By: Taylor of Galveston (Senate Sponsor - Huffman) H.B. No. 2605
(In the Senate - Received from the House April 20, 2011;
April 26, 2011, read first time and referred to Committee on
Government Organization; May 16, 2011, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 6, Nays
0; May 16, 2011, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 2605 By: Hegar
A BILL TO BE ENTITLED
AN ACT
relating to the continuation and functions of the division of
workers' compensation of the Texas Department of Insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.004(b), Insurance Code, is amended to
read as follows:
(b) Unless continued as provided by Chapter 325, Government
Code, the duties of the division of workers' compensation of the
Texas Department of Insurance under Title 5, Labor Code, expire
September 1, 2017 [2011], or another date designated by the
legislature.
SECTION 2. Sections 1305.355(e), (f), and (g), Insurance
Code, are amended to read as follows:
(e) A party to a medical dispute that remains unresolved
after a review under this section is entitled to a hearing and [may
seek] judicial review of the decision in accordance with Section
1305.356. The division of workers' compensation and the department
are not considered to be parties to the medical dispute.
(f) A determination of an independent review organization
related to a request for preauthorization or concurrent review is
binding during the pendency of a dispute [any appeal,] and the
carrier and network shall comply with the determination.
(g) If a contested case hearing or judicial review is not
sought under Section 1305.356 [this section], the carrier and
network shall comply with the independent review organization's
determination.
SECTION 3. Subchapter H, Chapter 1305, Insurance Code, is
amended by adding Section 1305.356 to read as follows:
Sec. 1305.356. CONTESTED CASE HEARING ON AND JUDICIAL
REVIEW OF INDEPENDENT REVIEW. (a) A party to a medical dispute
that remains unresolved after a review under Section 1305.355 is
entitled to a contested case hearing. A hearing under this
subsection shall be conducted by the department's division of
workers' compensation in the same manner as a hearing conducted
under Section 413.0311, Labor Code.
(b) At a contested case hearing held under Subsection (a),
the hearing officer conducting the hearing shall consider
evidence-based treatment guidelines adopted by the network under
Section 1305.304.
(c) A party that has exhausted all administrative remedies
under Subsection (a) and is aggrieved by a final decision of the
department's division of workers' compensation may seek judicial
review of the decision.
(d) Judicial review under Subsection (c) shall be conducted
in the manner provided for judicial review of a contested case under
Subchapter G, Chapter 2001, Government Code, and is governed by the
substantial evidence rule.
SECTION 4. Section 2051.151(e), Insurance Code, is amended
to read as follows:
(e) An insurance company that fails to comply with this
section commits an [a Class D] administrative violation under
Subtitle A, Title 5, Labor Code.
SECTION 5. Section 2053.206(a), Insurance Code, is amended
to read as follows:
(a) A person commits an [a Class A] administrative violation
under Subtitle A, Title 5, Labor Code, if the person engages in
conduct that violates this subchapter.
SECTION 6. Section 402.023, Labor Code, is amended by
adding Subsection (c-1) to read as follows:
(c-1) The division shall adopt a policy outlining the
division's complaint process from receipt of the initial complaint
to the complaint's disposition.
SECTION 7. Subchapter B, Chapter 402, Labor Code, is
amended by adding Section 402.0231 to read as follows:
Sec. 402.0231. DOCUMENTATION AND ANALYSIS OF COMPLAINTS.
(a) The division shall develop procedures to formally document and
analyze complaints received by the division.
(b) The division shall compile detailed statistics on all
complaints received and analyze complaint information trends,
including:
(1) the number of complaints;
(2) the source of each complaint;
(3) the types of complaints;
(4) the length of time from the receipt of the
complaint to its disposition; and
(5) the disposition of complaints.
(c) The division shall further analyze the information
compiled under Subsection (b) by field office and by program.
(d) The division shall report the information compiled and
analyzed under Subsections (b) and (c) to the commissioner at
regular intervals.
SECTION 8. Section 402.073, Labor Code, is amended to read
as follows:
Sec. 402.073. COOPERATION WITH STATE OFFICE OF
ADMINISTRATIVE HEARINGS. (a) The commissioner and the chief
administrative law judge of the State Office of Administrative
Hearings [by rule] shall adopt a memorandum of understanding
governing administrative procedure law hearings under this
subtitle conducted by the State Office of Administrative Hearings
in the manner provided for a contested case hearing under Chapter
2001, Government Code. The memorandum of understanding must
address the payment of costs by parties to a medical fee dispute
under Section 413.0312.
(b) In a case in which a hearing is conducted by the State
Office of Administrative Hearings under Section 413.031 or [,]
413.055, [or 415.034,] the administrative law judge who conducts
the hearing for the State Office of Administrative Hearings shall
enter the final decision in the case after completion of the
hearing.
(c) In a case in which a hearing is conducted in conjunction
with Section 402.072, 407.046, [or] 408.023, or 415.034, and in
other cases under this subtitle that are not subject to Subsection
(b), the administrative law judge who conducts the hearing for the
State Office of Administrative Hearings shall propose a decision to
the commissioner for final consideration and decision by the
commissioner.
(d) The notice of the commissioner's order must include a
statement of the right of the person to judicial review of the
order.
(e) In issuing an order under this section, the commissioner
shall comply with the requirements applicable to a state agency
under Section 2001.058, Government Code.
SECTION 9. Section 403.001(a), Labor Code, is amended to
read as follows:
(a) Except as provided by Sections 403.006, [and] 403.007,
and 403.008, or as otherwise provided by law, money collected under
this subtitle, including [administrative penalties and] advance
deposits for purchase of services, shall be deposited in the
general revenue fund of the state treasury to the credit of the
Texas Department of Insurance operating account.
SECTION 10. Chapter 403, Labor Code, is amended by adding
Section 403.008 to read as follows:
Sec. 403.008. DEPOSIT OF ADMINISTRATIVE PENALTIES.
Administrative penalties collected under this subtitle shall be
deposited in the general revenue fund.
SECTION 11. Section 408.0041, Labor Code, is amended by
amending Subsection (b) and adding Subsection (b-1) to read as
follows:
(b) Except as provided by Section 408.1225(f), a [A] medical
examination requested under Subsection (a) shall be performed by
the next available doctor on the division's list of certified
designated doctors whose credentials are appropriate for the area
of the body affected by the injury [issue in question] and the
injured employee's diagnosis [medical condition] as determined by
commissioner rule. [A designated doctor, other than a
chiropractor, is subject to Section 408.0043. A designated doctor
who is a chiropractor is subject to Section 408.0045.] The division
shall assign a designated doctor not later than the 10th day after
the date on which the request under Subsection (a) is approved, and
the examination must be conducted not later than the 21st day after
the date on which the commissioner issues the order under
Subsection (a). An examination under this section may not be
conducted more frequently than every 60 days, unless good cause for
more frequent examinations exists, as defined by commissioner
rules.
(b-1) A designated doctor, other than a chiropractor, is
subject to Section 408.0043. A designated doctor who is a
chiropractor is subject to Section 408.0045. To the extent of a
conflict between this section and Section 408.0043 or 408.0045,
this section controls.
SECTION 12. Section 408.1225, Labor Code, is amended by
amending Subsections (a), (b), and (e) and adding Subsections
(a-1), (a-2), (a-3), (a-4), (a-5), and (f) to read as follows:
(a) To be eligible to serve as a designated doctor, a doctor
must maintain an active certification by the division [meet
specific qualifications, including training in the determination
of impairment ratings and demonstrated expertise in performing
examinations and making evaluations as described by Section
408.0041. The commissioner shall develop qualification standards
and administrative policies to implement this subsection and may
adopt rules as necessary].
(a-1) The commissioner by rule shall develop a process for
the certification of a designated doctor.
(a-2) The rules adopted by the commissioner under
Subsection (a-1) must:
(1) require the division to evaluate the qualification
of designated doctors for certification using eligibility
requirements, including:
(A) educational experience;
(B) previous training; and
(C) demonstrated ability to perform the specific
designated doctor duties described by Section 408.0041; and
(2) require standard training and testing to be
completed in accordance with policies and guidelines developed by
the division.
(a-3) The division shall develop guidelines for
certification training programs for certification of a designated
doctor under Subsection (a-1) to ensure a designated doctor's
competency and continued competency in providing assessments,
including:
(1) a standard curriculum;
(2) standard course materials; and
(3) testing criteria.
(a-4) The division shall develop and implement a procedure
to periodically review and update the guidelines developed under
Subsection (a-3).
(a-5) The division may authorize an independent training
and testing provider to conduct the certification program for the
division under the guidelines developed under Subsection (a-3).
(b) The commissioner shall ensure the quality of designated
doctor decisions and reviews through active monitoring of the
decisions and reviews, and may take action as necessary to:
(1) restrict the participation of a designated doctor;
[or]
(2) deny renewal of [remove] a [doctor from inclusion
on the department's list of] designated doctor's certification; or
(3) revoke a designated doctor's certification under
Section 413.044 [doctors].
(e) A designated doctor, other than a chiropractor, is
subject to Section 408.0043. A designated doctor who is a
chiropractor is subject to Section 408.0045. To the extent of a
conflict between this section and Section 408.0043 or 408.0045,
this section controls.
(f) A designated doctor shall continue providing services
related to a case assigned to the designated doctor, including
performing subsequent examinations or acting as a resource for
division disputes, unless the division authorizes the designated
doctor to discontinue providing services. The commissioner by rule
shall prescribe the circumstances under which a designated doctor
is permitted to discontinue providing services, including:
(1) the doctor decides to stop practicing in the
workers' compensation system; or
(2) the doctor relocates the doctor's residence or
practice.
SECTION 13. Section 408.141, Labor Code, is amended to read
as follows:
Sec. 408.141. AWARD OF SUPPLEMENTAL INCOME BENEFITS. An
award of a supplemental income benefit[, whether by the
commissioner or a court,] shall be made in accordance with this
subchapter.
SECTION 14. Section 408.143(a), Labor Code, is amended to
read as follows:
(a) An [After the commissioner's initial determination of
supplemental income benefits, the] employee seeking supplemental
income benefits must file a statement with the insurance carrier
stating:
(1) that the employee has earned less than 80 percent
of the employee's average weekly wage as a direct result of the
employee's impairment;
(2) the amount of wages the employee earned in the
filing period provided by Subsection (b); and
(3) that the employee has complied with the
requirements adopted under Section 408.1415.
SECTION 15. Section 408.147, Labor Code, is amended to read
as follows:
Sec. 408.147. CONTEST OF SUPPLEMENTAL INCOME BENEFITS BY
INSURANCE CARRIER; ATTORNEY'S FEES. [(a) An insurance carrier may
request a benefit review conference to contest an employee's
entitlement to supplemental income benefits or the amount of
supplemental income benefits.
[(b) If an insurance carrier fails to make a request for a
benefit review conference within 10 days after the date of the
expiration of the impairment income benefit period or within 10
days after receipt of the employee's statement, the insurance
carrier waives the right to contest entitlement to supplemental
income benefits and the amount of supplemental income benefits for
that period of supplemental income benefits.
[(c)] If an insurance carrier denies an employee's
entitlement [disputes the commissioner's determination that an
employee is entitled] to supplemental income benefits or there is a
dispute regarding the amount of supplemental income benefits due
and the employee prevails on any disputed issue, the insurance
carrier is liable for reasonable and necessary attorney's fees
incurred by the employee as a result of the [insurance carrier's]
dispute and for supplemental income benefits accrued but not paid
and interest on that amount, according to Section 408.064.
Attorney's fees awarded under this section [subsection] are not
subject to Sections 408.221(b), (f), and (i).
SECTION 16. Section 408.149(b), Labor Code, is amended to
read as follows:
(b) Either party may request a benefit review conference to
contest a determination of the commissioner at any time[, subject
only to the limits placed on the insurance carrier by Section
408.147].
SECTION 17. Section 408.151(a), Labor Code, is amended to
read as follows:
(a) On or after the second anniversary of the date the
employee is initially awarded [commissioner makes the initial award
of] supplemental income benefits, an insurance carrier may not
require an employee who is receiving supplemental income benefits
to submit to a medical examination more than annually if, in the
preceding year, the employee's medical condition resulting from the
compensable injury has not improved sufficiently to allow the
employee to return to work.
SECTION 18. Section 408.221(b), Labor Code, is amended to
read as follows:
(b) Except as otherwise provided, an attorney's fee under
this section is based on the attorney's time and expenses according
to written evidence presented to the division or court. Except as
provided by Subsection (c) or Section 408.147 [408.147(c)], the
attorney's fee shall be paid from the claimant's recovery.
SECTION 19. Section 409.021(e), Labor Code, is amended to
read as follows:
(e) An insurance carrier commits an administrative [a]
violation if the insurance carrier does not initiate payments or
file a notice of refusal as required by this section. [A violation
under this subsection shall be assessed at $500 if the carrier
initiates compensation or files a notice of refusal within five
working days of the date required by Subsection (a), $1,500 if the
carrier initiates compensation or files a notice of refusal more
than five and less than 16 working days of the date required by
Subsection (a), $2,500 if the carrier initiates compensation or
files a notice of refusal more than 15 and less than 31 working days
of the date required by Subsection (a), or $5,000 if the carrier
initiates compensation or files a notice of refusal more than 30
days after the date required by Subsection (a). The administrative
penalties are not cumulative.]
SECTION 20. Section 410.023, Labor Code, is amended by
amending Subsection (b) and adding Subsections (c) and (d) to read
as follows:
(b) The division shall require the party requesting the
benefit review conference to provide documentation of efforts made
to resolve the disputed issues before the request was submitted.
(c) The commissioner by rule shall:
(1) adopt guidelines regarding the type of information
necessary to satisfy the requirements of Subsection (b); and
(2) establish a process through which the division
evaluates the sufficiency of the documentation provided under
Subsection (b) [this requirement].
(d) The division may deny a request for a benefit review
conference if the party requesting the benefit review conference
does not provide the documentation required under Subsection (b).
SECTION 21. Section 410.028, Labor Code, is amended to read
as follows:
Sec. 410.028. FAILURE TO ATTEND; ADMINISTRATIVE VIOLATION.
(a) A scheduled benefit review conference shall be conducted even
though a party fails to attend unless the benefit review officer
determines that good cause, as defined by commissioner rule, exists
to reschedule the conference.
(b) If a party to a benefit review conference under Section
410.023 requests that the benefit review conference be rescheduled
under this section, the party must submit a request in the same
manner as an initial request under Section 410.023. The division
shall evaluate a request for a rescheduled benefit review
conference received under this section in the same manner as an
initial request received under Section 410.023.
(c) If a [A party commits an administrative violation if
the] party fails to request that a benefit review conference be
rescheduled in the time required by commissioner rule or fails to
attend a benefit review conference without good cause as defined
[determined] by commissioner rule, the party forfeits the party's
entitlement to attend a benefit review conference on the issue in
dispute, unless a [the] benefit review officer is authorized to
schedule an additional benefit review conference under Section
410.026(b).
(d) The commissioner shall adopt rules necessary to
implement and enforce this section, including rules that:
(1) define good cause; and
(2) establish deadlines for requesting that a benefit
review conference be rescheduled under Subsection (b).
SECTION 22. Section 410.203(b), Labor Code, is amended to
read as follows:
(b) The appeals panel may:
(1) reverse the decision of the hearings officer and
render a new decision; [or]
(2) reverse the decision of the hearings officer and
remand the case to the hearing officer for further consideration
and development of evidence; or
(3) affirm the decision of the hearings officer in a
case described by Section 410.204(a-1).
SECTION 23. Section 410.204, Labor Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) The appeals panel shall review each request and issue a
written decision on each reversed or remanded case. The appeals
panel may issue a written decision on an affirmed case as described
by Subsection (a-1). The decision must be in writing and shall be
issued not later than the 45th day after the date on which the
written response to the request for appeal is filed. The appeals
panel shall file a copy of the decision with the commissioner.
(a-1) An appeals panel may only issue a written decision in
a case in which the panel affirms the decision of a hearings officer
if the case:
(1) is a case of first impression;
(2) involves a recent change in law; or
(3) involves errors at the contested case hearing that
require correction but do not affect the outcome of the hearing,
including:
(A) findings of fact for which insufficient
evidence exists;
(B) incorrect conclusions of law;
(C) findings of fact or conclusions of law
regarding matters that were not properly before the hearings
officer; and
(D) legal errors not otherwise described by this
subdivision.
SECTION 24. Sections 413.031(k) and (k-1), Labor Code, are
amended to read as follows:
(k) A party to a medical dispute [, other than a medical
dispute regarding spinal surgery subject to Subsection (l) and a
dispute subject to Section 413.0311,] that remains unresolved after
a review of the medical service under this section is entitled to a
hearing under Section 413.0311 or 413.0312, as applicable. [A
hearing under this subsection shall be conducted by the State
Office of Administrative Hearings not later than the 60th day after
the date on which the party notifies the division of the request for
a hearing. The hearing shall be conducted in the manner provided
for a contested case under Chapter 2001, Government Code.]
(k-1) A party who has exhausted all administrative remedies
described by [under] Subsection (k) and who is aggrieved by a final
decision of the division or the State Office of Administrative
Hearings may seek judicial review of the decision. Judicial review
under this subsection shall be conducted in the manner provided for
judicial review of a contested case under Subchapter G, Chapter
2001, Government Code.
SECTION 25. The heading to Section 413.0311, Labor Code, is
amended to read as follows:
Sec. 413.0311. REVIEW OF [CERTAIN] MEDICAL NECESSITY
DISPUTES; CONTESTED CASE HEARING.
SECTION 26. Section 413.0311(a), Labor Code, is amended to
read as follows:
(a) This section applies only to [the following medical
disputes that remain unresolved after any applicable review under
Sections 413.031(b) through (i):
[(1) a medical fee dispute in which the amount of
reimbursement sought by the requestor in its request for medical
dispute resolution does not exceed $2,000;
[(2)] an appeal of an independent review organization
decision regarding determination of the [retrospective] medical
necessity for a health care service [for which the amount billed
does not exceed $3,000; and
[(3) an appeal of an independent review organization
decision regarding determination of the concurrent or prospective
medical necessity for a health care service].
SECTION 27. Subchapter C, Chapter 413, Labor Code, is
amended by adding Section 413.0312 to read as follows:
Sec. 413.0312. REVIEW OF MEDICAL FEE DISPUTES; BENEFIT
REVIEW CONFERENCE. (a) This section applies only to a medical fee
dispute that remains unresolved after any applicable review under
Sections 413.031(b) through (i).
(b) Subject to Subsection (e), a party to a medical fee
dispute described by Subsection (a) must adjudicate the dispute in
the manner required by Subchapter B, Chapter 410.
(c) At a benefit review conference conducted under this
section, the parties to the dispute may not resolve the dispute by
negotiating fees that are inconsistent with any applicable fee
guidelines adopted by the commissioner.
(d) If issues remain unresolved after a benefit review
conference, the parties may elect to engage in arbitration as
provided by Section 410.104.
(e) If arbitration is not elected as described by Subsection
(d), a party to a medical fee dispute described by Subsection (a) is
entitled to a contested case hearing. A hearing under this
subsection shall be conducted by the State Office of Administrative
Hearings in the manner provided for a contested case under Chapter
2001, Government Code.
(f) The commissioner or the division may participate in a
contested case hearing conducted under Subsection (e) if the
hearing involves the interpretation of fee guidelines adopted by
the commissioner. The division and the department are not
considered to be parties to the medical fee dispute for purposes of
this section.
(g) Except as otherwise provided by this subsection, the
nonprevailing party shall reimburse the division for the costs for
services provided by the State Office of Administrative Hearings
under this section. If the injured employee is the nonprevailing
party, the insurance carrier shall reimburse the division for the
costs for services provided by the State Office of Administrative
Hearings under this section. The party required to reimburse the
division under this subsection shall remit payment to the division
not later than the 30th day after the date of receiving a bill or
statement from the division.
(h) The State Office of Administrative Hearings shall
timely notify the division if a dispute is dismissed before
issuance of a decision under this section. In the event of a
dismissal, the party requesting the hearing, other than the injured
employee, shall reimburse the division for the costs for services
provided by the State Office of Administrative Hearings unless
otherwise agreed by the parties. If the injured employee requested
the hearing, the insurance carrier shall reimburse the division for
the costs for services provided by the State Office of
Administrative Hearings unless otherwise agreed by the parties.
The responsible party shall remit payment to the division not later
than the 30th day after the date of receiving a bill or statement
from the division.
(i) The State Office of Administrative Hearings shall
identify the nonprevailing party and any costs for services
provided by the office under this section in its final decision.
Money collected by the division under this section shall be
deposited in the general revenue fund to the credit of the Texas
Department of Insurance operating account.
(j) Interest on the amount of reimbursement required by this
section that remains unpaid accrues at a rate provided by Section
401.023 beginning on the 45th day after the date the division
submits the bill or statement to a party until the date the
reimbursement is paid. Failure to pay the division as required by
this section is an administrative violation under this subtitle.
(k) The commissioner by rule shall establish procedures to
enable the division to charge a party to a medical fee dispute,
other than an injured employee, for the costs of services provided
by the State Office of Administrative Hearings.
SECTION 28. Section 413.044(b), Labor Code, is amended to
read as follows:
(b) Sanctions imposed under Subsection (a) may include:
(1) revocation of certification for a designated
doctor on [removal or suspension from] the division list of
designated doctors; or
(2) restrictions on the reviews made by the person as a
designated doctor.
SECTION 29. Section 413.0512, Labor Code, is amended by
amending Subsections (b), (c), (d), (e), and (f) and adding
Subsections (g) and (h) to read as follows:
(b) The agencies that regulate health professionals who are
licensed or otherwise authorized to practice a health profession
under Title 3, Occupations Code, and who are involved in the
provision of health care as part of the workers' compensation
system in this state [Texas State Board of Medical Examiners and the
Texas Board of Chiropractic Examiners, with input from their
respective professional associations,] shall develop lists of
health care providers [physicians and chiropractors] licensed or
otherwise regulated by those agencies who have demonstrated
experience in workers' compensation or utilization review. The
medical advisor shall consider appointing some of the members of
the medical quality review panel from the names on those lists and,
when appointing members of the medical quality review panel, shall
select specialists from various health care specialty fields to
serve on the panel to ensure that the membership of the panel has
expertise in a wide variety of health care specialty fields. The
medical advisor shall also consider nominations for the panel made
by labor, business, and insurance organizations.
(c) The medical quality review panel shall recommend to the
medical advisor:
(1) appropriate action regarding doctors, other
health care providers, insurance carriers, utilization review
agents, and independent review organizations; [and]
(2) the addition or deletion of doctors from the list
of approved doctors under Section 408.023; and
(3) the certification, revocation of certification,
or denial of renewal of certification [or the list] of a designated
doctor [doctors established] under Section 408.1225.
(d) A person who serves on the medical quality review panel
is immune from suit and from civil liability for an act performed,
or a recommendation made, within the scope of the person's
functions as a member of the panel if the person acts without malice
and in the reasonable belief that the action or recommendation is
warranted by the facts known to that person. In the event of a civil
action brought against a member of the panel that arises from the
person's participation on the panel, the person is entitled to the
same protections afforded the commissioner [a commission member]
under Section 402.00123 [402.010].
(e) The actions of a person serving on the medical quality
review panel do not constitute utilization review and are not
subject to Chapter 4201 [Article 21.58A], Insurance Code.
(f) A member of the medical quality review panel[, other
than a chiropractor,] who reviews a specific workers' compensation
case is subject to Section 408.0043, 408.0044, or [. A chiropractor
who reviews a specific workers' compensation case is subject to
Section] 408.0045, as applicable.
(g) The medical advisor shall notify the division if the
medical advisor determines that:
(1) it is no longer necessary for the medical quality
review panel to include a member that practices in a particular
health care specialty field; or
(2) there is a need for the panel to include a member
that practices in a particular health care specialty field not
represented on the panel.
(h) If the division receives notice from the medical advisor
under Subsection (g)(2), the division may enter into agreements
with other state agencies to access, as necessary, expertise in
that health care specialty field.
SECTION 30. Subchapter E, Chapter 413, Labor Code, is
amended by adding Sections 413.05115, 413.05121, and 413.05122 to
read as follows:
Sec. 413.05115. MEDICAL QUALITY REVIEW PROCESS. (a) The
division shall develop, and the commissioner shall adopt, criteria
concerning the medical case review process under this subchapter.
In developing the criteria, and before adopting the criteria, the
division and the commissioner, as applicable, must consult with the
medical advisor and seek input from potentially affected parties,
including health care providers and insurance carriers.
(b) The criteria developed and adopted under this section
must establish a clear process or processes:
(1) for handling complaint-based medical case
reviews; and
(2) through which the division selects health care
providers or other entities for a compliance audit or review.
(c) The division shall make the criteria developed and
adopted under this section available on the Internet website
maintained by the division.
Sec. 413.05121. QUALITY ASSURANCE PANEL. (a) The medical
advisor shall establish the quality assurance panel within the
medical quality review panel to:
(1) provide an additional level of evaluation in
medical case reviews; and
(2) assist the medical advisor in performing the
advisor's duties under Section 413.0511(b)(6) and the medical
quality review panel in performing that panel's duties under
Section 413.0512.
(b) Members of the quality assurance panel shall evaluate
medical care and recommend enforcement actions to the medical
advisor.
(c) The quality assurance panel shall meet periodically to
discuss issues and otherwise offer assistance to the medical
advisor and the medical quality review panel under Subsection
(a)(2).
Sec. 413.05122. MEDICAL QUALITY REVIEW PANEL: RULES;
TRAINING. (a) The commissioner, after consultation with the
medical advisor, shall adopt rules concerning the operation of the
medical quality review panel, including rules that establish:
(1) the qualifications necessary for a health care
provider to serve on the medical quality review panel;
(2) the composition of the medical quality review
panel, including the number of members to be included on the panel
and the health care specialty fields required to be represented by
the members of the panel;
(3) the maximum length of time a health care provider
may serve on the medical quality review panel;
(4) a policy defining situations that constitute a
conflict of interest for a member of the medical quality review
panel;
(5) procedures and grounds for removing a member of
the medical quality review panel from the panel, including as a
ground for removal that a member is repeatedly delinquent in
conducting case reviews; and
(6) a procedure through which members of the medical
quality review panel are notified concerning the status and
enforcement outcomes of cases resulting from the medical quality
review process.
(b) In addition to the rules required under Subsection (a),
the commissioner shall adopt rules concerning the training
requirements for members of the medical quality review panel. The
rules adopted under this subsection must ensure that panel members
are fully aware of any requirements imposed by this subtitle
concerning the medical quality review process and the division's
goals concerning the process. The rules adopted under this
subsection may require members to receive training on any topic
determined by the division or the commissioner to be relevant to the
operations of the panel and must require members of the panel to
receive training concerning:
(1) administrative violations that affect the
delivery of appropriate medical care;
(2) the confidentiality requirements described by
Section 413.0513 and the immunity from liability provided to
members of the panel under Section 413.054; and
(3) the medical quality review criteria adopted under
Section 413.05115.
SECTION 31. Section 413.054(a), Labor Code, is amended to
read as follows:
(a) A person who performs services for the division as a
designated doctor, an independent medical examiner, a doctor
performing a medical case review, or a member of a peer review panel
has the same immunity from liability as the commissioner under
Section 402.00123 [402.0024].
SECTION 32. Section 414.005, Labor Code, is amended to read
as follows:
Sec. 414.005. INVESTIGATION UNIT. (a) The division shall
maintain an investigation unit to conduct investigations relating
to alleged violations of this subtitle, commissioner rules, or a
commissioner order or decision, with particular emphasis on
violations of Chapters 415 and 416.
(b) As often as the commissioner considers necessary, the
commissioner or the investigation unit may review the operations of
a person regulated by the division, including an agent of the person
performing functions regulated by the division, to determine
compliance with this subtitle.
(c) The review described by Subsection (b) may include
on-site visits to the person's premises. The commissioner is not
required to announce an on-site visit in advance.
(d) During an on-site visit, a person regulated by the
division shall make available to the division all records relating
to the person's participation in the workers' compensation system.
(e) The commissioner by rule shall prescribe the procedures
to be used for both announced and unannounced on-site visits
authorized under this section, including specifying the types of
records subject to inspection.
SECTION 33. Section 415.0035(e), Labor Code, is amended to
read as follows:
(e) A person regulated by the division under this title [An
insurance carrier or health care provider] commits an
administrative violation if the [that] person violates this
subtitle or a rule, order, or decision of the commissioner.
SECTION 34. Section 415.008(a), Labor Code, is amended to
read as follows:
(a) A person commits an administrative [a] violation if the
person, to obtain or deny a payment of a workers' compensation
benefit or the provision of a benefit for the person or another,
knowingly or intentionally:
(1) makes a false or misleading statement;
(2) misrepresents or conceals a material fact;
(3) fabricates, alters, conceals, or destroys a
document; or
(4) conspires to commit an act described by
Subdivision (1), (2), or (3).
SECTION 35. Sections 415.009 and 415.010, Labor Code, are
amended to read as follows:
Sec. 415.009. FRIVOLOUS ACTIONS; ADMINISTRATIVE VIOLATION.
[(a)] A person commits an administrative [a] violation if the
person brings, prosecutes, or defends an action for benefits under
this subtitle or requests initiation of an administrative violation
proceeding that does not have a basis in fact or is not warranted by
existing law or a good faith argument for the extension,
modification, or reversal of existing law.
[(b) A violation under Subsection (a) is a Class B
administrative violation.]
Sec. 415.010. BREACH OF AGREEMENT; ADMINISTRATIVE
VIOLATION. [(a)] A party to an agreement approved by the division
commits an administrative [a] violation if the person breaches a
provision of the agreement.
[(b) A violation under Subsection (a) is a Class C
administrative violation.]
SECTION 36. The heading to Subchapter B, Chapter 415, Labor
Code, is amended to read as follows:
SUBCHAPTER B. SANCTIONS [PENALTIES]
SECTION 37. Section 415.021(a), Labor Code, is amended to
read as follows:
(a) In addition to any other provisions in this subtitle
relating to violations, a person commits an administrative
violation if the person violates, fails to comply with, or refuses
to comply with this subtitle or a rule, order, or decision of the
commissioner, including an emergency cease and desist order issued
under Section 415.0211. In addition to any sanctions,
administrative penalty, or other remedy authorized by this
subtitle, the commissioner may assess an administrative penalty
against a person who commits an administrative violation. The
administrative penalty shall not exceed $25,000 per day per
occurrence. Each day of noncompliance constitutes a separate
violation. The commissioner's authority under this chapter is in
addition to any other authority to enforce a sanction, penalty,
fine, forfeiture, denial, suspension, or revocation otherwise
authorized by law.
SECTION 38. Subchapter B, Chapter 415, Labor Code, is
amended by adding Section 415.0211 to read as follows:
Sec. 415.0211. EMERGENCY CEASE AND DESIST ORDER. (a) The
commissioner ex parte may issue an emergency cease and desist order
if:
(1) the commissioner believes a person regulated by
the division under this title is engaging in conduct violating a
law, rule, or order; and
(2) the commissioner believes that the alleged conduct
under Subdivision (1) will result in harm to the health, safety, or
welfare of another person.
(b) On issuance of an order under Subsection (a), the
commissioner shall serve on the affected person an order that
contains a statement of the charges and requires the person
immediately to cease and desist from the acts, methods, or
practices stated in the order. The commissioner shall serve the
order by registered or certified mail, return receipt requested, to
the affected person's last known address. The order is final on the
31st day after the date the affected person receives the order,
unless the affected person requests a hearing under Subsection (c).
(c) A person affected by an order is entitled to request a
hearing to contest the order. The affected person must request the
hearing not later than the 30th day after the date the person
receives the order required by Subsection (b). A request to contest
an order must:
(1) be in writing;
(2) be directed to the commissioner; and
(3) state the grounds for the request to set aside or
modify the order.
(d) On receiving a request for a hearing, the commissioner
shall serve notice of the time and place of the hearing. The
hearing is subject to the procedures for a contested case under
Chapter 2001, Government Code. The hearing shall be held not later
than the 10th day after the date the commissioner receives the
request for a hearing unless the parties mutually agree to a later
hearing date. At the hearing, the person requesting the hearing is
entitled to show cause why the order should not be affirmed.
Following receipt of the proposal for decision from the State
Office of Administrative Hearings regarding the hearing, the
commissioner shall wholly or partly affirm, modify, or set aside
the order.
(e) Pending a hearing under this section, an order continues
in effect unless the order is stayed by the commissioner.
SECTION 39. Section 402.072, Labor Code, is transferred to
Subchapter B, Chapter 415, Labor Code, and redesignated as Section
415.0215, Labor Code, to read as follows:
Sec. 415.0215 [402.072]. SANCTIONS. (a) The division may
impose sanctions against any person regulated by the division under
this subtitle.
(b) Only the commissioner may impose:
(1) a sanction that deprives a person of the right to
practice before the division or of the right to receive
remuneration under this subtitle for a period exceeding 30 days; or
(2) another sanction suspending for more than 30 days
or revoking a license, certification, or permit required for
practice in the field of workers' compensation.
(c) A sanction imposed by the division is binding pending
appeal.
SECTION 40. Sections 415.025, 415.032, 415.033, and
415.034, Labor Code, are amended to read as follows:
Sec. 415.025. REFERENCES TO A CLASS OF VIOLATION OR
PENALTY. A reference in this code or other law, or in rules of the
former Texas Workers' Compensation Commission or the commissioner,
to a particular class of violation, administrative violation, or
penalty shall be construed as a reference to an administrative
penalty. An [Except as otherwise provided by this subtitle, an]
administrative penalty may not exceed $25,000 per day per
occurrence. Each day of noncompliance constitutes a separate
violation.
Sec. 415.032. NOTICE OF POSSIBLE ADMINISTRATIVE VIOLATION;
RESPONSE. (a) If investigation by the division indicates that an
administrative violation has occurred, the division shall notify
the person alleged to have committed the violation in writing of:
(1) the charge;
(2) the proposed sanction [penalty];
(3) the right to consent to the charge and the sanction
[penalty]; and
(4) the right to request a hearing.
(b) Not later than the 20th day after the date on which
notice is received, the charged party shall:
(1) remit the amount of the sanction [penalty] to the
division or otherwise consent to the imposed sanction; or
(2) submit to the division a written request for a
hearing.
Sec. 415.033. FAILURE TO RESPOND. If, without good cause, a
charged party fails to respond as required under Section 415.032,
[the penalty is due and] the division shall initiate enforcement
proceedings.
Sec. 415.034. HEARING PROCEDURES. [(a)] On the request of
the charged party or the commissioner, the State Office of
Administrative Hearings shall set a hearing. The hearing shall be
conducted in the manner provided for a contested case under Chapter
2001, Government Code (the administrative procedure law).
[(b) At the close of the hearing, the hearing officer
conducting the hearing shall make findings of fact and conclusions
of law and shall issue a written decision. If the hearing officer
determines that an administrative violation has occurred, the
hearing officer shall include in the decision the amount of the
administrative penalty assessed and shall order payment of the
penalty.
[(c) The findings of fact, the decision, and the order shall
be sent immediately to the charged party.]
SECTION 41. Subchapter C, Chapter 415, Labor Code, is
amended by adding Section 415.036 to read as follows:
Sec. 415.036. STANDARD OF JUDICIAL REVIEW OF COMMISSIONER'S
ORDER. An order of the commissioner is subject to judicial review
under the substantial evidence rule.
SECTION 42. Subchapter C, Chapter 504, Labor Code, is
amended by adding Section 504.054 to read as follows:
Sec. 504.054. CONTESTED CASE HEARING ON AND JUDICIAL REVIEW
OF INDEPENDENT REVIEW. (a) A party to a medical dispute that
remains unresolved after the review described by Section
504.053(d)(3) is entitled to a contested case hearing. A hearing
under this subsection shall be conducted by the division in the same
manner as a hearing conducted under Section 413.0311.
(b) The hearing officer conducting the contested case
hearing under Subsection (a) shall consider any treatment
guidelines adopted by the political subdivision or pool that
provides medical benefits under Section 504.053(b)(2) if those
guidelines meet the standards provided by Section 413.011(e).
(c) A party that has exhausted all administrative remedies
under Subsection (a) and is aggrieved by a final decision of the
division may seek judicial review of the decision.
(d) Judicial review under Subsection (c) shall be conducted
in the manner provided for judicial review of a contested case under
Subchapter G, Chapter 2001, Government Code, and is governed by the
substantial evidence rule.
(e) A decision of the independent review organization is
binding during the pendency of a dispute.
SECTION 43. The following provisions of the Labor Code are
repealed:
(1) Sections 415.0035(c), (d), and (f);
(2) Section 415.0036(c);
(3) Section 415.004;
(4) Section 415.008(b); and
(5) Section 415.022.
SECTION 44. Sections 1305.355(e), (f), and (g), Insurance
Code, as amended by this Act, and Section 1305.356, Insurance Code,
as added by this Act, apply to a medical dispute based on a review by
an independent review organization under Section 1305.355 that is
commenced on or after June 1, 2012. A dispute based on a review by
an independent review organization under Section 1305.355 that is
commenced before June 1, 2012, is governed by the law in effect
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 45. (a) Section 402.073, Labor Code, as amended by
this Act, applies only to an administrative hearing that is
conducted on or after the effective date of this Act. An
administrative hearing conducted before the effective date of this
Act is governed by the law in effect when the hearing was conducted,
and the former law is continued in effect for that purpose.
(b) The State Office of Administrative Hearings and the
division of workers' compensation of the Texas Department of
Insurance shall adopt an updated memorandum of understanding
required by Section 402.073, Labor Code, as amended by this Act, not
later than June 1, 2012.
SECTION 46. Section 403.001, Labor Code, as amended by this
Act, and Section 403.008, Labor Code, as added by this Act, apply
only to an administrative penalty assessed for an administrative
violation that occurs on or after the effective date of this Act.
An administrative penalty assessed for an administrative violation
that occurred before the effective date of this Act is governed by
the law in effect when the violation occurred, and the former law is
continued in effect for that purpose.
SECTION 47. (a) The commissioner of workers' compensation
shall adopt the rules regarding certification of designated doctors
required by Section 408.1225, Labor Code, as amended by this Act,
not later than January 1, 2013.
(b) A designated doctor is not required to obtain
certification under Section 408.1225, Labor Code, as amended by
this Act, before January 1, 2013.
(c) Sections 408.1225(b), 413.044(b), and 413.0512(c),
Labor Code, as amended by this Act, apply only to a disciplinary
action taken against a designated doctor on or after January 1,
2013. A disciplinary action taken against a designated doctor
before that date is governed by the law as it existed immediately
before the effective date of this Act, and the former law is
continued in effect for that purpose.
(d) Section 408.0041, Labor Code, as amended by this Act,
applies only to a medical examination by a designated doctor that
occurs on or after January 1, 2013. A medical examination that
occurs before that date is governed by the law as it existed
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
SECTION 48. The change in law made by this Act in amending
Sections 409.021, 415.0035, 415.008, 415.009, 415.010, 415.021,
415.025, 415.032, 415.033, and 415.034, Labor Code, and Sections
2051.151 and 2053.206, Insurance Code, adding Section 415.0211,
Labor Code, and repealing Sections 415.0035(c), (d), and (f),
415.0036(c), 415.004, 415.008(b), and 415.022, Labor Code, applies
only to an administrative violation that occurs on or after the
effective date of this Act. An administrative violation that
occurs before the effective date of this Act is governed by the law
in effect on the date the violation occurred, and the former law is
continued in effect for that purpose.
SECTION 49. Sections 410.023 and 410.028, Labor Code, as
amended by this Act, apply only to a benefit review conference
requested on or after the effective date of this Act. A benefit
review conference requested before the effective date of this Act
is governed by the law in effect immediately before the effective
date of this Act, and that law is continued in effect for that
purpose.
SECTION 50. Sections 413.031(k) and (k-1) and 413.0311(a),
Labor Code, as amended by this Act, and Section 413.0312, Labor
Code, as added by this Act, apply only to the appeal of a medical fee
dispute under those sections that is based on a review conducted by
the division of workers' compensation of the Texas Department of
Insurance on or after June 1, 2012. The appeal of a medical fee
dispute that is based on a review conducted by the division of
workers' compensation before June 1, 2012, is governed by the law in
effect immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 51. Section 414.005, Labor Code, as amended by this
Act, applies only to an investigation or review conducted on or
after the effective date of this Act. An investigation or review
conducted before the effective date of this Act is governed by the
law in effect when the investigation or review was conducted, and
the former law is continued in effect for that purpose.
SECTION 52. Section 415.036, Labor Code, as added by this
Act, applies only to an order of the commissioner of workers'
compensation issued on or after the effective date of this Act. An
order of the commissioner that was issued before the effective date
of this Act is governed by the law in effect when the order was
issued, and the former law is continued in effect for that purpose.
SECTION 53. This Act takes effect September 1, 2011.
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