F O L I O   C L I E N T   N E W S L E T T E R   B Y   F L A H I V E ,   O G D E N   &   L A T S O N �

New MaNageMeNt; Old Values

In this Issue…

Instructions for filing Tpa annual Report .....p. 10

TDI proposes Network Examination Rule .....p. 17

©2008 – Flahive, Ogden & Latson J A N U A RY   2 0 0 8   n   V O L U M E   � 3 ,   N O .   �

A   P R I V I L E G E D   AT T O R N E Y   -   C L I E N T   C O M M U N I C AT I O N   B Y   F L A H I V E ,   O G D E N   &   L AT S O N

For the first time in its history, someone other than a Flahive, an Ogden, or a Latson, is leading the law firm of Flahive, Ogden & Latson. The firm’s new Managing Shareholder, Steve Tipton, will set the course for the office’s attorneys and staff. Four long-time firm members, James Sheffield, Bobby Stokes, Kevin MacEwan and Lynette Phillips, will assist him.

The management structure of the firm formally changed when Jack Latson took “of counsel” status with the firm on December 31, 2007. Jack made his decision to step back several years ago, and the new management team was formed shortly thereafter. The group has gradually taken the reins of the firm since that time.

“We are following in the footsteps of some very talented lawyers,” says Tipton, speaking of Ted Flahive, Ron Ogden and Jack Latson. “They set the course for this firm years ago. It is an honor to have the chance to serve our clients in the same way the firm’s founders did.”

Together, FO&L’s new management shares more than a century of experience defending clients in Texas comp cases. Among them these five lawyers hold nine board certifications from the Texas Board of Legal Specialization.

“This transition is merely a continuation of long established and trusted relationships,” says James Sheffield. “Our years together coupled

with our shared experiences will provide FO&L’s clients with a high comfort level.”

Each member shares a common experience in the comp business. “We each started the same way – handling hearings before the Industrial Accident Board in cities like Lufkin, Sulphur Springs, Eagle Pass, El Paso and Lubbock,” says Kevin MacEwan.

“I like the fact that we all started from the ground up with this firm,” says Lynette Phillips. “We know what our clients need, because we have all been there in the trenches with them.”

Two members of the new management team – James Sheffield and Lynette Phillips – were Texas Assistant Attorneys General before coming to work for the firm. Two others – Steve Tipton and Bobby Stokes – clerked for Texas appellate courts before starting with the firm. Kevin MacEwan maintained a defense

Continued on p. 3

Back Row: Bobby Stokes, Steve Tipton, James Sheffield. Front Row: Kevin MacEwan, Lynette Phillips.

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Flahive, Ogden & Latson, a 24 lawyer firm, defends contested workers’ compensation cases statewide every day. The firm has represented insurance companies and employers before the Texas Workers’ Compensation agency for more than

50 years. For general questions concerning the newsletter call: (512) 435-2234.

Flahive, Ogden & LatsonP.O. Box 13367

Austin Texas 78711

An electronic copy of FOLIO, our monthly client newsletter, is now available for

clients. If you are interested in receiving FOLIO by email, please let us know.

FOLIO is prepared for the exclusive use of Flahive, Ogden & Latson clients only. It contains privileged communications and further sharing of this newsletter

(in either hard copy or electronic format) outside your company without the express written consent of Flahive,

Ogden & Latson is not permitted.

Our regular office hours are 8:15 a.m. to 4:45 p.m. If you need to call after 4:45,

please call Patsy Shelton at (512) 435-2234. She will be on duty until 6:00 p.m. daily.

FO&l OFFICe HOuRsDon’t wait until the last hour of the day for deadline filing. Any faxes with information due must be received by 3:30 p.m. for any deadline handling for same day delivery to the Division, and faxed according to the fax directory listed on the last page of FOLIO.

Furthermore, if you have a last minute deadline, call our office by 3:00 p.m. and

speak with Tillie Aguirre or Patsy Shelton to advise that a last minute filing is necessary to meet a deadline. We will be watching and waiting for the fax. Otherwise, last

minute faxes could delay receipt. Our last daily run to the Division will be at 4:00 p.m.,

in order to get across town to meet their 5:00 closing time.

state MIleage Rates aNd tRaVel expeNse Rates

HaVe INCReased

Effective January 1, 2008, the State has increased its travel expense reimbursement rates. Because workers’ compensation travel reimbursement is tied to the rate of reimbursement for state employees, the amount of reimbursement to be given to injured workers for travel incurred on or after January 1, 2008 has also increased.

Effective January 1, 2008 the current travel reimbursement rates are:

Lodging: up to $85.00 per day Meals: up to $36.00 per day Mileage: 50.5 cents per mile (new as of January 1, 2008)

A claimant may request reimbursement from a carrier for travel expenses incurred for medical treatment for the injured worker’s compensable injury when: medical treatment for the compensable injury is not reasonably available within 30 miles from where the employee lives; and the distance traveled to secure medical treatment is greater than 30 miles one-way. Rule 134.110(a).

The injured worker must submit a Request for Travel Reimbursement (DWC Form-48) to the Carrier within one year of the date the expenses were incurred. Rule 134.110(b). The request must include documentation or evidence (such as itemized receipts) of the amount of the expense. Rule 134.110(c). Reimbursement is based on the travel rate for state employees on the date of travel. Rule 134.110(d). See Rule 134.110(d) for the methods used in measuring travel mileage.

Also, please note that the Division has taken the position recently (APD 060440-s) that reimbursement for travel expenses, including food and lodging is only available to an injured worker, and is not available under Rule 134.110 for family members of an injured worker.

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practice with an Abilene law firm before joining the firm.

“This firm’s reputation and experience has never been stronger,” says Bobby Stokes. “Yet, we still have a chance to bring new ideas and technologies to our practice, and to increase our level of service to each of our clients. We are looking forward to that.”

dwC INCReases MedICal Fee ReIMbuRseMeNt

Rates take effect March 1, 2008The Division has now adopted the much-discussed new medical fee guidelines for professional services. The Division amended Rule 134.1 and created new Rule 134.2, related to Medical Reimbursement Policies. The Division also created new Rules 134.203 and 134.204, regarding Medical Fee Guidelines.

These new rules will become effective for services rendered March 1, 2008 and after. Carriers and medical bill review vendors will need the additional time in the interim to prepare their systems for the new billing procedures and amounts of reimbursement.

For the first time, medical fees will be reimbursed at different rates, depending upon whether the physician is performing surgical or non-surgical services. Although the reimbursement rates for both classes of service will increase, surgical services will be reimbursed at a much greater rate.

For comparison purposes to the current 125% of Medicare multiplier, the new 2008 conversion factors are about 145% of Medicare for non-facility services and about 195% of Medicare for surgical, facility-based services. For 2008, this is an estimated increase in non-facility professional services of $51M and for surgical services in a facility of $20.6M.

Rule 134.1 is amended to include definitions of MAR, and “fair and reasonable”, and to incorporate the effect of networks on these terms.

Rule 134.2 is a new rule that lists all the zip codes that will receive the specific workers’ compensation incentive payments (10%). These will replace the current Medicare locations that are based upon different criteria. The medical service must be provided in a listed zip code to receive the incentive.

The current Medical Fee Guideline for physician services is Rule 134.202. That Rule is repealed and replace by Rules 134.203 and 134.204.

Rule 134.203 relates to medical fees for reimbursements predominantly based upon conversion factors and Medicare. For service categories of Evaluation & Management, General Medicine, Physical Medicine and Rehabilitation, Radiology, Pathology, Anesthesia, and Surgery when performed in an office setting, the established conversion factor to be applied is $52.83. For Surgery when performed in a facility setting, the Conversion Factor for 2008 will be $66.32.

As before, the payments are based upon the Medicare RBRVS system, which assigns a Relative Value Unit (RVU) to each procedure (CPT Code) which is multiplied by a geographical modifier, then by the Conversion Factor, converting the procedure to dollar values. Rather than adopt the Medicare conversion factor, the Division has adopted its own Conversions Factors based upon Texas statutory criteria.

The current Guideline uses a percentage of the final product of the Medicare calculation (125%). The new Guideline will, instead, automatically adjust only the Conversion Factor. The 2008 Conversion Factors will be adjusted annually based upon the increase or decrease in the Medicare Economic Index (MEI). Since this index is publicly tracked and Medicare usually makes public in November its increase or decrease for the next calendar year, Carriers can (theoretically) predict and anticipate future changes. The Conversion Factors in this Rule will be increased or decreased proportionally

New Management; Old Values – continued from p. 1

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for each calendar year by the change in the MEI. However, because these annual changes will be known in advance, the Division has reserved the right to adjust those changes to the Conversion Factors through additional rulemaking, if factors not relevant to Texas workers’ compensation are perceived to be influencing the Medicare indexing decisions.

Rule 134.204 relates to workers’ compensation-specific services that are not covered by Medicare Fee Schedules, such as treating doctor case management fees, designated doctor fees, FCEs and the like. These changes reflect new duties under the rules for participants and fill in gaps found in prior rules. The specific charges for work conditioning, work hardening, chronic pain management and licensed home health agencies are found here. All the workers’ compensation-specific modifiers are found here as well.

COMMIssIONeR betts sIgNs MedICal Fee

guIdelINe aNd HOspItal Fee guIdelINes Rules

AUSTIN, TX — Commissioner of Workers’ Compensation Albert Betts has signed rules to update a medical fee guideline for health care providers, to establish a hospital outpatient fee guideline and to update a hospital inpatient fee guideline for the Texas workers’ compensation system (28 Texas Administrative Code §§134.1, 134.2, 134.203, 134.204, 134.403 and 134.404). The medical fee guideline rules relate to professional service reimbursements to health care providers who provide medical treatments and services to injured employees on or after March 1, 2008. The outpatient and inpatient hospital fee guidelines rules apply to inpatient admissions and outpatient dates of service for injured employees on or after March 1, 2008.

In accordance with Labor Code § 413.011, the medical fee guideline and outpatient

and inpatient hospital fee guidelines use the Medicare system as a framework for billing and reimbursement methods in the workers’ compensation system. The guidelines establish standardized formats for billing and reimbursement as used in group health and Medicare systems. Also, in accordance with Labor Code §408.0052, the medical fee guideline establishes new incentive payments to health care providers caring for injured employees in areas of the state designated as underserved by Commissioner Betts.

The medical fee guideline and outpatient and inpatient hospital fee guidelines rules are posted on the agency website at: www.tdi.state.

texas supReMe COuRt alteRs “pROduCINg Cause” deFINItION

The Texas Supreme Court has redefined the meaning of “Producing Cause” in a case decided late in December 2007. While the court’s decision was announced in a products liability opinion, it will have a significant impact on workers’ compensation cases because entitlement to benefits in those cases is often governed by the producing cause standard.

In Ford Motor Company v. Ledesma, the automaker complained that the trial court had improperly instructed the jury on producing cause. The trial court, following a Texas Pattern Jury Charges instruction, instructed the jury: “‘Producing cause’ means an efficient, exciting, or contributing cause that, in a natural sequence, produces the incident in question. There may be more than one producing cause.”

The High Court adopted a more conservative standard, accepting Ford’s contention that producing cause “means that cause which, in a natural sequence, was a substantial factor in bringing about an event, and without which the event would not have occurred. There may be more than one producing cause.”

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Continued on p. 9

The court’s reasoning is outlined below:

We agree with Ledesma that the second part of the court’s definition, recognizing that there may be more than one producing cause of an event, is correct. And we have seemed to sanction the first part, employing it ourselves several times in describing producing cause. But we have also described a producing cause as one “that is a substantial factor that brings about injury and without which the injury would not have occurred,” the definition Ford asks us to adopt.

To say that a producing cause is “an efficient, exciting, or contributing cause that, in a natural sequence, produces the incident in question” is incomplete and, more importantly, provides little concrete guidance to the jury. Juries must ponder the meaning of “efficient” and “exciting” in this context. These adjectives are foreign to modern English language as a means to describe a cause, and offer little practical help to a jury striving to make the often difficult causation determination in a products case.

Defining producing cause as being a substantial factor in bringing about an injury, and without which the injury would not have occurred, is easily understood and conveys the essential components of producing cause that (1) the cause must be a substantial cause of the event in issue and (2) it must be a but-for cause, namely one without which the event would not have occurred. This is the definition that should be given in the jury charge.

The court’s unanimous opinion, authored by Justice Willett, was delivered December 21, 2007. The case is currently pending on motion for rehearing.

ebIllINg CONtaCts FOR uNbuNdled CaRRIeRs

ClaRIFIed

The eBilling deadline arrived and carriers and providers are now required to be capable of sending or receiving medical bills electronically, unless a waiver has been granted. Yet, the process continues to confuse.

One reason for the confusion is the existing of conflicting guidance from the Division of Workers’ Compensation. This is particularly true with respect to the eBilling requirements for carriers with unbundled business plans.

On December 5, 2007, the Albert Betts, Commissioner of Workers’ Compensation, issued an eBilling notice, which contained the following language:

“Notify TDI-DWC About Their eBill Agent(s): Insurance carriers are required to provide TDI-DWC with information about their eBill agent. Any insurance carrier that has not already provided this information must submit this information to TDI-DWC immediately. This information can be reported on the Carrier Representative Information Submission Form (DWC Form-027), which is available for download from the agency website at http://www.tdi.state.tx.us/forms/form20numberic.html. In addition, TDI-DWC has received numerous forms that list several eBill agents for one insurance carrier. TDI-DWC recognizes that an insurance carrier may use different eBill agents for different bill types or for different entities within the insurance carrier. In these instances, the insurance carrier should provide TDI-DWC a website address or Uniform Resource Locator (URL) as their “eBilling Contact” on the DWC Form-027. The insurance carrier is responsible for maintaining the webpage associated

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GQ CORNeR

Q:  When did the requirement to pay TIBs for the waiting period change from 28 days to 14 days? Does the requirement

to pay TIBs either after 28 days or 14 days depend upon the date of injury?

A:  Prior to September 1, 2005, the waiting period was paid after 4 weeks of disability. After September 1, 2005, the

waiting period is to be paid at the same time as the second week of disability benefits would be paid. The Act did not tie this provision to any particular date of injury, and it is arguably retroactive. This provision is found in Section 408.082 of the Texas Labor Code. As such, the safest course of action is to apply the current Section 408.082 to all claims under the 1989 Act.

Q:  What statute or rule provides that an injured employee has lost time from work as a result of the compensable

injury when he undergoes an office visit, diagnostic tests, or physical therapy for the compensable injury?

A:  There is no specific statute or rule that states lost time for office visits, diagnostic tests, or physical therapy

is considered disability. Instead, there is a very old series of Appeals Panel Decisions interpreting disability to include lost time as a result of office visits, diagnostic tests, or physical therapy for the compensable injury. For example, please see Appeal Panel Decision No. 961644.

Q:  Carrier recently received notice that a designated doctor was appointed to a file to address whether the injury is

related to the work-related event. Is it proper for the designated doctor to provide such an examination? Shouldn’t such a compensability dispute go to a BRC first?

A:  A designated doctor is authorized to address any issue (except medical treatment) that a carrier or commission

RME doctor was allowed to address prior to January 1, 2007. Thus, to the extent that carriers used to obtain RME’s to address whether (a) there is an injury and (2) whether such injury is consistent with the claimed work-related mechanism, it is now proper for a designated doctor to address such issues.

Q:  The injured employee was last treated on September 1, 2007 and was referred to a surgeon. The injured employee

has not followed up with any surgeon, nor has he followed up with his treating doctor who referred him to the surgeon. The last work status report carrier received indicated that the injured employee was off work until he is seen by a surgeon. Can the carrier suspend TIBs due to abandonment of treatment? What about Rule 130.4, which provides a presumption of MMI in the event of medical abandonment?

A:  Rule 130.4 has no practical meaning and cannot really be relied upon for any purpose. Please see the editor’s

comments to that rule in the Texas Workers’ Compensation Manual. Disability may be proved by a claimant’s testimony alone if credible. The fact that the claimant has not followed up with any surgeon is only one factor. You must consider the totality of the circumstances to determine whether it is appropriate to suspend TIBs. These factors include, but are not limited to, the MDA, the nature of the injury, and any co-morbid factors. After considering these factors, and provided that there is some question whether

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the claimant is disabled, you should request a designated doctor on ability to work.

Q:  Injured worker was working light duty as a result of a work-related injury. As a result of the light duty, the injured

worker was entitled to partial TIBs. The injured worker then did not show up for work for approximately one week. The injured worker reported to his employer that he could not come to work because of a stomach virus. What amount, if any, of TIBs would be owed for that one-week period where the injured worker did not come to work at all because of a stomach virus?

A:  Unless the stomach virus is the superseding cause of disability, then you owe, at minimum, the partial amount

of TIBS. However, it is certainly arguable that the wages the injured employee was earning on light duty were not lost as a result of the compensable injury, but rather because of his non-compensable stomach virus. On the other hand, the injured worker may argue that he is entitled to full TIBs because his compensable injury only has to be “a” producing cause of his inability to retain wages. Note that the Supreme Court recently defined “producing cause” as a substantial factor that brings about disability and without which the disability would not have occurred. Thus, “(1) the cause must be a substantial cause of the event in issue and (2) it must be a but-for cause, namely one without which the event would not have occurred.” This is a new definition. Therefore, it is arguable that it is all or nothing. Either you owe full TIBs or you owe no TIBs.

Q:  The injured worker had surgery at a hospital. Injured worker provided the hospital with Group Health

insurance information. The hospital obtained preauthorization through the Group Health carrier. The Group Health carrier notified the hospital on September 30, 2007 that surgery was provided for a work-related injury. The hospital reimbursed the Group Health carrier for the payment that was made for the surgery. The hospital has now submitted a bill to the workers’ compensation carrier for reimbursement. Carrier originally denied the injury for which the surgery was sought. Later, a CCH Decision and Order found that that injury was part of the compensable injury. What defenses, if any, does the workers’ compensation carrier have in this case?

A:  It is important to understand that the request for payment is from the hospital, not the Group Health carrier. As such,

carrier has two possible defenses. First, the hospital failed to timely submit its medical bill to the workers’ compensation carrier. Second, the hospital failed to obtain preauthorization from the workers’ compensation carrier.

Effective September 1, 2005, all health care billing for a workers’ compensation claim must be submitted to the carrier within 95 days from the date of service. Although there was an extent of injury dispute pending at the time the procedure was performed, nothing prevented the hospital from exhausting its administrative remedies by submitting the bill to the workers’ compensation carrier in a timely fashion, and then pursuing that dispute to conclusion. Moreover, nothing prevented the hospital from securing a proper history to determine whether the surgery in question was related to a workers’ compensation claim or not.

Section 408.0272 of the Texas Labor Code, which took effect September 1, 2007, does provide for an exception to the 95-day deadline, where the provider mistakenly bills the employee’s group accident or health insurance carrier. The provider must, under that statute, submit the bill to the correct carrier within 95 days of the date the provider was notified of the error. Section 408.0272,

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with the reported URL. This webpage should display and identify the insurance carrier’s eBilling agents and their contact information in a manner which allows health care providers to determine who to contact to enable electronic transmission of their bills.”

This requirement of a single point of contact for each underwriting carrier is problematic for carriers with unbundled business. The Department had rejected attempts to submit spreadsheets attached to the DWC Form-027.

After continued discussions, the Division has confirmed that it will be sufficient for now to have a single telephone number or single URL where all the TPAs for an underwriting carrier may be listed, each with its own contact information. The information provided need not provide individual employer coverage information or the direct contact information

eBilling Contacts for Unbundled Carriers Clarified – continued from p. 5

for the eBilling clearinghouse or vendor. In other words, it sufficient to provide the contact information for each TPA. It is presumed that the Provider will then contact the TPA to obtain all the information it needs for eBilling. It is also presumed the Provider will have the name of the carrier and the TPA in order to access this information by this method.

Accordingly, each underwriting carrier should confirm that it has filed a DWC Form-027 by January 1, 2008, which would notify TDI-DWC of the telephone number and/or web address/URL which is capable of providing at least the contact information for each TPA engaged in adjusting claims for the named insurance carrier. Preferably, and if practicable, the information should also include direct contact information for the appropriate clearinghouse and/or eBilling vendor.

Please continue to contact Steve Tipton (smt1@fol.com) or Bobby Stokes (rds@fol.com) if you have any questions about these filings. Amended filings of the DWC-027 may continue to be filed through Patsy Shelton of our office: pgs@fol.com

dIVIsION OF wORkeRs’ COMpeNsatION FINal dIsCIplINaRy ORdeRs

October and November 2007The Division of Workers’ Compensation has published its October and November 2007 disciplinary orders against health care providers and insurance carriers. The size of these penalties reflects Commissioner Albert Betts’ intent to significantly increase the penalties for actions that occurred on or after September 1, 2007 as compared to penalties for actions occurring prior to that date.

September 1, 2007 is the effective date for most of the provisions of House Bill 7. Commissioner Betts first served notice of his intent to greatly increase the penalty amounts in Bulletin #B-0043-06 issued on December 15, 2006. The Division’s actions in recent months

however, only applies to a claim for payment relating to healthcare services rendered on or after September 1, 2007. Claims for payment relating to healthcare services rendered before September 1, 2007 are covered by the law in effect immediately before September 1, 2007. Therefore, it would appear that you have a solid defense to the payment of the bill based on the 95-day rule, which your bill review vender should assert on its denial of the bill.

In looking at the preauthorization defense, Section 408.0272 did not do away with the provider’s obligation to comply with Rule 134.600. Preauthorization from the Group Health carrier is not the equivalent of preauthorization from the workers’ compensation carrier. The hospital was still obligated to obtain preauthorization from the workers’ compensation carrier before performing surgery, and its failure to do so would seem to set up a solid defense, which your bill review vender should assert on its denial of the bill.

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have gone a long way towards fulfilling that prophecy. Armed with amendments to Sections 415.015 and 415.002, Commissioner Betts has spearheaded a movement that employs punitive penalties to facilitate near perfect compliance.

The penalty amounts published by the Division represent a steep increase in fines. The next group of penalty amounts may sharply exceed the current ones.

Every carrier and TPA should have a system in place with the primary goal of reducing, if not eliminating, compliance deficiencies. The highest penalties are reserved for violation of Division Orders and violations of the preauthorized procedure. The penalty amounts for any violation are determined by a number of factors, including the following: the size of the carrier, the length of the period of non-compliance, the affected amount, whether the carrier has committed prior violations of the same type within two years immediately preceding the violation in question, whether the carrier took steps to resolve the issue prior to the Division’s involvement and the carrier’s PBO rating.

Flahive, Ogden and Latson will continue to update its clients on developments in the area of compliance. Moreover, compliance will be one of the hot topics discussed at FO&L’s annual seminar in February 2008.

Healthcare ProviderAction Taken: Fined $2,000 Violation(s): Failure to timely file the report of medical examination (two instances).

Insurance CarrierAction Taken: Fined $25,000 Violation(s): Failure to timely comply with a Medical Dispute Resolution (two instances). Failure to timely respond to a Commissioner’s Order to refund an independent review organization fee (one instance).

Insurance CarrierAction Taken: Fined $3,000 Violation(s): Failure to include the correct exception code or provide sufficient explanation at the time the carrier made payment or denied payment on a medical bill.

Insurance CarrierAction Taken: Fined $8,000 Violation(s): Failure to pay reasonable and necessary medical costs for medical services which were preauthorized by the insurance carrier.

Insurance CarrierAction Taken: Fined $2,000 Violation(s): Failure to include the correct exception code or provide sufficient explanation at the time the carrier made payment or denied payment on a medical bill.

Insurance CarrierAction Taken: Fined $5,000 Violation(s): Failure to timely take action on a health care provider’s claim and a medical bill.

Insurance CarrierAction Taken: Fined $6,000 Violation(s): Failure to timely take action on a health care provider’s claim and a medical bill (two instances).

Insurance CarrierAction Taken: Fined $2,000 Violation(s): Failure to include the correct exception code or provide sufficient explanation at the time the carrier made payment or denied payment on a medical bill.

Insurance CarrierAction Taken: Fined $2,800 Violation(s): Failure to give sufficient explanation for a reduction or denial of a medical bill.

Insurance CarrierAction Taken: Fined $5,000 Violation(s): Failure to give sufficient explanation for a reduction or denial of a medical bill.

Insurance CarrierAction Taken: Fined $2,000 Violation(s): Failure to timely take action on a correctly completed request for reconsideration of a medical bill.

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Healthcare ProviderAction Taken: Fined $5,000 Violation(s): Violated Texas Labor Code § 413.042 by pursuing a private claim against a workers’ compensation claimant.

Healthcare ProviderAction Taken: Fined $2,000 Violation(s): Untimely or inappropriately filing of Work Status Reports with the insurance carrier discovered in a Division audit.

Insurance CarrierAction Taken: Fined $8,000 Violation(s): Failure to conduct on-site accident prevention visits, or other appropriate services, at least every 12 months for each policyholder (two instances).

COMMIssIONeR’s bulletIN ClaRIFIes pHaRMaCy

bIllINg

As we reported in the December 2007 FOLIO, system stakeholders became concerned that the Division was abandoning a key billing form used in pharmaceutical billing matters.

Moreover, the proposed new form, the NCPDP UCF (required by Rule 133.10(b)) for pharmacy services with workers’ compensation and eBilling parameters was not readily compatible with most stakeholders’ systems. Stakeholders had been urging the Division to continue the use of the DWC-66. We anticipated some action on the part of the Division.

The Division of Workers’ Compensation has concluded that the old form should continue to be used and has announced that conclusion in Commissioner’s Bulletin #B-0052-07.

The new bulletin states that the Division will continue to allow the use of the DWC-66 after January 1, 2008. System participants have been urged to create work arounds and to cooperate with one another to assure smooth billing transitions. The Division expects system

participants will create their own resolutions to these problems. Do not expect the Division to mandate technical resolutions.

In the meantime, the NCPDP will work on a more compatible format and the Division will amend Rule 133.10(b) in the near future to reflect the reality on the ground.

INstRuCtIONs FOR FIlINg tpa aNNual RepORt

The Texas Department of Insurance has issued detailed instructions to assist Third Party Administrators in filing their annual reports with the agency. On or before March 1, all TPAs licensed in Texas as of December 31st are required to file an annual report Chapter 4151.206 Texas Insurance Code. THeRe IS NO STATUTORY PROVISION FOR AN eXTeNSION OF THIS DeADLINe.

All forms are available from the TDI website at www.tdi.state.tx.us/forms/form11.html#formstpa . The TPA annual report is the submission of LHL080 (TPA FORM 2A) for third party administrators or LHL084 (TPA FORM 6A) for Insurance Companies/HMO’s registered as TPAs.

Although TDI requests a copy of your financial report, it also requires the TPA Form 2A or 6A and Exhibits A-D LHL088. If you are not doing business in Texas, but were still licensed as of the end of 2007, you are required to file an annual report indicating -0- plans and -0- Texas participants. The same requirement applies to the maintenance tax. Even if you did not do business in Texas, you are still required to file a zero return with the Texas Comptroller. If you need to cancel this license, you should return it with a request for cancellation.

annual Report FaQ’s CAN We GeT AN eXTeNSION ON THe MARCH 1ST DeADLINe? Texas Insurance Code Chapter 4151.206 and Texas Administrative Code, 7.1612 (b) requires licensed TPAs to file an annual report on or

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before March 1st of each year. The postmark is used to determine the date “filed” on reports received after March 1st. There are no provisions for extensions. Please mail in your annual report with as much information as you have available along with the $100.00 and let us know when to expect the missing information.

WHAT IS THe STReeT ADDReSS TO OVeRNIGHT MY RePORT? TEXAS DEPARTMENT OF INSURANCE TPA Section/MC 107- TPA-PF 333 Guadalupe Street Austin, TX 78701

WHeRe CAN I GeT THe MAINTeNANCe TAX FORMS ReFeRReD TO ON THe LHL080 ANNUAL RePORT FORM? The forms can be downloaded from www.window.state.tx.us/taxinfo/taxforms/25-102.pdf.

WHICH OFFICeRS NeeD TO COMPLeTe BIOGRAPHICAL AFFIDAVITS? Submit biographical affidavits on the President, Secretary, Treasurer, Chief Financial Officer, Chairman of the Board and all Directors (as listed on the Officers & Directors Page) for corporations. It is not necessary to submit a biographical affidavit on Vice Presidents unless they also serve as one of the other key officers or as a director.

We HAVe NO PLANS IN TeXAS BUT HAVe TeXAS ReSIDeNTS IN SOMe OF OUR PLANS SITUSeD IN ANOTHeR STATe. DO We NeeD THe TPA LICeNSe TO PAY CLAIMS OR COLLeCT PReMIUMS? The Texas TPA statute requires the license if you pay claims or collect premiums for Texas residents regardless of where the plan is sitused.

We HAVe HAD THIS LICeNSe FOR SOMe TIMe BUT CURReNTLY HAVe NO ACCOUNTS IN TeXAS. DO We STILL NeeD TO FILe THe ANNUAL RePORT? YES. All licensed TPAs are required to file a report and maintain current information on file with the Department, including ownership, officers & directors, corporate name changes,

bylaw changes as well as current contact person and address.

We ARe ADMINISTeRING 100’S OR 1000’S OF INDIVIDUAL POLICIeS ON BeHALF OF SeVeRAL INSURANCe COMPANIeS. DO I NeeD TO LIST eACH OF THOSe ON eXHIBIT A? NO, please list the carriers and show “various” for policy no. and effective date.

eXHIBIT A LHL088 HAS A COLUMN (K) FOR “TOTAL NO. CLAIMS PAID - LAST 12 MO” – DO YOU WANT DOLLAR AMOUNTS? NO, we want the total number of claims paid and that number should include those claims that were adjudicated but no check was issued.

dON’t FORget wORkeRs’ COMpeNsatION deduCtIble plaN

data Call

This is a reminder of TDI Bulletin #B-0045-07 which notified carriers of the data call for fourth quarter experience. Please note that this data is due on or before February 15, 2008.

This Bulletin was first published on November 1, 2007 and was reprinted in the December issue of FOLIO. The Bulletin is located electronically at http://www.tdi.state.tx.us/bulletins/2007/cc44.html.

You may access the Instructions and reporting Forms by clicking on those links at the bottom of the Bulletin.

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MeMORaNduM

DATe: December 19, 2007 TO: Workers’ Compensation System Participants FROM: Robert E. Lang, Deputy Commissioner for Hearings Re: Process for Filing for Subclaimant Status

The purpose of this memo is to provide guidance to workers’ compensation system participants on the process and deadlines for filing for subclaimant status until rules are adopted.

Texas Labor Code §409.009 provides that a person may file a written claim as a subclaimant if the person has provided compensation, including health care provided by a health care insurer, directly or indirectly, and has sought and been refused reimbursement by the insurance carrier.

Further, §409.0091(s) provides a health care insurer requirements for filing as a subclaimant on specific claims that occurred on or after September 1, 2007, from information provided to the health care insurer before January 1, 2007. The health care insurer must file as a subclaimant no later than March 1, 2008.

To file a written claim as a subclaimant with the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC), a person must submit a separate written notice for each claim (preferably on letterhead of the organization they represent) on which they are asserting subclaimant status.

Written notices must be signed and dated by the person filing notice and should include:

• language to clearly state this is a notice of subclaimant status; • the subclaimant’s contact information, including the subclaimant’s name, mailing address

and telephone number; and • the injured employee’s information, including the employee’s first and last name, last four

digits of the employee’s social security number, date of injury and DWC claim number.

Written notices can be filed at the TDI-DWC Central Office located at 7551 Metro Center Drive, Suite 100, MS-93, Austin, Texas 78744 or any of the 24 TDI-DWC field offices. For information on the TDI-DWC field offices visit the TDI website at http://www.tdi.state.tx.us/wc/dwccontacts.html under “Office Locations”.

TDI-DWC will be adopting rules for implementing §409.0091. The informal draft rules will be posted on the TDI website at http://www.tdi.state.tx.us/wc/rules/planning/drafts.html the week of December 17, 2007. TDI-DWC will accept public comment on the draft rules until January 11, 2008. Proposed rules are scheduled to be published in the Texas Register on February 29, 2008 and TDI-DWC will accept public comment until March 30, 2008. The rules are scheduled for adoption on May 16, 2008.

For additional information on filing for subclaimant status, contact TDI-DWC at 512-305-7238 or 800-252-7031. Contact Jenifer Hopens at 512-804-4033 with questions regarding this memo.

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COMMIssIONeR’s bulletIN #b-0052-07

December 19, 2007 TO: WORKERS’ COMPENSATION HEALTH CARE PROVIDERS AND INSURANCE CARRIERSRe: Retaining the Statement of Pharmacy Services (DWC-66) The purpose of this bulletin is to inform workers’ compensation system participants of various issues with the National Council for Prescription Drug Programs (NCPDP) Universal Claim Form (UCF).

In December 2006, the Division adopted amendments to 28 TAC §133.10(b) extending the NCPDP UCF implementation date from January 1, 2007 to January 1, 2008. This amendment was adopted for the purpose of making the NCPDP UCF implementation date consistent with the eBilling implementation date and to give system participants a longer period of time to integrate the NCPDP UCF into their processes. Recently, system participants have provided the Division with numerous concerns and comments regarding technical, financial, and process issues which impede the successful implementation of the NCPDP UCF by January 1, 2008. These system participants support the continued use of the Division’s DWC-66 (Statement of Pharmacy Services) until such time as the NCPDP formally adopts a universal claim form that is tailored to the workers’ compensation system. In order to maintain continuity of services for injured employees, pharmacies may continue, beyond January 1, 2008, to submit their claims for pharmacy services by using the Division’s DWC-66. System participants should work together to ensure that necessary health care is appropriately delivered.

The Division anticipates that the NCPDP will in the future consider and adopt a universal claim form that is tailored to the workers’ compensation system. However, as a result of these comments and the lack of a NCPDP form that is suitable for the workers’ compensation system, the Division will initiate rulemaking efforts to amend 28 TAC §133.10(b) to address these concerns. The Division expects to file proposed amendments to 28 TAC §133.10(b) with the Texas Register in January 2008 and to proceed with adopting appropriate amendments no later than the first quarter of 2008.

If there are any questions regarding the information in this bulletin, please contact Allen McDonald, Director of Information Management Services, at (512) 804-4530 or email at Allen.McDonald@tdi.state.tx.us.

Albert BettsCommissioner of Workers’ CompensationTexas Department of Insurance

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COMMIssIONeR betts sIgNs peRFORMaNCe-based OVeRsIgHt INCeNtIVe Rule

AUSTIN, TX — On December 28, 2007, Commissioner of Workers’ Compensation Albert Betts signed a rule establishing incentives for performance-based oversight (28 Texas Administrative Code §180.19). The Texas Department of the Insurance, Division of Workers’ Compensation (TDI-DWC) will offer incentives to the insurance carriers and health care providers who were assessed for overall compliance and placed into a regulatory tier in August 2007. These incentives include limited audit exemption, public recognition and modified penalties depending on the tier placement of the insurance carrier or health care provider.

Commissioner of Workers’ Compensation is required by statute to adopt requirements that provide incentives for overall compliance in the Texas workers’ compensation system and that emphasize performance-based oversight linked to key regulatory outcomes.

“Performance-based oversight is just one compliance approach the Division of Workers’ Compensation uses to ensure system participants are meeting compliance goals,” Commissioner Betts said. “These rules provide incentives for insurance carriers and health care providers to continually work on improving their overall compliance in the workers’ compensation system.”

Key provisions of the Performance-Based Oversight Incentive rule include:

• key regulatory goals that outcomes will be measured against; • three regulatory tiers used by TDI-DWC; and • incentives offered for high, average and poor performers.

The rule is posted on the agency website at: http://www.tdi.state.tx.us/wc/rules/adopted/adopted.html.

For questions or more information about the Performance-Based Oversight Incentive rule, contact Teresa Carney at 512-804-4702; e-mail Teresa.Carney@tdi.state.tx.us. Additional information on performance-based oversight is available at: http://www.tdi.state.tx.us/wc/pbo/pbo.html

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dwC ReVIses FORM used tO ReQuest ReQuIRed

MedICal exaMINatIONs

On December 13, 2007, Patricia Gilbert, Executive Deputy Commissioner, announced that the Texas Department of Insurance’s Division of Workers’ Compensation had revised the DWC Form 22, Required Medical Examination Notice or Request for Order. Gilbert announced that the form is available for immediate use.

The form was changed to incorporate statutory changes mandated by House Bill (HB) 7, which was passed by the Texas Legislature during the 2005 legislative session. HB 7 amended Sections 408.004 and 408.0041 of the Texas Labor Code.

Ms. Gilbert said, “System participants should began using the revised form immediately.” She noted that the DWC would continue to accept the old version of the form, DWC Form 22 (10/05) through January 31, 2008.

The revised form is available at http://www.tdi.state.tx.us/forms/dwc/dwc022rme.pdf.

Ms. Gilbert also pointed out that requests for examinations to determine appropriateness of non-network medical care received and requests for examinations following a designed doctor exam may not be filed on the same form. Separate forms must be filed to request each type of examination.

OIeC OFFICIal plaNs tO ResIgN

The Deputy Public Counsel for the Office of Injured Employee Counsel has announced her intention to resign the agency and take a post with the 13th Court of Appeals. Dorian Ramirez, who has served as Deputy Public Counsel at OIEC since the agency’s creation, made the decision so that she could “live and work closer to her and her husband’s family”.

Office of Injured Employee Counsel, Norman Darwin, expressed his “sincere regret” following Ms. Ramirez’ decision. Mr. Darwin noted that Ms. Ramirez’ resignation “represents a loss of a close friend and valuable employee to all of us at OIEC. Dorian has been a diligent and committed employee that the Public Counsel has valued and relied upon during the formative stage of the agency.”

Before moving to OIEC, Ms. Ramirez worked for the Division of Workers’ Compensation as well as the agency’s predecessor, the Texas Workers’ Compensation Commission. She may be the only agency employee who has served the agency as a Benefit Review Officer, a Contested Case Hearing Officer and an Appeals Panel Judge.

Ms. Ramirez will leave the agency in late-January 2008. The Office of Injured Employee Counsel has not yet announced plans to fill the Deputy Public Counsel post.

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TO: Workers’ Compensation Insurance Carriers Workers’ Compensation Proof of Coverage Statistical Agents FROM: Patricia Gilbert, Executive Deputy Commissioner for Operations DATe: December 19, 2007 Re: Proof of Coverage Reporting Requirements

The Texas Department of Insurance, Division of Workers’ Compensation (TDIDWC) maintains an online employee coverage verification system. The system is based on information submitted by insurance carriers regarding their covered employers. Recently TDI-DWC discovered this information included the physical address of domestic violence shelters. In order to prevent disclosure of these addresses to the public, TDI-DWC, with the cooperation of the Texas Council on Family Violence (TCFV), is directing that carriers and statistical agents do the following:

An employer address is required for proof of coverage reporting under the IAIABC EDI Implementation Guide for Proof of Coverage, the adopted standard for reporting in Texas. In order to protect the confidential location of domestic violence shelters, employers, insurance carriers, and statistical agents should not report a physical address as a part of proof of coverage reporting. Insurance carriers should use a post office box or an alternative address, such as an administrative address if one is available, for these locations.

The TCFV provides a public directory of the domestic violence shelters on their website at http://www.tcfv.org/pdf/service_directory.pdf. This directory is updated annually. Carriers may use this directory as a listing of all the shelters.

Some shelters may have a physical address in the directory because the shelters have met certain conditions to allow their physical location to be made public. If the shelter prefers that its carrier report its physical address, the carrier may do so.

The directory also has a listing of Battering Intervention and Prevention Programs (BIPP). Many of the BIPPs are located within shelters. Carriers should not report the physical address of any BIPP that does not provide a physical address in the in the directory.

If you have questions about this, please contact the TDI-DWC Coverage Section at 512-804-4345.

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tdI pROpOses NetwORk exaMINatION Rule

The Texas Department of Insurance has proposed a new rule regarding workers’ compensation health care networks assessments to cover the expenses of examining workers’ compensation health care networks certified pursuant to Insurance Code, Chapter 1305, the Workers’ Compensation Health Care Network Act.

The proposed new rule § 10.200 is designed to implement S.B. 1253, 80th Legislature, Regular Session. Senate Bill 1253 amended Insurance Code, §1305.251, to require a certified workers’ compensation health care network (network) to pay a fee for Department examinations conducted under §1305.251 (relating to examination of networks) or §1305.252 (relating to general standards for retrospective review) in an amount set by the Commissioner and in accordance with rules adopted by the Commissioner.

Pursuant to §1305.252(c), the fee is to be paid for the expenses of an examination that are incurred by the Commissioner or under the Commissioner’s authority and that are directly attributable to that examination, including the actual salaries and expenses of the examiners directly attributable to that examination.

The rule is not yet effective. A copy of the proposed rule can be found at: http://www.sos.state.tx.us/texreg/archive/December282007/PROPOSED/28.INSURANCE.html#70

dwC updates CleaN ClaIM aNd bIllINg

COMpaNION guIdes

The Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) has released the new version of the Texas Clean Claim and Electronic Medical Billing and Payment Workers’ Compensation Companion

Guides (Companion Guides). All workers’ compensation system participants are expected to implement the associated technical format changes on or before May 1, 2008. In addition, system participants are expected to follow the new paper claim instructions for paper claims submitted on or after March 1, 2008.

TDI-DWC revised the Companion Guides in response to input received at stakeholder meetings regarding potential impediments to successful eBill implementation. The revised Companion Guides contain numerous areas of clarification designed to ensure that workers’ compensation eBill transaction standards are aligned with the transaction standards adopted under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The technical revisions to the Companion Guides will increase the ability of system participants to use their existing HIPAA compliant software systems to electronically process workers’ compensation claims for reimbursement. The changes to the paper claim instructions are designed to clarify issues associated with the use of certain data elements, such as the national provider identification number and the taxonomy code.

Insurance carriers, health care providers, and their eBill agents are strongly encouraged to develop business relationships with health care clearinghouses and software vendors in order to promote the integration of workers’ compensation eBilling into their current product line and services.

Questions regarding the Companion Guides may be directed to TDI-DWC by emailing TXComp.Help@tdi.state.tx.us or by calling toll free at 888-489-2667.

The Companion Guides are posted on the TDI website at http://www.tdi.state.tx.us/wc/ebill/index.html under “Texas Clean Claim & eBill Workers’ Compensation Companion Guide”.

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COMMIssIONeR betts appROVes 13 COMpaNIes tO selF-INsuRe FOR wORkeRs’ COMpeNsatION ClaIMs

AUSTIN, TX –Thirteen companies with approximately 183,200 employees in Texas recently were approved to self-insure for workers’ compensation claims for a one-year period under the Texas Department of Insurance (TDI), Division of Workers’ Compensation Self-Insurance Program.

Commissioner of Workers’ Compensation Albert Betts approved initial applications for Certificates of Authority to Self-Insure for Bronco Drilling Company, Inc., headquartered in Edmond, OK, and Wal-Mart Associates, Inc., headquartered in Bentonville, AR.

Under Texas law, certain large, private companies can self-insure for workers’ compensation claims, while retaining the protection of the Texas Workers’ Compensation Act for the company and for its employees. To qualify, a company must have a minimum workers’ compensation insurance unmodified manual premium of $500,000 and meet other requirements subject to annual review.

The following eleven companies received renewals of existing self-insurance certificates:

• AAA Cooper Transportation, Dothan, AL • American Electric Power Company, Inc., Columbus, OH • Emerson Electric Company, St. Louis, MO • FedEx Freight East, Inc., Harrison, AR • Guardian Industries Corporation, Auburn Hills, MI • International Paper Company, Memphis, TN • Lowe’s Home Center, Inc., Mooresville, NC • The Sherwin-Williams Company, Cleveland, OH • Unique Staff Leasing I, Ltd., Corpus Christi, TX • Valero Energy Corporation, San Antonio, TX • VF Corporation, Greensboro, NC

For more information on applying to the Self-Insurance Program, visit TDI’s website at http://www.tdi.state.tx.us/wc/si/index.html

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dIVIsION Rules Repealed — INItIatINg lIFetIMe INCOMe beNeFIts aNd pROspeCtIVe ReVIew OF MedICal CaRe

NOt ReQuIRINg pReautHORIzatION

AUSTIN, TX – On December 19, 2007, Commissioner of Workers’ Compensation Albert Betts repealed two rules; 28 Texas Administrative Code (TAC) §131.1 relating to initiation of lifetime income benefits and 28 TAC §134.650 relating to the prospective review of medical care not requiring preauthorization.

The repeal of 28 TAC §131.1 was necessary for the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) to conform with the Texas Court of Appeals’ ruling in Mid-Century Insurance Company v. Texas Workers’ Compensation Commission. The Mid-Century case held that lifetime income benefits are to be paid from the date an injured employee is determined to be entitled to lifetime income benefits, but not prior to that date.

In January 2007, TDI-DWC adopted the Official Disability Guidelines – Treatment in Workers’ Compensation (ODG) for disability management. The Commissioner of Workers’ Compensation repealed 28 TAC §134.650 because preauthorization is not required for treatments provided within ODG, except in certain circumstances.

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adOpted Rules

The Division of Workers’ Compensation has been busy writing and amending agency rules. The scorecard below will help you keep track of the effective dates of many of the new rules.

The following rule was adopted on December 28, 2007 and will publish in the Texas Register on January 11, 2008. The rule will become effective March 1, 2008.

Chapter 134 Benefits - Guidelines for Medical Services, Charges and Payments SUBCHAPTER A. Medical Reimbursement Policies Adopted Amendment - Section 134.1 Adopted New - Section 134.2SUBCHAPTER C. Medical fee Guidelines Adopted New - Sections 134.203 and 134.204 (Word, PDF)

The following rule was adopted on December 21, 2007 and will publish in the Texas Register on January 11, 2008. The rule will become effective January 16, 2008.Chapter 180 - Monitoring and Enforcement Subchapter A. General Rules for Enforcement Section 180.19 - Performance Based Oversight Incentives (Word, PDF)

The following rule was adopted on December 28, 2007 and will publish in the Texas Register on January 11, 2008. The rule will become effective March 1, 2008.Chapter 134 -Benefits - Guidelines for Medical Services, Charges, and Payments Subchapter E. Health Facility Fees Section 134.403 - Hospital Facility Fee Guideline - Outpatient Section 134.404 - Hospital Facility Fee Guideline - Inpatient (Word, PDF)

The following rules were adopted on December 19, 2007 and will publish in the Texas Register on January 4, 2008. The rules will become effective January 9, 2008.CHAPTER 131. Benefits – Lifetime Income Benefits 28 TAC §131.1 REPEAL (html, pdf) SUBCHAPTER G. Prospective and Concurrent Review of Health Care 28 TAC §134.650 REPEAL (html, pdf)

The following rule was adopted on December 10, 2007 and will publish in the Texas Register on December 21, 2007. The rule will become effective December 30, 2007.Chapter 134 Benefits - Guidelines for Medical Services, Charges and Payments SUBCHAPTER E. Health Facility Fees Section 134.402 (html, pdf)

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appeals paNel deCIsIONs

NO. 071822

Under an exception to the 90-day rule outlined in §408.123(e), for compelling medical evidence of a clearly mistaken diagnosis or a previously undiagnosed medical condition, the first certification of MMI/IR may not become final if the first certifying doctor does not list an accepted diagnosis, even if the accepted body part is examined and determined to be non-ratable.

FaCts: A CCH was held on this issue of finality of the first certification. The parties stipulated that Dr. L, the designated doctor, made the first certification of MMI and IR; that he certified that the claimant reached MMI with a 0% IR. The report from the designated doctor noted that the claimant fell on steps and injured her face, hands, knees, and low back. There was no diagnosis for the left knee in his report. Dr. L noted range of motion of the right and left knee was performed and he assigned a zero percent IR for the knees. Dr. L stated that no diagnosis-related impairment for the bilateral knees would be ratable.

In evidence was a report from a referral doctor, Dr. P, which showed that the claimant had left knee pain since her date of injury and a diagnosis of internal derangement of left medial meniscus. Also in evidence was a report from orthopedic surgeon, Dr. D, who diagnosed claimant with left knee internal derangement of the medial meniscus. Claimant underwent a left knee arthroscopy, including a partial medial meniscectomy and chondroplasty.

The hearing officer found that the claimant did not dispute Dr. L’s certification of MMI/IR within 90 days after the certification was provided to the claimant by verifiable means, and therefore also decided that the first certification of MMI/IR became final under §408.123. The claimant appealed, contending that an exception under §408.123(f) applied because there was a clearly mistaken diagnosis or a previously undiagnosed medical condition. The claimant asserts that Dr. L “under-diagnosed-misdiagnosed” her left knee. The carrier responded, urging affirmance.

HOldINg: Reversed and rendered. Section 408.123(f) provides that an employee’s first certification of MMI/IR may be disputed after the 90-day period described by subsection (e) if there is compelling medical evidence exists of either a significant error by the certifying doctor in applying the appropriate AMA guidelines or in calculating the IR; clearly mistaken diagnosis or a previously undiagnosed medical condition; or improper or inadequate treatment of the injury before the date of the certification or assignment that would render the certification or assignment invalid.

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The Appeals Panel reversed the hearing officer’s finding that no compelling medical evidence exists of a clearly mistaken diagnoses or previously undiagnosed medical condition finding that the hearing officer’s decision was against the great weight and preponderance of the evidence. The appeals panel reversed the determination that the first certification of MMI and IR became final under Section 408.123, and rendered a new decision that the first certification of MMI and IR did not become final under §408.123.

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Green v. Fort Bend ISd, NO. 01–06–01157–CV, 2007 wl 4465358 (tex. app.—HOustON [1st dIst.]

deC. 20, 2007, NO pet. H.).

A party may not raise an issue in the trial court that was not raised before the TWCC appeals panel.

FaCts: Green alleged that he injured his low back on August 16, 2002 while working as a 5th grade teacher for Fort Bend ISD. He initially had emergency treatment and then went to a chiropractor who took him off work. An FCE performed in September 2002 showed an ability to work at a heavy physical demand level. That FCE was actually for a non-work-related knee injury, but even though it occurred after the low back injury, there was no mention of any low back injury or pain during the evaluation. Green had an MRI performed on September 13, 2002 that showed a disc herniation. He then went to a medical doctor who recommended therapy and lumbar joint injections. A carrier RME doctor determined that he could return to work as a schoolteacher (but no lifting greater than 25 pounds) as of October 3, 2002. A designated doctor examined the claimant and determined in February 2003 that Green could work as a teacher, but had not yet reached MMI. The designated doctor eventually found him at MMI on June 2, 2003.

The parties attended a CCH where the TWCC determined that he had sustained a compensable injury and that he sustained disability from August 17, 2002 through October 3, 2002. Green appealed the disability determination, but the Appeals Panel upheld the CCH decision. Green then appealed the determination of disability to court and the trial court affirmed the TWCC’s decision. Green appealed the trial court ruling and alleged error in admitting certain evidence and failing to give presumptive weight to the designated doctor’s opinion. He also alleged that the evidence was not factually sufficient to support the findings.

HOldINg: Affirmed. The Court addressed Green’s contentions in order. First, regarding his allegation that the trial court erred in admitting evidence of his prior injury, the court noted that a party may not raise an issue in the trial court that was not raised before the TWCC appeals panel. This is well-settled law. He had not argued this to the Appeals Panel and was not allowed to bring the argument forward. Also, the court discussed the admission of evidence and noted that a trial court has “sound discretion” in admitting evidence. An appellate body will not reverse a trial court’s evidentiary ruling if unless there is an abuse of discretion and probably caused improper judgment or prevented proper appeal. Here, the court noted that the trial court had a legitimate basis for admitting evidence of a prior injury because it went to the issue of disability.

Case deCIsIONs texas COuRt OF appeals

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Second, the court discussed the allegation that more weight should have been afforded the designated doctor’s opinion than to the RME doctor’s opinion. Green’s contention was overruled; the issue was disability, and the designated doctor’s report actually supported the school’s contention that Green could return to work as of October 2, 2002.

Third, in response to Green’s contention that the trial court erred in not considering the evidence of MMI from the designated doctor, the court noted that MMI was not an issue, only disability, and thus overruled the point.

Finally, the court commented that it will set aside a verdict only if the evidence is so weak or if the finding is so against the great weight and preponderance of the evidence that it is clearly wrong or unjust. The evidence was factually sufficient per the court.

douGlaS v. Moody GardenS, Inc. and tranScontInental InS. co., NO. 14-07-00016-CV, 2007

wl 4442617 (tex.app.—HOustON[14tH dIst.] deC. 20, 2007, NO pet. H.).

A workers’ compensation claimant is barred from suing the employer under the exclusive remedy provision of the Act if the injury is found to have occurred in the course and scope of employment even if the claimant is barred from recovery of benefits due to untimely filing of a workers’ compensation claim.

FaCts: Moody Gardens, Inc. (“Moody”) employed Linda Douglas, and she was injured at work. She did not timely file a workers’ compensation claim, but filed a negligence lawsuit against Moody, who subscribed to workers’ compensation insurance. The issue of a compensable injury was pending before the TWCC when Douglas filed suit, so the trial court abated the proceeding.

At CCH, a hearing officer determined that Douglas had been injured in the course and scope of employment, but since she failed to timely file her claim, was not entitled to benefits. The Appeals Panel affirmed that holding. The trial court then reinstated the negligence lawsuit, and entered summary judgment in favor of the employer, finding that Douglas was barred from the personal injury lawsuit because of the exclusive remedy that the Workers’ Compensation Act provides. The Appeals Panel affirmed the decision against her. The trial court also granted summary judgment for Transcontinental, whom Douglas sued after the Appeals Panel decision. Moody’s appeal of the summary judgments forms the basis for this opinion.

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HOldINg: Affirmed. The court noted that while Moody asserted that she was appealing both summary judgments, she actually did not present any evidence to challenge summary judgment in favor of Transcontinental. Thus, she waived any challenge to that summary judgment and it was affirmed without discussion.

Douglas alleged theories of both equitable estoppel and quasi-estoppel against Moody. She specifically argued that because the employer initially asserted that she was not in the course and scope of employment, it should be estopped from arguing that in the lawsuit she filed.

The court found that neither theory created a genuine issue of material fact such that the summary judgment should be reversed. Douglas could not meet the elements of equitable estoppel (a party must prove a false representation or concealment of material facts made with knowledge of those facts with the intention that the representation should be acted on, to a party without knowledge, or the means of knowledge of those facts, who detrimentally relied upon the misrepresentation). She did have knowledge or means of knowledge that she may have been injured in the course and scope of employment. Likewise, she could not meet the elements of quasi-estoppel. Quasi-estoppel keeps another party from asserting a right inconsistent with a position previously taken by that party to another’s disadvantage. Douglas thus asserted that she was precluded from filing a workers’ compensation claim because of Moody’s initial position that she was not in the course and scope of employment and that she now has no form of recovery because Moody asserted in court that she was in the course and scope of employment when injured.

The court rejected this quasi-estoppel theory, noting that if the administrative process had yielded a finding that Douglas was not injured in the course and scope of employment, the exclusive remedy provision would not apply and she could sue the employer for negligence. The court stated that Douglas was not denied recovery due to Moody’s inconsistent positions, but rather due to the fact that she chose not to timely pursue a workers’ compensation claim. So, it is not unconscionable to allow Moody to rely on the exclusive remedy provision of the Act.

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lIBerty Mutual FIre InSurance v. laca, NO. 08-06-00036-CV, 2007 wl 4260973

(tex. app.—el pasO, deC. 6, 2007, NO pet.H.).

If a party requests written findings of fact and conclusions of law following a bench trial, the court’s failure to provide them is presumed to be harmful error unless the record affirmatively shows no harm to the complaining party.

FaCts: Laca injured his shoulder on April 17, 2003 while he was employed by Vertex Aerospace, LLC, when he helped a coworker tighten a nut on a five-ton truck wheel. He continued to work for two months after the accident. He testified that, although he immediately felt pain in his shoulder, he believed that he had merely pulled a muscle in his arm when he caught the wrench. Laca did not seek medical attention until June 20, 2003. An MRI of June 26, 2003 showed rotator cuff damage and his physician recommended surgery. Laca reported the injury to his employer on June 20, 2003 and did not return to work pending surgery. He filed a workers’ compensation claim and the parties attended a Contested Case Hearing. Ultimately, Laca sought judicial review of the Workers’ Compensation Commission Appeals Panel decision. The trial court reversed, determining that Laca proved that he sustained a compensable injury. Vertex’s workers’ compensation carrier, Liberty Mutual Fire Insurance, timely requested findings of fact and conclusions of law and notified the trial court they were past due when it failed to respond. Nevertheless, the trial court did not respond. Liberty Mutual appealed.

HOldINg: Reversed and remanded. Under Texas Rule of Civil Procedure 296, a party has the procedural right to request that, following a bench trial, the trial court prepare written findings of fact and conclusions of law. The trial court’s duty to make such findings, in response to a timely request, is mandatory and its failure to respond to a timely request for written findings of fact and conclusions of law is presumed to be harmful error, unless the appellate record affirmatively shows that the complaining party has suffered no harm.

There were no findings of fact and conclusions of law, so Liberty Mutual was forced to guess at the underlying basis for the trial court’s judgment. The trial court could have determined that Laca had good cause not to report the injury within 30 days, or that Vertex had notice of the accident through other employees, or both. In addition, without a finding as to the severity of Laca’s disability and long it continued, there is no way for defendant to determine how much the claim is worth or how much it would be obligated to pay, if it chose not to appeal the trial court’s order. The record does not affirmatively show that Liberty Mutual was not harmed by that court’s failure to respond to its timely request for findings of fact and conclusions of law because there were so many grounds on which the trial court might have based its decision.

The court noted that without findings of fact and conclusions of law, it would be forced to decision apply the standard of review used where the parties do not make

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a Rule 296 request, that is to affirm the judgment on any legal theory supported by the evidence. It is inappropriate to hold a party that did make a timely Rule 296 request to the same broad standard as a party who did not.

Because the judge who handled the case had been replaced as the result of an election, the Court was required to reverse and remand the case for a new trial.

Knapp MedIcal center v. de la Garza, 51 tex. sup. Ct. J. 235, 2007 wl 4357593 (deC. 14, 2007).

The Texas Supreme Court characterizes Rule 11 as a “statute of frauds” as it relates to settlement agreements. In other words, the settlement agreement must be in writing or it is unenforceable. A party cannot circumvent Rule 11 and argue fraud.

FaCts: De La Garza argued that the Court should address his contention that the hospital’s representation that it would contribute $200,000 to settle his claim induced him to make a Stowers demand on the hospital’s insurer to settle his claim for its policy limits. He argued that even if the oral agreement cannot be enforced, he still should be entitled to the benefit of the bargain.

HOldINg: Motion for Rehearing Overruled. Texas Rule of Civil Procedure 11 (“Rule 11”) is a “statute of frauds” for settlement agreements. (A “statute of frauds” requires that certain contracts be in writing, and that they be signed by all parties to be bound by the contract.) Rule 11 states unless otherwise provided in the rules, “no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, singed and filed with the papers as part of the record, or unless it be made in open court and entered of record.” A fraud claim cannot thus be used to circumvent a Rule 11 agreement and enforce an otherwise unenforceable oral settlement agreement.

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Ford Motor co. v. ledeSMa, 51 tex. sup. Ct. J. 250, 2007 wl 4465732 (deC. 21, 2007).

The Texas Supreme Court has modified the traditional definition of “producing cause”; to constitute a producing cause of an event (1) the cause must be a substantial cause of the event at issue and (2) it must be but-for, that is, without which the event would not have occurred.

FaCts: Ledesma sued Ford Motor Company in a products liability action after a truck that he bought malfunctioned and caused an accident. The jury held for Ledesma and awarded damages of $215,380. The court of appeals affirmed. Ford appealed the matter to the Texas Supreme Court.

HOldINg: Reversed and remanded. The Court discussed at length the issues of admissibility of expert evidence, but the most important part of the decision comes in the discussion of the jury charge. The Court notes a change in the long-used definition of “producing cause.”

The jury charge noted: “ ‘Producing cause’ means an efficient, exciting, or contributing cause that, in a natural sequence, produces the incident in question. There may be more than one producing cause.” Ford contended that the definition of producing cause should note that the phrase “means that cause which, in a natural sequence, was a substantial factor in bringing about an event, and without which the event would not have occurred. There may be more than one producing cause.”

The Court noted that the definition used in the charge was incomplete and contains adjectives not in modern English usage (“efficient” and “exciting”). The definition urged by Ford is easily understood and contains the two essential components of producing cause: (1) the cause must be a substantial cause of the event at issue and (2) it must be but-for, that is, without which the event would not have occurred.

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pRaCtICe pOINteR

disability when attending doctor’s appointments

• Question: Is a claimant disabled when going to a doctor’s appointment?• Answer: Yes.• Question: Is the claimant entitled to TIBs for going to a doctor’s appointment?• Answer: It depends.

In Appeal No. 961441 the Appeals Panel held that a claimant is disabled if the claimant misses work for a doctor’s appointment, but is not paid salary continuation. In a footnote, the Appeals Panel distinguished Appeal No. 950753, where they had determined that there was no disability when the claimant missed time for doctor’s appointments, but was provided salary continuation. The issue there was the accrual date of benefits.

Turn, next, to Appeal No. 020203. In that case the claimant missed time from work for doctor’s appointments but used sick leave and vacation pay. The Appeals Panel discussed that under Rule 129.2 voluntary use of sick leave and vacation pay constituted PIE. However, they noted that most of the period of the asserted disability was prior to the effective date of the rule and that it “cannot apply concepts in a rule that was not in effect at that time.” Therefore, under the precedence of 950753, the claimant was not disabled.

In Appeals Nos. 050565 and 052243-s, the Appeals Panel flatly held that the payment of salary continuation affects only the TIBs calculation and not the issue of disability.

Thus, it is clear that the claimant is disabled if work is missed due to a doctor’s appointment, regardless of whether the claimant is paid salary continuation.

However, this does not end the inquiry of liability for TIBs. Such liability is calculated based upon weekly earnings, not daily earnings. Therefore the fact that a claimant had a “day of disability” does not mean that the claimant is automatically entitled to TIBs. Rather, you must compare the weekly PIE to the AWW. Therefore, if the claimant made up the time later in the week, or had additional overtime during that week such that PIE exceeded AWW, then no TIBs would be due, despite the fact that the claimant was disabled.

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INteRest CalCulatOR

Interest Rate Effective from 01/01/2008 through 03/31/2008: 6.84%

1 Determine number of weeks of continuous payment owed. Find corresponding “X” value on chart.

2 Multiply “X” by weekly compensation rate. This is the approximate amount of interest owed on the ending date of benefits.

3 Determine number of weeks between ending date of payments and date benefits are to be paid. Find corresponding “Y” value on chart.

4 Multiply “Y” by the total benefits owed (not including interest determined in steps 1 and 2 above). This is the approximate amount of interest owed from benefit ending date to payment date.

5 Determine total benefits plus interest owed by adding interest from steps 2 and 4, and adding total benefits to be paid.

TIBs: Calculate interest from the 7th day after first day benefits began, or the 7th day after the first notice, whichever is LATeR.

IIBs: Calculate interest from the 5th day after notice of the certification of MMI and impairment, or the date of a CARRIeR dispute of MMI or impairment, whichever is eARLIeR.

NOTe: For partial weeks, round up to next week (8 2/7ths weeks = 9 weeks).

Accumulated Interest from Beginning to End of Continuous Payment

Accumulated Interest from End of Payment Period to Date Paid

Weeks “X” Value Weeks “X” Value Weeks “Y” Value Weeks “Y” Value1 0.0018 27 0.4964 1 0.0013 27 0.03552 0.0044 28 0.5331 2 0.0026 28 0.03683 0.0084 29 0.5711 3 0.0039 29 0.03814 0.0136 30 0.6105 4 0.0053 30 0.03955 0.0202 31 0.6511 5 0.0066 31 0.04086 0.0280 32 0.6931 6 0.0079 32 0.04217 0.0372 33 0.7364 7 0.0092 33 0.04348 0.0477 34 0.7810 8 0.0105 34 0.04479 0.0595 35 0.8269 9 0.0118 35 0.046010 0.0726 36 0.8741 10 0.0132 36 0.047411 0.0871 37 0.9227 11 0.0145 37 0.048712 0.1028 38 0.9725 12 0.0158 38 0.050013 0.1199 39 1.0237 13 0.0171 39 0.051314 0.1382 40 1.0762 14 0.0184 40 0.052615 0.1579 41 1.1299 15 0.0197 41 0.053916 0.1789 42 1.1850 16 0.0210 42 0.055217 0.2012 43 1.2414 17 0.0224 43 0.056618 0.2248 44 1.2992 18 0.0237 44 0.057919 0.2497 45 1.3582 19 0.0250 45 0.059220 0.2760 46 1.4185 20 0.0263 46 0.060521 0.3035 47 1.4802 21 0.0276 47 0.061822 0.3324 48 1.5432 22 0.0289 48 0.063123 0.3626 49 1.6074 23 0.0303 49 0.064524 0.3940 50 1.6730 24 0.0316 50 0.065825 0.4268 51 1.7399 25 0.0329 51 0.067126 0.4609 52 1.8081 26 0.0342 52 0.0684

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FlaHIVe, OgdeN & latsON dIReCtORy

attorneys direct dial (512)

direct Fax*(512)

e-Mail **Initials@FOl. paralegal paralegal

(512)

Bobby Stokes 435-2150 867-1705 RDS Anita Drake 435-2249

Carlos Acosta 435-2177 867-1712 CA1 Alanna Bielke 435-2231

Chuck Finch 435-2158 867-1745 CCF Elizabeth Brown 435-2223

Dana Gannon 435-2151 867-1710 DMG Anita Drake 435-2249

Elizabeth Campos 435-2159 867-1715 EBC Grace Guerrero 435-2242

Greg Solcher 435-2175 867-1718 GDS Shannon Morrison 435-2298

Jack Latson 435-2156 867-1701 JWL Patsy Shelton 435-2234

James Sheffield 435-2169 867-1703 JRS Sharissa Karol 435-2224

Jeremy Lord 435-2184 867-1711 JXL Anita Drake 435-2249

Katie Flahive 435-2168 867-1702 KMF Marlyn Mueller 435-2229

Kevin MacEwan 435-2166 867-1706 KEM Cynthia Sherman 435-2274

Kevin Poteete 435-2163 867-1728 KSP Grace Guerrero 435-2242

Lynette Phillips 435-2165 867-1708 LLP Sharon Youso 435-2233

Nancy Ippolito 435-2181 867-1721 NHI Marlyn Mueller 435-2229

Paul Stone 435-2157 867-1716 PBS Karen VanLoo 435-2240

Pamela Peavy 435-2152 867-1736 PEP Shannon Morrison 43.5-2298

Rebecca Strandwitz 435-2160 867-1720 RMS Sonya Burke 435-2257

Rhett Robinson 435-2154 867-1709 SRR Cynthia Carter 435-2228

Rob Dollars 435-2164 867-1707 RAD Karen Vanloo 435-2240

Ron Johnson 435-2178 867-1745 RMJ Elizabeth Brown 435-2223

Roy Leatherberry 435-2179 867-1714 RJL Cynthia Carter 435-2228

Scott Bouton 435-2153 867-1737 SDB Cynthia Sherman 435-2274

Steve Tipton 435-2162 867-1704 SMT1 Mary Casebier 435-2275

Susan Larsen 435-2182 867-1734 SJL Alanna Bielke 435-2231

Tom Wilkins 435-2183 867-1727 TRW Sonya Burke 435-2257

Tricia Blackshear 435-2180 867-1723 PHB Sharon Youso 435-2233

*Attorney’s direct dial fax no. is directed to his/her paralegal.**Alternative e-mail address: first initial+last name@fol.com (example: rstokes@fol.com)

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key task dIReCtORy

To help expedite your faxed information to the correct area within FO&L and get it to the responsible person at the earliest time, use the following fax directory. Please remember the 3:30 p.m. receipt deadline for material required to be date stamped at the Commission. Material received after 4:00 p.m. does not permit time to deliver it across town prior to the DWC close.

task Contact person direct dial (512)

Fax No.(512)

e-MailInitials@FOl.Com

Administrative Violations – C&P Dianne Townsend 435-2289 867-1724 DLT

BRC Settings (Request For evidence)

Cindi Friedel 435-2244 477-4987 CAF

Disputed Claims (PLNs)

Request for BRC (TWCC-45)Tillie Aguirre 435-2235 477-4996 TAA

General Questions Receptionist 477-4405 867-1700 GQS

Insurance Coverage (TWCC-20) Patsy Shelton 435-2234 867-1701 PGS

Records Requests/Photostats Katie Jaimes 435-2220 867-1748 KEJ

Medical Dispute Resolution Katie Foster 435-2266 867-1733 KTF

Client Consultant Trina DeCecco 435-2239 867-1700 TAD

Designated Doctor Filings Brandi Senters 435-2299 479-5319 BES

TWC Manual Sales Jordan Kazmann 482-9710 472-9160 jpk@cov-press.com

Flahive, Ogden & LatsonAttorneys at LawP. O. Box 13367Austin, TX 78711