ATTORNEY GENERAL OF TEXAS GREG ABBOTT

December 10, 2010

Mr. Rod Bordelon Commissioner ofWorkers' Compensation Texas Department ofInsurance 7551 Metro Center Drive, Suite 100 Austin, Texas 78744-1609

Dear Commissioner Bordelon: Opinion No. GA-0828 Re: Whether a workers' compensation carrier may pay for a prescription drug at a rate lower than the fee rate allowed under the guidelines of the Division of Workers' Compensation of the Department ofInsurance (RQ-0890-GA)

Youasktwo questions aboutthe fee rates thatworkers' compensationinsurancecarriers must pay to reimbursehealth care providers for prescription drugs and otherremedies deliveredto injured workers under Texas workers' compensation laws.' First, you ask whether insurers may contract with providers after January 1, 2011, to pay for prescriptions at rates lower than the rates that might be allowed under the fee guidelines established by the Texas Department ofInsurance, Division of Workers' Compensation (the "Division"). Request Letter at I. Ifthe answer to that question is "yes," you want to know whether insurers may contract with informal or voluntary networks to obtain such contracts. Id. 

### I. 

### Whether Insurers May Pay Rates Lower than the Guidelines Allow In presentingyourfirst question, you discuss whethersections408.027,408.028, and413.0 11 ofthe Labor Code prohibit insurers from contracting for a reimbursement rate that is lower than the rates that the guidelines allow. Id. at 1-3. Webegin our answerby noting thatnone ofthose statutes refers to a minimum fee rate at which insurers may reimburse providers for prescriptions. See generally TEX. LAB. CODE ANN. §§ 408.027 (West Supp. 2010), 408.028 (West 2006), 413.011 (West Supp. 2010). This suggests that the statutes you discuss do not establish a minimum rate. See State v. Shumake, 199 S.W.3d 279,284 (Tex. 2006) (holding that courts determine the Legislature's intent from the plain meaning ofthe words itchose); see also Cameron v. Terrel & Garrett, Inc., 618 S.W.2d 535, 540 (Tex. 1981) (holding that courts must presume that every word excluded from a statute was excluded for a purpose). The lack of a reference to a minimum rate contrasts with the express grant ofpermission in section 413.011 to insurers to contract "for fees that exceed the fees adopted by the division under this section." TEX. LAB. CODE ANN. § 413.011(d-4) (West Supp.

lRequest Letter at 1 (available at http://www.texasattorneygeneral.gov).Mr. Rod Bordelon

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20I0) (effective January I, 20II). This is further indication that the statutes you discuss do not establish a minimumrate. SeeMid-CenturyIns. Co. o/Tex. v. Kidd, 997 S.W.2d 265, 273-74 (Tex. 1999) (explaining that a law's express inclusion ofa thing generally excludes a thing not expressly included). We have not found any statutethatmentions a minimum rate for prescriptions under the Texas workers' compensation system, nor did any ofthe many briefs we received in this matter purport to identify such a law. Because we are unaware of a statute that identifies a minimum allowable rate, we must interpret the guidelines in order to determine whether there is a minimum allowable rate. The guidelines refer to a maximum allowable rate, but they do not refer to a minimum allowable rate. 28 TEx. ADMIN. CODE 

### § 134.503(a) (2010) (Tex. Dep't ofIns., Reimbursement Methodology).2 This suggests that the guidelines do not provide a minimum allowable rate. See Kidd, 997 S.W.2d at 273-74 (notingthatthe express inclusion ofsomething excludes somethingnot expressly included); see also Rodriguez v. Servo Lloyd'sIns. Co., 997 S.W.2d 248, 254 (Tex. 1999) (providing that courts interpret administrative rules as they interpret statutes). Therefore, we conclude that there is not a minimum allowable rate under the guidelines. 

### II. Whether Insnrers May Contract for Discounted Rates You also ask "whetherinsurancecarriers may contractwithinformal orvoluntary networks" to obtain a' contractual agreement with health care providers to pay for prescriptions at rates lower than therates allowedunderthe guidelines afterJanuary 1,2011. Request Letter at 1. Becausethere couldnotbe a rate lower thanthe rates the guidelines allow, we will discuss the morebasic question ofwhetherinsurance carriers may enterinto contracts with informal orvoluntary networks to obtain contracts with health care providers to pay for prescriptions at negotiated rates. Under Insurance Code chapter 1305, every informal or voluntary network must be certified as a workers' compensation health care network ("WCHCN") by January I, 2011. TEX. LAB. CODE ANN. 

### § 413.0115(b) (West Supp. 2010). Chapter 1305 provides that "prescription medication or services, as definedby section401.0II(19)(E), Labor Code, maynotbe delivered through" a WCHCN. TEx. INS. CODE ANN. 

### § 1305.101(c) (West 2009). Section 40 1.0 11 (19)(E) ofthe Labor Code provides that a "prescription drug, medicine, or other remedy" is a form of"[hJealth care," the definition of whichincludes "allreasonable andnecessarymedical aid, medicalexaminations,medicaltreatments, medical diagnoses, medical evaluation, and medical services." TEx. LAB. CODE ANN. 

### § 413.011(19)(E) (West Supp. 2010). Thus, "prescription medication or services" under chapter 1305.101 are medications or services that provide medical aid to injured workers. Neither the Labor Code nor Insurance Code defines the adjective "medical,"butboth codes use itto define otherterms in a waythat indicates it describes a physical treatment orcondition. See id. 

### § 401.011(31) (defming the term "medical benefit" aspayment for health care intended to treat an injury or disease); TEx.lNs. CODE ANN. 

### § 1305.004(13) (West Supp. 2010) (defining the term "medical emergency" as the suddenonsetofa conditionmanifestedby severe painor serious bodily

2 SeeE-mail from DirkJohnson,theDivision's GeneralCounsel,to JasonBoatright, AssistantAttorney General (Sept. 16,2010) (indicating that the guidelines are section 134.503) (on file with the Opinion Committee).Mr. Rod Bordelon

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dysfunction). Because enteringinto a contractwould notphysicallytreat aninjuredworker, entering into a contract could not be a prescription medication or service. See TEx. INs. CODE ANN. 

### § 1305.101(c) (West 2009) (prohibiting a WCHCN from providing a prescription medication or service). Therefore, although a WCHCN must not provide prescription medication or services, an insurance carrier may enter into a contract with a WCHCN to obtain a contract with a health care provider to pay for prescriptions at a negotiated rate after January I, 2011. 3

3We express no opinion onwhether any particularcontractbetween a WCHCN andan insurerwouldbe legally pennissible. Tex. Att'y Gen. Op. No. GA-0302 (2005) (stating that this office does not review or construe contracts).Mr. Rod Bordelon

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### SUMMARY Sections 408.027, 408.028, and 413.011 ofthe Texas Labor Code do not establish a minimum allowable rate at which workers' compensation insurance carriers may pay for a prescription drug, medicine, or other remedy. A workers' compensation insurance carrier may contract with a workers' compensation health care network to obtain a contract with a health care provider to pay for a prescription drug, medicine, or other remedy at negotiated rates that are permitted by law.

DANIEL T. HODGE First Assistant Attorney General DAVID 

### 1,. SCHENCK Deputy Attorney General for Legal Counsel NANCY S. FULLER Chair, Opinion Committee Jason Boatright Assistant Attorney General, Opinion Committee