Update on Implementation of HB 7
Saturday, June 17, 2006 | 0
On May 9, 2006, the Business & Industry and Insurance committees of the Texas House of Representatives held a joint hearing to receive an update from the Texas Department of Insurance (TDI) and TDI's Division of Workers' Compensation (DWC) on the implementation of House Bill (HB) 7.
The members of the two committees received invited testimony from several individuals to include:
Texas Insurance Commissioner Mike Geeslin;
Texas Workers' Compensation Commissioner Albert Betts; and
Texas Public Injured Employee Counsel Norman Darwin.
Insurance Commissioner Provides Update on Implementation of HB 7
Commissioner Geeslin reported that the focus of the reform of the Texas workers' compensation system has not changed. Geeslin said return-to-work and quality of health care, and lower system medical benefits costs are all included in the focus of the on-going reform of the Texas system.
The commissioner testified that TDI is addressing many issues and that some of those issues will raise a policy question for next legislative session.
Geeslin reported that as of the date of the hearing, TDI had certified two networks and had 22 network applications pending review. He noted that TDI has undertaken an extensive outreach program to educate applicants and system stakeholders about network and related issues.
Geeslin also reported that his staff had addressed an issue involving tailored networks. The insurance commissioner said tailored networks are no longer allowed. Tailored networks refer to certified networks establishing modified panels of health care providers for specific insurers or employers. Geeslin noted that any network that wishes to change or modify its panel of health care providers would be required to submit a separate application for certification of the modified panel network as a new network. Networks will not be required submit another application and pay the $5,000 application fee if they are merely modifying their service area.
Commissioner Geeslin reported that there were no tailored network applications pending before TDI.
Rep. Bill Zedler (R-Arlington) expressed concern about the small number of specialists that he hears will be included in workers' compensation networks in Texas. Rep. Zedler also said he is concerned about each network having an adequate doctor to patient ratio. He additionally expressed concern with the reimbursement rate of health care providers in the networks.
Geeslin responded by pointing out that networks must have an access plan that provides for access to specialists if they do not have those specialists in their networks.
Rep. Helen Giddings (D-De Soto), the chair of the House Business & Industry Committee, said the Texas Legislature wants to make sure that the workers' compensation networks look like preferred provider organizations with a substantial number of doctors. She noted that the Texas system and injured employees would not be well served by networks with an inadequate number of doctors.
Representatives Giddings and Solomons both said they wanted to make sure that the networks were adequate and that specialists, such as orthopedic surgeons, were participating in the networks.
Business As Usual?
Rep. Gary Elkins (R-Houston) expressed concerns about whether or not the reforms passed by the Texas Legislature had actually changed how business is conducted in the Texas workers' compensation system. He noted that a doctor with whom he had recently spoken reported that insurers, third party administrators, and utilization review companies were not paying his claims.
"Based upon what I am seeing, just from my limited exposure, we are back to where we were at pre-HB 7," said Elkins. "Insurance companies are denying all the claims which is going to get us back to where the doctors will not provide the service."
Rep. Elkins asked Commissioner Geeslin to look into why insurers are denying all of the claims to which he referred.
Commissioner Geeslin responded by stating that the DWC has the resources to look at individual medical necessity disputes and that is why TDI started the market conduct studies to look at the larger systematic business practice. The commissioner said he believed that there may have been a glitch and through human error it is being applied categorically across all of the treatment. He added that TDI will look at that issue.
Rep. Kevin Bailey (D-Houston) said a letter he received recently from a doctor expressing concern over the continual lack of medical bill payments from carriers and the long backlog of claims not being processed. He added that this has been a problem since he has been on the Business and Industry Committee and he asked if there is anything being done to address this problem.
Commissioner Geeslin responded by saying this issue is part of the legacy issues the DWC has inherited from the old system. Geeslin added that Commissioner Betts is working on this issue and is in the process of meeting with insurance carriers and health care providers and asking them to determine what disputes can be settled. The DWC recently had a good outcome from a settlement week in which a significant number of medical payment disputes were resolved.
Geeslin said what is lacking is a legal doctrine stating "enough is enough" and we can step back and give some sort of presumptive judgment to say the claim gets settled and we err on the side of the injured worker.
Rep. Bailey asked for the number of backlogged medical payment disputes to which Commissioner Geeslin responded that there were over 13,000.
Rep. Giddings asked about whether or not TDI and the DWC had enough staff to get the job done in light of the reforms included in HB 7. Geeslin said he would raise some issues during future budget hearings regarding staffing and that TDI and DWC were making due with the staff and resources available.
Workers' Compensation Commissioner Testifies
Commissioner Albert Betts testified about the DWC's ongoing efforts to implement HB 7, rule-making that has been undertaken, the reorganization of the DWC, and legacy issues.
Betts reported that the DWC has adopted rules to implement the return-to-work pilot project and new preauthorization rule requirements. He said the DWC is currently working on rules regarding the new designated doctor requirements and peer review monitoring and requirements.
The commissioner also reported that stakeholder meetings have been held to discuss several different rules under development. He noted that DWC is currently working on rules regarding treatment and disability guidelines. Betts added that his staff had met with stakeholders about performance-based oversight issues that will shape how the DWC's compliance and enforcement will work in the future.
Betts said that he and senior staff are in the process of reorganizing the DWC. He noted that the DWC has been reorganized into four distinct program areas: dispute resolution, workplace and medical services, compliance and regulation, and field services. He added that there are still 24 field offices around the state and that he would continue to review organizational requirements and make changes as needed.
Commissioner Betts said that part of the goal of the reorganization is to improve customer service to system participants. He said the DWC must do a better job of providing customer assistance to all system stakeholders. The commissioner said he is working closely with the Office of Injured Employee Counsel to make sure injured employees receive the customer service and assistance they need.
Betts also reported that he planned on hiring an Ombudsman who will be available to help system participants with navigating through the DWC and its processes. The Ombudsman will focus on complaint resolution within the DWC.
Commissioner Betts also said that the DWC has completed work on the strategic management plan required by HB 7. He said the plan focused on five key areas: injured employee services, return-to-work, dispute resolution, medical quality and access, and performance-based oversight.
Medical Quality Review Panel Update Provided
Betts reported that in late 2005, he directed that the Medical Quality Review Panel (MQRP) to temporarily cease operations while a review was conducted of its processes. The commissioner said that the DWC consulted with stakeholders in January 2006 and have made changes based upon the recommendations received from the stakeholders. He reported that changes made include: blind review of providers would be undertaken to make sure that the review process is unbiased, two independent reviews will be performed on each provider reviewed to see if there are differing opinions, the provider reviewed will be offered a face-to-face meeting with the DWC as part of an informal resolution process, any recommendation against the provider or any other party under review will go to the MQRP, and communications will be improved so that providers and system participants will know what is being done and why.
"We are going to strengthen our communication effort so that there are no questions about how we are operating," said Betts.
Update on Medical Dispute Resolution Provided
Commissioner Betts reported that there are approximately 13,000 medical payment disputes pending and added that number is down from a high of 40,000 a couple years ago. Betts said some of the disputes are between 5 and 6 years old and that a quarter to a third of the disputes are 3 to 4 years old.
Betts said that earlier this year DWC medical dispute resolution staff invited parties to discuss the disputes. He said 400 disputes were resolved as the result of this effort but that there were still a large number of disputes pending before the DWC.
Betts said he and Commissioner Geeslin would be sending letters to the insurers and health care providers with the most disputes asking them to review their respective cases and come to a resolution without DWC involvement.
"We need to get decisions about whether or not money is owed to health care providers," said Betts.
Rep. Giddings interrupted Commissioner Betts and said, "13,000 claims - some as old as five or six years - is totally unacceptable. I know it did not occur on your watch and that you inherited these disputes." Giddings said that she appreciates what Commissioner Geeslin and Betts are trying to do to get the disputes resolved by the disputing parties. She said the 13,000 disputes need to be addressed by the end of the year and that she hoped the disputes do not involve proposed health care.
Commissioner Betts clarified that the disputes involved payment issues related to health care already provided to injured employees.
Betts reported that there is no backlog on disputes regarding income benefits.
Rep. Giddings expressed her desire for the DWC to track the denial of medical benefits so that the insurers who deny a significant number of disputes can be identified and reviewed.
Commissioner Betts said a large number of the backlogged disputes are due to the lack of an outpatient hospital services fee guideline. He testified that fee guidelines for these types of disputes should reduce the number of disputes regarding reimbursement issues.
Betts added that the DWC would start working these types of disputes in June and would determine what the appropriate rate of reimbursement is in these cases. He also said the DWC is working on a new process and system to review and resolve disputes in a manner that will not result in a backlog of disputes in the future.
Rep. Senfronia Thompson (D-Houston) asked if the DWC would be monitoring the resolution process to make sure that insurers are not using the letter from the TDI and DWC to make the health care provider accept less money than they are actually owed. Commissioner Betts said his staff would be tracking the resolution efforts and make sure no party is taking advantage of the other party during this process.
Public Injured Employee Counsel Testifies
Norman Darwin, the Public Injured Employee Counsel, provided the Business & Industry and Insurance Committees with an update on the establishment and operations of the Office Injured Employee Counsel (OIEC).
Darwin said he has made a concerted effort to meet with representatives from the insurance industry and business community and said he hopes to be able to work out issues with them in a non-adversarial manner.
He said one of the first steps he took upon taking office was to instruct all Ombudsman to forward all peer review reports they receive during the field office dispute resolution process to his office. He said the reports would be used to build a database and act as a baseline to build information that will give the OIEC hard data regarding how the peer reviews are being used.
Darwin reported that his office has provided comments on the draft peer review monitoring rules and that should go a long way towards reducing the abusive peer review reports significantly. He also said that the information the OIEC gathers on peer reviews would be shared with the DWC for whatever enforcement action is deemed appropriate.
The report to the Insurance and Business & Industry Committees also included an update on a pilot program to enhance customer service and Ombudsman assistance provided to injured employees. Darwin reported that Ombudsman will interact with injured employees who have disputes earlier than the benefit review conference level. He said earlier intervention by Ombudsman should result in better service being provided to the state's injured employees.
Darwin also reported that Ombudsman would receive training at a level they have never received before. The training has been designed to improve the performance of Ombudsman during their effort to assist injured employees with the resolution of disputes that arise during the life of their claims.
Rep. Giddings Asked About Timeliness of Dispute Resolution
Rep. Giddings asked if the Office of Injured Employee Counsel had any idea what the average amount of time is from when a dispute arises to when the injured employee can get to a benefit review conference. Darwin said that could not be measured since many of the disputes do not require a benefit review conference. He noted that in the past there were delays due to dispute resolution officers, the first level of the dispute resolution process, attempting to mediate the disputed issues. Darwin said Commissioner Betts and the staff of the DWC has been able to move the process along in a timelier manner.
Darwin said that moving the point in which an Ombudsman gets involved in a dispute should improve the time it takes to get a dispute resolved or set for a benefit review conference. He added that the OIEC would track the time required to get a dispute to a benefit review conference and resolved and would be willing to share that information with the Insurance and Business & Insurance Committees and the DWC.
Other Testimony Received by the Insurance and Business & Industry Committees
The Insurance and Business & Industry Committees also received testimony from the following individuals:
Amy Lee, TDI Workers' Compensation Research and Analysis Group provided an update on the research efforts of her staff and issues that they would be focusing on in the future.
David Bragg, an attorney for Vista Medical Center Hospital. Bragg said his client, Vista Medical Center Hospitals in Pasadena and Dallas, has 4,340 disputes regarding reimbursement for surgeries performed in his client's office. Bragg said the surgeries were preauthorized and approved under an adopted fee guideline. He testified that several insurers refused to pay the bills of his clients and that there are now 850 cases involving $40,000 each pending before the State Office of Administrative Hearings (SOAH).
Bragg noted that a district court recently ruled that a constitutional denial of due process exists since parties to medical disputes are deprived of an administrative hearing at the Division of Workers' Compensation or SOAH. He added that if the district court ruling stands, then the provision in the HB 7 Texas Labor Code that provides for the appeal of a medical dispute resolution decision directly to the Travis County District Court would be found unconstitutional and all disputes pending in district court would have to go back to the DWC for a hearing to develop a record.
Bragg praised the efforts of Commissioners Geeslin and Betts to resolve the backlog of disputes the DWC is currently faced with and encouraged DWC to get these disputes resolved as soon as possible. He said his client, a publicly traded corporation, is facing the possibility of going out of business due to the money they have not been paid.
Article republished with the permission of the Insurance Council of Texas. www.insurancecouncil.org
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