* Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be

published and is not precedent except under the limited circumstancesset forth in 5THCIR.R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

January 4, 2005

Charles R. Fulbruge III

Clerk

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 04-50211

(Summary Calendar)

ANITA EVARO,

Plaintiff-Appellant,

versus

CONTINENTAL CASUALTY COMPANY,

Defendant - Appellee.

Appeal from the United States District Court

for the Western District of Texas

(USDC No. P-03-CV-36)

Before WIENER, BENAVIDES, and STEWART, Circuit Judges.

PER CURIAM:*

In this diversity action, Anita Evaro appeals the district court’s grant of summary judgment

for Continental Casualty Insurance based on lack of subject matter jurisdiction. For the following

reasons, we AFFIRM.

FACTUAL AND PROCEDURAL BACKGROUND

In August 1997, Anita Evaro (“Evaro”) suffered a back injury while employed as a produce
1 Evaro’s treatment included back surgery, epidural treatments, ganglionectomies,

implentation, x-rays, a trial spinal cord stimulator, and regular office visits. 

2 Specifically, he suggested Evaro suffered fromMunchausen Syndrome - a facitious disorder

with physical symptoms.

2

inspector for RX Staffing Corporation at its Anchor West facility. Continental Casualty Co.

(“Continental”) provided workers’ compensation insurance to RX Staffing. Evaro filed a claim for

workers’ compensation benefits for her injury. Continental denied the claim and contested the

compensability ofEvaro’sinjury before the Texas Workers’CompensationCommission (“TWCC”).

After a contested case hearing, TWCCdetermined that Evaro’sinjurywas compensable. Continental

appealed the decision to the Appeals Panel, which also ruled in Evaro’s favor. Subsequently,

Continental began payment of both income and medical benefits to Evaro in 1998. Evaro consulted

a team of physicians for her injury, among them Dr. Oei, a pain management specialist. Evaro was

eventually diagnosed with a herniated disk and under went surgery on March 16, 2000. In March

2001, Dejaune Phillips, an adjuster with Continental, requested a peer review to determine whether

the continued course oftreatment Evaro was undergoing withDr. Oeiwasreasonable and necessary.1

Dr. Theodore Pearlman, a psychiatrist, conducted the peer review by looking over Evaro’s medical

records. In a report dated March 22, 2001, Dr. Pearlman concluded that Evaro’s continued treatment

by Dr. Oei and other doctors was not reasonable or medically necessary. He opined that Evaro’s

continued problemsresulted fromnon-physical, psychologicalfactors which could be preventing her

improvement or contributing to the symptoms Dr. Oei and other providers were treating.2 He

recommended that follow-up visits be terminated and Evaro weaned from pain medications. 

Dr. Oei continued to see Evaro through October 2001; although Continental denied payment

for Evaro’s visits to Dr. Oei from May 2001 through October 2001, citing the lack of medical
3

necessity for the services as indicated by Dr. Pearlman’s report. Continental also refused to

preaut horize a request by Dr. Oei for diagnostic tests in October 2001. Dr. Oei did not contest

Continental’srefusal to pay with TWCC nor did he ask Continental to reconsider their non-payment.

Evaro contends she paid for Dr. Oei’s services herself from the end of January of 2001 until the end

of 2002; however, the district court noted there was no evidence Evaro paid for the treatments herself

nor evidence that she challenged the denial of payment to TWCC or Continental. 

InAugust 2002, Dr. Oeiperformed two ganglionectomies onEvaro that ContinentalCasualty

had prospectively approved. Continental paid Dr. Oei for the operations but in an amount which was

reduced to meet applicable TWCC fee guidelines. Dr. Oei did not challenge the reduced fee to

Continental nor did he request medical dispute resolution with TWCC. On or about January 14,

2003, Dr. Oei notified Evaro of his decision to cease treatment of her as a patient. Evaro contends

that Dr. Oeiwithdrew as her physician because ofContinental’s non-payment. Evaro asserts that her

condition has worsened since Dr. Oei stopped treating her. On March 27, 2003, Evaro filed suit in

Texas state court against Continental for breach of the duty of good faith and fair dealing because

Continental denied payment of workers’ compensation medical benefits without a reasonable basis.

Continental removed the case to United States District Court, Western District of Texas based on

diversity of citizenship. On January 28, 2004, the district court granted summary judgment for

Continental based on lack ofsubject-matter jurisdiction. The district court concluded that Evaro did

not exhaust her administrative remedies before TWCC prior to initiating this judicial proceeding.

Evaro filed a timely appeal.

DISCUSSION

I. Standard of Review 
3

 The employee is specifically entitled to health care that:

(1) cures or relieves the effects naturally resulting from the compensable injury;

(2) promotes recovery; or

(3) enhances the ability of the employee to return to or retain employment.

TEX. LAB. CODE § 408.021(a) (West 2004).

4

We review the grant of summary judgment de novo, applying the same standards as the

district court. See Mowbrayv. CameronCounty, Tex., 274 F.3d 269, 278 (5thCir. 2001). Summary

judgment is appropriate only when the record indicates "no genuine issue as to any material fact and

that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56.

II. Summary Judgment

Continental asserts that the district court was correct in finding it lacked jurisdiction over

Evaro’s suit because Evaro has not exhausted her administrative remedies with the TWCC.

Continental contends the TWCC has never ruled that Evaro is entitled to the challenged medical

treatments, and therefore, the courts have no authority to award damages for treatment the TWCC

has not determined Evaro is entitled pursuant to Am. Motorists Ins. Co. v. Fodge, 63 S.W.3d 801

(Tex. 2001). According to Continental, Dr. Oei should have requested medical dispute review of the

denial of payment, as was his right, so that TWCC could rule on whether payment was due. 

Evaro counters that the TWCC made a final decision determining she is entitled to benefits

when it concluded her injury was compensable. “An employee who suffers a compensable injury is

entitled to all health care reasonably required by the nature of the injury as and when needed.” TEX.

LAB.CODE § 408.021(a)3. Evaro asserts that there is at least a fact issue about whether Continental’s

denial of medical benefits was a bad faith attempt to challenge the prior compensability decision.

The power to award compensation benefits lies exclusively with the Texas Workers’
5

Compensation Commission. Bone v. Utica Nat’lIns. Co. ofTexas, 2003 WL 21810944, at *2 (Tex.

App. Aug. 7, 2003), reh’g denied, (Dec. 5, 2003) (quotation marks omitted); accord Fodge, 63

S.W.3d at 803. TWCC has jurisdiction over disputes involving income benefits, preauthorization of

medical care, and reimbursement of medical expenses. Fodge, 63 S.W.3d at 803 (quotation marks

omitted). The TWCC has pro mulgated rules through which an insurance carrier can review the

medical claims of health care providers. TEX. ADMIN.CODE §§ 133.301-.305 (West 2004). In turn,

the rules provide for a dispute resolution process through which a health care provider or claimant

can challenge the reduced payment or non-payment by a carrier. Id. § 133.305; TEX. LAB. CODE §

413.031(a)-(b). A party who is dissatisfied with the outcome of dispute resolution may seek relief

from the State Office of Administrative Hearings, and subsequently, from the courts. Texas

Workers'Comp. Comm'n v. Patient Advocates ofTexas, 136 S.W.3d 643, 652-53 (Tex. 2004); TEX.

LAB.CODE§ 413.031(k). A partymust exhaust their administrative remedies and there must be a final

decision of the TWCC’s Appeals Panel before a party may seek a judicial remedy. Cervantes v.

Tyson Foods, Inc., 130 S.W.3d 152, 157 (Tex. App. 2003); TEX.LAB.CODE § 410.251. A court has

no jurisdiction to award damages based on an insurance company’s denial of preauthorization or

failure to reimburse medical expenses if the TWCC has not determined that the claimant is entitled

to preauthorization or reimbursement. Malish v. Pac. Employers Ins. Co., 106 S.W.3d 744, 746

(Tex. App. 2003) (quotation marks omitted). 

The district courtfound that the onlyruling TWCCever made concerning the dispute between

Evaro andContinentalwasits 1998 ruling that Evaro’sinjurywas compensable. Evaro maintains that

the 1998 ruling by TWCC that her injury was compensable, and thus that she is entitled to all

reasonable health benefits associated with her injury, is a final decision that satisfies the exhaustion
4

 322 F.3d 883 (5th Cir. 2003).

5 A party, including a health care provider, is entitled to a review of a medical service

provided or for which authorization of payment is sought if a health care provider is:

(1) denied payment or paid a reduced amount for the medical service rendered;

(2) denied authorization for the payment of the service requested or performed if

authorization is required by the medical policies of the commission; or

(3) o rdered by the division to refund a payment received for a medical service

rendered.

6

requirement. Continental notes that retrospective, prospective or concurrent review of medical

treatment is distinct from compensability. See TEX. ADMIN. CODE § 134.600(h)-(i). Although,

Continental cannot challenge the final decision of the TWCC concerning the compensability of

Evaro’s injury, Continental asserts it was entitled to review the reasonableness or the necessity of

Evaro’s medical treatments. Id. § 133.301(a)(9); id. § 133.304;see also TEX.LAB.CODE § 413.014.

Evaro submits that her case is controlled by Gregson v. Zurich Am. Ins. Co.4 The insurance

carrier in Gregson found the plaintiff’sinjury compensable and agreed to provide coverage for back

surgery. However, the carrier refused payment for the medication prescribed to the plaintiff following

surgery; the plaintiff argued that was a breach of its duty of good faith. This Court found that the

plaintiffwas not required to exhaust his administrative remedies before bringing suit. First, the Court

found that Fodge did not apply because the insurance carrier already found Gregson’s injury

compensable and agreed to provide coverage for his back surgery and all other reasonable and

necessarybenefitsincident to the treatment- which included the post-surgeryprescription.Therefore,

the issue before it was whether an employee must exhaust administrative procedures with the TWCC

when the carrier denies coverage of a medical benefit incident to the approved medical treatment.

The Court stated that § 413.031(a) ofthe Texas Labor Code5providesfor medical dispute resolution
TEX. LAB. CODE § 413.031(a) 

7

of disputes arising from medical services rendered; but, Gregson did not receive the medication so

no medical service was rendered. Moreover, the provision stated it provided for review where

authorization of payment is sought; however, a prescription does not require preauthorization of

payment by the insurance carrier. Based on those conclusions, the Court found the medical dispute

resolution procedure did not apply to Gregson’s situation, nor did any other section of the Texas

Labor or Administrative Code require an employee who sought a medical benefit which did not

require preauthorization to exhaust any particular remedy. Therefore, Gregson was not required to

exhaust an administrative remedy. In contrast, Dr. Oei was denied payment for a medical service that

was actually rendered, and the invasive treatments Dr. Oei provided did require pre-authorization.

TEX. LAB. CODE § 413.014; TEX. ADMIN. CODE § 134.600(h)-(i). Accordingly, Evaro and Dr. Oei

were entitled to seek an administrative remedy. TEX.LAB.CODE § 413.031(a)-(c); ContinentalCas.

Ins. Co. v. Functional Restoration Assocs., 19 S.W.3d 393, 409 (Tex. 2000) (“When a workers'

compensation insurer denies payment ... the worker or the health care provider can request review

by a ‘health care provider professional review organization.’”); Bone, 2003 WL 21810944 (finding

the court lacked jurisdiction to adjudicate insurer’s refusal to pay pain management bill where

employee and physician did not exhaust their administrative remedies). Thus, Gregson is

distinguishable. 

The district court found that because Evaro did not utilize the medical dispute resolution

process, Evaro did not exhaust her administrative remedies. Furthermore, the district court

concluded Evaro was required to exhaust her administrative remedies pursuant to Texas state law

before she filed a claim in court. We affirm essentially for the reasons stated by the district court in
8

its memorandumorder. Because Evaro was required to exhaust her administrative remedies, and she

did not, the district court did not have jurisdiction to hear her claim.

II. Stay versus dismissal

Evaro arguesthat ifthisCourt findsthe courtslack jurisdiction over her claim, the appropriate

remedy is a stay rather than dismissal. Evaro avers that because she is not a health care provider,

the statute does not provide standing for her to assert an administrative proceeding. Since TWCC

does not have the power to grant her relief, Evaro argues TWCC’s primary jurisdiction does not

apply here and thus, a stay is more appropriate than a dismissal. For the reasons stated above, we

find Evaro’s arguments unpersuasive.

If a claim is not within a court’s jurisdiction, and the impediment to jurisdiction cannot be

removed, then it must be dismissed. Fodge, 63 S.W.3d at 805 (quotation marks omitted). The

TWCC provisionsstate that a medical dispute review must be initiated within a year after the service

in dispute. TEX. ADMIN. CODE § 133.307. Evaro’s one year window to initiate review of

Continental’s non-payment in 2001 and reduced payment in 2002, or have Dr. Oei initiate review,

has passed. Since, Evaro failed to exhaust her administrative remedies, and is now time barred from

doing so, dismissal is proper. 

CONCLUSION

For the foregoing reasons, the ruling of the district court is AFFIRMED.

AFFIRMED.