The Texas Workers' Compensation system ranks as one of the most
costly, least satisfactory, and least effective systems in the
country. Texas is the only state where workers' compensation
insurance is voluntary. 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 2005, the Texas Legislature reformed the workers'
compensation system by allowing networks to manage injured workers'
health care. In the past, injured employees in Texas could choose
any provider (including a chiropractor or a dentist) to be their
treating doctor. Workers now enrolled in managed care networks must
choose a treating doctor from a list of contracted doctors.
While the networks are slowly developing, the 80
Legislature indicated that the reforms of 2005 needed time to be
implemented, so major changes would not be considered. More than 65
bills were filed to "tweak" the system and 12 passed.
Prohibition on Anti-Kickback
House Bill 34 by Rep. Burt Solomons (R- Carrolton) prohibits
paying, allowing, or offering fees, rebates, or other
considerations in exchange for the referral of medical or case
management services on a workers' compensation claim.
Regulation of Third-Party Administrators
House Bill 472 by Representative Solomons and Sen. Kenneth Brimer
(R-Fort Worth) regulates third-party administrators in workers'
compensation. Until this law passed, third-party administrators
were exempt from the Texas Department of Insurance (TDI) regulation
through the Third-Party Administrator Act.
Elimination of "Voluntary Networks"
House Bill 473 by Representative Solomons and Sen. Leticia Van de
Putte (D-San Antonio) closes the loophole under which voluntary
networks have been operating. Prior to 2005, insurance carriers and
employers were prohibited by statute from directing employees to
specific health care providers for treatment of a workers'
compensation injury. However, carriers and employers had utilized
discount fee contracts with certain providers, referred to as
voluntary networks. Although the employers and carriers were
prohibited from directing an employee to see a particular provider
in that network, if the employee chose to receive care from one of
those providers, the provider would be paid the contractual fee
discount rather than the fee dictated by the medical fee
During the 79
Legislature, the legislature enacted House Bill 7, which
provided for certified health care networks for workers'
compensation by adding Chapter 1305, Insurance Code. It
specifically states that a person may not operate a workers'
compensation health care network in this state unless the person
holds a certificate issued under this chapter and rules adopted by
In addition to the creation of health care networks, HB 7
if an insurance carrier is authorized to pay an amount different
from the medical fee guideline if the carrier has a contract with
After the effective date of HB 7, carriers requested guidance from
TDI on the legality of voluntary networks arguing that although the
references to a voluntary network had been eliminated, there was no
prohibition of them mentioned either. TDI issued Bulletin
B-0071-05, which stated that under the provisions of HB 7, all
networks must be certified by TDI.
Immediately, the carriers requested further clarification of
whether voluntary networks were authorized, in light of a provision
added by HB 7 that stated that deviations from the medical fee
guideline were allowed as long as a contract existed between the
carrier and the provider with a specific fee schedule.
TDI then issued Bulletin B-0005-06, which states that a
voluntary network could continue to exist as long as it contracted
for a fee discount only if any management of the claims existed
then certification was required.
The original intent of the language of that provision, however, was
to allow a deviation from the fee guideline to treat an injured
worker in a non-network situation if the carrier was having
difficulty securing necessary medical treatment within the fee
Resolution of Fee Disputes
House Bill 724 by Representative Solomons and Sen. Mike Jackson
(R-Pasadena) sends medical necessity disputes with a cost lower
than $3,000 and fee disputes with a cost lower than $2,000 to a
contested hearing, and sends any disputes above these amounts to a
State Office of Administrative Hearings (SOAH) hearing.
Under previous law, workers' compensation fee dispute hearings
took place in state district court in Travis County. House Bill 7,
which passed in the 2005 legislature, eliminated appeals to SOAH
for all types of disputes and, in turn, created a problem for
medical necessity and fee disputes because there was no longer an
administrative hearing for such disputes. Therefore, there were no
administrative records to review when such disputes were appealed
Mandate to Use Texas Licensed Physicians in IRO Proceedings
House Bill 1003 by Rep. Helen Giddings (D-DeSoto) and Sen. Kirk
Watson (D-Austin) requires independent review organizations to use
only doctors licensed to practice in Texas when performing workers'
Timely Claim Filing Requirements
House Bill 1005 by Representative Giddings and Senator Van de Putte
provides that a health care provider in workers' compensation does
not forfeit his or her right to reimbursement if the claim for
payment is timely filed, but erroneously filed with the wrong
insurer. The bill also allows extension of the deadline by
agreement of the parties or in catastrophic situations.
Peer Review Requirements
House Bill 1006 by Representative Giddings and Senator Watson
requires doctors who perform utilization review, retrospective
review, and peer review to be licensed in Texas.
Same Specialty Physician Review
House Bill 2004 by Representative Giddings and Sen. Eduardo Lucio
(D-Brownsville) requires that the reviewing physician in certain
workers' compensation case be specialized in the area of injury
involved in the case. This requirement extends to a physician,
dentist, or chiropractor conducting a peer review, retrospective
review, required examination, or a designated doctor or physician
member of the medical quality review panel. Previous law did not
require doctors reviewing certain workers' compensation cases to
practice in a specialty related to the injury.
Care for Artificial Limbs
Senate Bill 458 by Senator Watson and Representative Giddings
ensures that workers' compensation carriers treat artificial limbs
as natural limbs. Currently, workers' compensation carriers do not
treat "artificial limbs" as a physical structure of the body. An
accident resulting in a broken leg would be treatable under
workers' compensation. However, if the same accident injured an
artificial leg, workers' compensation would not cover repair or
replacement of the artificial leg.
Workers' Compensation TMA Staff Team:
Legislation: Greg Herzog
Policy: Michael Reed and Rich Johnson
Legal: C.J. Francisco
Managed Care/Insurance Reform
Scope of Practice
Retail Health Clinics
Corporate Practice of Medicine
Health Care Funding
Medicaid, CHIP, and the
Emergency Medical Services and
Medical Science and Quality
Physician Workforce, Licensure,
Health Information Technology
Franchise Tax Reform