After All, We're Not Savages

Saturday, January 13, 2007 | 0

By Joe R. Anderson and Robert Graves

William Golding, in his classic novel Lord of the Flies, explained that: "We've got to have rules and obey them. After all, we're not savages." To that end, the Texas Department of Insurance, Division of Workers' Compensation (DWC), recently adopted rules regulating peer reviews.

Generally, in the workers' compensation system, peer reviews are the review of claim and medical information and rendition of an opinion by a health care provider at the request of an insurance carrier to assist the carrier in the handling of a claim. Carriers utilize peer reviews in order to obtain informed medical opinions regarding issues such as the necessity of care, compensability of an injury and the nature and extent of a compensable injury, maximum medical improvement, impairment ratings, and work abilities. In the past, there has been little regulation regarding the use of peer reviews and the providers who performed peer reviews. However, as Bob Dylan so eloquently explained, "the times they are a-changin'."

As a result of criticism regarding the use of peer reviews by carriers, the Texas Legislature adopted Texas Labor Code Section 408.0231(g), requiring the DWC to adopt rules regulating doctors who perform peer reviews for carriers. Accordingly, the DWC adopted the new peer review rules. In the preamble to the rules, the DWC addressed the purpose of the rules, explaining that:

These adopted rules reflect the DWC's efforts to address the following objectives regarding benefits of peer reviews as a result of stakeholder input as well as public comment: ensure the use of peer reviews for health care services provided in connection with a workers' compensation claim; curtail the carrier's ability to request multiple peer reviews of the same health care services or issues for a favorable decision; require the use of current, evidence-based treatment parameters; facilitate timely and appropriate medical treatments and services; control utilization of medical treatments and services; and control medical costs where appropriate. The intent of these rules is to improve the quality of health care provided to employees and to monitor peer review activities in the workers' compensation system. The implementation of peer review standards helps to ensure that health care providers performing peer reviews consider evidence-based medicine prior to making any determinations related to the review of medical care. The implementation of peer review standards may reduce excessive or inappropriate medical care while safeguarding the delivery of necessary medical care by requiring the treating doctor to identify, prescribe, and provide only appropriate health care.

The new peer review rules consist of DWC Rule 180.22(g) defining peer reviewer and DWC Rule 180.28 governing peer review requirements, reporting and sanctions.

Under Rule 180.22(g), a peer reviewer is defined as a "health care provider who, at the insurance carrier's request, performs an administrative review of the health care of a workers' compensation claim." This is a broad definition and applies to any health care provider performing a review of health care at the request of a carrier. Additionally, the phrase "administrative review of health care" limits the ability of a peer reviewer to address future care. In response to comments concerning the ability of a peer reviewer to address future care, the DWC explained that the definition of a peer reviewer "permits a prospective review as long as there is a specific request for treatment;" however "a peer review cannot be a review for all future treatment." The DWC also noted that carriers have "the option of requesting a required medical examination, instead of a peer review, to resolve any questions about the appropriateness of heath care."

The most notable change regarding peer reviews is that a peer reviewer who performs a prospective, concurrent, or retrospective review of the medical necessity or reasonableness of health care services (utilization review) is subject to the requirements Insurance Code Article 21.58A (regarding Health Care Utilization Review Agents), which imposes significant standards and requirement for utilization review. Under Article 21.58A, a retrospective review of the medical necessity and appropriateness of health care must be based on written screening criteria established and periodically updated with appropriate involvement from physicians, including practicing physicians, and other health care providers.

Under the new rules, a peer reviewer who performs utilization review must be: (1) certified or registered as a utilization review agent (URA) by the Department of Insurance or be employed by or under contract with a certified or registered URA to perform utilization review; and (2) licensed to practice in Texas or perform utilization reviews under the direction of a doctor licensed to practice in Texas.

The applicability of Article 21.58A and the URA requirements do not apply to peer reviewers performing reviews for issues other than medical necessity, such as compensability or an injured employee's ability to return to work. However, such a review must hold an appropriate professional license in Texas.

Under Rule 180.28, there are now specific requirements regarding the performance and reporting of peer reviewers. A peer reviewer's report must now document the objective medical findings and evidence-based medicine that supports the opinion and include: (1) the peer reviewer's name and professional license number; (2) a summary of the reviewer's qualifications; (3) a list of all medical records and other documents reviewed by the peer reviewer, including dates of those documents; (4) a summary of the clinical history; and (5) an analysis and explanation for the peer review recommendation, including the findings and conclusions used to support the recommendations.

Carriers are now prohibited from requesting additional peer reviews regarding the medical necessity of care for dates of services for which a peer review report has already been issued. However, an additional peer review may be requested if: (1) the review is for a different service requiring review by a different peer review specialty; (2) the carrier needs clarification of the peer review opinion based on new medical evidence that has not been presented to the peer reviewer; (3) the peer reviewer failed to fully address the questions submitted by the insurance carrier; or (4) it is sought for purposes other than determining medical necessity of the health care. Additionally, as mentioned above, carriers have the option of requesting a required medical examination, instead of a peer review, to resolve any questions about the appropriateness of heath care.

When a carrier uses a peer review report to reduce income or medical benefits, it is now required to submit a copy of the report to the treating doctor, the health care provider who rendered the health care, the injured employee and injured employee's representative. Peer reviewers and carriers are required to maintain accurate records to reflect information regarding requests, reports, and results for peer reviews. Peer reviewers and carriers may be required to submit such information upon request to the DWC to assist DWC in its monitoring of peer review use, activity and decisions.

The new rules also provide for sanctions. The commissioner may impose sanctions on doctors performing peer reviews and may prohibit a doctor from conducting peer reviews for any of the following: (1) non-compliance with the provisions of section 180.22 of this title (relating to Health Care Provider Roles and Responsibilities); (2) failure to consider all records provided for review; (3) a history of improper or unjustified decisions regarding the medical necessity of health care reviewed; or (4) any other violation of the Labor Code or Division rules.

The peer review rules went into effect on Aug. 16, 2006. Certainly there will be challenges for both carriers and peer reviewers during the transition to the new rules. The increased requirements and regulations will likely increase costs of the peer review process. However, that cost may be minimal as a number to the requirements where already being performed before the adoption of the rules.

For example, carriers' were already utilizing URAs in determining preauthorization questions. Many peer reviewers were already including much of the required information in their reports. The inability to obtain a medical opinion regarding all future treatment may pose some problems, particularly in calculating accurate insurance reserves. However, carriers remain able to obtain a required medical examination to resolve questions about the appropriateness of health care. In the end, carriers and peer reviewers will have to make some adjustments to comply with increased regulation imposed by the rules. "After all, we're not savages."

Joe R. Anderson, a founding partner of Burns Anderson Jury & Brenner, practices in workers' compensation insurance defense, including administrative hearings in workers' compensation claims, SOAH, medical dispute resolution, and compliance and practices. He serves on the Advisory Committee for Board Certification in Workers' Compensation Law, and is a Fellow of the Texas Bar Foundation.

Robert R. Graves is an attorney with the Austin-based law firm of Burns Anderson Jury & Brenner. He has extensive experience in all aspects of Texas workers' compensation, including benefit disputes, medical disputes, compliance matters, and subrogation. Graves is board certified by the Texas Board of Legal Specialization in Workers' Compensation Law.

This article was republished with the permission of the Insurance Council of Texas.

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The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.