77R12107 E                           
         By Brimer, Junell, Janek, Eiland, Dukes               H.B. No. 2600
         Substitute the following for H.B. No. 2600:
         By Brimer                                         C.S.H.B. No. 2600
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the provision of workers' compensation benefits and to
 1-3     the operation of the workers' compensation insurance system;
 1-4     providing penalties.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6                ARTICLE 1.  APPROVED DOCTORS; MEDICAL REVIEW
 1-7           SECTION 1.01. Subchapter B, Chapter 408, Labor Code, is
 1-8     amended by amending Section 408.023 and adding Section 408.0231 to
 1-9     read as follows:
1-10           Sec. 408.023.  LIST OF APPROVED DOCTORS; DUTIES OF TREATING
1-11     DOCTORS. (a)  The commission shall develop a list of doctors
1-12     licensed in this state who are approved to provide health care
1-13     services under this subtitle.  Each doctor licensed in this state
1-14     on September 1, 2001, [January 1, 1993,] is eligible to be included
1-15     on the commission's list of approved doctors if the doctor:
1-16                 (1)  registers with the commission in the manner
1-17     prescribed by commission rules; and
1-18                 (2)  complies with the requirements adopted by the
1-19     commission under this section.
1-20           (b)  The commission by rule shall establish reasonable
1-21     requirements for doctors and health care providers financially
1-22     related to those doctors regarding training, impairment rating
1-23     testing, and disclosure of financial interests as required by
1-24     Section 413.041, and for monitoring of those doctors and health
 2-1     care providers as provided by Sections 408.0231 and 413.0512.  The
 2-2     commission by rule shall provide a reasonable period, not to exceed
 2-3     18 months after the adoption of rules under this section, for
 2-4     doctors to comply with the registration and training requirements
 2-5     of this subchapter.  Except as otherwise provided by this section,
 2-6     the requirements under this subsection apply to doctors and health
 2-7     care providers who:
 2-8                 (1)  provide health care services as treating doctors;
 2-9                 (2)  provide health care services as authorized by
2-10     Section 408.004 or 408.122;
2-11                 (3)  perform medical peer review under this subtitle;
2-12                 (4)  perform utilization review of medical benefits
2-13     provided under this subtitle; or
2-14                 (5)  provide health care services on referral from a
2-15     treating doctor, as provided by commission rule.
2-16           (c)  The commission shall issue to a doctor who is approved
2-17     by the commission a certificate of registration.  In determining
2-18     whether to issue a certificate of registration, the commission may
2-19     consider and condition its approval on any practice restrictions
2-20     applicable to the applicant that are relevant to services provided
2-21     under this subtitle.  The commission may also consider the practice
2-22     restrictions of an applicant when determining appropriate sanctions
2-23     under Section 408.0231.
2-24           (d)  A certificate of registration issued under this
2-25     subsection is valid, unless revoked or revised, for the period
2-26     provided by commission rule, and may be renewed on application to
2-27     the commission.   The commission shall provide notice to each
 3-1     doctor on the approved doctor list of the pending expiration of the
 3-2     doctor's certificate of registration not later than the 60th day
 3-3     before the date of expiration of the certificate [unless
 3-4     subsequently deleted and not reinstated.  The name of a doctor
 3-5     shall be placed on the list of approved doctors when that doctor
 3-6     becomes licensed in this state].
 3-7           (e)  Notwithstanding other provisions of this section, a [A]
 3-8     doctor not licensed in this state but licensed in another state or
 3-9     jurisdiction who treats employees or performs utilization review of
3-10     health care for an insurance carrier may apply for a certificate of
3-11     registration under this section [to the commission] to be included
3-12     on the commission's list of approved doctors.
3-13           (f)  Except in an emergency or for immediate post-injury
3-14     medical care as defined by commission rule, or as provided by
3-15     Subsection (h) or (i), each doctor who performs functions under
3-16     this subtitle, including examinations under Sections 408.004 and
3-17     408.122, must hold a certificate of registration and be on the list
3-18     of approved doctors in order to perform services or receive payment
3-19     for those services.
3-20           (g)  The commission by rule shall modify registration and
3-21     training requirements for doctors who infrequently provide health
3-22     care, perform utilization review or peer review functions for
3-23     insurance carriers, or participate in regional networks established
3-24     under this subchapter, as necessary to ensure that those doctors
3-25     are informed of the regulations that effect health care benefit
3-26     delivery under this subtitle.
3-27           (h)  Notwithstanding Section 4(h), Article 21.58A, Insurance
 4-1     Code, a utilization review agent that uses doctors to perform
 4-2     reviews of health care services provided under this subtitle shall
 4-3     perform the reviews under the direction of a doctor licensed to
 4-4     practice in this state.
 4-5           (i)  The commission may grant exceptions to the requirement
 4-6     imposed under Subsection (f) as necessary to ensure that:
 4-7                 (1)  employees have access to health care; and
 4-8                 (2)  insurance carriers have access to evaluations of
 4-9     an employee's health care and income benefit eligibility as
4-10     provided by this subtitle.
4-11           (j)  The injured employee's treating doctor is responsible
4-12     for the efficient management of medical care as required by Section
4-13     408.025(c) and commission rules.  The commission shall collect
4-14     information regarding:
4-15                 (1)  return-to-work outcomes;
4-16                 (2)  patient satisfaction; and
4-17                 (3)  cost and utilization of health care provided or
4-18     authorized by a treating doctor on the list of approved doctors.
4-19           (k)  The commission may adopt rules to define the role of the
4-20     treating doctor and to specify outcome information to be collected
4-21     for a treating doctor.
4-22           Sec. 408.0231.  MAINTENANCE OF LIST OF APPROVED DOCTORS;
4-23     SANCTIONS AND PRIVILEGES RELATING TO HEALTH CARE. (a)  The
4-24     executive director shall delete from the list of approved doctors a
4-25     doctor:
4-26                 (1)  who is deceased;
4-27                 (2)  whose license to practice in this state is revoked
 5-1     or suspended by the appropriate licensing authority; or
 5-2                 (3)  who requests to be removed from the list.
 5-3           (b)  The commission by rule shall establish criteria for:
 5-4                 (1)  deleting a doctor from the list of approved
 5-5     doctors;
 5-6                 (2)  imposing sanctions on a doctor or an insurance
 5-7     carrier as provided by this section;
 5-8                 (3)  monitoring of utilization review agents, as
 5-9     provided by a memorandum of understanding between the commission
5-10     and the Texas Department of Insurance; and
5-11                 (4)  authorizing increased or reduced utilization
5-12     review and preauthorization controls on a doctor.
5-13           (c)  Rules adopted under Subsection (b) are in addition to,
5-14     and do not affect, the rules adopted under Section 415.023(b).  The
5-15     criteria for deleting a doctor from the list or for recommending or
5-16     imposing sanctions may include anything the commission considers
5-17     relevant, including:
5-18                 (1)  a sanction [sanctions] of the doctor by the
5-19     commission for a violation [violations] of Chapter 413 or Chapter
5-20     415;
5-21                 (2)  a sanction [sanctions] by the Medicare or Medicaid
5-22     program for:
5-23                       (A)  substandard medical care;
5-24                       (B)  overcharging; [or]
5-25                       (C)  overutilization of medical services; or
5-26                       (D)  any other substantive noncompliance with
5-27     requirements of those programs regarding professional practice or
 6-1     billing;
 6-2                 (3)  evidence from the commission's medical records
 6-3     that the applicable insurance carrier's utilization review
 6-4     practices or the doctor's charges, fees, diagnoses, [or]
 6-5     treatments, evaluations, or impairment ratings are substantially
 6-6     different from those the commission finds to be fair and reasonable
 6-7     based on either a single determination or a pattern of practice;
 6-8     [and]
 6-9                 (4)  a suspension or other relevant practice
6-10     restriction of the doctor's license by an [the] appropriate
6-11     licensing authority;
6-12                 (5)  professional failure to practice medicine or
6-13     provide health care, including chiropractic care,  in an acceptable
6-14     manner consistent with the public health, safety, and welfare;
6-15                 (6)  findings of fact and conclusions of law made by a
6-16     court, an administrative law judge of the State Office of
6-17     Administrative Hearings, or a licensing or regulatory authority; or
6-18                 (7)  a criminal conviction.
6-19           (d) [(c)]  The commission by rule shall establish procedures
6-20     under which [for] a doctor may [to] apply for:
6-21                 (1)  reinstatement to the list of approved doctors; or
6-22                 (2)  restoration of doctor practice privileges removed
6-23     by the commission based on sanctions imposed under this section.
6-24           (e)  The commission shall act on a recommendation by the
6-25     medical advisor selected under Section 413.0511, and, after notice
6-26     and the opportunity for a hearing, may impose sanctions under this
6-27     subsection on a doctor or an insurance carrier or may recommend
 7-1     action regarding a utilization review agent.  The commission and
 7-2     the Texas Department of Insurance shall enter into a memorandum of
 7-3     understanding to coordinate the regulation of insurance carriers
 7-4     and utilization review agents as necessary to ensure:
 7-5                 (1)  compliance with applicable regulations; and
 7-6                 (2)  that appropriate health care decisions are reached
 7-7     under this subtitle and under Article 21.58A, Insurance Code.
 7-8           (f)  The sanctions the commission may recommend or impose
 7-9     under this section include:
7-10                 (1)  reduction of allowable reimbursement;
7-11                 (2)  mandatory preauthorization of all or certain
7-12     health care services;
7-13                 (3)  required peer review monitoring and audit;
7-14                 (4)  deletion from the approved doctor list and the
7-15     designated doctor list;
7-16                 (5)  restrictions on appointment as a designated doctor
7-17     under Section 408.004;
7-18                 (6)  conditions or restrictions on an insurance carrier
7-19     regarding actions by insurance carriers under this subtitle in
7-20     accordance with the memorandum of understanding adopted between the
7-21     commission and the Texas Department of Insurance regarding Article
7-22     21.58A, Insurance Code; and
7-23                 (7)  mandatory participation in training classes or
7-24     other courses as established or certified by the commission.
7-25           SECTION 1.02. Subchapter E, Chapter 413, Labor Code, is
7-26     amended by amending Section 413.051 and adding Sections 413.0511,
7-27     413.0512, and 413.0513 to read as follows:
 8-1           Sec. 413.051.  CONTRACTS WITH REVIEW ORGANIZATIONS AND HEALTH
 8-2     CARE PROVIDERS. (a)  The commission may contract with a health care
 8-3     provider, health care provider professional review organization, or
 8-4     other entity to develop, maintain, or review medical policies or
 8-5     fee guidelines or to review compliance with the medical policies or
 8-6     fee guidelines.
 8-7           (b)  For purposes of review or resolution of a dispute as to
 8-8     compliance with the medical policies or fee guidelines, the
 8-9     commission may contract [only] with a health care provider, health
8-10     care provider professional review organization, or other entity
8-11     that includes in the review process health care practitioners who
8-12     are licensed in the category under review and are of the same field
8-13     or specialty as the category under review.
8-14           (c)  The commission may contract with a health care provider,
8-15     health care provider professional review organization, or other
8-16     entity for medical consultant services, including:
8-17                 (1)  independent medical examinations;
8-18                 (2)  medical case reviews; or
8-19                 (3)  establishment of medical policies and fee
8-20     guidelines.
8-21           (d)  The commission shall establish standards for contracts
8-22     under this section.
8-23           (e)  For purposes of this section, the term "health care
8-24     provider professional review organization" includes an independent
8-25     review organization.
8-26           Sec. 413.0511.  MEDICAL ADVISOR. (a)  The commission shall
8-27     employ or contract with a medical advisor, who must be a doctor as
 9-1     that term is defined by Section 401.011.
 9-2           (b)  The medical advisor shall make recommendations regarding
 9-3     the adoption of rules to:
 9-4                 (1)  develop, maintain, and review health care
 9-5     guidelines and fee guidelines as provided by Section 413.011,
 9-6     including rules regarding impairment ratings;
 9-7                 (2)  review compliance with those guidelines;
 9-8                 (3)  regulate other acts related to medical benefits as
 9-9     required by the commission;
9-10                 (4)  impose sanctions or delete doctors from the
9-11     commission's list of approved doctors under Section 408.023 for:
9-12                       (A)  any reason described by Section 408.0231; or
9-13                       (B)  noncompliance with commission rules;
9-14                 (5)  impose conditions or restrictions as authorized by
9-15     Section 408.0231(f)(6);
9-16                 (6)  receive confidential information from the Texas
9-17     State Board of Medical Examiners and the Texas Board of
9-18     Chiropractic Examiners regarding disciplinary actions imposed on a
9-19     physician or a chiropractor who applies for registration or is
9-20     registered with the commission on the list of approved doctors; and
9-21                 (7)  determine minimal modifications to the
9-22     reimbursement methodology and model used by the Medicare system as
9-23     necessary to meet occupational injury requirements.
9-24           Sec. 413.0512.  MEDICAL QUALITY REVIEW PANEL. (a)  The
9-25     medical advisor shall establish a medical quality review panel of
9-26     health care providers to assist the medical advisor in performing
9-27     the duties required under Section 413.0511.  The panel is
 10-1    independent of the medical advisory committee created under Section
 10-2    413.005 and is not subject to Chapter 2110, Government Code.
 10-3          (b)  The Texas State Board of Medical Examiners and the Texas
 10-4    Board of Chiropractic Examiners, with input from their respective
 10-5    professional associations, shall develop lists of physicians and
 10-6    chiropractors licensed by those agencies who have demonstrated
 10-7    experience in workers' compensation or utilization review. The
 10-8    medical advisor shall consider appointing some of the members of
 10-9    the medical quality review panel from the names on those lists.
10-10    The medical advisor may also consider nominations for the panel
10-11    made by labor, business, and insurance organizations.
10-12          (c)  The medical quality review panel shall recommend to the
10-13    medical advisor:
10-14                (1)  appropriate action regarding doctors, health care
10-15    providers, insurance carriers, and utilization review agents; and
10-16                (2)  the addition or deletion of doctors from the list
10-17    of approved doctors under Section 408.023 or the list of designated
10-18    doctors established under Section 408.122.
10-19          (d)  A person who serves on the medical quality review panel
10-20    is not liable in a civil action for an act performed in good faith
10-21    as a member of the panel and is entitled to the same protections
10-22    afforded a commission member under Section 402.010.
10-23          (e)  The actions of a person serving on the medical quality
10-24    review panel do not constitute utilization review and are not
10-25    subject to Article 21.58A, Insurance Code.
10-26          Sec. 413.0513.  CONFIDENTIALITY REQUIREMENTS. (a)
10-27    Information maintained by or on behalf of the commission under
 11-1    Section 413.0512, and that is confidential under law, may not be
 11-2    disclosed under Section 413.0512 except:
 11-3                (1)  in a criminal proceeding;
 11-4                (2)  in a hearing conducted by or on behalf of the
 11-5    commission;
 11-6                (3)  in a hearing conducted by another licensing or
 11-7    regulatory authority, as provided in the interagency agreement; or
 11-8                (4)  on a finding of good cause in an administrative or
 11-9    judicial proceeding involving the enforcement of this subtitle or
11-10    in a disciplinary action under this subtitle.
11-11          (b)  Confidential information developed by the commission
11-12    under Section 413.0512 is not subject to discovery or court
11-13    subpoena in any action other than:
11-14                (1)  an action to enforce this subtitle brought by the
11-15    commission, an appropriate licensing or regulatory agency, or an
11-16    appropriate enforcement authority; or
11-17                (2)  a criminal proceeding.
11-18          SECTION 1.03. (a)  The Texas Workers' Compensation Commission
11-19    shall adopt rules as required by Chapter 408, Labor Code, as
11-20    amended by this article, not later than February 1, 2002.
11-21          (b)  A doctor is not required to hold a certificate of
11-22    registration issued under Section 408.023, Labor Code, as amended
11-23    by this article,  to perform medical services under Subtitle A,
11-24    Title 5, Labor Code, before the date provided by commission rules
11-25    adopted to implement that section.
11-26              ARTICLE 2. MEDICAL NETWORK PARTICIPATION OPTION
11-27          SECTION 2.01. Subchapter B, Chapter 408, Labor Code, is
 12-1    amended by adding Sections 408.0221, 408.0222, and 408.0223 to read
 12-2    as follows:
 12-3          Sec. 408.0221.  REGIONAL HEALTH CARE DELIVERY NETWORKS;
 12-4    ADVISORY COMMITTEE. (a)  In this section:
 12-5                (1)  "Advisory committee" means the Health Care Network
 12-6    Advisory Committee.
 12-7                (2)  "Regional network" means a regional workers'
 12-8    compensation health care delivery network established by the
 12-9    commission under this section.
12-10          (b)  The Health Care Network Advisory Committee is
12-11    established to advise the commission on the implementation of this
12-12    section and Section 408.0222.  Members of the advisory committee
12-13    are appointed by and serve at the pleasure of the governor, with
12-14    the membership as follows:
12-15                (1)  three employee representatives;
12-16                (2)  three employer representatives;
12-17                (3)  two ex officio insurance carrier representatives;
12-18                (4)  two ex officio health care provider
12-19    representatives; and
12-20                (5)  the commission's medical advisor, who shall serve
12-21    as chair of the advisory committee.
12-22          (c)  The commission, on behalf of the advisory committee
12-23    established under this section, shall establish and, through
12-24    competitive procurement, contract with regional networks for the
12-25    provision of health care under this subtitle.  The commission
12-26    shall, through competitive procurement, contract with one or more
12-27    organizations to determine the feasibility of, develop, and
 13-1    evaluate the regional networks established under this section.
 13-2    Those organizations shall also recommend to the advisory committee
 13-3    appropriate network standards and application requirements and
 13-4    assist the advisory committee during the procurement process. The
 13-5    regional networks shall be fee-for-service networks designed to
 13-6    improve the quality and reduce the cost of health care with active
 13-7    health care management and monitoring and a full range of health
 13-8    care services under contract as considered feasible by the
 13-9    commission.
13-10          (d)  The advisory committee shall make recommendations to the
13-11    commission regarding:
13-12                (1)  the development of the standards by which health
13-13    care services are provided through regional networks;
13-14                (2)  regional network application requirements and
13-15    fees;
13-16                (3)  contract proposals;
13-17                (4)  the feasibility of establishing one or more
13-18    regional networks;
13-19                (5)  the use of consultants as necessary to assist the
13-20    commission in the procurement of regional network contracts; and
13-21                (6)  the selection of administrators to build and
13-22    manage the regional networks and to report on their progress.
13-23          (e)  The advisory committee shall gather information from
13-24    other entities, including the Research and Oversight Council on
13-25    Workers' Compensation, the Texas Health Care Information Council,
13-26    the Texas Department of Insurance, the Texas Department of Health,
13-27    and the Employees Retirement System of Texas.
 14-1          (f)  The standards adopted for preferred provider networks
 14-2    under Article 3.70-3C, Insurance Code, as added by Chapter 1024,
 14-3    Acts of the 75th Legislature, Regular Session, 1997, apply as
 14-4    minimum standards for regional health care delivery networks
 14-5    created under this section and are adopted by reference in this
 14-6    section except to the extent they are inconsistent with this
 14-7    subtitle.  The advisory committee may also recommend additional
 14-8    standards, including standards that require:
 14-9                (1)  for each geographic region, access to an adequate
14-10    number of health care providers and treating doctors in each health
14-11    care discipline and the professional specialties within those
14-12    disciplines and the use of economic profiling to ensure a viable
14-13    network as described by Article 3.70-3C, Insurance Code, as added
14-14    by Chapter 1024, Acts of the 75th Legislature, Regular Session,
14-15    1997;
14-16                (2)  the ability of an employee to receive treatment by
14-17    a regional network provider within a reasonable amount of time of
14-18    the regional network's knowledge of the need or request for
14-19    treatment and within a reasonable travel distance for the employee;
14-20                (3)  a reasonable effort by the regional network to
14-21    attract health care providers who reflect the ethnic and cultural
14-22    background of the regional employee population;
14-23                (4)  the availability of board-certified occupational
14-24    medicine specialists to provide expertise on disability management
14-25    and prevention and treatment of occupational injuries and
14-26    illnesses;
14-27                (5)  accreditation of the regional networks or a
 15-1    commitment to seek accreditation from a nationally recognized
 15-2    organization such as the American Accreditation HealthCare
 15-3    Commission or the National Committee for Quality Assurance;
 15-4                (6)  the use of strict credentialing criteria by
 15-5    regional networks in the selection and deselection of its health
 15-6    care providers, including verification that the provider:
 15-7                      (A)  is on the commission's list of approved
 15-8    doctors, if the provider is required to be on that list;
 15-9                      (B)  has not been sanctioned or made subject to
15-10    additional utilization review requirements by the commission;
15-11                      (C)  is not, at the time of selection, subject to
15-12    sanctions or substantive practice restrictions imposed by the
15-13    provider's licensing authority;
15-14                      (D)  has or is able to obtain practice
15-15    privileges, if required, at a participating hospital; and
15-16                      (E)  is covered by medical malpractice insurance
15-17    coverage as required by the regional network contract;
15-18                (7)  satisfactory evidence of the regional network's
15-19    ability to comply with any financial requirements and ensure
15-20    delivery of services;
15-21                (8)  compliance with ongoing training and educational
15-22    requirements established by the commission;
15-23                (9)  the use of nationally recognized, scientifically
15-24    valid, and outcome-based treatment standards as guidelines for
15-25    health care;
15-26                (10)  disclosure of the availability of interpreter
15-27    services as appropriate for the evaluation and treatment of
 16-1    employees;
 16-2                (11)  timely and accurate reporting of data to
 16-3    appropriately manage and determine the effectiveness of the
 16-4    regional network in reducing medical costs and ensuring quality of
 16-5    care; and
 16-6                (12)  a process for reconsideration of medical
 16-7    necessity denials and resolution of medical necessity disputes
 16-8    within the regional network.
 16-9          (g)  The advisory committee and the Research and Oversight
16-10    Council on Workers' Compensation shall develop evaluation standards
16-11    and specifications as necessary to implement a workers'
16-12    compensation medical regional network report card.  The commission
16-13    shall ensure that the report card is published and available for
16-14    inspection.  The commission may procure services as necessary to
16-15    produce the report card.  The report card, at a minimum, must be
16-16    based on contracted reviews and must include a risk-adjusted
16-17    evaluation of:
16-18                (1)  employee access to care;
16-19                (2)  coordination of care and return to work;
16-20                (3)  communication among system participants;
16-21                (4)  return-to-work outcomes;
16-22                (5)  health-related outcomes;
16-23                (6)  employee, health care provider, employer, and
16-24    insurance carrier satisfaction;
16-25                (7)  disability and re-injury prevention;
16-26                (8)  appropriate clinical care;
16-27                (9)  health care costs;
 17-1                (10)  utilization of health care; and
 17-2                (11)  statistical outcomes of medical dispute
 17-3    resolution provided by independent review organizations.
 17-4          (h)  The regional network administrators shall report
 17-5    quarterly to the commission and the advisory committee on the
 17-6    progress of implementing the regional networks and shall submit
 17-7    consolidated annual reports.  The Research and Oversight Council on
 17-8    Workers' Compensation shall report to the legislature by January 1
 17-9    of each odd-numbered year on the status of the implementation of
17-10    regional networks under this section.
17-11          (i)  The commission shall ensure that regional network
17-12    contracts provide that insurance carriers have reasonable rights to
17-13    conduct audits under this subsection.  Insurance carriers
17-14    participating in the regional network shall be allowed the
17-15    opportunity for consolidated audits of the regional networks.
17-16          (j)  The cost of assessing the feasibility of, developing,
17-17    and evaluating the regional networks created under this section
17-18    shall be funded through an assessment on the subsequent injury fund
17-19    established under Section 403.006.  This cost may not exceed
17-20    $250,000 per regional network or a total of $1.5 million for up to
17-21    six regional networks.  The cost of ongoing regional network
17-22    administration and management services shall be included in the
17-23    fees for health care services paid by insurance carriers
17-24    participating in the regional network.
17-25          Sec. 408.0222.  PARTICIPATION IN REGIONAL NETWORK; SELECTION
17-26    OF DOCTOR WITHIN REGIONAL NETWORK; BENEFIT INCENTIVES. (a)  An
17-27    insurance carrier or a self-insurer certified to provide workers'
 18-1    compensation coverage in this state may elect to participate, by
 18-2    contract, in a regional network established under Section 408.0221.
 18-3    A public employer covered under Subtitle C of this title, other
 18-4    than an employer covered under Chapter 504, is required to
 18-5    participate in a regional network established under Section
 18-6    408.0221.  An insurance carrier who elects to participate in
 18-7    regional networks agrees to abide by the terms of the regional
 18-8    network contracts between the commission and the regional networks.
 18-9          (b)  An insurance carrier may limit its election to
18-10    participate in a regional network established under Section
18-11    408.0221 to a particular employer or a particular region of this
18-12    state.  This subsection expires January 1, 2006.
18-13          (c)  A doctor participating in a regional network established
18-14    under Section 408.0221 may perform only those procedures that are
18-15    within the scope of the practice for which the doctor is licensed.
18-16          (d)  An employee may elect to participate or not participate
18-17    in a regional network established under Section 408.0221. Only an
18-18    employee covered by an insurance carrier who has elected to
18-19    participate in a regional network established under Section
18-20    408.0221 may elect to participate in that regional network.  The
18-21    commission, by rule, shall establish the form and manner by which
18-22    an employee receives notice of the employee's rights under this
18-23    section.  Except as provided by Subsection (e), an employee may
18-24    make the election described by this subsection at the time of
18-25    employment or may make that election or rescind an election made
18-26    under this subsection at any later time before the earlier of:
18-27                (1)  the date on which the employee begins to receive
 19-1    enhanced income benefits under Subsection (l); or
 19-2                (2)  the 14th day after the date on which the employee
 19-3    incurs a compensable injury.
 19-4          (e)  An employee may elect to participate in a regional
 19-5    network established under Section 408.0221 at any time with the
 19-6    insurance carrier's permission. An employee is not bound by an
 19-7    election to participate in a  regional network made under
 19-8    Subsection (d) or this subsection if:
 19-9                (1)  the insurance carrier waives the election;
19-10                (2)  the commission invalidates the election based on a
19-11    determination of coercion; or
19-12                (3)  the employee relocates to an area outside of the
19-13    regional network's service area, and the regional network is not
19-14    able to identify alternate network providers to provide health care
19-15    services reasonable for the employee's medical condition.
19-16          (f)  An insurance carrier who elects to participate in a
19-17    regional network established under Section 408.0221 shall provide
19-18    each employer who obtains coverage through the insurance carrier
19-19    with adequate information about the regional network to share with
19-20    the employer's employees. Before an employee makes an election
19-21    under this section to participate in a regional network, the
19-22    employer shall provide the employee with:
19-23                (1)  a complete, plain-language description of the
19-24    regional network's services, restrictions, and benefits; and
19-25                (2)  access to the most recent:
19-26                      (A)  list of doctors  available through the
19-27    regional network; and
 20-1                      (B)  regional network report card developed under
 20-2    Section 408.0221.
 20-3          (g)  An employer shall not discharge, subject to disciplinary
 20-4    action, or take an adverse employment action against an employee
 20-5    who elects not to participate in a regional network created under
 20-6    Section 408.0221 if the employer's action would not have occurred
 20-7    in the absence of the employee's election not to participate.
 20-8          (h)  An employee may bring suit against an employer for
 20-9    violation of Subsection (g) if:
20-10                (1)  the employee gives written notice of intent to
20-11    bring suit to the employer within 60 days of the alleged violation;
20-12    and
20-13                (2)  the employer does not reinstate the employee and
20-14    pay actual wages lost and reasonable attorney's fees incurred due
20-15    to the employer's action within 60 days of notification of the
20-16    employee's intent to bring suit.
20-17          (i)  The employee must bring suit for an employer's violation
20-18    of Subsection (g) within 120 days of the alleged violation.  A suit
20-19    under this section may be brought in the county in which:
20-20                (1)  the plaintiff resides;
20-21                (2)  the plaintiff was employed; or
20-22                (3)  the defendant's primary place of business is
20-23    located.
20-24          (j)  If the employee prevails in an action under Subsection
20-25    (h), the employee may recover:
20-26                (1)  lost wages;
20-27                (2)  reinstatement of front pay as equitable relief in
 21-1    lieu of reinstatement;
 21-2                (3)  reasonable attorney's fees; and
 21-3                (4)  court costs.
 21-4          (k)  A suit under this section is the exclusive remedy for
 21-5    violation of Subsection (g) and the provisions of Chapter 451 of
 21-6    this subtitle do not apply to such a violation.  Parties may not
 21-7    maintain an action under Rule 42, Texas Rules of Civil Procedure.
 21-8          (l)  An employee who elects to participate in a regional
 21-9    network created under Section 408.0221 shall receive:
21-10                (1)  notwithstanding Section 408.082(c), income
21-11    benefits from the date disability begins if the disability lasts
21-12    two weeks or longer; and
21-13                (2)  notwithstanding Section 408.061, an increased
21-14    maximum weekly benefit of up to 150 percent of the state average
21-15    weekly wage for temporary income benefits.
21-16          (m)  Except for emergency care, or as otherwise provided by
21-17    this section, an employee who elects to participate in a regional
21-18    network shall receive medical treatment, including referrals, from
21-19    health care providers within the regional network.  An employee or
21-20    an employee's treating doctor may use a health care provider
21-21    outside of the regional network with the approval of the regional
21-22    network for good cause consistent with the regional network
21-23    contract.  If medically necessary services are not available
21-24    through regional network health care providers, the regional
21-25    network must, on the request of a regional network health care
21-26    provider, within a reasonable time period allow a referral to a
21-27    nonregional network health care provider and shall fully reimburse
 22-1    the nonregional network physician or provider at an agreed rate.
 22-2    For purposes of this subsection, "emergency care" has the meaning
 22-3    assigned by Section 2(g), Texas Health Maintenance Organization Act
 22-4    (Article 20A.02, Vernon's Texas Insurance Code).
 22-5          (n)  A health care provider who participates in a regional
 22-6    network created under Section 408.0221 shall be reimbursed and be
 22-7    subject to utilization review as provided by the regional network
 22-8    contract.  The insurance carrier is responsible for payment of
 22-9    regional network providers as provided by the contract between the
22-10    regional network and the insurance carrier.  A nonregional network
22-11    provider who does not obtain the approval of the regional network
22-12    to provide services may not be reimbursed by the insurance carrier.
22-13          (o)  To resolve an issue regarding the necessity or the
22-14    appropriateness of care, or referrals to nonregional network
22-15    physicians or providers, an employee or an employee's treating
22-16    doctor may request a review by an independent review organization
22-17    under Section 413.031(c).
22-18          (p)  An employee who elects to participate in a regional
22-19    network established under Section 408.0221 shall select an initial
22-20    treating doctor within the regional network as provided by the
22-21    regional network contract.  An employee may change treating doctors
22-22    within the regional network in accordance with Sections 408.022(d)
22-23    and (e).  An employee who requests to change treating doctors
22-24    within the regional network is not subject to Section 408.022(b) or
22-25    (c).  At the sole discretion of the regional network, an employee
22-26    may select a treating doctor outside of the regional network if:
22-27                (1)  the employee has a pre-existing relationship with
 23-1    a doctor who maintains the employee's medical records and has a
 23-2    documented history of treatment before the date of injury; and
 23-3                (2)  that doctor agrees in writing to abide by the
 23-4    rules, terms, and conditions of the regional network contract,
 23-5    including an agreement to refer the employee within the regional
 23-6    network for services available through the regional network.
 23-7          (q)  An employee is subject to the selection of doctor,
 23-8    change of doctor, and other medical benefit and income benefit
 23-9    requirements established under Chapters 408 and 413 if an employee:
23-10                (1)  elects not to participate in a regional network
23-11    established under Section 408.0221; or
23-12                (2)  is covered by an insurance carrier that has not
23-13    elected to participate in a regional network established under
23-14    Section 408.0221.
23-15          (r)  An employee may change treating doctors within the
23-16    regional network established under Section 408.0221 in which the
23-17    employee is participating in accordance with the regional network
23-18    contract and is entitled to:
23-19                (1)  make one change from the initial treating doctor
23-20    to an alternate treating doctor within the regional network unless
23-21    the initial treating doctor has found that the employee has reached
23-22    maximum medical improvement; and
23-23                (2)  request additional changes of the treating doctor
23-24    in the manner provided by the regional network contract.
23-25          Sec. 408.0223.  INSURANCE CARRIER NETWORKS. (a)  In this
23-26    section, "insurance carrier network" means a voluntary workers'
23-27    compensation health care delivery network established by an
 24-1    insurance carrier.  The term does not include a regional network
 24-2    established under Section 408.0221.
 24-3          (b)  This subtitle does not prohibit an insurance carrier,
 24-4    whether doing business as an individual carrier or as a group, from
 24-5    participating in or maintaining voluntary insurance carrier
 24-6    networks if those voluntary insurance carrier networks allow
 24-7    selection of doctors as provided by Section 408.022.
 24-8          (c)  This subtitle does not prohibit an insurance carrier
 24-9    from concurrently participating in an insurance carrier network and
24-10    a regional network established under Section 408.0221.
24-11          SECTION 2.02. (a)  The Texas Workers' Compensation Commission
24-12    shall adopt rules as required by Chapter 408, Labor Code, as
24-13    amended by this article, not later than October 1, 2002.
24-14          (b)  The Texas Workers' Compensation Commission shall convene
24-15    the first meeting of the Health Care Network Advisory Committee
24-16    established under Section 408.0221, Labor Code, as added by this
24-17    article, not later than October 1, 2001.
24-18          (c)  Unless determined to be unfeasible, the Texas Workers'
24-19    Compensation Commission shall contract for regional workers'
24-20    compensation health care delivery networks under Section 408.0221,
24-21    Labor Code, as added by this article, not later than December 31,
24-22    2002.
24-23          (d)  Section 408.0222, Labor Code, as added by this article,
24-24    as that section affects workers' compensation benefits an employee
24-25    may receive for participating in a regional network under Section
24-26    408.0221, Labor Code, as added by this article, takes effect on the
24-27    certification by the Texas Workers' Compensation Commission that
 25-1    the regional network is operational.
 25-2             ARTICLE 3.  RETURN-TO-WORK REPORTING AND SERVICES
 25-3          SECTION 3.01. Section 409.005, Labor Code, is amended to read
 25-4    as follows:
 25-5          Sec. 409.005.  REPORT OF INJURY; MODIFIED DUTY PROGRAM
 25-6    NOTICE; ADMINISTRATIVE VIOLATION. (a)  An employer shall report to
 25-7    the employer's insurance carrier if:
 25-8                (1)  an injury results in the absence of an employee of
 25-9    that employer from work for more than one day; or
25-10                (2)  an employee of the employer notifies that employer
25-11    of an occupational disease under Section 409.001.
25-12          (b)  The report under Subsection (a)  must be made not later
25-13    than the eighth day after:
25-14                (1)  the employee's absence from work for more than one
25-15    day due to an injury; or
25-16                (2)  the day on which the employer receives notice
25-17    under Section 409.001 that the employee has contracted an
25-18    occupational disease.
25-19          (c)  The employer shall deliver a written copy of the report
25-20    under Subsection (a) to the injured employee at the time that the
25-21    report is made to the insurance carrier.
25-22          (d)  The insurance carrier shall file the report of the
25-23    injury on behalf of the policyholder.  Except as provided by
25-24    Subsection (e), the insurance carrier must electronically file the
25-25    report with the commission not later than the seventh day after the
25-26    date on which the carrier receives the report from the employer.
25-27          (e)  The executive director may waive the electronic filing
 26-1    requirement under Subsection (d) and allow an insurance carrier to
 26-2    mail or deliver the report to the commission not later than the
 26-3    seventh day after the date on which the carrier receives the report
 26-4    from the employer.
 26-5          (f)  A report required under this section may not be
 26-6    considered to be an admission by or evidence against an employer or
 26-7    an insurance carrier in a proceeding before the commission or a
 26-8    court in which the facts set out in the report are contradicted by
 26-9    the employer or insurance carrier.
26-10          (g)  In addition to any information required under Subsection
26-11    (h), the report provided to the injured employee under Subsection
26-12    (c) must contain a summary written in plain language of the
26-13    employee's statutory rights and responsibilities under this
26-14    subtitle.
26-15          (h)  The commission may adopt rules relating to:
26-16                (1)  the information that must be contained in a report
26-17    required under this section, including the summary of rights and
26-18    responsibilities required under Subsection (g); and
26-19                (2)  the development and implementation of an
26-20    electronic filing system for injury reports under this section.
26-21          (i)  An employer and insurance carrier shall file subsequent
26-22    reports as required by commission rule.
26-23          (j)  The employer shall, on the written request of the
26-24    employee, a  doctor, the insurance carrier, or the commission,
26-25    notify the employee, the employee's treating doctor if known to the
26-26    employer, and the insurance carrier of the existence or absence of
26-27    opportunities for modified duty or a modified duty return-to-work
 27-1    program available through the employer.  If those opportunities or
 27-2    that program exists, the employer shall identify the employer's
 27-3    contact person and provide other information to assist the treating
 27-4    doctor, the employee, and the insurance carrier to assess modified
 27-5    duty or return-to-work options.
 27-6          (k)  A person commits a violation if the person fails to
 27-7    comply with this section unless good cause exists.  A violation
 27-8    under this subsection is a Class D administrative violation.
 27-9          SECTION 3.02. Subchapter B, Chapter 413, Labor Code, is
27-10    amended by adding Section 413.021 to read as follows:
27-11          Sec. 413.021.  RETURN-TO-WORK COORDINATION SERVICES. (a)  An
27-12    insurance carrier shall, with the agreement of a participating
27-13    employer, provide the employer with return-to-work coordination
27-14    services as necessary to facilitate an employee's reintegration to
27-15    employment.  The insurance carrier shall notify the employer of the
27-16    availability of return-to-work coordination services. In offering
27-17    the services, insurance carriers and the commission shall target
27-18    employers without return-to-work programs and shall focus
27-19    return-to-work efforts on workers who begin to receive temporary
27-20    income benefits.  These services may be offered by insurance
27-21    carriers in conjunction with the accident prevention services
27-22    provided under Section 411.061.  Nothing in this section supersedes
27-23    the provisions of a collective bargaining agreement between an
27-24    employer and the employer's employees, and nothing in this section
27-25    authorizes or requires an employer to engage in conduct that would
27-26    otherwise be a violation of the employer's obligations under the
27-27    National Labor Relations Act (29 U.S.C. Section 151 et seq.), and
 28-1    its subsequent amendments.
 28-2          (b)  Return-to-work coordination services under this section
 28-3    may include:
 28-4                (1)  job analysis to identify the physical demands of a
 28-5    job;
 28-6                (2)  job modification and restructuring assessments as
 28-7    necessary to match job requirements with the functional capacity of
 28-8    an employee; and
 28-9                (3)  medical or vocational case management to
28-10    coordinate the efforts of the employer, the treating doctor, and
28-11    the injured employee to achieve timely return to work.
28-12          (c)  An insurance carrier is not required to provide physical
28-13    workplace modifications under this section and is not liable for
28-14    the cost of modifications made under this section to facilitate an
28-15    employee's return to employment.
28-16          (d)  The commission shall use certified rehabilitation
28-17    counselors or other appropriately trained or credentialed
28-18    specialists to provide training to commission staff regarding the
28-19    coordination of return-to-work services under this section.
28-20          (e)  The commission shall adopt rules necessary to collect
28-21    data on return-to-work outcomes to allow full evaluations of
28-22    successes and of barriers to achieving timely return to work after
28-23    an injury.
28-24          (f)  The commission shall report twice annually to the
28-25    Research and Oversight Council on Workers' Compensation regarding
28-26    the implementation and outcome of the return-to-work initiatives
28-27    required by this section.
 29-1          SECTION 3.03. The Texas Workers' Compensation Commission may
 29-2    adopt rules as necessary to implement Sections 409.005(j) and
 29-3    413.021, Labor Code, as added by this article, not earlier than
 29-4    January 1, 2004.
 29-5             ARTICLE 4.  PREAUTHORIZATION, CONCURRENT REVIEW,
 29-6                      AND CERTIFICATION REQUIREMENTS
 29-7          SECTION 4.01. Section 408.026, Labor Code, is amended to read
 29-8    as follows:
 29-9          Sec. 408.026.  SPINAL SURGERY [SECOND OPINION]. [(a)]  Except
29-10    in a medical emergency, an insurance carrier is liable for medical
29-11    costs related to spinal surgery only as provided by Section 413.014
29-12    and commission rules [if:]
29-13                [(1)  before surgery, the employee obtains from a
29-14    doctor approved by the insurance carrier or the commission a second
29-15    opinion that concurs with the treating doctor's recommendation;]
29-16                [(2)  the insurance carrier waives the right to an
29-17    examination or fails to request an examination before the 15th day
29-18    after the date of the notification that surgery is recommended; or]
29-19                [(3)  the commission determines that extenuating
29-20    circumstances exist and orders payment for surgery].
29-21          [(b)  The commission shall adopt rules necessary to ensure
29-22    that an examination required under this section is performed
29-23    without undue delay.]
29-24          SECTION 4.02. Section 413.014, Labor Code, is amended to read
29-25    as follows:
29-26          Sec. 413.014.  PREAUTHORIZATION REQUIREMENTS; CONCURRENT
29-27    REVIEW AND CERTIFICATION OF HEALTH CARE. (a)  In this section,
 30-1    "investigational or experimental service or device" means a health
 30-2    care treatment, service, or device for which there is early,
 30-3    developing scientific or clinical evidence demonstrating the
 30-4    potential efficacy of the treatment, service, or device but that is
 30-5    not yet broadly accepted as the prevailing standard of care.
 30-6          (b)  The commission by rule shall specify which health care
 30-7    treatments and services require express preauthorization or
 30-8    concurrent review by the insurance carrier. Treatments and services
 30-9    for a medical emergency do not require express preauthorization.
30-10          (c)  The commission rules adopted under this section must
30-11    provide that preauthorization and concurrent review are required at
30-12    a minimum for:
30-13                (1)  spinal surgery, as provided by Section 408.026;
30-14                (2)  work-hardening or work-conditioning services
30-15    provided by a health care facility that is not credentialed by an
30-16    organization recognized by commission rules;
30-17                (3)  inpatient hospitalization, including any procedure
30-18    and length of stay;
30-19                (4)  outpatient or ambulatory surgery; and
30-20                (5)  any investigational or experimental services or
30-21    devices.
30-22          (d) [(b)]  The insurance carrier is not liable for those
30-23    specified treatments and services requiring preauthorization unless
30-24    preauthorization is sought by the claimant or health care provider
30-25    and either obtained from the insurance carrier or ordered by the
30-26    commission.
30-27          (e)  Each insurance carrier shall allow health care providers
 31-1    to request that the insurance carrier prospectively or concurrently
 31-2    certify coverage for health care services, including pharmaceutical
 31-3    services, that do not require preauthorization and concurrent
 31-4    review.  Regardless of the insurance carrier's response to the
 31-5    request, the carrier retains the right to retrospectively review
 31-6    health care services and supporting records and to contest the
 31-7    certification of those services.
 31-8          SECTION 4.03. Subchapter B, Chapter 413, Labor Code, is
 31-9    amended by adding Section 413.0141 to read as follows:
31-10          Sec. 413.0141.  INITIAL PHARMACEUTICAL COVERAGE. The
31-11    commission may by rule provide that an insurance carrier shall
31-12    provide for payment of specified pharmaceutical services sufficient
31-13    for the first seven days following the date of injury if the health
31-14    care provider requests and receives verification of insurance
31-15    coverage and a verbal confirmation of an injury from the employer
31-16    or from the insurance carrier as provided by Section 413.014.  The
31-17    rules adopted by the commission may also provide that an insurance
31-18    carrier is eligible for reimbursement for pharmaceutical services
31-19    paid under this section from the subsequent injury fund in the
31-20    event the injury is determined not to be compensable.
31-21          SECTION 4.04. The Texas Workers' Compensation Commission
31-22    shall adopt the rules required under Sections 408.026 and 413.0141,
31-23    Labor Code, as amended or added by this article, not later than
31-24    February 1, 2002, and may adopt rules required by Section 413.014,
31-25    Labor Code, as amended by this article, not later than that date.
31-26       ARTICLE 5. REQUIRED MEDICAL EXAMINATIONS; DESIGNATED DOCTORS
31-27          SECTION 5.01. Sections 408.004(a) and (c), Labor Code, are
 32-1    amended to read as follows:
 32-2          (a)  The commission may require an employee to submit to
 32-3    medical examinations to resolve any question about[:]
 32-4                [(1)]  the appropriateness of the health care received
 32-5    by the employee[;]
 32-6                [(2)  the impairment caused by the compensable injury;]
 32-7                [(3)  the attainment of maximum medical improvement; or]
 32-8                [(4)  similar issues].
 32-9          (c)  The insurance carrier shall pay for:
32-10                (1)  an examination required under Subsection (a) or
32-11    (b); and
32-12                (2)  the reasonable mileage expenses [expense] incident
32-13    to the employee in submitting to the examination.
32-14          SECTION 5.02.  Subchapter A, Chapter 408, Labor Code, is
32-15    amended by adding Section 408.0041 to read as follows:
32-16          Sec. 408.0041.  DESIGNATED DOCTOR EXAMINATION.  (a)  At the
32-17    request of an insurance carrier or an employee, the commission
32-18    shall order a medical examination to resolve any question about:
32-19                (1)  the impairment caused by the compensable injury;
32-20                (2)  the attainment of maximum medical improvement;
32-21                (3)  the ability of the employee to return to work;
32-22                (4)  the compensability and extent of the injury; or
32-23                (5)  similar issues.
32-24          (b)  A medical examination requested under Subsection (a)
32-25    shall be performed by the next available doctor on the commission's
32-26    list of designated doctors whose credentials are appropriate for
32-27    the issue in question and the injured employee's medical condition.
 33-1    The commission shall assign a designated doctor not later than the
 33-2    10th day after the date on which the request under Subsection (a)
 33-3    is received, and the examination must be conducted not later than
 33-4    the 21st day after the date on which the commission issues the
 33-5    order under Subsection (a).  An examination under this section may
 33-6    not be held more frequently than every 60 days, unless good cause
 33-7    for more frequent examinations exists, as defined by commission
 33-8    rules.
 33-9          (c)  The treating doctor and the insurance carrier are both
33-10    responsible for sending to the designated doctor all of the injured
33-11    employee's medical records relating to the issue to be evaluated by
33-12    the designated doctor that are in their possession.  The treating
33-13    doctor and insurance carrier may send the records without a signed
33-14    release from the employee.  The designated doctor is authorized to
33-15    receive the employee's confidential medical records to assist in
33-16    the resolution of disputes.  The treating doctor and insurance
33-17    carrier may also send the designated doctor an analysis of the
33-18    injured worker's medical condition, functional abilities, and
33-19    return-to-work opportunities.
33-20          (d)  To avoid undue influence on a person selected as a
33-21    designated doctor under this section, only the injured employee or
33-22    an appropriate member of the staff of the commission may
33-23    communicate with the designated doctor about the case regarding the
33-24    injured employee's medical condition or history before the
33-25    examination of the injured employee by the designated doctor.
33-26    After that examination is completed, communication with the
33-27    designated doctor regarding the injured employee's medical
 34-1    condition or history may be made only through appropriate
 34-2    commission staff members.  The designated doctor may initiate
 34-3    communication with any doctor who has previously treated or
 34-4    examined the injured employee for the work-related injury or with
 34-5    peer reviewers identified by the insurance carrier.
 34-6          (e)  The designated doctor shall report to the commission.
 34-7    The report of the designated doctor has presumptive weight unless
 34-8    the great weight of the evidence is to the contrary.  An employer
 34-9    may make a bona fide offer of employment subject to Sections
34-10    408.103(e) and 408.144(c) based on the designated doctor's report.
34-11          (f)  If an insurance carrier is not satisfied with the
34-12    opinion rendered by a designated doctor under this section, the
34-13    insurance carrier may request the commission to order an employee
34-14    to attend an examination by a doctor selected by the insurance
34-15    carrier.  The commission shall allow the insurance carrier
34-16    reasonable time to obtain and present the opinion of the doctor
34-17    selected under this subsection before the commission makes a final
34-18    decision on the merits of the issue in question.
34-19          (g)  The insurance carrier shall pay for:
34-20                (1)  an examination required under Subsection (a); and
34-21                (2)  the reasonable mileage expenses incident to the
34-22    employee in submitting to the examination.
34-23          (h)  An employee is not entitled to temporary income
34-24    benefits, and an insurance carrier may suspend the payment of
34-25    temporary income benefits, during and for a period in which the
34-26    employee fails to submit to an examination under Subsection (a) or
34-27    (b) unless the commission determines that the employee had good
 35-1    cause for the failure to submit to the examination.  The commission
 35-2    may order temporary income benefits to be paid for the period that
 35-3    the commission determines the employee had good cause.  The
 35-4    commission by rule shall ensure that an employee receives
 35-5    reasonable notice of an examination and of the insurance carrier's
 35-6    basis for suspension of payment and that the employee is provided a
 35-7    reasonable opportunity to reschedule an examination missed by the
 35-8    employee for good cause.
 35-9          (i)  If the report of a designated doctor indicates that an
35-10    employee can return to work immediately or has reached maximum
35-11    medical improvement, the insurance carrier may suspend or reduce
35-12    the payment of temporary income benefits immediately.
35-13          (j)  If the report of a doctor selected by the insurance
35-14    carrier indicates that an employee can return to work immediately
35-15    or has reached maximum medical improvement, the insurance carrier
35-16    may suspend or reduce the payment of temporary income benefits on
35-17    the 14th day after the date on which the insurance carrier files a
35-18    notice of suspension with the commission.
35-19          (k)  At the request of the employee or the insurance carrier
35-20    to dispute a decision under Subsection (i) or (j), the commission
35-21    shall hold an expedited benefit review conference, by personal
35-22    appearance or by telephone, not later than the 10th day after the
35-23    date on which the commission receives the request for the
35-24    conference.  If a benefit review conference is not held by the 14th
35-25    day after the date on which the commission receives the insurance
35-26    carrier's notice of suspension, an interlocutory order, effective
35-27    from the date of the report certifying maximum medical improvement,
 36-1    is automatically entered for the continuation of temporary income
 36-2    benefits until a benefit review conference is held, and the
 36-3    insurance carrier is eligible for reimbursement for any overpayment
 36-4    of benefits as provided by Chapter 410.  The commission is not
 36-5    required to schedule a contested case hearing as required by
 36-6    Section 410.025(b) if a benefit review conference is scheduled
 36-7    under this subsection.  If a benefit review conference is held not
 36-8    later than the 14th day, the commission may enter an interlocutory
 36-9    order for the continuation of benefits and the insurance carrier is
36-10    eligible for reimbursement for any overpayments of benefits as
36-11    provided by Chapter 410.  The commission shall adopt rules as
36-12    necessary to implement this subsection under which:
36-13                (1)  an insurance carrier is required to notify the
36-14    employee and the treating doctor of the suspension of benefits
36-15    under this subsection by certified mail or another verifiable
36-16    delivery method;
36-17                (2)  the commission makes a reasonable attempt to
36-18    obtain the treating doctor's opinion before the commission makes a
36-19    determination regarding the entry of an interlocutory order; and
36-20                (3)  the commission may allow abbreviated contested
36-21    case hearings by personal appearance or telephone to consider
36-22    issues relating to overpayment of benefits under this section.
36-23          SECTION 5.03. Sections 408.122(b) and (c), Labor Code, are
36-24    amended to read as follows:
36-25          (b)  To be eligible to serve as a designated doctor, a doctor
36-26    must meet specific qualifications, including training in the
36-27    determination of impairment ratings.  The executive director shall
 37-1    develop qualification standards and administrative policies to
 37-2    implement this subsection, and the commission may adopt rules as
 37-3    necessary.  A designated doctor's credentials must be appropriate
 37-4    for the issue in question and the injured employee's medical
 37-5    condition. [To the extent possible, a designated doctor must be in
 37-6    the same discipline and licensed by the same board of examiners as
 37-7    the employee's doctor of choice.]
 37-8          (c)  [If a dispute exists as to whether the employee has
 37-9    reached maximum medical improvement, the commission shall direct
37-10    the employee to be examined by a designated doctor chosen by mutual
37-11    agreement of the parties.  If the parties are unable to agree on a
37-12    designated doctor, the commission shall direct the employee to be
37-13    examined by a designated doctor chosen by the commission.  The
37-14    designated doctor shall report to the commission.]  The report of
37-15    the designated doctor has presumptive weight, and the commission
37-16    shall base its determination of whether the employee has reached
37-17    maximum medical improvement on the report unless the great weight
37-18    of the other medical evidence is to the contrary.
37-19          SECTION 5.04. The Research and Oversight Council on Workers'
37-20    Compensation shall report to the legislature not later than
37-21    December 31, 2002, regarding issues related to medical examinations
37-22    conducted under Section 408.0041, Labor Code, as added by this
37-23    article.
37-24          SECTION 5.05. Section 408.004, Labor Code, as amended by this
37-25    article, applies only to a request for a medical examination made
37-26    to the Texas Workers' Compensation Commission by an insurance
37-27    carrier on or after January 1, 2002.
 38-1         ARTICLE 6. MEDICAL BENEFIT REGULATION; DISPUTE RESOLUTION
 38-2          SECTION 6.01. Section 408.028, Labor Code, is amended to read
 38-3    as follows:
 38-4          Sec. 408.028.  PHARMACEUTICAL SERVICES. (a)  A physician
 38-5    [health care practitioner] providing care to an employee under this
 38-6    subchapter shall prescribe for the employee any necessary
 38-7    prescription drugs, and over-the-counter alternatives to
 38-8    prescription medications as clinically appropriate and applicable,
 38-9    in accordance with applicable state law and as provided by
38-10    Subsection (b).  A doctor providing care may order over-the-counter
38-11    alternatives to prescription medications, when clinically
38-12    appropriate, in accordance with applicable state law and as
38-13    provided by Subsection (b).
38-14          (b)  The commission by rule shall develop an open formulary
38-15    under Section 413.011 that requires the use of generic
38-16    pharmaceutical medications and clinically appropriate
38-17    over-the-counter alternatives to prescription medications unless
38-18    otherwise specified by the prescribing doctor, in accordance with
38-19    applicable state law.
38-20          (c)  Except as otherwise provided by this subtitle, an [An]
38-21    insurance carrier may not require an employee to use pharmaceutical
38-22    services designated by the carrier.
38-23          (d)  The commission shall adopt rules to allow an employee to
38-24    purchase over-the-counter alternatives to prescription medications
38-25    prescribed or ordered under Subsection (a) or (b) and to obtain
38-26    reimbursement from the insurance carrier for those medications.
38-27          SECTION 6.02.  Section 413.011, Labor Code, is amended to
 39-1    read as follows:
 39-2          Sec. 413.011.  FEE GUIDELINES; TREATMENT GUIDELINES [AND
 39-3    MEDICAL POLICIES].  (a)  The commission by rule shall adopt by
 39-4    reference the reimbursement methodology and model used by the
 39-5    Medicare system with minimal modifications to that reimbursement
 39-6    methodology as necessary to meet occupational injury requirements
 39-7    and to allow chiropractors to serve as treating doctors.  This
 39-8    section may not be interpreted in a manner inconsistent with state
 39-9    laws relating to insurance equity regarding parity of payment or
39-10    fee reimbursement levels based on provider type, license,
39-11    discipline, or specialty.  The commission shall calculate
39-12    conversion factors to set fees for services based on that
39-13    methodology and shall provide for reasonable fees for the
39-14    evaluation and management of care by treating doctors as required
39-15    by Section 408.025(c) and commission rules.  The commission shall
39-16    adopt other Medicare requirements and related rules, including
39-17    coding compliance standards, to meet the standards for reporting
39-18    documentation and billing required by Section 413.053, and
39-19    guidelines relating to [establish medical policies and guidelines
39-20    relating to:]
39-21                [(1)  fees charged or paid for medical services for
39-22    employees who suffer compensable injuries, including guidelines
39-23    relating to payment of fees for specific medical treatments or
39-24    services;]
39-25                [(2)  use of medical services by employees who suffer
39-26    compensable injuries; and]
39-27                [(3)]  fees charged or paid for providing expert
 40-1    testimony relating to an issue arising under this subtitle.
 40-2          (b)  Guidelines for medical services fees must be fair and
 40-3    reasonable and designed to ensure the quality of medical care and
 40-4    to achieve effective medical cost control.  The guidelines may not
 40-5    provide for payment of a fee in excess of the fee charged for
 40-6    similar treatment of an injured individual of an equivalent
 40-7    standard of living and paid by that individual or by someone acting
 40-8    on that individual's behalf.  The commission shall consider the
 40-9    increased security of payment afforded by this subtitle in
40-10    establishing the fee guidelines.
40-11          (c)  The commission by rule may adopt treatment guidelines.
40-12    If adopted, treatment guidelines adopted must be nationally
40-13    recognized, scientifically valid, and outcome-based and designed to
40-14    reduce excessive or inappropriate medical care while safeguarding
40-15    necessary medical care [Medical policies adopted by the commission
40-16    must be consistent with Sections 413.013, 413.020, 413.052, and
40-17    413.053].
40-18          (d)  The commission by rule may [shall] establish medical
40-19    policies relating to necessary treatments for injuries.
40-20          (e)  Any medical [Medical] policies or guidelines adopted by
40-21    the commission must [shall] be:
40-22                (1)  designed to ensure the quality of medical care and
40-23    to achieve effective medical cost control;
40-24                (2)  designed to enhance a timely and appropriate
40-25    return to work; and
40-26                (3)  consistent with Sections 413.013, 413.020,
40-27    413.052, and 413.053.
 41-1          SECTION 6.03. Section 413.031, Labor Code, is amended to read
 41-2    as follows:
 41-3          Sec. 413.031.  MEDICAL DISPUTE RESOLUTION. (a)  A party,
 41-4    including a health care provider or claimant, is entitled to a
 41-5    review of a medical service provided or for which authorization of
 41-6    payment is sought if that party [a health care provider] is:
 41-7                (1)  denied payment or paid a reduced amount for the
 41-8    medical service rendered;
 41-9                (2)  denied authorization for the payment for the
41-10    service requested or performed if authorization is required or
41-11    allowed by this subtitle or [the medical policies of the]
41-12    commission rules; [or]
41-13                (3)  ordered by the commission [division] to refund a
41-14    payment received; or
41-15                (4)  ordered to make a payment that was refused or
41-16    reduced for a medical service rendered.
41-17          (b)  A health care provider who submits a charge in excess of
41-18    the fee guidelines or treatment policies is entitled to a review of
41-19    the medical service to determine if reasonable medical
41-20    justification exists for the deviation.
41-21          (c)  In resolving disputes over the amount of payment due for
41-22    services determined to be medically necessary and appropriate for
41-23    treatment of a compensable injury, the role of the commission is to
41-24    adjudicate the correct payment given the relevant statutory
41-25    provisions and commission rules.  The commission shall publish on
41-26    its Internet website its medical dispute decisions, including
41-27    decisions of independent review organizations, and any subsequent
 42-1    decisions by the State Office of Administrative Hearings.  Before
 42-2    publication, the commission shall redact only that information
 42-3    necessary to prevent identification of the injured worker.
 42-4          (d)  A review of the medical necessity of a health care
 42-5    [medical] service requiring preauthorization under Section 413.014
 42-6    or commission rules under that [this] section shall be conducted by
 42-7    an independent review organization under Article 21.58C, Insurance
 42-8    Code, in the same manner as reviews of utilization review decisions
 42-9    by health maintenance organizations.  It is a defense for the
42-10    insurance carrier if the carrier timely complies with the decision
42-11    of the independent review organization.  The commission by rule
42-12    shall specify the appropriate dispute resolution process for
42-13    disputes in which a claimant has paid for medical services and is
42-14    seeking reimbursement [provided by a health care provider
42-15    professional review organization if requested by the health care
42-16    practitioner or if ordered by the commission].
42-17          (e)  Except as provided by Subsection (d), a review of the
42-18    medical necessity of a health care service provided under this
42-19    chapter or Chapter 408 shall be conducted by an independent review
42-20    organization under Article 21.58C, Insurance Code, in the same
42-21    manner as reviews of utilization review decisions by health
42-22    maintenance organizations. It is a defense for the insurance
42-23    carrier if the carrier timely complies with the decision of the
42-24    independent review organization.
42-25          (f)  The insurance carrier shall pay the cost of the review
42-26    if the dispute arises in connection with a request for health care
42-27    services that require preauthorization under Section 413.014 or
 43-1    commission rules under that section.
 43-2          (g)  Except as provided by Subsection (f), the cost of the
 43-3    review shall be paid by the nonprevailing party.
 43-4          (h)  Notwithstanding Subsections (f) and (g), an employee may
 43-5    not be required to pay any portion of the cost of a review.
 43-6          (i) [(d)]  A party to a medical dispute that remains
 43-7    unresolved after a review of the medical service under this section
 43-8    is entitled to a hearing.  The hearing shall be conducted by the
 43-9    State Office of Administrative Hearings within 90 days of receipt
43-10    of a request for a hearing in the manner provided for a contested
43-11    case under Chapter 2001, Government Code (the administrative
43-12    procedure law).
43-13          SECTION 6.04. Section 413.041, Labor Code, is amended to read
43-14    as follows:
43-15          Sec. 413.041.  DISCLOSURE. (a)  Each doctor shall disclose to
43-16    the commission the identity of any health care provider in which
43-17    the doctor, or the health care provider that employs the doctor,
43-18    has a financial interest.  The doctor shall make the disclosure in
43-19    the manner provided by commission rule.
43-20          (b)  The commission shall require by rule that a doctor
43-21    disclose financial interests in other health care providers as a
43-22    condition of registration for the approved doctor list established
43-23    under Section 408.023, and shall define "financial interest" for
43-24    purposes of this subsection as provided by analogous federal
43-25    regulations.  The commission by rule shall adopt the federal
43-26    standards that prohibit the payment or acceptance of payment in
43-27    exchange for health care referrals.
 44-1          (c)  A doctor or health care provider that fails to comply
 44-2    with this section is subject to penalties and sanctions as provided
 44-3    by this subtitle, including forfeiture of the right to
 44-4    reimbursement for services rendered during the period of
 44-5    noncompliance.
 44-6          (d)  The commission shall publish all final disclosure
 44-7    enforcement orders issued under this section on the commission's
 44-8    Internet website [A health care provider who refers a workers'
 44-9    compensation claimant to another health care provider in which the
44-10    referring provider has more than a five percent financial interest
44-11    shall file an annual disclosure statement with the commission as
44-12    provided by commission rules and shall disclose the interest to the
44-13    insurance carrier at the time of the referral.  The referring
44-14    provider shall specify the degree of the financial interest and
44-15    shall provide other information as required by commission rules].
44-16          SECTION 6.05. Section 415.0035, Labor Code, is amended by
44-17    adding Subsections (e) and (f) to read as follows:
44-18          (e)  An insurance carrier or health care provider commits an
44-19    administrative violation if that person violates this subtitle or a
44-20    rule, order, or decision of the commission.
44-21          (f)  A subsequent administrative violation under this
44-22    section, after prior notice to the insurance carrier or health care
44-23    provider of noncompliance, is subject to penalties as provided by
44-24    Section 415.021. Prior notice under this subsection is not required
44-25    if the violation was committed wilfully or intentionally, or if the
44-26    violation was of a decision or order of the commission.
44-27          SECTION 6.06. Section 415.021(a), Labor Code, is amended to
 45-1    read as follows:
 45-2          (a)  The commission may assess an administrative penalty
 45-3    against a person who commits an administrative violation.
 45-4    Notwithstanding Subsection (c), the commission by rule shall adopt
 45-5    a schedule of specific monetary administrative penalties for
 45-6    specific violations under this subtitle.
 45-7          SECTION 6.07. Section 415.023, Labor Code, is amended to read
 45-8    as follows:
 45-9          Sec. 415.023.  COMMISSION OF WRONGFUL ACT AS MATTER OF
45-10    PRACTICE; ADMINISTRATIVE VIOLATION. (a)  A person who commits an
45-11    administrative violation under Section 415.001, 415.002, [or]
45-12    415.003, or 415.0035 as a matter of practice is subject to an
45-13    applicable rule adopted under Subsection (b) in addition to the
45-14    penalty assessed for the violation.
45-15          (b)  The commission may adopt rules providing for:
45-16                (1)  a reduction or denial of fees;
45-17                (2)  public or private reprimand by the commission;
45-18                (3)  suspension from practice before the commission;
45-19    [or]
45-20                (4)  restriction, suspension, or revocation of the
45-21    right to receive reimbursement under this subtitle; or
45-22                (5)  referral and petition to the appropriate licensing
45-23    authority for appropriate disciplinary action, including the
45-24    restriction, suspension, or revocation of the person's license.
45-25          SECTION 6.08. (a)  The Texas Workers' Compensation Commission
45-26    shall adopt the rules and fee guidelines under Section 413.011,
45-27    Labor Code, as amended by this article, not later than May 1, 2002.
 46-1    Unless subsequently readopted by the commission, the treatment
 46-2    guidelines adopted under Chapter 413, Labor Code, in effect
 46-3    immediately before September 1, 2001, are not applicable to health
 46-4    care services provided on or after January 1, 2002.
 46-5          (b)  The Texas Workers' Compensation Commission shall adopt
 46-6    rules as required by Sections 408.028 and 413.041, Labor Code, as
 46-7    amended by this article, not later than June 1, 2002.
 46-8          (c)  The change in law made by this article by the amendment
 46-9    of Section 413.031, Labor Code, applies only to a request for a
46-10    review of medical services received on or after January 1, 2002.  A
46-11    request received before that date is covered by the law in effect
46-12    immediately before September 1, 2001, and that law is continued in
46-13    effect for that purpose.
46-14          (d)  Section 413.041(c), Labor Code, as added by this
46-15    article, applies only to a failure to comply with Section 413.041
46-16    that occurs after June 1, 2002.
46-17          (e)  Section 415.0035, Labor Code, as amended by this
46-18    article, applies only to a violation occurring on or after
46-19    September 1, 2002.
46-20                     ARTICLE 7.  SUNSET REVIEW; AUDIT
46-21          SECTION 7.01.  Section 401.002, Labor Code, is amended to
46-22    read as follows:
46-23          Sec. 401.002.  APPLICATION OF SUNSET ACT. The Texas Workers'
46-24    Compensation Commission is subject to Chapter 325, Government Code
46-25    (Texas Sunset Act).  Unless continued in existence as provided by
46-26    that chapter, the commission is abolished September 1, 2005 [2007].
46-27          SECTION 7.02.  Subchapter A, Chapter 401, Labor Code, is
 47-1    amended by adding Section 401.003 to read as follows:
 47-2          Sec. 401.003.  ACTIVITIES OF THE STATE AUDITOR. (a)  The
 47-3    commission is subject to audit by the state auditor in accordance
 47-4    with Chapter 321, Government Code.  The state auditor may audit the
 47-5    commission's:
 47-6                (1)  structure and internal controls;
 47-7                (2)  level and quality of service provided to
 47-8    employers, injured employees, insurance carriers, self-insured
 47-9    governmental entities, and other participants;
47-10                (3)  implementation of statutory mandates;
47-11                (4)  employee turnover;
47-12                (5)  information management systems, including public
47-13    access to nonconfidential information;
47-14                (6)  adoption and implementation of administrative
47-15    rules; and
47-16                (7)  assessment of administrative violations and the
47-17    penalties for those violations.
47-18          (b)  Nothing in this section limits the authority of the
47-19    state auditor under Chapter 321, Government Code.
47-20                        ARTICLE 8.  ATTORNEY'S FEES
47-21          SECTION 8.01. Section 408.221, Labor Code, is amended to read
47-22    as follows:
47-23          Sec. 408.221.  ATTORNEY'S FEES PAID TO CLAIMANT'S COUNSEL.
47-24    (a)  An attorney's fee, including a contingency fee, for
47-25    representing a claimant before the commission or court under this
47-26    subtitle must be approved by the commission or court.
47-27          (b)  Except as otherwise provided, an attorney's fee under
 48-1    this section is based on the attorney's time and expenses according
 48-2    to written evidence presented to the commission or court. Except as
 48-3    provided by Subsection (c) or Section 408.147(c), the attorney's
 48-4    fee shall be paid from the claimant's recovery.
 48-5          (c)  An insurance carrier that seeks judicial review under
 48-6    Subchapter G, Chapter 410, of a final decision of a commission
 48-7    appeals panel regarding compensability or eligibility for, or the
 48-8    amount of, income or death benefits is liable for reasonable and
 48-9    necessary attorney's fees incurred by the claimant as a result of
48-10    the insurance carrier's appeal if the claimant prevails on an issue
48-11    on which judicial review is sought by the insurance carrier in
48-12    accordance with the limitation of issues contained in Section
48-13    410.302.  This subsection does not apply to attorney's fees for
48-14    which an insurance carrier may be liable under Section 408.147.  An
48-15    award of attorney's fees under this subsection is not subject to
48-16    commission rules adopted under Subsection (f).  This subsection
48-17    expires September 1, 2005.
48-18          (d)  In approving an attorney's fee under this section, the
48-19    commission or court shall consider:
48-20                (1)  the time and labor required;
48-21                (2)  the novelty and difficulty of the questions
48-22    involved;
48-23                (3)  the skill required to perform the legal services
48-24    properly;
48-25                (4)  the fee customarily charged in the locality for
48-26    similar legal services;
48-27                (5)  the amount involved in the controversy;
 49-1                (6)  the benefits to the claimant that the attorney is
 49-2    responsible for securing; and
 49-3                (7)  the experience and ability of the attorney
 49-4    performing the services.
 49-5          (e) [(d)]  The commission by rule or the court may provide
 49-6    for the commutation of an attorney's fee, except that the
 49-7    attorney's fee shall be paid in periodic payments in a claim
 49-8    involving death benefits if the only dispute is as to the proper
 49-9    beneficiary or beneficiaries.
49-10          (f) [(e)]  The commission by rule shall provide guidelines
49-11    for maximum attorney's fees for specific services in accordance
49-12    with this section.
49-13          (g) [(f)]  An attorney's fee may not be allowed in a case
49-14    involving a fatal injury or lifetime income benefit if the
49-15    insurance carrier admits liability on all issues and tenders
49-16    payment of maximum benefits in writing under this subtitle while
49-17    the claim is pending before the commission.
49-18          (h) [(g)]  An attorney's fee shall be paid to the attorney by
49-19    separate draft.
49-20          (i) [(h)]  Except as provided by Subsection (c) or Section
49-21    408.147(c), an attorney's fee may not exceed 25 percent of the
49-22    claimant's recovery.
49-23          SECTION 8.02. Section 408.147(c), Labor Code, is amended to
49-24    read as follows:
49-25          (c)  If an insurance carrier disputes a commission
49-26    determination that an employee is entitled to supplemental income
49-27    benefits or the amount of supplemental income benefits due and the
 50-1    employee prevails on any disputed issue, the insurance carrier is
 50-2    liable for reasonable and necessary attorney's fees incurred by the
 50-3    employee as a result of the insurance carrier's dispute and for
 50-4    supplemental income benefits accrued but not paid and interest on
 50-5    that amount, according to Section 408.064.  Attorney's fees awarded
 50-6    under this subsection are not subject to Sections 408.221(b), (f)
 50-7    [(e)], and (i) [(h)].
 50-8          SECTION 8.03. Section 408.222(b), Labor Code, is amended to
 50-9    read as follows:
50-10          (b)  In determining whether a fee is reasonable under this
50-11    section, the commission or court shall consider issues analogous to
50-12    those listed under Section 408.221(d) [408.221(c)].  The defense
50-13    counsel shall present written evidence to the commission or court
50-14    relating to:
50-15                (1)  the time spent and expenses incurred in defending
50-16    the case; and
50-17                (2)  other evidence considered necessary by the
50-18    commission or court in making a determination under this section.
50-19                   ARTICLE 9.  LIFETIME INCOME BENEFITS
50-20          SECTION 9.01.  Section 408.161(a), Labor Code, is amended to
50-21    read as follows:
50-22          (a)  Lifetime income benefits are paid until the death of the
50-23    employee for:
50-24                (1)  total and permanent loss of sight in both eyes;
50-25                (2)  loss of both feet at or above the ankle;
50-26                (3)  loss of both hands at or above the wrist;
50-27                (4)  loss of one foot at or above the ankle and the
 51-1    loss of one hand at or above the wrist;
 51-2                (5)  an injury to the spine that results in permanent
 51-3    and complete paralysis of both arms, both legs, or one arm and one
 51-4    leg; [or]
 51-5                (6)  a physically traumatic injury to the brain
 51-6    resulting in incurable insanity or imbecility; or
 51-7                (7)  third degree burns over 40 percent of the body.
 51-8         ARTICLE 10.  MULTIPLE EMPLOYMENT; SUBSEQUENT INJURY FUND
 51-9          SECTION 10.01. Section 403.006, Labor Code, is amended by
51-10    amending Subsection (b) and adding Subsection (d) to read as
51-11    follows:
51-12          (b)  The subsequent injury fund is liable for:
51-13                (1)  the payment of compensation as provided by Section
51-14    408.162;
51-15                (2)  reimbursement of insurance carrier claims of
51-16    overpayment of benefits based on interlocutory orders of the
51-17    commission as provided by this subtitle, consistent with the
51-18    priorities established by rule by the commission;
51-19                (3)  reimbursement of insurance carrier claims as
51-20    provided by Sections 408.042 and 413.0141, consistent with the
51-21    priorities established by rule by the commission; and
51-22                (4)  the payment of an assessment of feasibility and
51-23    the development of regional networks established under Section
51-24    408.0221.
51-25          (d)  Based on an actuarial assessment of the funding
51-26    available under Section 403.007(e), the commission may make partial
51-27    payment of insurance carrier claims under Subsection (b)(3).
 52-1          SECTION 10.02. Section 403.007, Labor Code, is amended by
 52-2    adding Subsections (e) and (f) to read as follows:
 52-3          (e)  If the commission determines that the funding under
 52-4    Subsection (a) is not adequate to meet the expected obligations of
 52-5    the subsequent injury fund established under Section 403.006, the
 52-6    fund shall be supplemented by the collection of a maintenance tax
 52-7    paid by insurance carriers, other than a governmental entity, as
 52-8    provided by Sections 403.002 and 403.003.  The rate of assessment
 52-9    must be adequate to provide 120 percent of the projected unfunded
52-10    liabilities of the fund for the next biennium as certified by an
52-11    independent actuary or financial advisor.
52-12          (f)  The commission's actuary or financial advisor shall
52-13    report biannually to the Research and Oversight Council on Workers'
52-14    Compensation on the financial condition and projected assets and
52-15    liabilities of the subsequent injury fund.  The commission shall
52-16    make the reports available to members of the legislature and the
52-17    public.  The commission may purchase annuities to provide for
52-18    payments due to claimants under this subtitle if the commission
52-19    determines that the purchase of annuities is financially prudent
52-20    for the administration of the fund.
52-21          SECTION 10.03. Section 408.042, Labor Code, is amended to
52-22    read as follows:
52-23          Sec. 408.042.  AVERAGE WEEKLY WAGE FOR PART-TIME EMPLOYEE OR
52-24    EMPLOYEE WITH MULTIPLE EMPLOYMENT. (a)  The average weekly wage of
52-25    a part-time employee who limits the employee's work to less than
52-26    [full-time hours or] a full-time workweek as a regular course of
52-27    that employee's conduct is computed as provided by Section 408.041.
 53-1          (b)  For part-time employees not covered by Subsection (a),
 53-2    the average weekly wage:
 53-3                (1)  for determining temporary income benefits is
 53-4    computed as provided by Section 408.041; and
 53-5                (2)  for determining impairment income benefits,
 53-6    supplemental income benefits, lifetime income benefits, and death
 53-7    benefits is computed as follows:
 53-8                      (A)  if the employee has worked for the employer
 53-9    for at least the 13 weeks immediately preceding the date of the
53-10    injury, the average weekly wage is computed by dividing the sum of
53-11    the wages paid in the 13 consecutive weeks immediately preceding
53-12    the date of the injury by 13 and adjusting that amount to the
53-13    weekly wage level the employee would have attained by working a
53-14    full-time workweek at the same rate of pay; or
53-15                      (B)  if the employee has worked for the employer
53-16    for less than 13 weeks immediately preceding the date of the
53-17    injury, the average weekly wage is equal to:
53-18                            (i)  the weekly wage that the employer pays
53-19    a similar employee for similar services based on a [in] full-time
53-20    workweek [employment]; or
53-21                            (ii)  if a similar employee does not exist,
53-22    the usual wage paid in that vicinity for the same or similar
53-23    services based on a [provided for compensation in] full-time
53-24    workweek [employment].
53-25          (c)  For employees with multiple employment, the average
53-26    weekly wage for determining temporary income benefits, impairment
53-27    income benefits, supplemental income benefits, lifetime income
 54-1    benefits, and death benefits, is computed as follows:
 54-2                (1)  the average weekly wage for an employee with
 54-3    multiple employment is equal to the sum of the average weekly wages
 54-4    computed under Subdivisions (2) and (3);
 54-5                (2)  for each of the employers for whom the employee
 54-6    has worked for at least the 13 weeks immediately preceding the date
 54-7    of injury, the average weekly wage is equal to the sum of the wages
 54-8    paid by that employer to the employee in the 13 weeks immediately
 54-9    preceding the injury divided by 13;
54-10                (3)  for each of the employers for whom the employee
54-11    has worked for less than the 13 weeks immediately preceding the
54-12    date of the injury, the average weekly wage is equal to:
54-13                      (A)  the weekly wage that employer pays similar
54-14    employees for similar services; or
54-15                      (B)  if a similar employee does not exist, the
54-16    usual weekly wage paid in that vicinity for the same or similar
54-17    services; and
54-18                (4)  the average weekly wage of an employee with
54-19    multiple employment who limits the employee's work to less than a
54-20    full-time workweek, but does not do so as a regular course of that
54-21    employee's conduct, is adjusted to the weekly wage level the
54-22    employee would have attained by working a full-time workweek at the
54-23    employee's average rate of pay.
54-24          (d)  The commission shall:
54-25                (1)  prescribe a form to collect information regarding
54-26    the wages of employees with multiple employment; and
54-27                (2)  by rule, determine the manner by which wage
 55-1    information is collected and distributed to implement this section.
 55-2          (e)  For an employee with multiple employment, only the
 55-3    employee's wages that are reportable for federal income tax
 55-4    purposes may be considered.  The employee shall document and verify
 55-5    wage payments subject to this section.
 55-6          (f)  If the commission determines that computing the average
 55-7    weekly wage for an employee as provided by Subsection (c) is
 55-8    impractical or unreasonable, the commission shall set the average
 55-9    weekly wage in a manner that more fairly reflects the employee's
55-10    average weekly wage and that is fair and just to both parties or is
55-11    in the manner agreed to by the parties.  The commission by rule may
55-12    define methods to determine a fair and just average weekly wage
55-13    consistent with this section.
55-14          (g)  An insurance carrier is entitled to apply for and
55-15    receive reimbursement at least annually from the subsequent injury
55-16    fund for the amount of income benefits paid to a worker under this
55-17    section that are based on employment other than the employment
55-18    during which the compensable injury occurred.  The commission may
55-19    adopt rules that govern the documentation, application process, and
55-20    other administrative requirements necessary to implement this
55-21    subsection.
55-22          (h)  In this section:
55-23                (1)  "Employee with multiple employment" means an
55-24    employee who has more than one employer.
55-25                (2)  "Full-time workweek" means a 40-hour workweek.
55-26                (3)  "Part-time[, "part-time] employee" means an
55-27    employee who, at the time of the injury, was working less than a
 56-1    [the] full-time [hours or full-time] workweek for the employer for
 56-2    whom the employee was working when the compensable injury occurred
 56-3    [of similar employees in the same employment, whether for the same
 56-4    or a different employer].
 56-5              ARTICLE 11.  GENERAL TRANSITION; EFFECTIVE DATE
 56-6          SECTION 11.01. Except as otherwise provided by this Act, this
 56-7    Act applies only to a claim for workers' compensation benefits
 56-8    based on a compensable injury that occurs on or after the effective
 56-9    date of this Act.  A claim based on a compensable injury that
56-10    occurs before that date is governed by the law in effect on the
56-11    date that the compensable injury occurred, and the former law is
56-12    continued in effect for that purpose.
56-13          SECTION 11.02. Except as expressly provided, this Act takes
56-14    effect September 1, 2001.