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

Heading: TWCC's Fee-Setting Authority

Text: Similar to its contention that the Dispute and Audit Rules constitute a private delegation of TWCC's audit power, PAT alleges that the rules also delegate TWCC's fee-setting authority. PAT argues that permitting insurance carriers to develop a methodology to determine reimbursement amounts where TWCC has not determined a MAR gives carriers unfettered discretion and allows them to engage in secret rulemaking. TWCC counters that the Dispute and Audit Rules require carriers to make consistent and fair payments to each provider in the absence of a fee guideline and that any deviation from carriers' usual method in determining the rate of reimbursement must be explained and documented. TWCC further argues that the carrier-developed methodologies must incorporate the statutory standards set forth in section 413.011 of the Labor Code, which is to establish fair and reasonable reimbursements that are designed to ensure the quality of medical care and to achieve effective medical cost control. The Legislature assigned TWCC the task of establishing medical policies and guidelines for fees charged or paid for medical services. Tex. Lab.Code § 413.011(a). The agency complied with this mandate, in part, by promulgating the Medical Fee Guideline. See 28 Tex. Admin. Code § 134.201. The Guideline is over four hundred pages long and sets forth MARs for thousands of medical treatments and services. We recognize that it may be impossible for TWCC to create a comprehensive guideline covering all possible medical procedures that an injured employee might require. [4] Although our analysis in Lone Star Gas was in the context of a legislative delegation, the logic of the case is applicable to these analogous circumstances: an administrative agency's failure to include every specific detail and anticipate unforeseen circumstances when promulgating rules does not invalidate the rules. 844 S.W.2d at 689; accord Boll Weevil, 952 S.W.2d at 467 (citations omitted). The Dispute and Audit Rules contain specific standards that a carrier must follow in calculating fees when a MAR has not been established: (1) the methodology used must be consistently applied to determine fair and reasonable reimbursement amounts that are uniformly paid for similar procedures under similar circumstances; (2) the method must be explained and documented and referenced in the claim file; and (3) any deviation from the usual method established to calculate fees must be explained and documented. 28 Tex. Admin. Code § 133.304(i). With regard to the first requirement, TWCC has defined fair and reasonable reimbursement to mean a reimbursement that meets the standards set out in section 413.011 of the Labor Code. Id. § 133.1(a)(8). Thus, where no MARs have been established, carriers are required to apply methodologies that determine fair and reasonable medical fees, ensure quality medical care to injured workers, and achieve effective cost control. Tex. Lab. Code § 413.011(b). PAT contends that this process is an invalid delegation of TWCC's fee-setting authority to insurance carriers because TWCC's rules allegedly give carriers the legislative power to unilaterally establish reimbursements for medical treatments and services for which no MARs exist. We consider PAT's argument in context. According to figures relied on by PAT, in calendar year 2000 approximately 0.02% of the more than 10,000,000 medical claims submitted to insurance carriers for reimbursement involved fee disputes. Because these claims included services covered by MARs and services for which MARs did not exist, less than 0.02% of claims submitted to TWCC for review involved fee disputes over procedures not covered by MARs. It is for the less than 0.02% of the medical fees at issue that PAT claims insurance carriers unilaterally set the reimbursement amounts. PAT's argument that carriers solely establish fees in the absence of specific reimbursement guidelines ignores reality. Health care providers determine the initial bills for medical services by billing insurance carriers their usual and customary charges. Texas Workers' Compensation Commission Medical Fee Guideline 1996, General Instruction VI, at 2. This first step is the same where a MAR has been established for a particular medical procedure and where no MAR exists. Id. In both situations, carriers review the bills submitted and pay or deny them in accordance with TWCC's rulesthe MARs in the Medical Fee Guideline or the procedures delineated in the Dispute and Audit Rules. Id. When a provider bills a carrier for a service or treatment that has no specific MAR attached, the carrier must develop and consistently apply a methodology which determines a fair and reasonable reimbursement amount. See 28 Tex. Admin. Code § 133.304(i)(1). However, it is the provider that initially sets the fee when it submits a claim to the carrier for payment. Moreover, carriers do not make the final determination of the fees for disputed claims. If a carrier and a provider disagree on the reimbursement amount, TWCC, not the carrier, makes the decision on the proper payment, subject to review. See Tex. Lab.Code §§ 413.013(1), 413.031(a); 28 Tex. Admin. Code §§ 133.304(m), (p), 133.305(b)(3)-(4). Any party that is not satisfied with the outcome may continue the review process through SOAH and then the courts. Tex. Lab. Code § 413.031(d). As discussed, carriers must follow TWCC's rules in establishing methodologies for determining medical fees when reimbursing health care providers in the absence of specific fee guidelines. See 28 Tex. Admin. Code § 133.304(i). Contrary to PAT's argument, this process does not allow carriers to employ secret methodologies. The Dispute and Audit Rules do not grant carriers hidden and unbridled discretion to arbitrarily set payments, but give them specific instructions on the procedures they are to follow. Id. The methodologies employed and the conclusions reached must be documented and available for TWCC's scrutiny. Id. The Dispute and Audit Rules set out a legitimate approach to payment of medical bills by specifying each private party's responsibilities and limitations, consistent with the enabling legislation. Health care providers submit bills for payment and insurance carriers review and process the bills, and either party may dispute the reimbursement. Tex. Lab.Code § 413.031(a); Texas Workers' Compensation Commission Medical Fee Guideline 1996, General Instruction VI, at 2. Carriers are not allowed to determine public policy and do not unilaterally establish medical fees; [5] they operate within TWCC's guidelines and in accordance with its rules. See FM Props., 22 S.W.3d at 873, 880; Boll Weevil, 952 S.W.2d at 470-71. Additionally, carriers are not given the authority to ascertain conditions upon which existing workers' compensation laws may operate. See FM Props., 22 S.W.3d at 873, 880; Higginbotham, 143 S.W.2d at 87. Therefore, we cannot say that a private insurance carrier's act of reviewing medical bills and determining a reimbursement amount when no MAR has been established falls within the legal definition of a delegation. Since we conclude that there is no delegation of TWCC's authority to audit participants in the workers' compensation system or to set fees, we need not consider whether a delegation meets the test set forth in Boll Weevil. We hold that the Dispute and Audit Rules were promulgated in accordance with the provisions in the Labor Code and provide a permissible form of carrier review of medical claims. We therefore reverse this part of the court of appeals' judgment.