2005 Legislative Compendium: Workers' Compensation

At present, the Texas Workers' Compensation system ranks as one of the most costly, least satisfactory, and least effective systems in the country. Universally, all participants agree that the system, in its current state, is one of disarray and frustration. Physicians are refusing to treat workers' compensation patients primarily because of the extremely high administrative hassles, billing issues, and low reimbursement rates. In 2002, the Texas Workers' Compensation Commission established a medical fee guideline that pays physicians 125 percent of Medicare. In 2002, approximately 30,000 physicians were willing to treat workers' compensation patients; now, that number is about 12,000.

At this time, injured employees in Texas can choose any provider (including a chiropractor or a dentist) to be their treating doctor and may change providers as many times as they desire. These issues, along with the adversarial nature of the workers' compensation system, have created a system with high health care costs, high employer premiums, low satisfaction for injured workers, and very little incentive for injured employees to return to work.

Workers' Compensation Reform

Of primary interest to physicians were HB 7 and SB 5, each with major ramifications to the entire workers' compensation system. HB 7 by Rep. Burt Solomons (R-Carrollton) and SB 5 by Sen. Todd Staples (R-Palestine) sought to dramatically revamp the faulty system. HB 7, also known as the Sunset Commission's Workers' Compensation Reform bill, is the result of the Sunset Commission's periodic review of the Texas Workers Compensation Commission (TWCC). SB 5 was the result of a large Senate interim study chaired by Senator Staples.

Both bills attempted to reform workers' compensation health care delivery through managed care-style networks to help control utilization, the largest cost driver in the system, in exchange for the ability of physicians to negotiate fees and a reduction in administrative burdens. TMA consistently stated that networks were not its idea nor did it believe they will be a "silver-bullet." TMA stated that if the legislature decided that "networks" were to be adopted, the same regulatory controls that exist for commercial networks must apply to any workers' compensation network. These controls include prompt pay language, networks adequacy language, the ability to negotiate fees, and streamlined dispute processes.

Both chambers handed out their respective workers' compensation reform bills early on in the session. Upon arrival in the other chamber, both bills came to a procedural halt. Without negotiation, each bill was ultimately substituted for the other and sent to a conference committee. Ultimately, intervention from the legislature and governor was required to establish a compromise. The primary issues of concern about both bills were who would be the final author, whether or not the existing regulatory agency was retained, and the level of benefits for injured workers.

HB 7 prevailed. The final version abolishes the Texas Workers' Compensation Commission and transferred its regulatory authority to a new division under the Texas Department of Insurance. The new division will have a single gubernatorial-appointed commissioner who reports directly to the insurance commissioner and governor. HB 7 also allows for managed care networks to deliver health care. The networks will sign up providers, then monitor their utilization. In theory, because these providers will be those chosen, trusted, and monitored by the networks, the carriers will not impose many of the unnecessary administrative burdens found in the existing system and pay the providers fair and reasonable fees.

TMA-supported prompt pay language was included in the bill as well as language dealing with network adequacy and due process. Additionally, compensability determination and payment reform was included in the final version. In an attempt to curb denial abuses, carriers will be required to pay providers up to $7,000 if providers successfully contest compensability.

Access to Workers' Comp Claimant Information

HB 251 by Rep. Rob Eisler (R-The Woodlands) and Sen. Tommy Williams (R-Beaumont) allows employers, hospital groups, carriers, and other affiliated groups to access workers' compensation claimant information such as name, social security number, date of birth, date of injury, injury type, and so forth. This measure should affect insurance carriers much more than physicians. It will give additional information to carriers and employers to address sub-claim issues.

Guaranty Fund for Self-Insured Worker's Comp Groups

HB 1353 by Rep. Robby Cook (D-Eagle Lake) and Sen. Robert Duncan (R-Lubbock) creates a guaranty fund for self-insured workers' compensation groups who are declared insolvent. The bill will set up a trust fund of at least $1 million for the emergency payment of the compensation liabilities of an insolvent group.

Temporary Employees Workers' Comp Benefits

HB 1745 by Rep. Gene Seaman (R-Corpus Christi) and Sen. John Carona (R-Dallas) disqualifies certain temporary employees for workers' compensation benefits.

Workers' Compensation TMA Staff Contacts:  

• Greg Herzog, Legislative Affairs, (512) 370-1360
• Rich Johnson, Medical Economics, (512) 370-1315
• Michael Reed, Health Care Delivery, (512) 370-1409
• Donna Kinney, Regulatory Analysis and Advocacy, (512) 370-1422
• C.J. Francisco, JD, Office of the General Counsel, (512) 370-1339

Overview  | Tax Reform | Scope of Practice | Physician Ownership | Inadequate Health Plan Networks (Balanced Billing) | Managed Care/Insurance Reform | Texas State Board of Medical Examiners Sunset and Physician Licensure | Agency Sunset Review  | Corporate Practice of Medicine | Health Care Funding | Medicaid and CHIP | Indigent Care and the Uninsured | Professional Liability Reform | Medical Education/Workforce | Child Health, Safety, and Nutrition/Fitness | Public Health | Border Health | Rural Health | Mental Health | Trauma/EMS | Prescription Drugs | Medical Science | Long-Term Care | Abortion | Transplantation/Organ Donation | Table of Contents