ATTORNEY GENERAL OF TEXAS 

GREG ABBOTT 

December 10, 2010 

Mr. Rod Bordelon 

Commissioner of Workers' Compensation 

Texas Department of Insurance 

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 of Insurance (RQ-0890-GA) 

You ask two questions about the fee rates that workers' compensation insurance carriers must 

pay to reimburse health care providers for prescription drugs and other remedies delivered to 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 of Insurance, Division of 

Workers' Compensation (the "Division"). Request Letter at I. If the 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 presenting your first question, you discuss whether sections 408.027 ,408.028, and413.0 11 

of the Labor Code prohibit insurers from contracting for a reimbursement rate that is lower than the 

rates that the guidelines allow. Id. at 1-3. We begin our answer by noting that none of those 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 of the words it chose); 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 of permission 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 - Page 2 (GA-0828) 

20 I 0) (effective January I, 20 II). This is further indication that the statutes you discuss do not 

establish a minimum rate. See Mid-Century Ins. Co. o/Tex. v. Kidd, 997 S.W.2d 265, 273-74 (Tex. 

1999) (explaining that a law's express inclusion of a thing generally excludes a thing not expressly 

included). We have not found any statute that mentions a minimum rate for prescriptions under the 

Texas workers' compensation system, nor did any of the 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 (noting thatthe express inclusion of something excludes something not 

expressly included); see also Rodriguez v. Servo Lloyd's Ins. 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 "whether insurance carriers may contract with informal or voluntary networks" 

to obtain a' contractual agreement with health care providers to pay for prescriptions at rates lower 

than the rates allowed under the guidelines after January 1,2011. Request Letter at 1. Because there 

could not be a rate lower than the rates the guidelines allow, we will discuss the more basic question 

of whether insurance carriers may enter into contracts with informal or voluntary 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 defined by section 401.0 II (19)(E), Labor Code, may not be 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 

which includes "all reasonable and necessary medical aid, medical examinations, medical treatments, 

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," but both codes 

use it to define other terms in a way that indicates it describes a physical treatment or condition. See 

id. § 401.011(31) (defming the term "medical benefit" as payment 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 sudden onset of a condition manifested by severe pain or serious bodily 

2 See E-mail from Dirk Johnson, the Division's General Counsel, to Jason Boatright, Assistant Attorney General 

(Sept. 16,2010) (indicating that the guidelines are section 134.503) (on file with the Opinion Committee). 
Mr. Rod Bordelon - Page 3 (GA-0828) 

dysfunction). Because entering into a contract would not physically treat an injured worker, 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 on whether any particular contract between a WCHCN and an insurer would be legally 

pennissible. Tex. Att'y Gen. Op. No. GA-0302 (2005) (stating that this office does not review or construe contracts). 
Mr. Rod Bordelon - Page 4 (GA-0828) 

, SUMMARY 

Sections 408.027, 408.028, and 413.011 of the 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