Opinion ID: 894529
Heading Depth: 2
Heading Rank: 1

Heading: Reasoned Justification

Text: The APA requires an administrative agency to provide a reasoned justification for a rule it promulgates in the order adopting it. Tex. Gov't Code § 2001.033(1). That is, the order must include how and why the agency reached the conclusions it did for adopting the rule, and the conclusions must be presented in a relatively clear, precise, and logical fashion. Nat'l Ass'n of Indep. Insurers v. Tex. Dep't of Ins., 925 S.W.2d 667, 669 (Tex. 1996). The order also must provide (1) a summary of the comments received from interested parties; (2) a restatement of the factual basis for the rule; and (3) the reasons why the agency disagrees with the comments. Tex. Gov't Code § 2001.033(1)(A)-(C); Nat'l Ass'n of Indep. Insurers, 925 S.W.2d at 669. If an order fails to substantially comply with these requirements, the rule is invalid. Tex. Gov't Code § 2001.035(a); Nat'l Ass'n of Indep. Insurers, 925 S.W.2d at 669. Requiring an agency to demonstrate a rational connection between the facts before it and the agency's rules promotes public accountability and facilitates judicial review. Nat'l Ass'n of Indep. Insurers, 925 S.W.2d at 669. In the order adopting Rule 134.201, TWCC provided its reasons for enacting the Guideline. 21 Tex. Reg. 2361-92 (1996). Among other things, TWCC explained that based on an extensive national study by the Workers' Compensation Research Institute comparing fee reimbursement systems of twenty-seven states, Texas's workers' compensation system's reimbursements for specified procedures significantly exceeded the national median. 21 Tex. Reg. at 2362. TWCC's own analysis confirmed this conclusion. Id. TWCC enacted the Guideline to move Texas towards a median cost position in comparison with other states and towards a market based system which reimburses based on values set by the market for [medical] procedures.... Id. TWCC also explained its rationale for adopting statewide rates instead of utilizing regional MARs. Id. The agency's analysis found that the minimal overall variance in reimbursements among the various regions of the state did not justify developing a medical fee guideline with regional MARs. Id. Throughout the adoption order, TWCC provided factual evidence, policy objectives, and legal rationale for its decisions. See id. at 2361-92. The order included a summary of the written comments from interested parties and TWCC's responses to them. Id. at 2367-91. TWCC provided an extensive explanation of its reasoning for adopting the Guideline. Thus, TWCC substantially complied with the reasoned justification requirement of the APA.