Office of House Bill AnalysisH.B. 2600
By: Brimer
Business & Industry


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


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. 


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.
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.

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.

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). 


September 1, 2001.