Last week the Texas Supreme Court granted review of case from the Austin Court of Appeals styled Facility Insurance Corporation v. Patients Medical Center, 03-17-00666-CV (Tex. App. 2018). The case arose from a fee dispute between a medical provider and a workers’ compensation carrier. The Texas Workers’ Compensation Division’s dispute resolution process resulted in an additional award to the provider for a spinal surgical procedure. The carrier appealed the Division’s decision to the State Office of Administrative Hearings. After hearing, the ALJ upheld the Division’s determination on the basis that that the carrier failed to carry the burden of proof that the provider was not entitled to the additional compensation for services provided. The carrier appealed to district court, which affirmed SOAH’s decision. The carrier then appealed to the 3rd Court.

In an opinion by Justice Puryear, the court held that a medical provider always has the burden of proof in a fee dispute, regardless of the identity of the party asserting the appeal. The court noted that the provider initiates the dispute resolution process and seeks affirmative relief at all times in the process, which culminates with a SOAH determination. To place the burden of proof on the carrier would require it to “prove a negative” and allow the ALJ merely to affirm the final decision of the TWCD’s medical dispute resolution officer on its own basis, without requiring any evidence from the provider of entitlement to the additional sum. Since the ALJ improperly placed the burden of proof on the carrier, the court reversed the trial court and remanded the case to SOAH for a new hearing. The provider sought SCOTX review, which was granted on June 1.

TWCD filed an amicus brief in support of the petition for review, arguing that the Court of Appeals misinterpreted division rules that assign the burden of proof to the party seeking affirmative relief. Whereas the court read the term “affirmative relief” to apply at all times to the provider’s claim, TWCD argues rather that the rule should be interpreted to mean that the party appealing decision has the burden. “Setting the burden of proof upon the party contesting an earlier decision,” the Division argues, “is in accordance with general judicial practices and encourages finality (and resulting reduction in dispute costs to system participants) of the original decision.” TWCD further argues that if the Court of Appeals decision stands and the burden of proof stays with the provider, carriers will have no incentive to accept the Division’s final decision and appeal up the chain. “Thus,” the Division contends, “insurance carriers might be incentivized to bypass the paper review process and get their medical fee disputes docketed at SOAH, where costs to health care providers significantly increase, even if health care providers are satisfied with the initial administrative decisions.”

This case has not gotten a lot of attention, but it will bear careful watching. The fact that SCOTX decided to take it up tells us that it recognizes the importance of the issue to the dispute resolution process at the Division.

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