The state Supreme Court has sided with the Texas Medical Association on a key issue in workers’ compensation administrative fee disputes, ruling that physicians and hospitals don’t have to constantly reprove their case if an insurer appeals a decision.
The high court’s ruling Friday in Patients Medical Center v. Facility Insurance Corp. agreed with a TMA friend-of-the-court brief filed in late 2019. TMA’s brief had urged the court to reverse a 2018 appeals-court decision that could have upended the Texas Division of Workers’ Compensation’s (DWC’s) administrative appeal process.
In the case, Patients Medical Center, a hospital in Pasadena, had filed a fee dispute resolution request with DWC over an injured worker’s care. DWC agreed with Patients Medical that the hospital had been underpaid and awarded it more than $20,000 in additional payments. Facility Insurance appealed that decision to the State Office of Administrative Hearings (SOAH), which sided with Patients Medical and the division’s payment finding. Then, Facility Insurance appealed to a Travis County district court, which also sided with the hospital.
But the Third Court of Appeals ruled in December 2018 that the burden of proof at SOAH should’ve been on the hospital, not the health plan – even though it was the health plan that had appealed to SOAH. The appeals court reasoned that the dispute – how much the hospital was entitled to be paid – remained the same throughout the fee dispute resolution process. As the side that originally disputed the fees at the beginning of the process, the hospital was “seeking to change the status quo,” the appeals court said.
That decision, TMA argued, would’ve meant physicians or facilities would always have to prove their case at each stage of appeal – no matter who had done the appealing – racking up additional legal costs along the way.
The appeals-court decision “creates bad public policy by giving insurance companies significantly more power in DWC’s medical reimbursement dispute process,” allowing them to place the burden of each appeal, both legal and financial, on the hospital or physician even though the hospital or physician agreed with the DWC’s decision, TMA’s brief stated
The workers’ compensation division itself filed a Supreme Court brief supporting the hospital, as the division’s own rules say that in a SOAH case, the “party seeking relief” has the burden of proof. DWC’s friend-of-the-court brief also had warned the Supreme Court that the appeal’s court’s decision “threatens the system’s integrity.”
The Supreme Court on Friday sided with Patients Medical, TMA, and DWC.
“The court of appeals took a static view of the parties’ positions during the administrative phase of the proceeding to hold that the provider, as the party who initiates the [medical fee dispute] process to determine the proper reimbursement amount, is ‘the party seeking relief’ throughout that process until SOAH reaches a final decision,” Justice Debra Lehrmann wrote. “But the Division’s rules, considered as a contextual whole, do not support that view. Instead, the rules characterize the party requesting a contested case hearing as the party ‘seek[ing] review’ of and ‘appeal[ing]’ the [medical fee dispute] decision. … Thus, the identity of “the party seeking relief” depends not on who initially requested [dispute resolution] but on who requested relief at SOAH.”