On remand from the Texas Supreme Court, the Austin Court of Appeals has affirmed in part and reversed in part a SOAH decision awarding a medical provider additional fees in a dispute with a workers’ compensation insurance carrier over reimbursement for services provided to an injured worker.
The original issue in Facility Insurance Corporation v. Patients Medical Center (No. 03-17-00666-CV) was whether the administrative law judge, when the judge awarded about $20,000 in additional reimbursement to the provider, properly shifted the burden of proof during the hearing from the provider to demonstrate entitlement to the additional reimbursement to the carrier to demonstrate that the provider was not entitled to it. The court of appeals held that the ALJ improperly shifted the burden and reversed the ALJ’s order. SCOTX reversed the court of appeals, holding that “in a worker’s compensation proceeding, the burden of proof in a contested case hearing before SOAH is on the party seeking review of the Division’s MFDR decision.” Patients Med. Ctr. v. Facility Ins. Corp., 623 S.W.3d 336, 343 (Tex. 2021). The Court remanded the case for a determination of the appellate issues on the merits that it did not reach in the prior decision.
The underlying facts in the case involved a provider’s fees for certain spinal procedures. The provider requested pre-authorization for the procedures, which the carrier’s agent recommended be approved. The provider performed the procedure and sent the bill. The carrier denied most of the billed amount. After some going back and forth with the carrier without success, the provider initiated a medical fee dispute resolution (MFDR) process at DWC, asserting that the carrier owed $92,285.73 on the bill. The MFDR officer concluded that the provider was entitled to $20,495.78. The provider did not contest the decision, but the carrier requested a contested case hearing before SOAH. The ALJ confirmed the MFDR officer’s decision. The carrier sought judicial review, and the district court affirmed.
On remand, the court of appeals considered four issues asserted by the carrier. The first was whether the provider’s bill qualified as a “complete medical bill” because it had an incorrect service code and the provider did not submit a corrected bill within the 95-day deadline. The court held that since the carrier took final action on the bill (by paying in part and denying in part) without following the applicable rules for responding to an incomplete bill without taking final action, the incomplete bill did not substantially prejudice its rights. Once the carrier took final action, the provider could request MFDR and did not forfeit its right to reimbursement for failing to timely submit a claim for payment. On similar reasoning, the court rejected the carrier’s argument that the corrected bill submitted by the provider after the 95-day deadline was a “new bill” and that the provider forfeited its right to reimbursement because it did not request reconsideration of the carrier’s denial as required by the rules. Since the carrier had already taken final action on the original bill, the court held, the carrier did not meet “its appellate burden to demonstrate that the Provider was not entitled to MFDR of the Carrier’s denial of the original bill and request for reconsideration.” As to the third issue—whether the ALJ erred by determining that the carrier had not met its burden to show that the provider was not entitled to the reimbursement awarded by the MFDR officer—the court applied SCOTX’s ruling to hold that that there was a reasonable basis in the record for the ALJ to conclude that the carrier had not met its burden “to demonstrate that any alleged notice provided to the Provider satisfied [the applicable rule] such that the [contracted fee] applied.” In the event, the carrier produced no evidence that it provided the required notice, although the provider may have been otherwise aware of it.
In its last issue, the carrier challenged the MFDR officer’s calculation of the reimbursement amount, alleging that the officer included charges and costs for which it was not liable and that exceeded the preauthorized procedures. Here the court found that the carrier “met its appellate burden to demonstrate that substantial evidence did not support the ALJ’s conclusion that the Carrier failed to carry its burden regarding the calculation of the amount of additional reimbursement due.” In short, the problem appeared to be that the MFDR officer erroneously included the cost of an implant that did not have preauthorization when the officer calculated the additional reimbursement (in fact, it was not at all clear how the officer came up with the $20,000 number). The court remanded the case to the DWC for another swing at calculating the additional fee.
This dispute goes back to 2009, the date the provider sent the original bill to the carrier. The MFDR process commenced in September 2010, and the MFDR officer issued her findings and decisions in March 2013. The SOAH hearing and judicial review brought the case to the court of appeals in 2017. The court issued its first decision in 2018, which the provider appealed to SCOTX. SCOTX’s opinion came down in 2021, and the court of appeals ruled again in September. The case now goes back to DWC for what we are sure the parties hope is a final resolution.
Should we be concerned that a case involving a relatively small amount of money (though not to either the provider or the carrier) take so long to get sorted out? We don’t think so. This case involves significant issues regarding the MFDR process, the burden of proof in a contested case hearing resulting from that process, and compliance with DWC rules governing the submission of medical bills to a workers’ compensation carrier, the consequences of a carrier’s final action on a bill, and the requirements that carriers notify providers of participation in informal or voluntary network fee arrangements. It took a long time to get to the merits because the court of appeals did the right thing in the first instance: it decided the case on a fundamental procedural issue that was unclear and required SCOTX clarification. Once it received that clarification, the court moved swiftly to deal with a complex interaction of the sequence of events, the parties’ compliance with a body of DWC rules, and questions of covered and outlier procedures that may or may not have been considered by the MFDR officer. The wheels of justice don’t always turn very fast, but sometimes getting the right answers on a bunch of complicated questions simply takes time. That appears to be the case here.
