HBA-CCH H.B. 2600 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2600 By: Brimer Business & Industry 3/12/2001 Introduced BACKGROUND AND PURPOSE Under current law, the Texas Workers' Compensation Commission (TWCC) requires an employee who sustains a compensable injury to receive medical treatment from a doctor chosen from a list of doctors approved by TWCC. Currently, each doctor licensed in Texas on January 1, 1993, is on the list, unless subsequently deleted for any conduct TWCC considers relevant. A study by the Research and Oversight Council on Workers' Compensation (ROC) showed that medical costs for workers' compensation services in Texas exceeds the costs of other states in the study, but that the additional expenditures did not result in better return-to-work outcomes or an increase in workers' satisfaction with their medical services. The ROC found that over one-third of workers had not returned to work more than two years after their injury, and that many health care providers were frustrated with the workers' compensation system as well. House Bill 2600 expands regulation, training, and disciplinary actions and penalties applicable to insurance carriers and doctors that participate in the payment or delivery of medical services in the workers' compensation system. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Workers' Compensation Commission in SECTION 1.01 (Section 408.023 and 408.0231, Labor Code), SECTION 1.03, SECTION 2.02, SECTION 3.01 (Section 409.005, Labor Code), SECTION 3.02 (Section 413.021, Labor Code), SECTION 3.03, SECTION 4.02 (Section 413.014, Labor Code), SECTION 4.03, SECTION 6.02, SECTION 6.04 (Section 413.041, Labor Code), and in SECTION 6.06 (Section 415.023, Labor Code) of this bill. ANALYSIS House Bill 2600 amends the Labor Code relating to the medical review of health care provided under the workers' compensation insurance system. The bill provides that each doctor licensed in this state is eligible to be on the Texas Worker's Compensation Commission's (TWCC) list of approved doctors if the doctor registers with TWCC in the manner presented by commission rules and complies with the requirements adopted by TWCC. The bill requires TWCC to develop a list of Texas licensed doctors who are approved to provide workers' compensation services and sets forth provisions authorizing out-of-state doctors to perform these services. TWCC is required, by rule, to establish reasonable requirements for doctors and health care providers financially related to those doctors who provide services as treating or designated doctors, perform medical peer review, perform utilization review of medical benefits, and provide medical services on referral from the treating doctor. The bill requires TWCC to issue to an approved doctor a renewable certificate of registration that is valid for four years or as provided by TWCC rule in order to perform services. Each doctor, including a doctor who performs required medical examinations, must hold a certificate of registration and be on the list of approved doctors to perform workers' compensation services or to receive payment for those services. TWCC is, however, authorized to grant exceptions as necessary to ensure that employees have access to medical care (Sec. 408.023). TWCC is required, by rule, to establish criteria for removing a doctor from the list of approved doctors, for imposing sanctions for violations, and for authorizing reduced utilization review and preauthorization controls. The bill modifies the criteria for removing a doctor from the list. The bill also requires TWCC, by rule, to establish procedures under which a doctor may apply for reinstatement to the list of approved doctors, or for restoration of doctor practice privileges removed by TWCC based on sanctions. The bill specifies conditions for which TWCC is authorized to impose sanctions on a health care provider, an insurance carrier, or a utilization review agent (Sec. 408.231). The bill requires TWCC to employ or contract with a doctor who serves as a medical advisor (advisor) and specifies the advisor's duties (Sec. 413.0511). The bill authorizes the advisor to establish an independent medical quality review panel of health care providers as an advisory body to assist the advisor in providing recommendations for sanctions on health care providers and utilization review agents and for modifications to the list of approved doctors. The bill requires the Texas State Board of Medical Examiners and the Texas State Board of Chiropractic Medical Examiners to develop lists of physicians and chiropractors licensed by those agencies who have demonstrated experience in workers' compensation or utilization review from which the advisor shall appoint the members of the medical quality review panel. Except for harm resulting from gross negligence, malice, or recklessness, a person on the medical quality review panel is not liable for an act or omission committed in the course and scope of the person's service as a member of the panel. The actions of a person serving on the medical quality review panel do not constitute utilization review (Sec. 413.0512). H.B. 2600 requires TWCC to establish a medical network advisory committee (advisory committee) and specifies the composition of the committee. TWCC is also required, along with the advisory committee, to create standards for workers' compensation health care delivery networks. TWCC is further required to establish regional workers' compensation health care delivery networks by contract by May 1, 2002. The bill provides that an employee who elects to participate in the network receives employee income benefits from the date of the disability if the disability lasts longer than two weeks, and provides an employee with an increased maximum weekly temporary benefit of up to 150 percent of the state average weekly wage. The bill also sets forth provisions for an employee to select a doctor or change doctors within or outside the network. The bill requires the first meeting of the advisory committee to be held no later than October 1, 2001 (Sec. 408.0221 and SECTION 2.02). H.B. 2600 sets forth requirements and provisions for an employer to notify an injured employee, the employee's treating doctor, and the insurance carrier (insurer) of the possibility of modified duty opportunities or a modified duty return-to-work program available through the employer (Sec. 409.005). H.B. 2600 requires an insurer to notify the employer of the availability of return-to-work coordination services and the bill specifies those services. With the participating employer's consent, insurers and TWCC are required to target small employers and employers without return-to-work programs, and to focus return-to-work efforts on workers that begin to receive temporary income benefits. The bill requires TWCC to hire or secure the services of certified rehabilitation counselors or other comparably credentialed vocational specialists to train TWCC staff regarding the coordination of return-to-work programs and to assist in the evaluation and resolution of disputes. The bill requires TWCC to adopt rules to define the extent of required services, the minimum credential of service providers, the fees and the reporting of those fees by insurers, and other relevant matters. The bill requires TWCC to report to the Research and Oversight Council on Workers' Compensation regarding the implementation and outcome of return-towork initiatives twice each year (Sec. 413.021). The bill provides that except in a medical emergency, an insurer is liable for medical costs related to spinal surgery only if the insurer preauthorizes the surgery in accordance with applicable law and TWCC rules (Sec. 408.026). H.B. 2600 requires TWCC, by rule, to specify which health care treatments and services require express preauthorization and concurrent review by the insurer, and provides that treatments and services for a medical emergency do not require express preauthorization or concurrent review. Each insurer is required to allow health care providers the option to request that the insurer certify coverage for health care services, including pharmaceutical services, that do not require preauthorization and concurrent review, but the insurer retains the right to review and contest the request. The bill authorizes TWCC, by rule, to provide that an insurer is liable for payment of particular medical services, and also provides that an insurer is eligible for reimbursement for medical services paid from the subsequent injury fund in the event the injury is not compensable (Sec. 413.014). The bill authorizes TWCC to require an employee to submit to medical examinations to resolve any question about the employee's ability to return to work and specifies the administration of the examination. The bill requires TWCC to allow the insurer reasonable time to obtain the opinion of a doctor selected by the insurer because the insure is not satisfied with the opinion of the designated doctor before TWCC makes a final decision. The bill removes provisions regarding the amount of examinations an employee is required to undergo at the request of the insurer, the scheduling of a benefit review conference for an employee who is able to return to work, and the establishment of an administrative violation for an employee who fails or refuses to appear at the required examination (Sec. 408.004). In establishing fee and treatment guidelines regarding pharmaceuticals, TWCC is required to develop a formulary that requires generic pharmaceutical medications when authorized by the doctor (Sec. 408.028). The bill provides that a treating doctor is responsible for the efficient management of medical care whether that care is provided directly or by a provider on referral from the treating doctor. The bill requires TWCC to gather information regarding return to work outcomes, patient satisfaction, and cost and utilization of medical services provided or authorized by a treating doctor on the approved list (Sec. 408.023). H.B. 2600 provides that a review of the medical necessity of a medical service provided or requested and denied shall be provided by a health care provider professional independent review organization, unless waived in accordance with TWCC rules. The bill requires the insurer to pay the cost of the review unless TWCC determines that the health care provider has repeatedly or unreasonably exceeded medically sound practices, in which case the health care provider shall pay the cost of the review (Sec. 413.031). H.B. 2600 requires a doctor to disclose to TWCC the health care providers in which the doctor, or the health care provider that employs the doctor, has a financial interest as provided by the regulations adopted by the federal government for the Medicare program. The bill requires TWCC to adopt the federal regulations that define financial interest, and requires TWCC, by rule, to require a doctor to disclose financial interests in other health care providers as a condition of registration for the approved doctor list. A doctor or health care provider that fails to comply is subject to penalties and sanctions including the forfeiture of the right to reimbursement for services rendered during the period of noncompliance (Sec. 413.041). An insurer or healthcare provider may also be assessed administrative penalties for repeat violations after a prior notice of noncompliance. Prior notice is not required if the violation was committed wilfully or intentionally, or the violation was of a decision or order of TWCC (Sec. 415.0035). The bill authorizes TWCC to adopt rules providing for referral and petition to the appropriate licensing agency to restrict, suspend, or revoke the license of the violator (Sec. 415.023). TWCC shall adopt rules relating to the approved doctors list no later than February 1, 2002 (SECTION 1.03). TWCC shall adopt rules relating to the medical network participation option no later than December 1, 2001 (SECTION 2.02). TWCC shall adopt rules and implement provisions relating to return-to-work reporting and services no later than March 1, 2002. This change in law expires September 1, 2004, unless continued by the legislature (SECTION 3.03). TWCC shall adopt rules relating to preauthorization, concurrent review, and certification by April 1, 2002 (SECTION 4.03). The change in law relating to required medical examinations is effective for examinations on or after January 1, 2002 (SECTION 5.02). TWCC shall adopt rules relating to medical benefit regulation and dispute resolution by June 1, 2002 (SECTION 6.02). EFFECTIVE DATE September 1, 2001.