrues at the rate provided by Section 401.023 (Interest or Discount Rate), Labor Code, beginning on the 31th, rather than 60th, day after the provider submits the bill to an insurance carrier until the date the bill is paid. Makes a conforming change. SECTION 7. Amends Section 413.042(a), Labor Code, as follows: (a) Prohibits a provider or any other person, rather than a provider, from pursuing a private claim against a workers' compensation claimant for all or part of the cost of a health care service provided to the claimant by the provider, with certain exceptions. SECTION 8.Effective date: September 1, 1999. Makes application of this Act prospective, as it applies to a claim for workers' compensation medical benefits. Makes application of Sections 408.023 and 413.019, Labor Code, as added by this Act, prospective. SECTION 9.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE This substitute redesignates SECTIONS 2-3 and 5-8 from the original bill to SECTIONS 3-4 and 6-9 of the substitute, respectively. This substitute also deletes SECTION 4 (proposed Sections 413.014(c)-(e), Labor Code) from the original bill, relating to the commission's authority to impose additional reimbursement restrictions and preauthorization requirements on certain providers and establishing immunity from liability for a person who performs or assists in performing services for the commission. This substitute differs from the original bill in SECTION 1 (Section 408.022, Labor Code), in Subsection (b), by providing that the employee's application for a second treating doctor must be made for a good cause and the applicant is prohibited from being made to secure a new impairment rating or medical report. This substitute also provides that evidence that the initial treating doctor has certified that the employee has reached maximum medical improvement or has cleared the employee to return to work creates a presumption that the employee's application for a second treating doctor is not made for good cause. This substitute authorizes a third or subsequent change of treating doctor to be granted by the commission only in exceptional circumstances unless the doctor is agreed upon by the employee and the insurance carrier. This substitute also adds new Subsection (f), relating to the authorization of an employer or employer's designee to offer an employee the option of selecting a doctor from a list developed by the employer or employer's designee. In addition, this substitute makes conforming and nonsubstantive changes. This substitute differs from the original bill by adding new SECTION 2 (Section 408.023, Labor Code), relating to the compilation, updating, removal, and sanctioning of doctors on an approved list of doctors by the commission, and the commission's authority to grant exceptions to the requirement that doctors providing certain services must be on the commission's list. The provisions in SECTION 2 are more fully addressed in the Section-by-Section Analysis portion of this document. This substitute differs from the original bill in SECTION 3 (Section 408.027, Labor Code), by requiring an insurance carrier to pay the fee which is charged for a service rendered by a health care provider (provider) no later than 30, rather than 20, days after the insurance carrier receives the charge unless the amount of the payment or the entitlement to payment is disputed. This substitute also requires an insurance carrier, if the insurance carrier disputes the amount charged by a provider and requests an audit of the services rendered, to pay 50 percent of the lesser of the allowed fee or the fee charged, rather than to pay 50 percent of the amount charged by the provider, no later than 30, rather than 20, days after the insurance carrier receives the statement of charge. This substitute deletes proposed Subsection (e), relating to the payment of a fee by an insurance carrier within a certain time period. This substitute differs from the original bill in SECTION 4 (Section 413.012, Labor Code), by providing that the fees provided in the guideline be increased by three percent each year, if the medical policies and fee guidelines are not received within the required two-year period for review and revision of medical policies and fee guidelines, until the medical policy or fee guideline is readopted, as well as revised or repealed. This substitute differs from the original bill in SECTION 5 (Section 413.013, Labor Code), relating to the creation of a medical quality review panel to assist in or direct the review of treatment, evaluation, utilization to review practices, and regulation of medical service providers and reviewers. The provisions in SECTION 5 are more fully addressed in the Section-by-Section Analysis portion of this document. This substitute differs from the original bill in SECTION 6 (Section 413.019, Labor Code), by providing that interest on an unpaid fee or charge that is consistent with the fee guidelines accrues at the rate provided by Section 401.023 (Interest or Discount Rate), Labor Code, beginning on the 31th, rather than 20th, day after the provider submits the bill to an insurance carrier until the date the bill is paid. This substitute also deletes proposed Subsection (c), which provided that interest on an unpaid fee or charge consistent with the fee guidelines accrues at a certain rate beginning 30 days after the provider submits the bill to an insurance carrier until the date the bill is paid. This substitute makes a conforming change. This substitute differs from the original bill in SECTION 8, by making application of Sections 408.023, 408.027, and 408.019 prospective, rather than making application of SECTIONS 2 and 5 prospective, as in the original bill.