79R8082 PB-D
By: Solomons, Giddings, Hamric, Dunnam H.B. No. 7
Substitute the following for H.B. No. 7:
By: Elkins C.S.H.B. No. 7
A BILL TO BE ENTITLED
AN ACT
relating to the continuation and operation of the workers'
compensation system of this state and to the abolition of the Texas
Workers' Compensation Commission, the establishment of the office
of injured employee counsel, and the transfer of the powers and
duties of the Texas Workers' Compensation Commission to the Texas
Department of Insurance and the office of injured employee counsel;
providing administrative violations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. AMENDMENTS TO SUBTITLE A, TITLE 5, LABOR CODE
PART 1. AMENDMENTS TO CHAPTER 401, LABOR CODE
SECTION 1.001. The heading to Subchapter A, Chapter 401,
Labor Code, is amended to read as follows:
SUBCHAPTER A. GENERAL PROVISIONS [SHORT TITLE; APPLICATION OF
SUNSET ACT]
SECTION 1.002. Section 401.003(a), Labor Code, is amended
to read as follows:
(a) The department [commission] is subject to audit by the
state auditor in accordance with Chapter 321, Government Code. The
state auditor may audit the department's [commission's]:
(1) structure and internal controls;
(2) level and quality of service provided to
employers, injured employees, insurance carriers, self-insured
governmental entities, and other participants;
(3) implementation of statutory mandates;
(4) employee turnover;
(5) information management systems, including public
access to nonconfidential information;
(6) adoption and implementation of administrative
rules by the commissioner; and
(7) assessment of administrative violations and the
penalties for those violations.
SECTION 1.003. Section 401.011, Labor Code, is amended by
amending Subdivisions (1), (8), (14), (15), (19), (28), (30), (37),
(39), (42), and (44) and adding Subdivisions (2-a), (4-a), (5-a),
(5-b), (5-c), (11-a), (11-b), (12-a), (13-a), (16-a), (17-a),
(17-b), (25-a), (25-b), (29-a), (31-a), (31-b), (31-c), (31-d),
(34-a), (34-b), (34-c), (34-d), (35-a), (35-b), (35-c), (38-a),
(38-b), (39-a), (39-b), (42-a), (42-b), (42-c), and (42-d) to read
as follows:
(1) "Adjuster" means a person licensed under Chapter
4101, Insurance Code [407, Acts of the 63rd Legislature, Regular
Session, 1973 (Article 21.07-4, Vernon's Texas Insurance Code)].
(2-a) "Adverse determination" means a determination,
made through utilization review or retrospective review, that the
health care services furnished or proposed to be furnished to an
injured employee are not reasonable and necessary health care
services or are not appropriate.
(4-a) "Appeal process" means the formal process by
which an insurance carrier addresses adverse determinations.
(5-a) "Carrier-network contract" means a written
agreement between a provider network and an insurance carrier that
meets the requirements of Section 408B.152 and under which the
provider network:
(A) agrees to undertake to arrange for or to
provide, by itself or through subcontracts with one or more
entities, health care services on a non-capitated basis to
participants through participating providers; and
(B) accepts responsibility to perform certain
delegated functions on behalf of the insurance carrier.
(5-b) "Case management" means a collaborative process
of assessment, planning, facilitation, and advocacy for options and
services to meet an individual's health needs through communication
and application of available resources to promote quality,
cost-effective outcomes.
(5-c) "Certified provider network" means a network of
participating health care providers using care management
procedures that is certified by an insurance carrier in accordance
with Subchapter C, Chapter 408B, and is used by the carrier to
provide health care services to participants. A certified provider
network may include one or more provider networks and individual
providers.
(8) "Commissioner" ["Commission"] means the
commissioner of insurance [Texas Workers' Compensation
Commission].
(11-a) "Complainant" means a person who files a
complaint under this subtitle. The term includes:
(A) an employee;
(B) an employer;
(C) a health care provider; and
(D) another person designated to act on behalf of
an employee.
(11-b) "Complaint" means any dissatisfaction
expressed orally or in writing by a complainant to a provider
network regarding any aspect of the network's operation. The term
includes dissatisfaction relating to medical fee disputes, the
network's administration, and the manner in which a service is
provided. The term does not include:
(A) a misunderstanding or a problem of
misinformation that is resolved promptly by clearing up the
misunderstanding or supplying the appropriate information to the
satisfaction of the complainant; or
(B) an oral or written expression of
dissatisfaction or disagreement with an adverse determination.
(12-a) "Credentialing" means the insurance carrier's
processes, established in accordance with Section 408B.301, for
review of qualifications and of other relevant information relating
to a health care provider who seeks a participating provider
contract.
(13-a) "Department" means the Texas Department of
Insurance.
(14) "Dependent" means an individual who receives a
regular or recurring economic benefit that contributes
substantially to the individual's welfare and livelihood if the
individual is eligible for distribution of benefits under this
subtitle [Chapter 408].
(15) "Designated doctor" means a doctor appointed by
[mutual agreement of the parties or by] the department [commission]
to recommend a resolution of a dispute as to the medical condition
of an injured employee.
(16-a) "Dispute" means a disagreement related to
review or appeal of an adverse determination, the denial,
reduction, or termination of services for reasons not related to
whether the services were reasonable and necessary health care
services, or the manner in which a service is provided. The term
does not include:
(A) a misunderstanding or a problem of
misinformation that is resolved promptly by clearing up the
misunderstanding or supplying the appropriate information to the
satisfaction of the complainant; or
(B) an oral or written expression of
dissatisfaction or disagreement with an adverse determination.
(17-a) "Emergency care" means services provided in a
hospital emergency facility or a comparable facility to evaluate
and stabilize medical conditions of a recent onset and severity,
including severe pain, that would lead a prudent layperson
possessing an average knowledge of medicine and health care to
believe that the person's condition, sickness, or injury is of such
a nature that failure to get immediate medical care could result in:
(A) serious jeopardy to the person's health;
(B) serious impairment to bodily functions;
(C) serious dysfunction of any bodily organ or
part;
(D) serious disfigurement; or
(E) in the case of a pregnant woman, serious
jeopardy to the health of the fetus.
(17-b) "Fee dispute" means a dispute over the amount
of payment due for health care services determined to be medically
necessary and appropriate for treatment of a compensable injury.
(19) "Health care" means only medically [includes all
reasonable and] necessary medical aid, medical examinations,
medical treatments, medical diagnoses, medical evaluations, and
medical services. The term does not include vocational
rehabilitation. The term includes:
(A) medical, surgical, chiropractic, podiatric,
optometric, dental, nursing, and physical therapy services
provided by or at the direction of, or that are the subject of a
referral by, a treating doctor;
(B) physical rehabilitation services performed
by a licensed [occupational] therapist and provided by or at the
direction of, or that are the subject of a referral by, a treating
doctor;
(C) psychological services provided by or at the
direction of, or that are the subject of a referral by, a treating
[prescribed by a] doctor;
(D) the services of a hospital or other health
care facility provided by or at the direction of, or that are the
subject of a referral by, a treating doctor;
(E) a prescription drug, medicine, or other
remedy provided by or at the direction of, or that is the subject of
a referral by, a treating doctor; and
(F) a medical or surgical supply, appliance,
brace, artificial member, or prosthesis, including training in the
use of the appliance, brace, member, or prosthesis, provided by or
at the direction of, or that is the subject of a referral by, a
treating doctor.
(25-a) "Independent review" means a system for final
administrative review by an independent review organization of the
medical necessity and appropriateness of health care services being
provided, proposed to be provided, or that have been provided to an
employee.
(25-b) "Independent review organization" means an
entity that is certified by the commissioner to conduct independent
review under Article 21.58C, Insurance Code, and rules adopted by
the commissioner.
(28) "Insurance company" means a person authorized and
admitted by the department [Texas Department of Insurance] to
engage in the business of [do] insurance [business] in this state
under a certificate of authority that includes authorization to
write workers' compensation insurance.
(29-a) "Life threatening" has the meaning assigned by
Section 2, Article 21.58A, Insurance Code.
(30) "Maximum medical improvement" means the earlier
of:
(A) the earliest date after which, based on
reasonable medical probability, further material recovery from or
lasting improvement to an injury can no longer reasonably be
anticipated;
(B) the expiration of 104 weeks from the date on
which income benefits begin to accrue; or
(C) the date determined as provided by Section
408D.054 [408.104].
(31-a) "Medical emergency" means the sudden onset of a
medical condition manifested by acute symptoms of sufficient
severity, including severe pain, that the absence of immediate
medical attention could reasonably be expected to result in:
(A) serious jeopardy to the patient's health or
bodily functions; or
(B) serious dysfunction of any body organ or
part.
(31-b) "Medical records" means the history of
diagnosis and treatment for an injury, including medical, dental,
and other health care records from each health care practitioner
who provides care to an injured employee.
(31-c) "Mental health emergency" means a condition
that could reasonably be expected to present danger to the person
experiencing the mental health condition or another person.
(31-d) "Nurse" has the meaning assigned by Section 2,
Article 21.58A, Insurance Code.
(34-a) "Participating health care provider" and
"participating provider" mean a health care provider that:
(A) participates in a certified provider network
by entering into a participating provider contract to provide
health care services to participants in accordance with this
subtitle; and
(B) has been credentialed by the insurance
carrier or provider network in the manner described by Section
408B.301.
(34-b) "Participating provider contract" means the
written agreement entered into by a health care provider with an
insurance carrier or provider network under which the health care
provider agrees to, by itself or through subcontracts with one or
more entities, provide or arrange for health care services to
injured employees under Chapter 408B.
(34-c) "Pattern of practice of under-utilization or
over-utilization" means repetition of instances of
under-utilization or over-utilization within a specific medical
case or multiple cases by a participating health care provider.
(34-d) "Pattern of practice review" means an
evaluation, conducted by two or more health care providers licensed
under the same authority and with the same or similar specialty as
the participating provider under review, that includes an
evaluation of:
(A) the appropriateness of both the level and the
quality of health care services provided to an injured employee;
(B) the appropriateness of treatment,
hospitalization, or office visits consistent with nationally
recognized, scientifically valid, outcome-based treatment
standards and guidelines;
(C) utilization control; and
(D) the existence of a pattern of practice of
under-utilization or over-utilization.
(35-a) "Preauthorization" means the process required
to request approval from a provider network to provide a specific
treatment or service before the treatment or service is provided.
(35-b) "Provider network" means an entity, including a
preferred provider organization, a health maintenance
organization, or a nonprofit health corporation certified under
Section 162.001, Occupations Code, that has entered into a
carrier-network contract under Chapter 408B.
(35-c) "Quality improvement program" means a system
designed to continuously examine, monitor, and revise processes and
systems that support and improve administrative and clinical
functions in accordance with Section 408B.203.
(37) "Representative" means a person, including an
attorney, authorized by the department [commission] to assist or
represent an employee, a person claiming a death benefit, or an
insurance carrier in a matter arising under this subtitle that
relates to the payment of compensation.
(38-a) "Retrospective review" means the process of
reviewing whether services that have been provided to an injured
employee are reasonable and necessary services.
(38-b) "Rural area" means:
(A) a county with a population of 50,000 or less;
(B) an area that is not designated as an
urbanized area by the United States Census Bureau; or
(C) any other area designated as rural under
rules adopted by the commissioner.
(39) "Sanction" means a penalty or other punitive
action or remedy imposed by the department [commission] on an
insurance carrier, representative, employee, employer, or health
care provider for an act or omission in violation of this subtitle
or a rule or order of the commissioner [commission].
(39-a) "Screening criteria" means the written
policies, decision rules, medical protocols, and treatment
guidelines used by a provider network as set forth in Section
408B.352(c) as part of utilization review and retrospective review.
(39-b) "Service area" means a geographic area within
which health care services from network providers are available and
accessible to employees who live or work within that geographic
area.
(42) "Treating doctor" means the doctor who is
primarily responsible for the employee's health care for an injury.
Within a provider network, the term includes a participating
provider who is primarily responsible for:
(A) the efficient management of health care
services for an injured employee;
(B) return-to-work outcomes; and
(C) all referrals to other health care providers.
(42-a) "Utilization control" means a systematic
process of implementing measures that assure overall quality,
management and cost containment of services delivered, including
compliance with nationally recognized, scientifically valid,
outcome-based treatment standards and guidelines.
(42-b) "Utilization review" has the meaning assigned
by Section 2, Article 21.58A, Insurance Code.
(42-c) "Utilization review agent" means any entity
with which a provider network contracts or subcontracts to provide
utilization review under Article 21.58A, Insurance Code.
(42-d) "Utilization review plan" means the screening
criteria, retrospective review procedures, and utilization review
procedures of an insurance carrier, provider network, or
utilization review agent.
(44) "Workers' compensation insurance coverage" means
coverage to secure the payment of compensation provided through:
(A) an approved insurance policy [to secure the
payment of compensation];
(B) [coverage to secure the payment of
compensation through] self-insurance, as provided by this
subtitle; or
(C) [coverage provided by] a governmental
entity, as provided by Subtitle C [to secure the payment of
compensation].
SECTION 1.004. Section 401.021, Labor Code, is amended to
read as follows:
Sec. 401.021. APPLICATION OF OTHER ACTS. Except as
otherwise provided by this subtitle:
(1) a proceeding, hearing, judicial review, or
enforcement of a commissioner [commission] order, decision, or rule
under this title is governed by the following subchapters and
sections of Chapter 2001, Government Code:
(A) Subchapters A, B, D, E, G, and H, excluding
Sections 2001.004(3) and 2001.005;
(B) Sections 2001.051, 2001.052, and 2001.053;
(C) Sections 2001.056 through 2001.062; and
(D) Section 2001.141(c);
(2) a proceeding, hearing, judicial review, or
enforcement of a commissioner [commission] order, decision, or rule
under this title is governed by Subchapters A and B, Chapter 2002,
Government Code, excluding Sections 2002.001(3) [2002.001(2)] and
2002.023;
(3) Chapter 551, Government Code, applies to a
proceeding under this subtitle, other than:
(A) [a benefit review conference;
[(B)] a contested case hearing;
(B) [(C) an appeals panel proceeding;
[(D)] arbitration; or
(C) [(E)] another proceeding involving a
determination on a workers' compensation claim; and
(4) Chapter 552, Government Code, applies to a
workers' compensation record of the department or the office of
injured employee counsel [commission or the research center].
SECTION 1.005. Section 401.023(b), Labor Code, is amended
to read as follows:
(b) The department [commission] shall compute and publish
the interest and discount rate quarterly, using the treasury
constant maturity rate for one-year treasury bills issued by the
United States government, as published by the Federal Reserve Board
on the 15th day preceding the first day of the calendar quarter for
which the rate is to be effective, plus 3.5 percent. For this
purpose, calendar quarters begin January 1, April 1, July 1, and
October 1.
SECTION 1.006. Sections 401.024(b)-(d), Labor Code, are
amended to read as follows:
(b) Notwithstanding another provision of this subtitle that
specifies the form, manner, or procedure for the transmission of
specified information, the commissioner [commission] by rule may
permit or require the use of an electronic transmission instead of
the specified form, manner, or procedure. If the electronic
transmission of information is not authorized or permitted by
commissioner [commission] rule, the transmission of that
information is governed by any applicable statute or rule that
prescribes the form, manner, or procedure for the transmission,
including standards adopted by the Department of Information
Resources.
(c) The commissioner [commission] may designate and
contract with a data collection agent to fulfill the data
collection requirements of this subtitle.
(d) The commissioner [executive director] may prescribe the
form, manner, and procedure for transmitting any authorized or
required electronic transmission, including requirements related
to security, confidentiality, accuracy, and accountability.
SECTION 1.007. The following laws are repealed:
(1) Section 401.002, Labor Code; and
(2) Section 401.011(38), Labor Code.
PART 2. AMENDMENTS TO CHAPTER 402, LABOR CODE
SECTION 1.011. The heading to Chapter 402, Labor Code, is
amended to read as follows:
CHAPTER 402. OPERATION AND ADMINISTRATION OF [TEXAS]
WORKERS' COMPENSATION SYSTEM [COMMISSION]
SECTION 1.012. The heading to Subchapter A, Chapter 402,
Labor Code, is amended to read as follows:
SUBCHAPTER A. GENERAL ADMINISTRATION OF SYSTEM [ORGANIZATION]
SECTION 1.013. Section 402.001, Labor Code, is amended to
read as follows:
Sec. 402.001. ADMINISTRATION OF SYSTEM: TEXAS DEPARTMENT OF
INSURANCE. Except as provided by Section 402.002, the Texas
Department of Insurance is the state agency designated to oversee
and operate the workers' compensation system of this state.
[MEMBERSHIP REQUIREMENTS. (a) The Texas Workers' Compensation
Commission is composed of six members appointed by the governor
with the advice and consent of the senate.
[(b) Appointments to the commission shall be made without
regard to the race, color, disability, sex, religion, age, or
national origin of the appointee. Section 401.011(16) does not
apply to the use of the term "disability" in this subsection.
[(c) Three members of the commission must be employers of
labor and three members of the commission must be wage earners. A
person is not eligible for appointment as a member of the commission
if the person provides services subject to regulation by the
commission or charges fees that are subject to regulation by the
commission.
[(d) In making appointments to the commission, the governor
shall attempt to reflect the social, geographic, and economic
diversity of the state. To ensure balanced representation, the
governor may consider:
[(1) the geographic location of a prospective
appointee's domicile;
[(2) the prospective appointee's experience as an
employer or wage earner;
[(3) the number of employees employed by a prospective
member who would represent employers; and
[(4) the type of work performed by a prospective
member who would represent wage earners.
[(e) The governor shall consider the factors listed in
Subsection (d) in appointing a member to fill a vacancy on the
commission.
[(f) In making an appointment to the commission, the
governor shall consider recommendations made by groups that
represent employers or wage earners.]
SECTION 1.014. Section 402.002, Labor Code, is amended to
read as follows:
Sec. 402.002. ADMINISTRATION OF SYSTEM: OFFICE OF INJURED
EMPLOYEE COUNSEL. The office of injured employee counsel
established under Chapter 404 shall perform the functions regarding
the provision of workers' compensation benefits in this state
designated by this subtitle as under the authority of that office.
[TERMS; VACANCY. (a) Members of the commission hold office for
staggered two-year terms, with the terms of three members expiring
on February 1 of each year.
[(b) If a vacancy occurs during a term, the governor shall
fill the vacancy for the unexpired term. The replacement must be
from the group represented by the member being replaced.]
SECTION 1.015. The heading to Subchapter B, Chapter 402,
Labor Code, is amended to read as follows:
SUBCHAPTER B. SYSTEM GOALS [ADMINISTRATION]
SECTION 1.016. Section 402.021, Labor Code, is renumbered
as Section 402.051, Labor Code, and amended to read as follows:
Sec. 402.051 [402.021]. GOALS; LEGISLATIVE INTENT. (a)
The basic goals of the workers' compensation system of this state
are as follows:
(1) each employee shall be treated with dignity and
respect when injured on the job;
(2) each injured employee shall have access to a fair
and accessible dispute resolution process;
(3) each injured employee shall have access to prompt,
high-quality medical care within the framework established by this
subtitle; and
(4) each injured employee shall receive services to
facilitate the employee's return to employment as soon as it is
considered safe and appropriate by the employee's health care
provider.
(b) It is the intent of the legislature that, in
implementing the goals described by Subsection (a), the workers'
compensation system of this state must:
(1) promote safe and healthy workplaces through
appropriate incentives, education, and other actions;
(2) encourage the safe and timely return of injured
employees to productive roles in the workplace;
(3) provide appropriate income benefits and medical
benefits in a manner that is timely and cost-effective;
(4) provide timely, appropriate, and high-quality
medical care supporting restoration of the injured employee's
physical condition and earning capacity;
(5) minimize the likelihood of disputes and resolve
them promptly and fairly when identified;
(6) promote compliance with this subtitle and rules
adopted under this subtitle through performance-based incentives;
(7) promptly detect and appropriately address acts or
practices of noncompliance with this subtitle and rules adopted
under this subtitle;
(8) effectively educate and clearly inform each person
who participates in the system as a claimant, employer, insurance
carrier, health care provider, or other participant of the person's
rights and responsibilities under the system and how to
appropriately interact within the system; and
(9) take maximum advantage of technological advances
to provide the highest levels of service possible to system
participants and to promote communication among system
participants. [COMMISSION DIVISIONS. (a) The commission shall
have:
[(1) a division of workers' health and safety;
[(2) a division of medical review;
[(3) a division of compliance and practices; and
[(4) a division of hearings.
[(b) In addition to the divisions listed by Subsection (a),
the executive director, with the approval of the commission, may
establish divisions within the commission for effective
administration and performance of commission functions. The
executive director may allocate and reallocate functions among the
divisions.
[(c) The executive director shall appoint the directors of
the divisions of the commission. The directors serve at the
pleasure of the executive director.]
SECTION 1.017. Subchapter B, Chapter 402, Labor Code, is
amended by adding Section 402.052 to read as follows:
Sec. 402.052. GENERAL WORKERS' COMPENSATION MISSION OF
DEPARTMENT. As provided by this subtitle, the department shall
work to promote and help ensure the safe and timely return of
injured employees to productive roles in the workforce.
SECTION 1.018. The heading to Subchapter C, Chapter 402,
Labor Code, is amended to read as follows:
SUBCHAPTER C. DEPARTMENT WORKFORCE EDUCATION AND SAFETY
FUNCTIONS [EXECUTIVE DIRECTOR AND PERSONNEL]
SECTION 1.019. Subchapter C, Chapter 402, Labor Code, is
amended by adding Sections 402.101 and 402.102 to read as follows:
Sec. 402.101. GENERAL DUTIES; FUNDING. (a) The department
shall perform the workforce education and safety functions of the
workers' compensation system of this state.
(b) The operations of the department under this subtitle are
funded through the maintenance tax assessed under Section 403.002.
Sec. 402.102. EDUCATIONAL PROGRAMS. (a) The department
shall provide education on best practices for return-to-work
programs and workplace safety.
(b) The department shall evaluate and develop the most
efficient, cost-effective procedures for implementing this
section.
SECTION 1.020. Section 402.082, Labor Code, is transferred
to Subchapter C, Chapter 402, Labor Code, renumbered as Section
402.103, Labor Code, and amended to read as follows:
Sec. 402.103 [402.082]. INJURY INFORMATION MAINTAINED BY
DEPARTMENT [COMMISSION]. (a) The department [commission] shall
maintain information on every compensable injury as to the:
(1) race, ethnicity, and sex of the claimant;
(2) classification of the injury;
(3) amount of wages earned by the claimant before the
injury; and
(4) amount of compensation received by the claimant.
(b) The department shall provide information maintained
under Subsection (a) to the office of injured employee counsel. The
confidentiality requirements imposed under Section 402.202 apply
to injury information maintained by the department.
SECTION 1.021. The heading to Subchapter D, Chapter 402,
Labor Code, is amended to read as follows:
SUBCHAPTER D. GENERAL POWERS AND DUTIES OF COMMISSIONER AND
DEPARTMENT [COMMISSION]
SECTION 1.022. Section 402.042, Labor Code, is transferred
to Subchapter D, Chapter 402, Labor Code, renumbered as Section
402.151, Labor Code, and amended to read as follows:
Sec. 402.151 [402.042]. GENERAL POWERS AND DUTIES OF
COMMISSIONER AND DEPARTMENT [EXECUTIVE DIRECTOR]. (a) The
commissioner [executive director] shall conduct the [day-to-day]
operations of the department under this subtitle [commission in
accordance with policies established by the commission and
otherwise implement commission policy].
(b) The commissioner or the commissioner's designee, acting
under this subtitle, [executive director] may:
(1) investigate misconduct;
(2) hold hearings;
(3) issue subpoenas to compel the attendance of
witnesses and the production of documents in accordance with
Subchapter C, Chapter 36, Insurance Code;
(4) administer oaths;
(5) take testimony directly or by deposition or
interrogatory;
(6) assess and enforce penalties established under
this subtitle;
(7) enter appropriate orders as authorized by this
subtitle;
(8) correct clerical errors in the entry of orders;
(9) institute an action [in the commission's name] to
enjoin the violation of this subtitle;
(10) initiate an action under Section 410.254 to
intervene in a judicial proceeding;
(11) prescribe the form, manner, and procedure for
transmission of information to the department [commission]; and
(12) delegate all powers and duties as necessary.
(c) The commissioner [executive director] is the agent for
service of process under this subtitle on out-of-state employers.
(d) The department shall operate regional offices
throughout this state as necessary to implement the duties of the
department under this subtitle.
SECTION 1.023. Section 402.061, Labor Code, is renumbered
as Section 402.152, Labor Code, and amended to read as follows:
Sec. 402.152 [402.061]. ADOPTION OF RULES. The
commissioner [commission] shall adopt rules as necessary for the
implementation and enforcement of this subtitle.
SECTION 1.024. Section 402.062, Labor Code, is renumbered
as Section 402.153, Labor Code, and amended to read as follows:
Sec. 402.153 [402.062]. ACCEPTANCE OF CERTAIN GIFTS,
GRANTS, OR [AND] DONATIONS. [(a)] The department [commission] may
accept gifts, grants, or donations for the operation of this
subtitle as provided by rules adopted by the commissioner
[commission].
[(b) Notwithstanding Chapter 575, Government Code, the
commission may accept a grant paid by the Texas Mutual Insurance
Company established under Article 5.76-3, Insurance Code, to
implement specific steps to control and lower medical costs in the
workers' compensation system and to ensure the delivery of quality
medical care. The commission must publish the name of the grantor
and the purpose and conditions of the grant in the Texas Register
and provide for a 20-day public comment period before the
commission may accept the grant. The commission shall acknowledge
acceptance of the grant at a public meeting. The minutes of the
public meeting must include the name of the grantor, a description
of the grant, and a general statement of the purposes for which the
grant will be used.]
SECTION 1.025. Section 402.064, Labor Code, is renumbered
as Section 402.154, Labor Code, and amended to read as follows:
Sec. 402.154 [402.064]. FEES. In addition to fees
established by this subtitle, the commissioner [commission] shall
set reasonable fees for services provided to persons requesting
services from the department under this subtitle [commission],
including services provided under Subchapter E.
SECTION 1.026. Section 402.065, Labor Code, is renumbered
as Section 402.155, Labor Code, and amended to read as follows:
Sec. 402.155 [402.065]. EMPLOYMENT OF COUNSEL.
Notwithstanding Article 1.09-1, Insurance Code, or any other law,
the commissioner [The commission] may employ counsel to represent
the department [commission] in any legal action the department
[commission] is authorized to initiate under this subtitle.
SECTION 1.027. Section 402.066, Labor Code, is renumbered
as Section 402.156, Labor Code, and amended to read as follows:
Sec. 402.156 [402.066]. RECOMMENDATIONS TO LEGISLATURE.
(a) The commissioner [commission] shall consider and recommend to
the legislature changes to this subtitle, including any statutory
changes required by an evaluation conducted under Section 402.162.
(b) The commissioner [commission] shall forward the
recommended changes to the legislature not later than December 1 of
each even-numbered year.
SECTION 1.028. Section 402.067, Labor Code, is renumbered
as Section 402.157, Labor Code, and amended to read as follows:
Sec. 402.157 [402.067]. ADVISORY COMMITTEES. The
commissioner [commission] may appoint advisory committees under
this subtitle as the commissioner [it] considers necessary.
SECTION 1.029. Section 402.068, Labor Code, is renumbered
as Section 402.158, Labor Code, and amended to read as follows:
Sec. 402.158 [402.068]. DELEGATION OF RIGHTS AND DUTIES.
Except as expressly provided by this subchapter, the commissioner
[commission] may not delegate rulemaking and policy-making
functions [rights and duties] imposed on the commissioner and the
department [it] by this subchapter.
SECTION 1.030. Section 402.022, Labor Code, is transferred
to Subchapter D, Chapter 402, Labor Code, renumbered as Section
402.159, Labor Code, and amended to read as follows:
Sec. 402.159 [402.022]. PUBLIC INTEREST INFORMATION. (a)
The department [executive director] shall prepare information of
public interest describing the functions of the commissioner and
the department under this subtitle [commission] and the procedures
by which complaints are filed with and resolved by the department
under this subtitle [commission].
(b) The department [executive director] shall make the
information available to the public and appropriate state agencies.
(c) The commissioner by rule shall ensure that each
department form, standard letter, and brochure under this subtitle:
(1) is written in plain language;
(2) is in a readable and understandable format; and
(3) complies with all applicable requirements
relating to minimum readability requirements.
(d) The department shall make informational materials
described by this section available in English and Spanish.
SECTION 1.031. Section 402.023, Labor Code, is transferred
to Subchapter D, Chapter 402, Labor Code, renumbered as Section
402.160, Labor Code, and amended to read as follows:
Sec. 402.160 [402.023]. COMPLAINT INFORMATION. (a) The
commissioner shall:
(1) adopt rules regarding the filing of a complaint
under this subtitle against an individual or entity subject to
regulation under this subtitle; and
(2) ensure that information regarding the complaint
process is available on the department's Internet website.
(b) The rules adopted under this section must, at a minimum:
(1) ensure that the department clearly defines in rule
the method for filing a complaint; and
(2) define what constitutes a frivolous complaint
under this subtitle.
(c) The department shall develop and post on the
department's Internet website:
(1) a simple standardized form for filing complaints
under this subtitle; and
(2) information regarding the complaint filing
process.
(d) The department [executive director] shall keep an
information file about each written complaint filed with the
department under this subtitle [commission] that is unrelated to a
specific workers' compensation claim. The information must
include:
(1) the date the complaint is received;
(2) the name of the complainant;
(3) the subject matter of the complaint;
(4) a record of all persons contacted in relation to
the complaint;
(5) a summary of the results of the review or
investigation of the complaint; and
(6) for complaints for which the department
[commission] took no action, an explanation of the reason the
complaint was closed without action.
(e) [(b)] For each written complaint that is unrelated to a
specific workers' compensation claim that the department
[commission] has authority to resolve, the department [executive
director] shall provide to the person filing the complaint and the
person about whom the complaint is made information about the
department's [commission's] policies and procedures under this
subtitle relating to complaint investigation and resolution. The
department [commission], at least quarterly and until final
disposition of the complaint, shall notify those persons about the
status of the complaint unless the notice would jeopardize an
undercover investigation.
SECTION 1.032. Subchapter D, Chapter 402, Labor Code, is
amended by adding Sections 402.161-402.166 to read as follows:
Sec. 402.161. PRIORITIES FOR COMPLAINT INVESTIGATIONS. (a)
The department shall assign priorities to complaint investigations
under this subtitle based on risk. In developing priorities under
this section, the department shall develop a formal, risk-based
complaint investigation system that considers:
(1) the severity of the alleged violation;
(2) whether the alleged violator showed continued or
wilful noncompliance; and
(3) whether a commissioner order has been violated.
(b) The commissioner may develop additional risk-based
criteria as determined necessary.
Sec. 402.162. STRATEGIC MANAGEMENT; EVALUATION. (a) The
commissioner shall implement a strategic management plan that:
(1) requires the department to evaluate and analyze
the effectiveness of the department in implementing:
(A) the statutory goals adopted under Section
402.051, particularly goals established to encourage the safe and
timely return of injured employees to productive work roles; and
(B) the other standards and requirements adopted
under this code, the Insurance Code, and other applicable laws of
this state; and
(2) modifies the organizational structure and
programs of the department as necessary to address shortfalls in
the performance of the workers' compensation system of this state.
(b) The department shall conduct research regarding the
system as provided by Chapter 405 to obtain the necessary data and
analysis to perform the evaluations required by this section.
Sec. 402.163. INFORMATION TO EMPLOYERS. (a) The
department shall provide employers with information on methods to
enhance the ability of an injured employee to return to work. The
information may include access to available research and best
practice information regarding return-to-work programs for
employers.
(b) The department shall augment return-to-work program
information provided to employers to include information regarding
methods for an employer to appropriately assist an injured employee
to obtain access to doctors who:
(1) provide high-quality care; and
(2) use effective occupational medicine treatment
practices that lead to returning employees to productive work.
(c) The information provided to employers under this
section must help to foster:
(1) effective working relationships with local
doctors and with insurance carriers or provider networks to improve
return-to-work communication; and
(2) access to return-to-work coordination services
provided by insurance carriers and provider networks.
(d) The department shall develop and make available the
information described by this section.
Sec. 402.164. INFORMATION TO EMPLOYEES. The department
shall provide injured employees with information regarding the
benefits of early return to work. The information must include
information on how to receive assistance in accessing high-quality
medical care through the workers' compensation system.
Sec. 402.165. SINGLE POINT OF CONTACT. To the extent
determined feasible by the commissioner, the department shall
establish a single point of contact for injured employees receiving
services from the department.
Sec. 402.166. INCENTIVES; PERFORMANCE-BASED OVERSIGHT.
(a) The commissioner by rule shall adopt requirements that:
(1) provide incentives for overall compliance in the
workers' compensation system of this state; and
(2) emphasize performance-based oversight linked to
regulatory outcomes.
(b) The commissioner shall develop key regulatory goals to
be used in assessing the performance of insurance carriers,
provider networks, and health care providers. The goals adopted
under this subsection must align with the general regulatory goals
of the department under this subtitle, such as improving workplace
safety and return-to-work outcomes, in addition to goals that
support timely payment of benefits and increased communication.
(c) At least biennially, the department shall assess the
performance of insurance carriers, provider networks, and health
care providers in meeting the key regulatory goals. The department
shall examine overall compliance records and dispute resolution
practices to identify insurance carriers, provider networks, and
health care providers who adversely impact the workers'
compensation system and who may require enhanced regulatory
oversight. The department shall conduct the assessment through
analysis of data maintained by the department and through
self-reporting by insurance carriers, provider networks, and
health care providers.
(d) Based on the performance assessment, the department
shall develop regulatory tiers that distinguish among insurance
carriers, provider networks, and health care providers who are poor
performers, who generally are average performers, and who are
consistently high performers. The department shall focus its
regulatory oversight on insurance carriers, provider networks, and
health care providers identified as poor performers.
(e) The commissioner by rule shall develop incentives
within each tier under Subsection (d) that promote greater overall
compliance and performance. The regulatory incentives may include
modified penalties, self-audits, or flexibility based on
performance.
(f) The department shall:
(1) ensure that high-performing entities are publicly
recognized; and
(2) allow those entities to use that designation as a
marketing tool.
(g) In conjunction with the department's accident
prevention services under Subchapter E, Chapter 411, the department
shall conduct audits of accident prevention services offered by
insurance carriers based on the comprehensive risk assessment. The
department shall periodically review those services, but may
provide incentives for less regulation of carriers based on
performance.
SECTION 1.033. Section 402.071, Labor Code, is renumbered
as Section 402.167, Labor Code, and amended to read as follows:
Sec. 402.167 [402.071]. REPRESENTATIVES. (a) The
commissioner by rule [commission] shall establish qualifications
for a representative and shall adopt rules establishing procedures
for authorization of representatives.
(b) A representative may receive a fee for providing
representation under this subtitle only if the representative [is]:
(1) is an adjuster representing an insurance carrier;
or
(2) is licensed to practice law.
SECTION 1.034. Section 402.072, Labor Code, is renumbered
as Section 402.168, Labor Code, and amended to read as follows:
Sec. 402.168 [402.072]. SANCTIONS. Only the commissioner
[commission] may impose:
(1) a sanction that deprives a person of the right to
practice before the department under this subtitle [commission] or
of the right to receive remuneration under this subtitle for a
period exceeding 30 days; or
(2) another sanction suspending for more than 30 days
or revoking a certificate of authority, license, certification, or
permit required for practice in the field of workers' compensation.
SECTION 1.035. Section 402.073, Labor Code, is renumbered
as Section 402.169, Labor Code, and amended to read as follows:
Sec. 402.169 [402.073]. COOPERATION WITH STATE OFFICE OF
ADMINISTRATIVE HEARINGS. (a) The commissioner [commission] and
the chief administrative law judge of the State Office of
Administrative Hearings by rule shall adopt a memorandum of
understanding governing administrative procedure law hearings
under this subtitle conducted by the State Office of Administrative
Hearings in the manner provided for a contested case hearing under
Chapter 2001, Government Code [(the administrative procedure
law)].
(b) [In a case in which a hearing is conducted by the State
Office of Administrative Hearings under Section 411.049, 413.031,
413.055, or 415.034, the administrative law judge who conducts the
hearing for the State Office of Administrative Hearings shall enter
the final decision in the case after completion of the hearing.
[(c)] In a case in which a hearing is conducted in
conjunction with Section 402.168 or [402.072,] 407.046, [or
408.023,] and in other cases under this subtitle other than cases
subject to Subchapter C, Chapter 413 [that are not subject to
Subsection (b)], the administrative law judge who conducts the
hearing for the State Office of Administrative Hearings shall
propose a decision to the commissioner [commission] for final
consideration and decision by the commissioner [commission].
SECTION 1.036. Section 402.081, Labor Code, is renumbered
as Section 402.201, Labor Code, and amended to read as follows:
Sec. 402.201 [402.081]. WORKERS' COMPENSATION [COMMISSION]
RECORDS. (a) The commissioner [executive director] is the
custodian of the department's [commission's] records under this
subtitle and shall perform the duties of a custodian required by
law, including providing copies and the certification of records.
(b) The department shall comply with records retention
schedules as provided by Section 441.185, Government Code
[executive director may destroy a record maintained by the
commission pertaining to an injury after the 50th anniversary of
the date of the injury to which the record refers unless benefits
are being paid on the claim on that date].
(c) A record maintained by the department under this
subtitle [commission] may be preserved in any format permitted by
Chapter 441, Government Code, and rules adopted by the Texas State
Library and Archives Commission under that chapter.
(d) The department [commission] may charge a reasonable fee
for making available for inspection any of its information that
contains confidential information that must be redacted before the
information is made available. However, when a request for
information is for the inspection of 10 or fewer pages, and a copy
of the information is not requested, the department [commission]
may charge only the cost of making a copy of the page from which
confidential information must be redacted. The fee for access to
information under Chapter 552, Government Code, shall be in accord
with the rules of the Texas Building and Procurement [General
Services] Commission that prescribe the method for computing the
charge for copies under that chapter.
SECTION 1.037. Section 402.083, Labor Code, is renumbered
as Section 402.202, Labor Code, and amended to read as follows:
Sec. 402.202 [402.083]. CONFIDENTIALITY OF INJURY
INFORMATION. (a) Information in or derived from a claim file
regarding an employee is confidential and may not be disclosed by
the department or the State Office of Risk Management [commission]
except as provided by this subtitle.
(b) Information concerning an employee who has been finally
adjudicated of wrongfully obtaining payment under Section 415.008
is not confidential.
SECTION 1.038. Section 402.084, Labor Code, is renumbered
as Section 402.203, Labor Code, and amended to read as follows:
Sec. 402.203 [402.084]. RECORD CHECK; RELEASE OF
INFORMATION. (a) The department [commission] shall perform and
release a record check on an employee, including current or prior
injury information, to the parties listed in Subsection (b) if:
(1) the claim is:
(A) open or pending before the department
[commission];
(B) on appeal to a court of competent
jurisdiction; or
(C) the subject of a subsequent suit in which the
insurance carrier or the subsequent injury fund is subrogated to
the rights of the named claimant; and
(2) the requesting party requests the release on a
form prescribed by the commissioner [commission] for this purpose
and provides all required information.
(b) Information on a claim may be released as provided by
Subsection (a) to:
(1) the employee or the employee's legal beneficiary;
(2) the employee's or the legal beneficiary's
representative;
(3) the employer at the time of injury;
(4) the insurance carrier;
(5) the Texas Certified Self-Insurer Guaranty
Association established under Subchapter G, Chapter 407, if that
association has assumed the obligations of an impaired employer;
(6) the Texas Property and Casualty Insurance Guaranty
Association, if that association has assumed the obligations of an
impaired insurance company;
(7) a third-party litigant in a lawsuit in which the
cause of action arises from the incident that gave rise to the
injury; or
(8) a subclaimant under Section 409.009 that is an
insurance carrier that has adopted an antifraud plan under
Subchapter B, Chapter 704 [Article 3.97-3], Insurance Code, or the
authorized representative of such a subclaimant.
(c) The requirements of Subsection (a)(1) do not apply to a
request from a third-party litigant described by Subsection (b)(7).
(d) Information on a claim relating to a subclaimant under
Subsection (b)(8) may include information, in an electronic data
format, on all workers' compensation claims necessary to determine
if a subclaim exists. The information on a claim remains subject to
confidentiality requirements while in the possession of a
subclaimant or representative. The commissioner [commission] by
rule may establish a reasonable fee for all information requested
under this subsection in an electronic data format by subclaimants
or authorized representatives of subclaimants. The commissioner
[commission] shall adopt rules under Section 401.024(d) to
establish:
(1) reasonable security parameters for all transfers
of information requested under this subsection in electronic data
format; and
(2) requirements regarding the maintenance of
electronic data in the possession of a subclaimant or the
subclaimant's representative.
SECTION 1.039. Section 402.085, Labor Code, is renumbered
as Section 402.204, Labor Code, and amended to read as follows:
Sec. 402.204 [402.085]. EXCEPTIONS TO CONFIDENTIALITY.
(a) The department [commission] shall release information on a
claim to:
(1) [the Texas Department of Insurance for any
statutory or regulatory purpose;
[(2)] a legislative committee for legislative
purposes;
(2) [(3)] a state or federal elected official
requested in writing to provide assistance by a constituent who
qualifies to obtain injury information under Section 402.203(b)
[402.084(b)], if the request for assistance is provided to the
department [commission];
(3) [(4)] the workers' compensation research and
evaluation group [Research and Oversight Council on Workers'
Compensation] for research purposes; [or]
(4) [(5)] the attorney general or another entity that
provides child support services under Part D, Title IV, Social
Security Act (42 U.S.C. Section 651 et seq.), relating to:
(A) establishing, modifying, or enforcing a
child support or medical support obligation; or
(B) locating an absent parent; or
(5) the office of injured employee counsel for any
statutory or regulatory purpose that relates to a duty of that
office.
(b) The department [commission] may release information on
a claim to a governmental agency, political subdivision, or
regulatory body to use to:
(1) investigate an allegation of a criminal offense or
licensing or regulatory violation;
(2) provide:
(A) unemployment compensation benefits;
(B) crime victims compensation benefits;
(C) vocational rehabilitation services; or
(D) health care benefits;
(3) investigate occupational safety or health
violations;
(4) verify income on an application for benefits under
an income-based state or federal assistance program; or
(5) assess financial resources in an action, including
an administrative action, to:
(A) establish, modify, or enforce a child support
or medical support obligation;
(B) establish paternity;
(C) locate an absent parent; or
(D) cooperate with another state in an action
authorized under Part D, Title IV, Social Security Act (42 U.S.C.
Section 651 et seq.), or Chapter 231, Family [76, Human Resources]
Code.
SECTION 1.040. Section 402.086, Labor Code, is renumbered
as Section 402.205, Labor Code, to read as follows:
Sec. 402.205 [402.086]. TRANSFER OF CONFIDENTIALITY. (a)
Information relating to a claim that is confidential under this
subtitle remains confidential when released to any person, except
when used in court for the purposes of an appeal.
(b) This section does not prohibit an employer from
releasing information about a former employee to another employer
with whom the employee has applied for employment, if that
information was lawfully acquired by the employer releasing the
information.
SECTION 1.041. Section 402.087, Labor Code, is renumbered
as Section 402.206, Labor Code, and amended to read as follows:
Sec. 402.206 [402.087]. INFORMATION AVAILABLE TO
[PROSPECTIVE] EMPLOYERS. (a) A prospective employer who has
workers' compensation insurance coverage and who complies with this
subchapter is entitled to obtain information from the department on
the prior injuries of an applicant for employment if the employer
obtains written authorization from the applicant before making the
request.
(b) A current employer who has workers' compensation
insurance and who complies with this subchapter is entitled to
obtain information from the department on the prior injuries of an
employee, without authorization from the employee, if the employer
requests the information from the department not later than the
30th day after the date of hire of the employee.
(c) The employer must make a [the] request for information
under Subsection (a) by telephone or file the request in writing not
later than the 14th day after the date on which the application for
employment is made.
(d) A [(c) The] request under this section must include the
applicant's or employee's name, address, and social security
number.
(e) [(d)] If a [the] request under Subsection (a) is made in
writing, the authorization must be filed simultaneously. If the
request is made by telephone, the employer must file the
authorization not later than the 10th day after the date on which
the request is made.
(f) An employer may not use information obtained under this
section in a manner that violates the Americans with Disabilities
Act (42 U.S.C. Section 12101 et seq.).
SECTION 1.042. Section 402.088, Labor Code, is renumbered
as Section 402.207, Labor Code, and amended to read as follows:
Sec. 402.207 [402.088]. REPORT OF PRIOR INJURY. (a) In
this section, "general injury" means an injury other than an injury
limited to one or more of the following:
(1) an injury to a digit, limb, or member;
(2) an inguinal hernia; or
(3) vision or hearing loss.
(b) On receipt of a valid request made under and complying
with Section 402.206 [402.087], the department [commission] shall
review its records.
(c) [(b)] If the department [commission] finds that an
[the] applicant or an employee has made any [two or more] general
injury claims in the preceding five years, the department
[commission] shall release the date and description of each injury
regarding:
(1) the applicant, to the prospective employer; and
(2) the employee, to the current employer.
(d) [(c)] The information may be released in writing or by
telephone.
(e) [(d)] If a prospective [the] employer requests
information on three or more applicants at the same time, the
department [commission] may refuse to release information until it
receives the written authorization from each applicant.
[(e) In this section, "general injury" means an injury other
than an injury limited to one or more of the following:
[(1) an injury to a digit, limb, or member;
[(2) an inguinal hernia; or
[(3) vision or hearing loss.]
SECTION 1.043. Section 402.089, Labor Code, is renumbered
as Section 402.208, Labor Code, and amended to read as follows:
Sec. 402.208 [402.089]. FAILURE TO FILE AUTHORIZATION;
ADMINISTRATIVE VIOLATION. (a) A prospective [An] employer who
receives information by telephone from the department [commission]
under Section 402.207 [402.088] and who fails to file the necessary
authorization in accordance with Section 402.206 [402.087] commits
a Class C administrative violation.
(b) Each failure to file an authorization is a separate
violation.
SECTION 1.044. Section 402.090, Labor Code, is renumbered
as Section 402.209, Labor Code, and amended to read as follows:
Sec. 402.209 [402.090]. STATISTICAL INFORMATION. The
department [commission], the workers' compensation research and
evaluation group [center], or any other governmental agency may
prepare and release statistical information if the identity of an
employee is not explicitly or implicitly disclosed.
SECTION 1.045. Section 402.091, Labor Code, is renumbered
as Section 402.210, Labor Code, and amended to read as follows:
Sec. 402.210 [402.091]. FAILURE TO MAINTAIN
CONFIDENTIALITY; OFFENSE; PENALTY. (a) A person commits an
offense if the person knowingly, intentionally, or recklessly
publishes, discloses, or distributes information that is
confidential under this subchapter to a person not authorized to
receive the information directly from the department [commission].
(b) A person commits an offense if the person knowingly,
intentionally, or recklessly receives information that is
confidential under this subchapter and that the person is not
authorized to receive.
(c) An offense under this section is a Class A misdemeanor.
(d) An offense under this section may be prosecuted in a
court in the county where the information was unlawfully received,
published, disclosed, or distributed.
(e) A district court in Travis County has jurisdiction to
enjoin the use, publication, disclosure, or distribution of
confidential information under this section.
SECTION 1.046. Section 402.092, Labor Code, is renumbered
as Section 402.211, Labor Code, and amended to read as follows:
Sec. 402.211 [402.092]. INVESTIGATION FILES CONFIDENTIAL;
DISCLOSURE OF CERTAIN INFORMATION. (a) In this section,
"investigation file" means any information compiled or maintained
by the department with respect to a department investigation
authorized under this subtitle or other workers' compensation law.
The term does not include information or material acquired by the
department that is relevant to an investigation by the insurance
fraud unit and subject to Section 701.151, Insurance Code.
(b) Information maintained in the investigation files of
the department [commission] is confidential and may not be
disclosed except:
(1) in a criminal proceeding;
(2) in a hearing conducted by the department
[commission];
(3) on a judicial determination of good cause; [or]
(4) to a governmental agency, political subdivision,
or regulatory body if the disclosure is necessary or proper for the
enforcement of the laws of this or another state or of the United
States; or
(5) to an insurance carrier if the investigation file
relates directly to a felony regarding workers' compensation or to
a claim in which restitution is required to be paid to the insurance
carrier.
(c) Department [(b) Commission] investigation files are
not open records for purposes of Chapter 552, Government Code.
(d) [(c)] Information in an investigation file that is
information in or derived from a claim file, or an employer injury
report or occupational disease report, is governed by the
confidentiality provisions relating to that information.
[(d) For purposes of this section, "investigation file"
means any information compiled or maintained by the commission with
respect to a commission investigation authorized by law.]
(e) The department [commission], upon request, shall
disclose the identity of a complainant under this section if the
department [commission] finds:
(1) the complaint was groundless or made in bad faith;
[or]
(2) the complaint lacks any basis in fact or evidence;
[or]
(3) the complaint is frivolous; or
(4) the complaint is done specifically for competitive
or economic advantage.
(f) Upon completion of an investigation in which [where] the
department [commission] determines a complaint is described by
Subsection (e), [groundless, frivolous, made in bad faith, or is
not supported by evidence or is done specifically for competitive
or economic advantage] the department [commission] shall notify the
person who was the subject of the complaint of its finding and the
identity of the complainant.
SECTION 1.047. Chapter 402, Labor Code, is amended by
adding Subchapter F to read as follows:
SUBCHAPTER F. COOPERATION WITH OFFICE OF INJURED EMPLOYEE COUNSEL
Sec. 402.251. COOPERATION; FACILITIES. (a) The department
shall cooperate with the office of injured employee counsel in
providing services to claimants under this subtitle.
(b) The department shall provide facilities to the office of
injured employee counsel in each regional department office
operated to administer the duties of the department under this
subtitle.
SECTION 1.048. Effective March 1, 2006, the following laws
are repealed:
(1) Section 402.0015, Labor Code;
(2) Sections 402.003-402.012, Labor Code;
(3) Sections 402.024 and 402.025, Labor Code;
(4) Section 402.041, Labor Code;
(5) Sections 402.043-402.045, Labor Code;
(6) Section 402.063, Labor Code;
(7) Section 402.0665, Labor Code; and
(8) Sections 402.069 and 402.070, Labor Code.
SECTION 1.049. (a) The commissioner of insurance shall
conduct a review of the rules, policies, and practices of the Texas
Department of Insurance regarding the operation of the workers'
compensation system of this state. The review must include
analysis of the rules, policies, and practices of the Texas
Workers' Compensation Commission, as that commission existed
before abolishment under this Act, that are continued as rules,
policies, and practices of the Texas Department of Insurance until
replaced by the commissioner of insurance. In the review, the
commissioner shall:
(1) analyze the effectiveness of the rules, policies,
and practices in implementing the goals of the workers'
compensation system as described by Section 402.051, Labor Code, as
added by this Act, especially the return-to-work goals; and
(2) evaluate the existence of any statutory barriers
to the implementation of those goals.
(b) The commissioner of insurance shall report the results
of the review, together with any recommendations for statutory
changes, to the governor, the lieutenant governor, the speaker of
the house of representatives, and the members of the 80th
Legislature not later than December 1, 2006.
PART 3. AMENDMENTS TO CHAPTER 403, LABOR CODE
SECTION 1.051. The heading to Chapter 403, Labor Code, is
amended to read as follows:
CHAPTER 403. [COMMISSION] FINANCING OF
WORKERS' COMPENSATION SYSTEM
SECTION 1.052. Section 403.001, Labor Code, is amended to
read as follows:
Sec. 403.001. [COMMISSION] FUNDS. (a) Except as provided
by Sections 403.006 and 403.007 or as otherwise provided by law,
money collected under this subtitle, including administrative
penalties and advance deposits for purchase of services, shall be
deposited in the general revenue fund of the state treasury to the
credit of the Texas Department of Insurance operating account.
Notwithstanding Section 202.101, Insurance Code, or any other law,
money deposited in the account under this section may be
appropriated only for the use and benefit of the department and the
office of injured employee counsel as provided by the General
Appropriations Act to pay salaries and other expenses arising from
and in connection with the duties under this title of the department
and the office [commission].
(b) The money may be spent as authorized by legislative
appropriation on warrants issued by the comptroller under
requisitions made by the commissioner [commission].
(c) Money deposited in the general revenue fund under this
section may be used to satisfy the requirements of Section 201.052
[Article 4.19], Insurance Code.
SECTION 1.053. Section 403.003, Labor Code, is amended to
read as follows:
Sec. 403.003. RATE OF ASSESSMENT. (a) The commissioner
[commission] shall set and certify to the comptroller the rate of
maintenance tax assessment not later than October 31 of each year,
taking into account:
(1) any expenditure projected as necessary for the
department [commission] to:
(A) administer this subtitle during the fiscal
year for which the rate of assessment is set; and
(B) reimburse the general revenue fund as
provided by Section 201.052 [Article 4.19], Insurance Code;
(2) projected employee benefits paid from general
revenues;
(3) a surplus or deficit produced by the tax in the
preceding year;
(4) revenue recovered from other sources, including
reappropriated receipts, grants, payments, fees, gifts, and
penalties recovered under this subtitle; and
(5) expenditures projected as necessary to support the
prosecution of workers' compensation insurance fraud.
(b) In setting the rate of assessment, the commissioner
[commission] may not consider revenue or expenditures related to:
(1) the State Office of Risk Management;
(2) the workers' compensation research and evaluation
group [oversight council on workers' compensation]; or
(3) any other revenue or expenditure excluded from
consideration by law.
SECTION 1.054. Section 403.004, Labor Code, is amended to
read as follows:
Sec. 403.004. COLLECTION OF TAX AFTER WITHDRAWAL FROM
BUSINESS. The [insurance] commissioner [or the executive director
of the commission] immediately shall proceed to collect taxes due
under this chapter from an insurance carrier that withdraws from
business in this state, using legal process as necessary.
SECTION 1.055. Section 403.005, Labor Code, is amended to
read as follows:
Sec. 403.005. TAX RATE SURPLUS OR DEFICIT. (a) If the tax
rate set by the commissioner [commission] for a year does not
produce sufficient revenue to make all expenditures authorized by
legislative appropriation, the deficit shall be paid from the
general revenue fund.
(b) If the tax rate set by the commissioner [commission] for
a year produces revenue that exceeds the amount required to make all
expenditures authorized by the legislature, the excess shall be
deposited in the general revenue fund to the credit of the Texas
Department of Insurance operating account. Notwithstanding Section
202.101, Insurance Code, or any other law, money deposited in the
account under this section may be appropriated only for the use and
benefit of the department as provided by the General Appropriations
Act to pay salaries and other expenses arising from and in
connection with the department's duties under this title
[commission].
SECTION 1.056. Section 403.006, Labor Code, as amended by
Chapters 211 and 1296, Acts of the 78th Legislature, Regular
Session, 2003, is reenacted and amended to read as follows:
Sec. 403.006. SUBSEQUENT INJURY FUND. (a) The subsequent
injury fund is a dedicated [general revenue] account in the general
revenue fund [in the state treasury]. Money in the account may be
appropriated only for the purposes of this section or as provided by
other law. The subsequent injury fund is not subject to any
provision of law that makes dedicated revenue available for general
governmental purposes and available for the purpose of
certification under Section 403.121, Government Code. [Section
403.095, Government Code, does not apply to the subsequent injury
fund.]
(b) The subsequent injury fund is liable for:
(1) the payment of compensation as provided by Section
408D.202 [408.162];
(2) reimbursement of insurance carrier claims of
overpayment of benefits made under an interlocutory order or
decision of the commissioner [commission] as provided by this
subtitle, consistent with the priorities established by rule by the
commissioner [commission]; and
(3) reimbursement of insurance carrier claims as
provided by Sections 408.042 and 413.0141, consistent with the
priorities established by rule by the commissioner [commission; and
[(4) the payment of an assessment of feasibility and
the development of regional networks established under Section
408.0221].
(c) The commissioner [executive director] shall appoint an
administrator for the subsequent injury fund.
(d) Based on an actuarial assessment of the funding
available under Section 403.007(e), the department [commission]
may make partial payment of insurance carrier claims under
Subsection (b)(3).
SECTION 1.057. Section 403.007, Labor Code, is amended to
read as follows:
Sec. 403.007. FUNDING OF SUBSEQUENT INJURY FUND. (a) If a
compensable death occurs and no legal beneficiary survives or a
claim for death benefits is not timely made, the insurance carrier
shall pay to the department [commission] for deposit to the credit
of the subsequent injury fund an amount equal to 364 weeks of the
death benefits otherwise payable.
(b) The insurance carrier may elect or the commissioner
[commission] may order that death benefits payable to the fund be
commuted on written approval of the commissioner [executive
director]. The commutation may be discounted for present payment
at the rate established in Section 401.023, compounded annually.
(c) If a claim for death benefits is not filed with the
department [commission] by a legal beneficiary on or before the
first anniversary of the date of the death of the employee, it is
presumed, for purposes of this section only, that no legal
beneficiary survived the deceased employee. The presumption does
not apply against a minor beneficiary or an incompetent beneficiary
for whom a guardian has not been appointed.
(d) If the insurance carrier makes payment to the subsequent
injury fund and it is later determined by a final award of the
department [commission] or the final judgment of a court of
competent jurisdiction that a legal beneficiary is entitled to the
death benefits, the commissioner [commission] shall order the fund
to reimburse the insurance carrier for the amount overpaid to the
fund.
(e) If the department [commission] determines that the
funding under Subsection (a) is not adequate to meet the expected
obligations of the subsequent injury fund established under Section
403.006, the fund shall be supplemented by the collection of a
maintenance tax paid by insurance carriers, other than a
governmental entity, as provided by Sections 403.002 and 403.003.
The rate of assessment must be adequate to provide 120 percent of
the projected unfunded liabilities of the fund for the next
biennium as certified by an independent actuary or financial
advisor.
(f) The department's [commission's] actuary or financial
advisor shall report biannually to the workers' compensation
research and evaluation group [Research and Oversight Council on
Workers' Compensation] on the financial condition and projected
assets and liabilities of the subsequent injury fund. The
department [commission] shall make the reports available to members
of the legislature and the public. The department [commission] may
purchase annuities to provide for payments due to claimants under
this subtitle if the commissioner [commission] determines that the
purchase of annuities is financially prudent for the administration
of the fund.
PART 4. ADOPTION OF CHAPTER 404, LABOR CODE
SECTION 1.061. Subtitle A, Title 5, Labor Code, is amended
by adding Chapter 404 to read as follows:
CHAPTER 404. OFFICE OF INJURED EMPLOYEE COUNSEL
SUBCHAPTER A. OFFICE; GENERAL PROVISIONS
Sec. 404.001. DEFINITIONS. In this chapter:
(1) "Office" means the office of injured employee
counsel.
(2) "Public counsel" means the injured employee public
counsel.
Sec. 404.002. ESTABLISHMENT OF OFFICE; ADMINISTRATIVE
ATTACHMENT TO DEPARTMENT. (a) The office of injured employee
counsel is established to represent the interests of workers'
compensation claimants in this state.
(b) The office is administratively attached to the
department but is independent of direction by the commissioner and
the department.
(c) The department shall provide the staff and facilities
necessary to enable the office to perform the duties of the office
under this subtitle, including:
(1) administrative assistance and services to the
office, including budget planning and purchasing;
(2) personnel services; and
(3) computer equipment and support.
(d) The public counsel and the commissioner may enter into
interagency contracts and other agreements as necessary to
implement this chapter.
Sec. 404.003. SUNSET PROVISION. The office of injured
employee counsel is subject to Chapter 325, Government Code (Texas
Sunset Act). Unless continued in existence as provided by that
chapter, the office is abolished and this chapter expires September
1, 2019.
Sec. 404.004. PUBLIC INTEREST INFORMATION. (a) The office
shall prepare information of public interest describing the
functions of the office.
(b) The office shall make the information available to the
public and appropriate state agencies.
Sec. 404.005. ACCESS TO PROGRAMS AND FACILITIES. (a) The
office shall prepare and maintain a written plan that describes how
a person who does not speak English can be provided reasonable
access to the office's programs.
(b) The office shall comply with federal and state laws for
program and facility accessibility.
Sec. 404.006. RULEMAKING. (a) The public counsel shall
adopt rules as necessary to implement this chapter.
(b) Rulemaking under this section is subject to Chapter
2001, Government Code.
[Sections 404.007-404.050 reserved for expansion]
SUBCHAPTER B. INJURED EMPLOYEE PUBLIC COUNSEL
Sec. 404.051. APPOINTMENT; TERM. (a) The governor, with
the advice and consent of the senate, shall appoint the injured
employee public counsel. The public counsel serves a two-year term
that expires on February 1 of each odd-numbered year.
(b) The governor shall appoint the public counsel without
regard to the race, color, disability, sex, religion, age, or
national origin of the appointee.
(c) If a vacancy occurs during a term, the governor shall
fill the vacancy for the unexpired term.
(d) In appointing the public counsel, the governor shall
consider recommendations made by groups that represent wage
earners.
Sec. 404.052. QUALIFICATIONS. To be eligible to serve as
public counsel, a person must:
(1) be licensed to practice law in this state;
(2) have demonstrated a strong commitment to and
involvement in efforts to safeguard the rights of the public;
(3) have management experience;
(4) possess knowledge and experience with the workers'
compensation system; and
(5) have experience with legislative procedures and
administrative law.
Sec. 404.053. BUSINESS INTEREST; SERVICE AS PUBLIC COUNSEL.
(a) A person is not eligible for appointment as public counsel if
the person or the person's spouse:
(1) is employed by or participates in the management
of a business entity or other organization that holds a license,
certificate of authority, or other authorization from the
department or that receives funds from the department;
(2) owns or controls, directly or indirectly, more
than a 10 percent interest in a business entity or other
organization regulated by or receiving funds from the department or
the office; or
(3) uses or receives a substantial amount of tangible
goods, services, or funds from the department or the office, other
than compensation or reimbursement authorized by law.
(b) A person is not eligible for appointment as public
counsel if the person or the person's spouse has been an employee of
an insurance company in the five years preceding the date of
appointment.
Sec. 404.054. LOBBYING ACTIVITIES. A person may not serve
as public counsel if the person is required to register as a
lobbyist under Chapter 305, Government Code, because of the
person's activities for compensation related to the operation of
the department or the office.
Sec. 404.055. GROUNDS FOR REMOVAL. (a) It is a ground for
removal from office that the public counsel:
(1) does not have at the time of appointment or
maintain during service as public counsel the qualifications
required by Section 404.052;
(2) violates a prohibition established by Section
404.053, 404.054, 404.056, or 404.057; or
(3) cannot, because of illness or disability,
discharge the public counsel's duties for a substantial part of the
public counsel's term.
(b) The validity of an action of the office is not affected
by the fact that the action is taken when a ground for removal of the
public counsel exists.
Sec. 404.056. PROHIBITED REPRESENTATION OR EMPLOYMENT. (a)
A former public counsel may not make any communication to or
appearance before the department, the commissioner, or an employee
of the department before the second anniversary of the date the
person ceases to serve as public counsel if the communication or
appearance is made:
(1) on behalf of another person in connection with any
matter on which the person seeks official action; or
(2) with the intent to influence a commissioner
decision or action, unless the person is acting on the person's own
behalf and without remuneration.
(b) A former public counsel may not represent any person or
receive compensation for services rendered on behalf of any person
regarding a matter before the department before the second
anniversary of the date the person ceases to serve as public
counsel.
(c) A person commits an offense if the person violates this
section. An offense under this subsection is a Class A misdemeanor.
(d) A former employee of the office may not:
(1) be employed by an insurance carrier regarding a
matter that was in the scope of the employee's official
responsibility while the employee was associated with the office;
or
(2) represent a person before the department or a
court in a matter:
(A) in which the employee was personally involved
while associated with the office; or
(B) that was within the employee's official
responsibility while the employee was associated with the office.
(e) The prohibition of Subsection (d)(1) applies until the
first anniversary of the date the employee's employment with the
office ceases.
(f) The prohibition of Subsection (d)(2) applies to a
current employee of the office while the employee is associated
with the office and at any time after.
Sec. 404.057. TRADE ASSOCIATIONS. (a) In this section,
"trade association" means a nonprofit, cooperative, and
voluntarily joined association of business or professional
competitors designed to assist its members and its industry or
profession in dealing with mutual business or professional problems
and in promoting their common interest.
(b) A person may not serve as public counsel if the person
is:
(1) an officer, employee, or paid consultant of a
trade association in the field of workers' compensation; or
(2) the spouse of an officer, manager, or paid
consultant of a trade association in the field of workers'
compensation.
[Sections 404.058-404.100 reserved for expansion]
SUBCHAPTER C. GENERAL POWERS AND DUTIES OF OFFICE
Sec. 404.101. GENERAL DUTIES. (a) The office shall:
(1) provide representation to workers' compensation
claimants as provided by this subtitle; and
(2) advocate on behalf of the public regarding
rulemaking by the commissioner relating to workers' compensation.
(b) The office shall accept or reject cases for
representation in disputes subject to Chapter 410 or 413 based on
standards set by department policy.
(c) To the extent determined feasible by the public counsel,
the office shall establish a single point of contact for injured
employees receiving services from the office.
(d) In determining how best to provide services for injured
employees as required by this subtitle, the public counsel may
consider contracting with other legal assistance entities to
provide some portion of the services, including contracting for the
use of legal aid offices and legal service clinics operated at the
law schools in this state.
(e) The office:
(1) may assess the impact of workers' compensation
laws, rules, procedures, and forms on injured employees in this
state; and
(2) shall:
(A) monitor the performance and operation of the
workers' compensation system, with a focus on the system's effect on
the return to work of injured employees;
(B) assist injured employees with the resolution
of complaints against system participants, including state
regulatory agencies;
(C) provide assistance to injured workers in the
administrative dispute resolution system; and
(D) advocate in the office's own name positions
determined by the public counsel to be most advantageous to a
substantial number of injured workers.
Sec. 404.102. GENERAL POWERS AND DUTIES OF PUBLIC COUNSEL.
The public counsel shall administer and enforce this chapter,
including preparing and submitting to the legislature a budget for
the office and approving expenditures for professional services,
travel, per diem, and other actual and necessary expenses incurred
in administering the office.
Sec. 404.103. OPERATION OF OMBUDSMAN PROGRAM. (a) The
office shall operate the ombudsman program under Subchapter D.
(b) The office shall coordinate services provided by the
ombudsman program with services provided by the Department of
Assistive and Rehabilitative Services.
Sec. 404.104. AUTHORITY TO APPEAR OR INTERVENE. The public
counsel:
(1) may appear or intervene, as a party or otherwise,
as a matter of right before the commissioner or department on behalf
of injured employees as a class in matters involving rates, rules,
and forms affecting workers' compensation insurance for which the
commissioner promulgates rates or adopts or approves rules or
forms;
(2) may intervene as a matter of right or otherwise
appear in a judicial proceeding involving or arising from an action
taken by an administrative agency in a proceeding in which the
public counsel previously appeared under the authority granted by
this chapter;
(3) may appear or intervene, as a party or otherwise,
as a matter of right on behalf of injured employees as a class in any
proceeding in which the public counsel determines that injured
employees are in need of representation, except that the public
counsel may not intervene in an enforcement or parens patriae
proceeding brought by the attorney general; and
(4) may appear or intervene before the commissioner or
department, as a party or otherwise, on behalf of injured employees
as a class in a matter involving rates, rules, or forms affecting
injured employees as a class in any proceeding in which the public
counsel determines that injured employees are in need of
representation.
Sec. 404.105. AUTHORITY TO REPRESENT INJURED EMPLOYEES IN
ADMINISTRATIVE PROCEDURES. (a) The office may appear before the
commissioner or department on behalf of an individual injured
employee during an administrative dispute resolution process.
(b) The office may represent injured employees either
through attorney representation or by an ombudsman whose
representation will be under the direction of an attorney.
(c) The public counsel shall adopt rules and polices for
representation of individual injured employees before the
department. The rules must include:
(1) mandatory representation of an injured employee
who requests representation and who is unrepresented by private
counsel;
(2) a process for determining which cases need direct
attorney involvement, that takes into consideration the complexity
of the case and of the issue in dispute; and
(3) representation at the request of an injured
employee in a case in which compensability or extent of injury is in
dispute.
(d) A determination of an injured employee's need for direct
attorney representation does not constitute a fact determination on
the validity of the claim.
(e) The office is prohibited from representing an injured
employee in:
(1) an informal dispute resolution process before an
insurance carrier or certified provider network;
(2) a judicial review; or
(3) a hearing before the department alleging an
administrative violation or fraud.
Sec. 404.106. RESOLUTION OF COMPLAINTS. (a) The office
shall receive and attempt to resolve complaints from injured
employees against system participants, including state agencies.
The office shall:
(1) work with various state agencies to assist in
resolving complaints, including coordination of communications
among various state agencies;
(2) assist injured employees with contacting
appropriate licensing boards for complaints against a health care
provider; and
(3) assist injured employees with referral to local,
state, and federal financial assistance, rehabilitation, and work
placement programs, as well as other social services that the
office considers appropriate.
(b) The office, at least quarterly and until final
disposition of the complaint, shall notify the injured employee of
the status of the complaint unless the notice would jeopardize an
investigation by law enforcement or the fraud units of an
individual insurance company or a state or federal regulatory body.
Sec. 404.107. LEGISLATIVE REPORT. (a) The office shall
report to the governor, lieutenant governor, speaker of the house
of representatives, and the chairs of the legislative committees
with appropriate jurisdiction not later than December 31 of each
even-numbered year. The report must include:
(1) a description of the activities of the office;
(2) identification of any problems in the workers'
compensation system from the perspective of injured employees as
considered by the public counsel, with recommendations for
regulatory and legislative action; and
(3) an analysis of the ability of the workers'
compensation system to provide adequate, equitable, and timely
benefits to injured employees at a reasonable cost to employers.
(b) The office shall coordinate with the workers'
compensation research and evaluation group to obtain needed
information and data to make the evaluations required for the
report.
(c) The office shall publish and disseminate the
legislative report to interested persons, and may charge a fee for
the publication as necessary to achieve optimal dissemination.
Sec. 404.108. ACCESS TO INFORMATION BY PUBLIC COUNSEL. The
public counsel:
(1) is entitled to the same access as a party, other
than department staff, to department records available in a
proceeding before the commissioner or department under the
authority granted to the public counsel by this chapter; and
(2) is entitled to obtain discovery under Chapter
2001, Government Code, of any non-privileged matter that is
relevant to the subject matter involved in a proceeding or
submission before the commissioner or department as authorized by
this chapter.
Sec. 404.109. LEGISLATIVE RECOMMENDATIONS. The public
counsel may recommend proposed legislation to the legislature that
the public counsel determines would positively affect the interests
of injured employees.
Sec. 404.110. INJURED EMPLOYEE RIGHTS; NOTICE. The public
counsel shall submit to the department for adoption by the
commissioner a notice of injured employee rights and
responsibilities to be distributed as provided by commissioner
rules on first report of injury.
Sec. 404.111. PROHIBITED INTERVENTIONS OR APPEARANCES. The
public counsel may not intervene or appear in:
(1) any proceeding or hearing before the commissioner
or department, or any other proceeding, that relates to approval or
consideration of an individual charter, license, certificate of
authority, acquisition, merger, or examination; or
(2) any proceeding concerning the solvency of an
individual insurer, a financial issue, a policy form, advertising,
or another regulatory issue affecting an individual insurer or
agent.
Sec. 404.112. APPLICABILITY OF CONFIDENTIALITY
REQUIREMENTS. Confidentiality requirements applicable to
examination reports under Article 1.18, Insurance Code, and to the
commissioner under Section 3A, Article 21.28-A, Insurance Code,
apply to the public counsel.
Sec. 404.113. ACCESS TO INFORMATION. (a) The office is
entitled to information that is otherwise confidential under a law
of this state, including information made confidential under:
(1) Section 843.006, Insurance Code;
(2) Chapter 108, Health and Safety Code; and
(3) Chapter 552, Government Code.
(b) On request by the public counsel, the department and the
Texas Health Care Information Council shall provide any information
or data requested by the office in furtherance of the duties of the
office under this chapter.
(c) The office shall use information collected or received
under this chapter for the benefit of the public.
Sec. 404.114. CONFIDENTIALITY AND USE OF INFORMATION. (a)
Except as provided by this section, information collected under
this subchapter is subject to Chapter 552, Government Code. The
office shall make determinations on requests for information in
favor of access.
(b) The office may not make public any confidential
information provided to the office under this chapter but may
disclose a summary of the information that does not directly or
indirectly identify the individual or entity that is the subject of
the information. The office may not release, and an individual or
entity may not gain access to, any information that:
(1) could reasonably be expected to reveal the
identity of a doctor or an injured employee;
(2) reveals the zip code of an injured employee's
primary residence;
(3) discloses a provider discount or a differential
between a payment and a billed charge; or
(4) relates to an actual payment made by a payer to an
identified provider.
(c) Information collected or used by the office under this
chapter is subject to the confidentiality provisions and criminal
penalties of:
(1) Section 81.103, Health and Safety Code;
(2) Section 311.037, Health and Safety Code; and
(3) Chapter 159, Occupations Code.
(d) Information on doctors and injured employees that is in
the possession of the office, and any compilation, report, or
analysis produced from the information that identifies doctors and
injured employees is not:
(1) subject to discovery, subpoena, or other means of
legal compulsion for release to any individual or entity; or
(2) admissible in any civil, administrative, or
criminal proceeding.
(e) Notwithstanding Subsection (b)(2), the office may use
zip code information to analyze information on a geographical
basis.
Sec. 404.115. LITERACY AND BASIC SKILLS CURRICULUM. (a)
The office shall coordinate with the Texas Workforce Commission and
local workforce development boards to develop a workplace literacy
and basic skills curriculum designed to eliminate the skills gap
between employees and current and emerging jobs.
(b) The public counsel may enter into memoranda of
understanding or other agreements with the Texas Workforce
Commission and local workforce development boards as necessary to
implement Subsection (a).
SECTION 1.062. Subchapter C, Chapter 409, Labor Code, is
redesignated as Subchapter D, Chapter 404, Labor Code, and Sections
409.041-409.044, Labor Code, are renumbered as Sections
404.151-404.154, Labor Code, and amended to read as follows:
SUBCHAPTER D [C]. OMBUDSMAN PROGRAM
Sec. 404.151 [409.041]. OMBUDSMAN PROGRAM. (a) The office
[commission] shall maintain an ombudsman program as provided by
this subchapter to assist injured employees [workers] and persons
claiming death benefits in obtaining benefits under this subtitle.
(b) An ombudsman shall:
(1) meet with or otherwise provide information to
injured employees [workers];
(2) investigate complaints;
(3) communicate with employers, insurance carriers,
and health care providers on behalf of injured employees [workers];
(4) assist unrepresented claimants, employers, and
other parties to enable those persons to protect their rights in the
workers' compensation system; and
(5) meet with an unrepresented claimant privately for
a minimum of 15 minutes prior to any prehearing conference
[informal] or formal hearing.
Sec. 404.152 [409.042]. DESIGNATION AS OMBUDSMAN;
ELIGIBILITY AND TRAINING REQUIREMENTS; CONTINUING EDUCATION
REQUIREMENTS. (a) At least one specially qualified employee in
each department workers' compensation [commission] office shall be
an ombudsman designated by the office [an ombudsman] who shall
perform the duties under this subchapter [section] as the person's
primary responsibility.
(b) To be eligible for designation as an ombudsman, a person
must:
(1) demonstrate satisfactory knowledge of the
requirements of:
(A) this subtitle and the provisions of Subtitle
C that relate to claims management;
(B) other laws relating to workers'
compensation; and
(C) rules adopted under this subtitle and the
laws described under Subdivision (1)(B);
(2) have demonstrated experience in handling and
resolving problems for the general public;
(3) possess strong interpersonal skills; and
(4) have at least one year of demonstrated experience
in the field of workers' compensation.
(c) The public counsel shall [commission] by rule [shall]
adopt training guidelines and continuing education requirements
for ombudsmen. Training provided under this subsection must:
(1) include education regarding this subtitle and[,]
rules adopted under this subtitle, [and appeals panel decisions,]
with emphasis on benefits and the dispute resolution process; and
(2) require an ombudsman undergoing training to be
observed and monitored by an experienced ombudsman during daily
activities conducted under this subchapter.
Sec. 404.153 [409.043]. EMPLOYER NOTIFICATION;
ADMINISTRATIVE VIOLATION. (a) Each employer shall notify its
employees of the ombudsman program in the [a] manner prescribed by
the office [commission].
(b) An employer commits a violation if the employer fails to
comply with this section. A violation under this section is a Class
C administrative violation.
Sec. 404.154 [409.044]. PUBLIC INFORMATION. The office
[commission] shall widely disseminate information about the
ombudsman program.
SECTION 1.063. The ombudsman program operated by the office
of injured employee counsel under Subchapter D, Chapter 404, Labor
Code, as added by this Act, shall begin providing services under
that subchapter not later than March 1, 2006.
PART 5. AMENDMENTS TO CHAPTER 405, LABOR CODE
SECTION 1.071. Section 405.001, Labor Code, is amended to
read as follows:
Sec. 405.001. DEFINITION. In this chapter, "group"
["department"] means the workers' compensation research and
evaluation group [Texas Department of Insurance].
SECTION 1.072. Section 405.002, Labor Code, is amended to
read as follows:
Sec. 405.002. WORKERS' COMPENSATION RESEARCH DUTIES OF
DEPARTMENT; RESEARCH AND EVALUATION GROUP. (a) The workers'
compensation research and evaluation group is located within the
department and serves as a resource for the commissioner on
workers' compensation issues [shall conduct professional studies
and research related to:
[(1) the delivery of benefits;
[(2) litigation and controversy related to workers'
compensation;
[(3) insurance rates and rate-making procedures;
[(4) rehabilitation and reemployment of injured
workers;
[(5) workplace health and safety issues;
[(6) the quality and cost of medical benefits; and
[(7) other matters relevant to the cost, quality, and
operational effectiveness of the workers' compensation system].
(b) The department may apply for and spend grant funds to
implement this chapter.
(c) The department shall ensure that all research reports
prepared under this chapter or by the former Research and Oversight
Council on Workers' Compensation are accessible to the public
through the Internet to the extent practicable.
SECTION 1.073. Chapter 405, Labor Code, is amended by
adding Sections 405.0025, 405.0026, and 405.0027 to read as
follows:
Sec. 405.0025. RESEARCH DUTIES OF GROUP. (a) The group
shall conduct professional studies and research related to:
(1) the delivery of benefits;
(2) litigation and controversy related to workers'
compensation;
(3) insurance rates and ratemaking procedures;
(4) rehabilitation and reemployment of injured
employees;
(5) the quality and cost of medical benefits;
(6) employer participation in the workers'
compensation system;
(7) employment health and safety issues; and
(8) other matters relevant to the cost, quality, and
operational effectiveness of the workers' compensation system.
(b) The group shall:
(1) objectively evaluate the impact of the workers'
compensation health care networks certified under this subtitle on
the cost and the quality of medical care provided to injured
employees; and
(2) report the group's findings to the governor, the
lieutenant governor, the speaker of the house of representatives,
and the members of the legislature not later than December 1 of each
even-numbered year.
(c) At a minimum, the report required under Subsection (b)
must evaluate the impact of workers' compensation health care
networks on:
(1) the average medical and indemnity cost per claim;
(2) access and utilization of health care;
(3) injured employee return-to-work outcomes;
(4) injured employee, health care provider, and
insurance carrier satisfaction;
(5) injured employee health-related functional
outcomes; and
(6) the frequency, duration, and outcome of disputes
regarding medical benefits.
Sec. 405.0026. RESEARCH AGENDA. (a) The group shall
prepare and publish annually in the Texas Register a proposed
workers' compensation research agenda for commissioner review and
approval.
(b) The commissioner shall:
(1) accept public comments on the research agenda; and
(2) hold a public hearing on the proposed research
agenda if a hearing is requested by interested persons.
Sec. 405.0027. REPORT CARD. (a) The group shall develop
and issue an annual informational report card that identifies and
compares, on an objective basis, the quality, costs, provider
availability, and other analogous factors of provider networks
operating under the workers' compensation system of this state.
(b) The group may procure services as necessary to produce
the report card. The report card must include a risk-adjusted
evaluation of:
(1) employee access to care;
(2) return-to-work outcomes;
(3) health-related outcomes;
(4) employee satisfaction with care; and
(5) health care costs and utilization of health care.
(c) The report cards may be based on information or data
from any person, agency, organization, or governmental entity that
the group considers reliable. The group may not endorse or
recommend a specific provider network or plan, or subjectively rate
or rank provider networks or plans, other than through comparison
and evaluation of objective criteria.
(d) The commissioner shall ensure that consumer report
cards issued by the group under this section are accessible to the
public on the department's Internet website and available to any
person on request. The commissioner by rule may set a reasonable
fee for obtaining a paper copy of report cards.
SECTION 1.074. Sections 405.003(a) and (e), Labor Code, are
amended to read as follows:
(a) The group's [department's] duties under this chapter are
funded through the assessment of a maintenance tax collected
annually from all insurance carriers, and self-insurance groups
that hold certificates of approval under Chapter 407A, except
governmental entities.
(e) Amounts received under this section shall be deposited
in the general revenue fund [state treasury] in accordance with
Section 251.004 [Article 5.68(e)], Insurance Code, to be used:
(1) for the operation of the group's [department's]
duties under this chapter; and
(2) to reimburse the general revenue fund in
accordance with Section 201.052 [Article 4.19], Insurance Code.
SECTION 1.075. Section 405.004, Labor Code, is amended by
amending Subsections (a), (b), and (d) and adding Subsections (e)
and (f) to read as follows:
(a) As required to fulfill the group's [department's]
objectives under this chapter, the group [department] is entitled
to access to the files and records of:
(1) [the commission;
[(2)] the Texas Workforce Commission;
(2) [(3)] the [Texas] Department of Assistive and
Rehabilitative [Human] Services;
(3) the office of injured employee counsel;
(4) the State Office of Risk Management; and
(5) other appropriate state agencies.
(b) A state agency shall assist and cooperate in providing
information to the group [department].
(d) Except as provided by this subsection, the [The]
identity of an individual or entity selected to participate in a
[department] survey conducted by the group or who participates in
such a survey is confidential and is not subject to public
disclosure under Chapter 552, Government Code. This subsection
does not prohibit the identification of a provider network in a
report card issued under Section 405.0027, provided that the report
card may not identify any injured employee or other individual.
(e) A working paper, including all documentary or other
information, prepared or maintained by the group in performing the
group's duties under this chapter or other law to conduct an
evaluation and prepare a report is excepted from the public
disclosure requirements of Section 552.021, Government Code.
(f) A record held by another entity that is considered to be
confidential by law and that the group receives in connection with
the performance of the group's functions under this chapter or
another law remains confidential and is excepted from the public
disclosure requirements of Section 552.021, Government Code.
PART 6. AMENDMENTS TO CHAPTER 406, LABOR CODE
SECTION 1.081. Section 406.005(c), Labor Code, is amended
to read as follows:
(c) Each employer shall post a notice of whether the
employer has workers' compensation insurance coverage at
conspicuous locations at the employer's place of business as
necessary to provide reasonable notice to the employees. The
commissioner [commission] may adopt rules relating to the form and
content of the notice. The employer shall revise the notice when
the information contained in the notice is changed.
SECTION 1.082. Sections 406.006(a)-(c), Labor Code, are
amended to read as follows:
(a) An insurance company from which an employer has obtained
workers' compensation insurance coverage, a certified
self-insurer, and a political subdivision shall file notice of the
coverage and claim administration contact information with the
department [commission] not later than the 10th day after the date
on which the coverage or claim administration agreement takes
effect, unless the commissioner [commission] adopts a rule
establishing a later date for filing. Coverage takes effect on the
date on which a binder is issued, a later date and time agreed to by
the parties, on the date provided by the certificate of
self-insurance, or on the date provided in an interlocal agreement
that provides for self-insurance. The commissioner [commission]
may adopt rules that establish the coverage and claim
administration contact information required under this subsection.
(b) The notice required under this section shall be filed
with the department [commission] in accordance with Section
406.009.
(c) An insurance company, certified self-insurer, or
political subdivision commits a violation if the person fails to
file notice with the department [commission] as provided by this
section. A violation under this subsection is a Class C
administrative violation. Each day of noncompliance constitutes a
separate violation.
SECTION 1.083. Sections 406.007(a)-(c), Labor Code, are
amended to read as follows:
(a) An employer who terminates workers' compensation
insurance coverage obtained under this subtitle shall file a
written notice with the department [commission] by certified mail
not later than the 10th day after the date on which the employer
notified the insurance carrier to terminate the coverage. The
notice must include a statement certifying the date that notice was
provided or will be provided to affected employees under Section
406.005.
(b) The notice required under this section shall be filed
with the department [commission] in accordance with Section
406.009.
(c) Termination of coverage takes effect on the later of:
(1) the 30th day after the date of filing of notice
with the department [commission] under Subsection (a); or
(2) the cancellation date of the policy.
SECTION 1.084. Section 406.008, Labor Code, is amended to
read as follows:
Sec. 406.008. CANCELLATION OR NONRENEWAL OF COVERAGE BY
INSURANCE COMPANY; NOTICE. (a) An insurance company that cancels a
policy of workers' compensation insurance or that does not renew
the policy by the anniversary date of the policy shall deliver
notice of the cancellation or nonrenewal by certified mail or in
person to the employer and the department [commission] not later
than:
(1) the 30th day before the date on which the
cancellation or nonrenewal takes effect; or
(2) the 10th day before the date on which the
cancellation or nonrenewal takes effect if the insurance company
cancels or does not renew because of:
(A) fraud in obtaining coverage;
(B) misrepresentation of the amount of payroll
for purposes of premium calculation;
(C) failure to pay a premium when due;
(D) an increase in the hazard for which the
employer seeks coverage that results from an act or omission of the
employer and that would produce an increase in the rate, including
an increase because of a failure to comply with:
(i) reasonable recommendations for loss
control; or
(ii) recommendations designed to reduce a
hazard under the employer's control within a reasonable period; or
(E) a determination made by the commissioner [of
insurance] that the continuation of the policy would place the
insurer in violation of the law or would be hazardous to the
interest of subscribers, creditors, or the general public.
(b) The notice required under this section shall be filed
with the department [commission].
(c) Failure of the insurance company to give notice as
required by this section extends the policy until the date on which
the required notice is provided to the employer and the department
[commission].
SECTION 1.085. Sections 406.009(a)-(d), Labor Code, are
amended to read as follows:
(a) The department [commission] shall collect and maintain
the information required under this subchapter and shall monitor
compliance with the requirements of this subchapter.
(b) The commissioner [commission] may adopt rules as
necessary to enforce this subchapter.
(c) The commissioner [commission] may:
(1) designate a data collection agent, implement an
electronic reporting and public information access program, and
adopt rules as necessary to implement the data collection
requirements of this subchapter; and
(2) [. The executive director may] establish the
form, manner, and procedure for the transmission of information to
the department [commission as authorized by Section
402.042(b)(11)].
(d) The commissioner [commission] may require an employer
or insurance carrier subject to this subtitle to identify or
confirm an employer's coverage status and claim administration
contact information as necessary to achieve the purposes of this
subtitle.
SECTION 1.086. Section 406.010(c), Labor Code, is amended
to read as follows:
(c) The commissioner [commission] by rule shall further
specify the requirements of this section.
SECTION 1.087. Section 406.011(a), Labor Code, is amended
to read as follows:
(a) The commissioner [commission] by rule may require an
insurance carrier to designate a representative in Austin to act as
the insurance carrier's agent before the department [commission] in
Austin. Notice to the designated representative [agent]
constitutes notice under this subtitle or the Insurance Code to the
insurance carrier.
SECTION 1.088. Section 406.012, Labor Code, is amended to
read as follows:
Sec. 406.012. ENFORCEMENT OF SUBCHAPTER. The department
[commission] shall enforce the administrative penalties
established under this subchapter in accordance with Chapter 415.
SECTION 1.089. Subchapter B, Chapter 406, Labor Code, is
amended by adding Section 406.0325 to read as follows:
Sec. 406.0325. DETERMINATION OF INTOXICATION; DRUG
TESTING. (a) There is a rebuttable presumption that an employee is
intoxicated or under the influence of a controlled substance not
prescribed by the employee's physician, and that being intoxicated
or under the influence of a controlled substance not prescribed by
the employee's physician is the proximate cause of an injury, if the
employee, through a qualifying chemical test:
(1) administered within eight hours of when an injury
occurs, is determined to have an alcohol concentration level equal
to or in excess of the levels established in Section 49.01, Penal
Code;
(2) administered within 32 hours of when an injury
occurs, is determined to have one of the following controlled
substances not prescribed by the employee's physician in the
employee's system that tests above the following levels in an
enzyme multiplied immunoassay technique screening test and above
the levels established under Subdivision (3) in a gas
chromatography mass spectrometry test:
(A) for amphetamines, 1,000 nanograms per
milliliter of urine;
(B) for cannabinoids, 50 nanograms per
milliliter of urine;
(C) for cocaine, including crack cocaine, 300
nanograms per milliliter of urine;
(D) for opiates, 2,000 nanograms per milliliter
of urine; and
(E) for phencyclidine, 25 nanograms per
milliliter of urine;
(3) administered within 32 hours of when an injury
occurs, is determined to have one of the following controlled
substances not prescribed by the employee's physician in the
employee's system that tests above the following levels in a gas
chromatography mass spectrometry test:
(A) for amphetamines, 500 nanograms per
milliliter of urine;
(B) for cannabinoids, 15 nanograms per
milliliter of urine;
(C) for cocaine, including crack cocaine, 150
nanograms per milliliter of urine;
(D) for opiates, 2,000 nanograms per milliliter
of urine; and
(E) for phencyclidine, 25 nanograms per
milliliter of urine; or
(4) administered within 32 hours of when an injury
occurs, is determined to have barbiturates, benzodiazepines,
methadone, or propoxyphene in the employee's system that tests
above levels established by laboratories certified by the United
States Department of Health and Human Services.
(b) An employee may not be forced to submit to a drug test
without consent.
(c) A qualified health care provider that performs a drug
test under Subsection (a) shall submit on request the analysis of
the drug test to the employee and to the employer or insurance
carrier.
SECTION 1.090. Sections 406.051(b) and (c), Labor Code, are
amended to read as follows:
(b) The contract for coverage must be written on a policy
and endorsements approved by the department [Texas Department of
Insurance].
(c) The employer may not transfer:
(1) the obligation to accept a report of injury under
Section 409.001;
(2) the obligation to maintain records of injuries
under Section 409.006;
(3) the obligation to report injuries to the insurance
carrier under Section 409.005;
(4) liability for a violation of Section 415.006 or
415.008 or of Chapter 451; or
(5) the obligation to comply with a commissioner
[commission] order.
SECTION 1.091. Section 406.053, Labor Code, is amended to
read as follows:
Sec. 406.053. ALL STATES COVERAGE. The department [Texas
Department of Insurance] shall coordinate with the appropriate
agencies of other states to:
(1) share information regarding an employer who
obtains all states coverage; and
(2) ensure that the department has knowledge of an
employer who obtains all states coverage in another state but fails
to file notice with the department.
SECTION 1.092. Section 406.073(b), Labor Code, is amended
to read as follows:
(b) The employer shall file the agreement with the
department [executive director] on request.
SECTION 1.093. Sections 406.074(a) and (b), Labor Code, are
amended to read as follows:
(a) The commissioner [executive director] may enter into an
agreement with an appropriate agency of another jurisdiction with
respect to:
(1) conflicts of jurisdiction;
(2) assumption of jurisdiction in a case in which the
contract of employment arises in one state and the injury is
incurred in another;
(3) procedures for proceeding against a foreign
employer who fails to comply with this subtitle; and
(4) procedures for the appropriate agency to use to
proceed against an employer of this state who fails to comply with
the workers' compensation laws of the other jurisdiction.
(b) An executed agreement that has been adopted as a rule by
the commissioner [commission] binds all subject employers and
employees.
SECTION 1.094. Section 406.093(b), Labor Code, is amended
to read as follows:
(b) The commissioner [commission] by rule shall adopt
procedures relating to the method of payment of benefits to legally
incompetent employees.
SECTION 1.095. Section 406.095(b), Labor Code, is amended
to read as follows:
(b) The commissioner [commission] by rule shall establish
the procedures and requirements for an election under this section.
SECTION 1.096. Section 406.098(c), Labor Code, is amended
to read as follows:
(c) The commissioner [Texas Department of Insurance] shall
adopt rules governing the method of calculating premiums for
workers' compensation insurance coverage for volunteer members who
are covered pursuant to this section.
SECTION 1.097. Section 406.123(f), Labor Code, is amended
to read as follows:
(f) A general contractor shall file a copy of an agreement
entered into under this section with the general contractor's
workers' compensation insurance carrier not later than the 10th day
after the date on which the contract is executed. If the general
contractor is a certified self-insurer, the copy must be filed with
the department [division of self-insurance regulation].
SECTION 1.098. Sections 406.144(c) and (d), Labor Code, are
amended to read as follows:
(c) An agreement under this section shall be filed with the
department [commission] either by personal delivery or by
registered or certified mail and is considered filed on receipt by
the department [commission].
(d) The hiring contractor shall send a copy of an agreement
under this section to the hiring contractor's workers' compensation
insurance carrier on filing of the agreement with the department
[commission].
SECTION 1.099. Sections 406.145(a)-(d) and (f), Labor Code,
are amended to read as follows:
(a) A hiring contractor and an independent subcontractor
may make a joint agreement declaring that the subcontractor is an
independent contractor as defined in Section 406.141(2) and that
the subcontractor is not the employee of the hiring contractor. If
the joint agreement is signed by both the hiring contractor and the
subcontractor and filed with the department [commission], the
subcontractor, as a matter of law, is an independent contractor and
not an employee, and is not entitled to workers' compensation
insurance coverage through the hiring contractor unless an
agreement is entered into under Section 406.144 to provide workers'
compensation insurance coverage. The commissioner [commission]
shall prescribe forms for the joint agreement.
(b) A joint agreement shall be delivered to the department
[commission] by personal delivery or registered or certified mail
and is considered filed on receipt by the department [commission].
(c) The hiring contractor shall send a copy of a joint
agreement signed under this section to the hiring contractor's
workers' compensation insurance carrier on filing of the joint
agreement with the department [commission].
(d) The department [commission] shall maintain a system for
accepting and maintaining the joint agreements.
(f) If a subsequent hiring agreement is made to which the
joint agreement does not apply, the hiring contractor and
independent contractor shall notify the department [commission]
and the hiring contractor's workers' compensation insurance carrier
in writing.
SECTION 1.0991. Section 406.004, Labor Code, is repealed.
PART 7. AMENDMENTS TO CHAPTER 407, LABOR CODE
SECTION 1.101. Sections 407.001(3) and (5), Labor Code, are
amended to read as follows:
(3) "Impaired employer" means a certified
self-insurer:
(A) who has suspended payment of compensation as
determined by the department [commission];
(B) who has filed for relief under bankruptcy
laws;
(C) against whom bankruptcy proceedings have
been filed; or
(D) for whom a receiver has been appointed by a
court of this state.
(5) "Qualified claims servicing contractor" means a
person who provides claims service for a certified self-insurer,
who is a separate business entity from the affected certified
self-insurer, and who is:
(A) an insurance company authorized by the
department [Texas Department of Insurance] to write workers'
compensation insurance;
(B) a subsidiary of an insurance company that
provides claims service under contract; or
(C) a third-party administrator that has on its
staff an individual licensed under Chapter 4101, Insurance Code
[407, Acts of the 63rd Legislature, Regular Session, 1973 (Article
21.07-4, Vernon's Texas Insurance Code)].
SECTION 1.102. Subchapter A, Chapter 407, Labor Code, is
amended by adding Section 407.002 to read as follows:
Sec. 407.002. CLAIM; SUIT. (a) A claim or suit brought by a
claimant or a certified self-insurer shall be styled "in re: [name
of employee] and [name of certified self-insurer]."
(b) The commissioner is the agent for service of process for
a claim or suit brought by a workers' compensation claimant against
the qualified claims servicing contractor or a certified
self-insurer.
SECTION 1.103. Sections 407.041(a)-(c), Labor Code, are
amended to read as follows:
(a) An employer who desires to self-insure under this
chapter must submit an application to the department [commission]
for a certificate of authority to self-insure.
(b) The application must be:
(1) submitted on a form adopted by the commissioner
[commission]; and
(2) accompanied by a nonrefundable $1,000 application
fee.
(c) Not later than the 60th day after the date on which the
application is received, the commissioner [director] shall approve
or deny [recommend approval or denial of] the application [to the
commission].
SECTION 1.104. Section 407.042, Labor Code, is amended to
read as follows:
Sec. 407.042. ISSUANCE OF CERTIFICATE OF AUTHORITY. With
the approval of the Texas Certified Self-Insurer Guaranty
Association, [and by majority vote,] the commissioner [commission]
shall issue a certificate of authority to self-insure to an
applicant who meets the certification requirements under this
chapter and pays the required fee.
SECTION 1.105. Section 407.043, Labor Code, is amended to
read as follows:
Sec. 407.043. PROCEDURES ON DENIAL OF APPLICATION. (a) If
the commissioner [commission] determines that an applicant for a
certificate of authority to self-insure does not meet the
certification requirements, the department [commission] shall
notify the applicant in writing of the [its] determination, stating
the specific reasons for the denial and the conditions to be met
before approval may be granted.
(b) The applicant is entitled to a reasonable period, as
determined by the commissioner [commission], to meet the conditions
for approval before the application is considered rejected for
purposes of appeal.
SECTION 1.106. Section 407.044, Labor Code, is amended to
read as follows:
Sec. 407.044. TERM OF CERTIFICATE OF AUTHORITY; RENEWAL.
(a) A certificate of authority to self-insure is valid for one year
after the date of issuance and may be renewed under procedures
prescribed by the commissioner [commission].
(b) The commissioner [director] may stagger the renewal
dates of certificates of authority to self-insure to facilitate the
work load of the department [division].
SECTION 1.107. Section 407.045, Labor Code, is amended to
read as follows:
Sec. 407.045. WITHDRAWAL FROM SELF-INSURANCE. (a) A
certified self-insurer may withdraw from self-insurance at any time
with the approval of the commissioner [commission]. The
commissioner [commission] shall approve the withdrawal if the
certified self-insurer shows to the satisfaction of the
commissioner [commission] that the certified self-insurer has
established an adequate program to pay all incurred losses,
including unreported losses, that arise out of accidents or
occupational diseases first distinctly manifested during the
period of operation as a certified self-insurer.
(b) A certified self-insurer who withdraws from
self-insurance shall surrender to the department [commission] the
certificate of authority to self-insure.
SECTION 1.108. Sections 407.046(a), (b), and (d), Labor
Code, are amended to read as follows:
(a) The commissioner [commission by majority vote] may
revoke the certificate of authority to self-insure of a certified
self-insurer who fails to comply with requirements or conditions
established by this chapter or a rule adopted by the commissioner
[commission] under this chapter.
(b) If the commissioner [commission] believes that a ground
exists to revoke a certificate of authority to self-insure, the
commissioner [commission] shall refer the matter to the State
Office of Administrative Hearings. That office shall hold a hearing
to determine if the certificate should be revoked. The hearing
shall be conducted in the manner provided for a contested case
hearing under Chapter 2001, Government Code [(the administrative
procedure law)].
(d) If the certified self-insurer fails to show cause why
the certificate should not be revoked, the commissioner
[commission] immediately shall revoke the certificate.
SECTION 1.109. Section 407.047(b), Labor Code, is amended
to read as follows:
(b) The security required under Sections 407.064 and
407.065 shall be maintained with the department [commission] or
under the department's [commission's] control until each claim for
workers' compensation benefits is paid, is settled, or lapses under
this subtitle.
SECTION 1.110. Sections 407.061(a), (c), (e), and (f),
Labor Code, are amended to read as follows:
(a) To be eligible for a certificate of authority to
self-insure, an applicant for an initial or renewal certificate
must present evidence satisfactory to the commissioner
[commission] and the association of sufficient financial strength
and liquidity, under standards adopted by the commissioner
[commission], to ensure that all workers' compensation obligations
incurred by the applicant under this chapter are met promptly.
(c) The applicant must present a plan for claims
administration that is acceptable to the commissioner [commission]
and that designates a qualified claims servicing contractor.
(e) The applicant must provide to the department
[commission] a copy of each contract entered into with a person that
provides claims services, underwriting services, or accident
prevention services if the provider of those services is not an
employee of the applicant. The contract must be acceptable to the
department [commission] and must be submitted in a standard form
adopted by the commissioner [commission], if the commissioner
[commission] adopts such a form.
(f) The commissioner [commission] shall adopt rules for the
requirements for the financial statements required by Subsection
(b)(2).
SECTION 1.111. Section 407.062, Labor Code, is amended to
read as follows:
Sec. 407.062. FINANCIAL STRENGTH AND LIQUIDITY
REQUIREMENTS. In assessing the financial strength and liquidity of
an applicant, the department [commission] shall consider:
(1) the applicant's organizational structure and
management background;
(2) the applicant's profit and loss history;
(3) the applicant's compensation loss history;
(4) the source and reliability of the financial
information submitted by the applicant;
(5) the number of employees affected by
self-insurance;
(6) the applicant's access to excess insurance
markets;
(7) financial ratios, indexes, or other financial
measures that the commissioner considers [commission finds]
appropriate; and
(8) any other information considered appropriate by
the commissioner [commission].
SECTION 1.112. Section 407.063(a), Labor Code, is amended
to read as follows:
(a) In addition to meeting the other certification
requirements imposed under this chapter, an applicant for an
initial certificate of authority to self-insure must present
evidence satisfactory to the department [commission] of a total
unmodified workers' compensation insurance premium in this state in
the calendar year of application of at least $500,000.
SECTION 1.113. Sections 407.064(a), (b), and (e), Labor
Code, are amended to read as follows:
(a) Each applicant shall provide security for incurred
liabilities for compensation through a deposit with the department
[director], in a combination and from institutions approved by the
commissioner [director], of the following security:
(1) cash or negotiable securities of the United States
or of this state;
(2) a surety bond that names the commissioner
[director] as payee; or
(3) an irrevocable letter of credit that names the
commissioner [director] as payee.
(b) If an applicant who has provided a letter of credit as
all or part of the security required under this section desires to
cancel the existing letter of credit and substitute a different
letter of credit or another form of security, the applicant shall
notify the department [commission] in writing not later than the
60th day before the effective date of the cancellation of the
original letter of credit.
(e) If an applicant is granted a certificate of authority to
self-insure, any interest or other income that accrues from cash or
negotiable securities deposited by the applicant as security under
this section while the cash or securities are on deposit with the
department [director] shall be paid to the applicant quarterly.
SECTION 1.114. Sections 407.065(b)-(f), Labor Code, are
amended to read as follows:
(b) A surety bond, irrevocable letter of credit, or document
indicating issuance of an irrevocable letter of credit must be in a
form approved by the commissioner [director] and must be issued by
an institution acceptable to the commissioner [director]. The
instrument may be released only according to its terms but may not
be released by the deposit of additional security.
(c) The certified self-insurer shall deposit the security
with the comptroller on behalf of the department [director]. The
comptroller may accept securities for deposit or withdrawal only on
the written order of the commissioner [director].
(d) On receipt by the department [director] of a request to
renew, submit, or increase or decrease a security deposit, a
perfected security interest is created in the certified
self-insurer's assets in favor of the commissioner [director] to
the extent of any then unsecured portion of the self-insurer's
incurred liabilities for compensation. That perfected security
interest transfers to cash or securities deposited by the
self-insurer with the department [director] after the date of the
request and may be released only on:
(1) the acceptance by the commissioner [director] of a
surety bond or irrevocable letter of credit for the full amount of
the incurred liabilities for compensation; or
(2) the return of cash or securities by the department
[director].
(e) The certified self-insurer loses all right to, title to,
interest in, and control of the assets or obligations submitted or
deposited as security. The commissioner [director] may liquidate
the deposit and apply it to the certified self-insurer's incurred
liabilities for compensation either directly or through the
association.
(f) If the commissioner [director] determines that a
security deposit is not immediately available for the payment of
compensation, the commissioner [director] shall determine the
appropriate method of payment and claims administration, which may
include payment by the surety that issued the bond or by the issuer
of an irrevocable letter of credit, and administration by a surety,
an adjusting agency, the association, or through any combination of
those entities approved by the commissioner [director].
SECTION 1.115. Sections 407.066(a) and (b), Labor Code, are
amended to read as follows:
(a) The commissioner [director], after notice to the
concerned parties and an opportunity for a hearing, shall resolve a
dispute concerning the deposit, renewal, termination, release, or
return of all or part of the security, liability arising out of the
submission or failure to submit security, or the adequacy of the
security or reasonableness of the administrative costs, including
legal fees, that arises among:
(1) a surety;
(2) an issuer of an agreement of assumption and
guarantee of workers' compensation liabilities;
(3) an issuer of a letter of credit;
(4) a custodian of the security deposit;
(5) a certified self-insurer; or
(6) the association.
(b) A party aggrieved by a decision of the commissioner
[director] is entitled to judicial review. Venue for an appeal is
in Travis County.
SECTION 1.116. Sections 407.067(a)-(c), Labor Code, are
amended to read as follows:
(a) Each applicant shall obtain excess insurance or
reinsurance to cover liability for losses not paid by the
self-insurer in an amount not less than the amount required by the
commissioner [director].
(b) The commissioner [director] shall require excess
insurance or reinsurance in at least the amount of $5 million per
occurrence.
(c) A certified self-insurer shall notify the department
[director] not later than the 10th day after the date on which the
certified self-insurer has notice of the cancellation or
termination of excess insurance or reinsurance coverage required
under this section.
SECTION 1.117. Sections 407.081(a)-(d), (f), and (g), Labor
Code, are amended to read as follows:
(a) Each certified self-insurer shall file an annual report
with the department [commission]. The commissioner [commission]
shall prescribe the form of the report and shall furnish blank forms
for the preparation of the report to each certified self-insurer.
(b) The report must:
(1) include payroll information, in the form
prescribed by this chapter and the commissioner [commission];
(2) state the number of injuries sustained in the
three preceding calendar years; and
(3) indicate separately the amount paid during each
year for income benefits, medical benefits, death benefits, burial
benefits, and other proper expenses related to worker injuries.
(c) Each certified self-insurer shall file with the
department [commission] as part of the annual report annual
independent financial statements that reflect the financial
condition of the self-insurer. The department [commission] shall
make a financial statement filed under this subsection available
for public review.
(d) The commissioner [commission] may require that the
report include additional financial and statistical information.
(f) The report must include an estimate of future liability
for compensation. The estimate must be signed and sworn to by a
certified casualty actuary every third year, or more frequently if
required by the commissioner [commission].
(g) If the commissioner [commission] considers it
necessary, the commissioner [it] may order a certified self-insurer
whose financial condition or claims record warrants closer
supervision to report as provided by this section more often than
annually.
SECTION 1.118. Sections 407.082(a), (c), and (d), Labor
Code, are amended to read as follows:
(a) Each certified self-insurer shall maintain the books,
records, and payroll information necessary to compile the annual
report required under Section 407.081 and any other information
reasonably required by the commissioner [commission].
(c) The material maintained by the certified self-insurer
shall be open to examination by an authorized agent or
representative of the department [commission] at reasonable times
to ascertain the correctness of the information.
(d) The examination may be conducted at any location,
including the department's [commission's] Austin offices, or, at
the certified self-insurer's option, in the offices of the
certified self-insurer. The certified self-insurer shall pay the
reasonable expenses, including travel expenses, of an inspector who
conducts an inspection at its offices.
SECTION 1.119. Section 407.101(b), Labor Code, is amended
to read as follows:
(b) The department [commission] shall deposit the
application fee for a certificate of authority to self-insure in
the state treasury to the credit of the workers' compensation
self-insurance fund.
SECTION 1.120. Section 407.102, Labor Code, is amended to
read as follows:
Sec. 407.102. REGULATORY FEE. (a) Each certified
self-insurer shall pay an annual fee to cover the administrative
costs incurred by the department [commission] in implementing this
chapter.
(b) The department [commission] shall base the fee on the
total amount of income benefit payments made in the preceding
calendar year. The department [commission] shall assess each
certified self-insurer a pro rata share based on the ratio that the
total amount of income benefit payments made by that certified
self-insurer bears to the total amount of income benefit payments
made by all certified self-insurers.
SECTION 1.121. Sections 407.103(a), (b), and (d), Labor
Code, are amended to read as follows:
(a) Each certified self-insurer shall pay a self-insurer
maintenance tax for the administration of the department
[commission] and to support the prosecution of workers'
compensation insurance fraud in this state. Not more than two
percent of the total tax base of all certified self-insurers, as
computed under Subsection (b), may be assessed for a maintenance
tax under this section.
(b) To determine the tax base of a certified self-insurer
for purposes of this chapter, the department [director] shall
multiply the amount of the certified self-insurer's liabilities for
workers' compensation claims incurred in the previous year,
including claims incurred but not reported, plus the amount of
expense incurred by the certified self-insurer in the previous year
for administration of self-insurance, including legal costs, by
1.02.
(d) In setting the rate of maintenance tax assessment for
insurance companies, the department [commission] may not consider
revenue or expenditures related to the operation of the
self-insurer program under this chapter [division].
SECTION 1.122. Sections 407.104(b), (c), and (e), Labor
Code, are amended to read as follows:
(b) The department [commission] shall compute the fee and
taxes of a certified self-insurer and notify the certified
self-insurer of the amounts due. The taxes and fees shall be
remitted to the department [commission].
(c) The regulatory fee imposed under Section 407.102 shall
be deposited in the state treasury to the credit of the workers'
compensation self-insurance fund. The self-insurer maintenance
tax shall be deposited in the state treasury to the credit of the
Texas Department of Insurance operating account. Notwithstanding
Section 202.101, Insurance Code, or any other law, money deposited
in the account under this section may be appropriated only for the
use and benefit of the department as provided by the General
Appropriations Act to pay salaries and other expenses arising from
and in connection with the department's duties under this title
[commission].
(e) If the certificate of authority to self-insure of a
certified self-insurer is terminated, the [insurance] commissioner
[or the executive director of the commission] shall proceed
immediately to collect taxes due under this subtitle, using legal
process as necessary.
SECTION 1.123. Section 407.122(b), Labor Code, is amended
to read as follows:
(b) The board of directors is composed of the following
voting members:
(1) four [three] certified self-insurers;
(2) the commissioner [one commission member
representing wage earners;
[(3) one commission member representing employers];
and
(3) [(4)] the public counsel of the office of public
insurance counsel.
SECTION 1.124. Section 407.123(b), Labor Code, is amended
to read as follows:
(b) Rules adopted by the board are subject to the approval
of the commissioner [commission].
SECTION 1.125. Section 407.124, Labor Code, is amended to
read as follows:
Sec. 407.124. IMPAIRED EMPLOYER; ASSESSMENTS. (a) On
determination by the department [commission] that a certified
self-insurer has become an impaired employer, the commissioner
[director] shall secure release of the security deposit required by
this chapter and shall promptly estimate:
(1) the amount of additional funds needed to
supplement the security deposit;
(2) the available assets of the impaired employer for
the purpose of making payment of all incurred liabilities for
compensation; and
(3) the funds maintained by the association for the
emergency payment of compensation liabilities.
(b) The commissioner [director] shall advise the board of
directors of the association of the estimate of necessary
additional funds, and the board shall promptly assess each
certified self-insurer to collect the required funds. An
assessment against a certified self-insurer shall be made in
proportion to the ratio that the total paid income benefit payment
for the preceding reported calendar year for that self-insurer
bears to the total paid income benefit payment by all certified
self-insurers, except impaired employers, in this state in that
calendar year.
(c) A certified self-insurer designated as an impaired
employer is exempt from assessments beginning on the date of the
designation until the department [commission] determines that the
employer is no longer impaired.
SECTION 1.126. Section 407.125, Labor Code, is amended to
read as follows:
Sec. 407.125. PAYMENT OF ASSESSMENTS. Each certified
self-insurer shall pay the amount of its assessment to the
association not later than the 30th day after the date on which the
department [division] notifies the self-insurer of the assessment.
A delinquent assessment may be collected on behalf of the
association through suit. Venue is in Travis County.
SECTION 1.127. Section 407.126(d), Labor Code, is amended
to read as follows:
(d) The board of directors shall administer the trust fund
in accordance with rules adopted by the commissioner [commission].
SECTION 1.128. Section 407.127(a), Labor Code, is amended
to read as follows:
(a) If the commissioner [commission] determines that the
payment of benefits and claims administration shall be made through
the association, the association assumes the workers' compensation
obligations of the impaired employer and shall begin the payment of
the obligations for which it is liable not later than the 30th day
after the date of notification by the department [director].
SECTION 1.129. Section 407.128, Labor Code, is amended to
read as follows:
Sec. 407.128. POSSESSION OF SECURITY BY ASSOCIATION. On
the assumption of obligations by the association under the
commissioner's [director's] determination, the association is
entitled to immediate possession of any deposited security, and the
custodian, surety, or issuer of an irrevocable letter of credit
shall deliver the security to the association with any accrued
interest.
SECTION 1.130. Section 407.132, Labor Code, is amended to
read as follows:
Sec. 407.132. SPECIAL FUND. Funds advanced by the
association under this subchapter do not become assets of the
impaired employer but are a special fund advanced to the
commissioner [director], trustee in bankruptcy, receiver, or other
lawful conservator only for the payment of compensation
liabilities, including the costs of claims administration and legal
costs.
SECTION 1.131. Section 407.133(a), Labor Code, is amended
to read as follows:
(a) The commissioner [commission], after notice and hearing
[and by majority vote], may suspend or revoke the certificate of
authority to self-insure of a certified self-insurer who fails to
pay an assessment. The association promptly shall report such a
failure to the department [director].
SECTION 1.132. The following laws are repealed:
(1) Section 407.001(2), Labor Code;
(2) Section 407.122(c), Labor Code; and
(3) Subchapter B, Chapter 407, Labor Code.
PART 8. AMENDMENTS TO CHAPTER 407A, LABOR CODE
SECTION 1.141. Section 407A.053(d), Labor Code, is amended
to read as follows:
(d) Any securities posted must be deposited in the state
treasury and must be assigned to and made negotiable by the
commissioner [executive director of the commission] under a trust
document acceptable to the commissioner. Interest accruing on a
negotiable security deposited under this subsection shall be
collected and transmitted to the depositor if the depositor is not
in default.
SECTION 1.142. Section 407A.201(c), Labor Code, is amended
to read as follows:
(c) The membership of an individual member of a group is
subject to cancellation by the group as provided by the bylaws of
the group. An individual member may also elect to terminate
participation in the group. The group shall notify the
commissioner [and the commission] of the cancellation or
termination of a membership not later than the 10th day after the
date on which the cancellation or termination takes effect and
shall maintain coverage of each canceled or terminated member until
the 30th day after the date of the notice, at the terminating
member's expense, unless before that date the commissioner
[commission] notifies the group that the canceled or terminated
member has:
(1) obtained workers' compensation insurance
coverage;
(2) become a certified self-insurer; or
(3) become a member of another group.
SECTION 1.143. The heading to Section 407A.301, Labor Code,
is amended to read as follows:
Sec. 407A.301. MAINTENANCE TAX FOR DEPARTMENT [COMMISSION]
AND WORKERS' COMPENSATION RESEARCH AND EVALUATION GROUP [OVERSIGHT
COUNCIL].
SECTION 1.144. Sections 407A.301(a) and (c), Labor Code,
are amended to read as follows:
(a) Each group shall pay a self-insurance group maintenance
tax under this section for:
(1) the administration of the department
[commission];
(2) the prosecution of workers' compensation insurance
fraud in this state; and
(3) the workers' compensation research and evaluation
group [Research and Oversight Council on Workers' Compensation].
(c) The tax liability of a group under Subsection (a)(3) is
based on gross premium for the group's retention multiplied by the
rate assessed insurance carriers under Section 405.003 [404.003].
SECTION 1.145. Section 407A.303(c), Labor Code, is amended
to read as follows:
(c) If the certificate of approval of a group is terminated,
the commissioner [or the executive director of the commission]
shall immediately notify the comptroller to collect taxes as
directed under Sections 407A.301 and 407A.302.
SECTION 1.146. Section 407A.357(b), Labor Code, is amended
to read as follows:
(b) The guaranty association advisory committee is composed
of the following voting members:
(1) three members who represent different groups under
this chapter, subject to Subsection (c);
(2) one [commission] member, designated by the
commissioner, who represents wage earners;
(3) one member, designated by the commissioner, who
represents employers; and
(4) the public counsel of the office of public
insurance counsel.
PART 9. AMENDMENTS TO CHAPTER 408, LABOR CODE
SECTION 1.151. The heading to Chapter 408, Labor Code, is
amended to read as follows:
CHAPTER 408. WORKERS' COMPENSATION BENEFITS: GENERAL PROVISIONS
SECTION 1.152. Section 408.001, Labor Code, is amended by
adding Subsection (d) to read as follows:
(d) A determination under Section 406.032, 409.002, or
409.004 that a work-related injury is non-compensable does not
adversely affect the exclusive remedy provisions under Subsection
(a).
SECTION 1.153. Sections 408.003(b) and (c), Labor Code, are
amended to read as follows:
(b) If an injury is found to be compensable and an insurance
carrier initiates compensation, the insurance carrier shall
reimburse the employer for the amount of benefits paid by the
employer to which the employee was entitled under this subtitle.
Payments that are not reimbursed or reimbursable under this section
may be reimbursed under Section 408D.107 [408.127].
(c) The employer shall notify the department [commission]
and the insurance carrier on forms prescribed by the commissioner
[commission] of the initiation of and amount of payments made under
this section.
SECTION 1.154. Sections 408.005(a)-(g), Labor Code, are
amended to read as follows:
(a) A settlement may not provide for payment of benefits in
a lump sum except as provided by Section 408D.108 [408.128].
(b) An employee's right to medical benefits as provided by
Section 408A.001 [408.021] may not be limited or terminated.
(c) A settlement or agreement resolving an issue of
impairment:
(1) may not be made before the employee reaches
maximum medical improvement; and
(2) must adopt an impairment rating using the
impairment rating guidelines described by Section 408D.104
[408.124].
(d) A settlement must be signed by the commissioner
[director of the division of hearings] and all parties to the
dispute.
(e) The commissioner [director of the division of hearings]
shall approve a settlement if the commissioner [director] is
satisfied that:
(1) the settlement accurately reflects the agreement
between the parties;
(2) the settlement reflects adherence to all
appropriate provisions of law and the policies of the department
[commission]; and
(3) under the law and facts, the settlement is in the
best interest of the claimant.
(f) A settlement that is not approved or rejected before the
16th day after the date the settlement is submitted to the
commissioner [director of the division of hearings] is considered
to be approved by the commissioner [director] on that date.
(g) A settlement takes effect on the date it is approved by
the commissioner [director of the division of hearings].
SECTION 1.155. Section 413.021, Labor Code, is transferred
to Subchapter A, Chapter 408, Labor Code, renumbered as Section
408.009, Labor Code, and amended to read as follows:
Sec. 408.009 [413.021]. RETURN-TO-WORK COORDINATION
SERVICES. (a) An insurance carrier shall, with the agreement of a
participating employer, provide each [the] employer with
return-to-work coordination services as necessary to facilitate an
injured employee's return to employment.
(b) The insurance carrier shall notify the employer of the
availability of return-to-work coordination services. In offering
the services, insurance carriers and the department [commission]
shall target employers without return-to-work programs and shall
focus return-to-work efforts on workers who begin to receive
temporary income benefits. The carrier shall evaluate a
compensable injury in which the injured employee sustains a
disability that results in lost time from employment that extends
for more than six weeks as early as is practicable to determine if
skilled case management is necessary for the injured employee's
case.
(c) These services may be offered by insurance carriers in
conjunction with the accident prevention services provided under
Section 411.061. Nothing in this section:
(1) supersedes the provisions of a collective
bargaining agreement between an employer and the employer's
employees; or
(2) [, and nothing in this section] authorizes or
requires an employer to engage in conduct that would otherwise be a
violation of the employer's obligations under the National Labor
Relations Act (29 U.S.C. Section 151 et seq.)[, and its subsequent
amendments].
(d) [(b)] Return-to-work coordination services under this
section may include:
(1) job analysis to identify the physical demands of a
job;
(2) job modification and restructuring assessments as
necessary to match job requirements with the functional capacity of
an employee; and
(3) medical or vocational case management to
coordinate the efforts of the employer, the treating doctor, and
the injured employee to achieve timely return to work.
(e) [(c)] An insurance carrier is not required to provide
physical workplace modifications under this section and is not
liable for the cost of modifications made under this section to
facilitate an employee's return to employment.
(f) [(d)] The department [commission] shall use certified
rehabilitation counselors or other appropriately trained or
credentialed specialists to provide training to department
[commission] staff regarding the coordination of return-to-work
services under this section.
(g) [(e)] The commissioner [commission] shall adopt rules
necessary to collect data on return-to-work outcomes to allow full
evaluations of successes and of barriers to achieving timely return
to work after an injury.
SECTION 1.156. Section 408.041(c), Labor Code, is amended
to read as follows:
(c) If Subsection (a) or (b) cannot reasonably be applied
because the employee's employment has been irregular or because the
employee has lost time from work during the 13-week period
immediately preceding the injury because of illness, weather, or
another cause beyond the control of the employee, the department
[commission] may determine the employee's average weekly wage by
any method that the commissioner [commission] considers fair, just,
and reasonable to all parties and consistent with the methods
established under this section.
SECTION 1.157. Sections 408.042(d), (f), and (g), Labor
Code, are amended to read as follows:
(d) The commissioner [commission] shall:
(1) prescribe a form to collect information regarding
the wages of employees with multiple employment; and
(2) by rule, determine the manner by which the
department [commission] collects and distributes wage information
to implement this section.
(f) If the department [commission] determines that
computing the average weekly wage for an employee as provided by
Subsection (c) is impractical or unreasonable, the department
[commission] shall set the average weekly wage in a manner that more
fairly reflects the employee's average weekly wage and that is fair
and just to both parties or is in the manner agreed to by the
parties. The commissioner [commission] by rule may define methods
to determine a fair and just average weekly wage consistent with
this section.
(g) An insurance carrier is entitled to apply for and
receive reimbursement at least annually from the subsequent injury
fund for the amount of income benefits paid to a worker under this
section that are based on employment other than the employment
during which the compensable injury occurred. The commissioner
[commission] may adopt rules that govern the documentation,
application process, and other administrative requirements
necessary to implement this subsection.
SECTION 1.158. Section 408.043(c), Labor Code, is amended
to read as follows:
(c) If, for good reason, the commissioner [commission]
determines that computing the average weekly wage for a seasonal
employee as provided by this section is impractical, the department
[commission] shall compute the average weekly wage as of the time of
the injury in a manner that is fair and just to both parties.
SECTION 1.159. Section 408.0445, Labor Code, is amended to
read as follows:
Sec. 408.0445. AVERAGE WEEKLY WAGE FOR MEMBERS OF STATE
MILITARY FORCES AND TEXAS TASK FORCE 1. (a) For purposes of
computing income benefits or death benefits under Section 431.104,
Government Code, the average weekly wage of a member of the state
military forces as defined by Section 431.001, Government Code, who
is engaged in authorized training or duty is an amount equal to the
sum of the member's regular weekly wage at any employment the member
holds in addition to serving as a member of the state military
forces, disregarding any period during which the member is not
fully compensated for that employment because the member is engaged
in authorized military training or duty, and the member's regular
weekly wage as a member of the state military forces, except that
the amount may not exceed 130 [100] percent of the state average
weekly wage as determined under Section 408.047.
(b) For purposes of computing income benefits or death
benefits under Section 88.303, Education Code, the average weekly
wage of a Texas Task Force 1 member, as defined by Section 88.301,
Education Code, who is engaged in authorized training or duty is an
amount equal to the sum of the member's regular weekly wage at any
employment, including self-employment, that the member holds in
addition to serving as a member of Texas Task Force 1, except that
the amount may not exceed 130 [100] percent of the state average
weekly wage as determined under Section 408.047. A member for whom
an average weekly wage cannot be computed shall be paid the minimum
weekly benefit established by the department [commission].
SECTION 1.160. Sections 408.0446(d) and (e), Labor Code,
are amended to read as follows:
(d) If the department [commission] determines that
computing the average weekly wage of a school district employee as
provided by this section is impractical because the employee did
not earn wages during the 12 months immediately preceding the date
of the injury, the department [commission] shall compute the
average weekly wage in a manner that is fair and just to both
parties.
(e) The commissioner [commission] shall adopt rules as
necessary to implement this section.
SECTION 1.161. Section 408.045, Labor Code, is amended to
read as follows:
Sec. 408.045. NONPECUNIARY WAGES. The department
[commission] may not include nonpecuniary wages in computing an
employee's average weekly wage during a period in which the
employer continues to provide the nonpecuniary wages.
SECTION 1.162. Section 408.047, Labor Code, is amended to
read as follows:
Sec. 408.047. STATE AVERAGE WEEKLY WAGE. The state average
weekly wage for a state [the] fiscal year is the amount computed by
the Texas Workforce Commission under Section 207.002 as the average
weekly wage in covered employment in this state [beginning
September 1, 2003, and ending August 31, 2004, is $537, and for the
fiscal year beginning September 1, 2004, and ending August 31,
2005, is $539].
SECTION 1.163. Sections 408.061(a), (b), (c), (d), (e), and
(f), Labor Code, are amended to read as follows:
(a) A weekly temporary income benefit may not exceed 130
[100] percent of the state average weekly wage under Section
408.047 rounded to the nearest whole dollar.
(b) A weekly impairment income benefit may not exceed 100
[70] percent of the state average weekly wage rounded to the nearest
whole dollar.
(c) A weekly supplemental income benefit may not exceed 100
[70] percent of the state average weekly wage rounded to the nearest
whole dollar.
(d) A weekly death benefit may not exceed 130 [100] percent
of the state average weekly wage rounded to the nearest whole
dollar.
(e) A weekly lifetime income benefit may not exceed 130
[100] percent of the state average weekly wage rounded to the
nearest whole dollar.
(f) The department [commission] shall compute the maximum
weekly income benefits for each state fiscal year not later than
September 1 of each year.
SECTION 1.164. Section 408.062(b), Labor Code, is amended
to read as follows:
(b) The department [commission] shall compute the minimum
weekly income benefit for each state fiscal year not later than
September 1 of each year.
SECTION 1.165. Section 408.063(a), Labor Code, is amended
to read as follows:
(a) To expedite the payment of income benefits, the
commissioner [commission] may by rule establish reasonable
presumptions relating to the wages earned by an employee, including
the presumption that an employee's last paycheck accurately
reflects the employee's usual wage.
SECTION 1.166. Section 408.202, Labor Code, is amended to
read as follows:
Sec. 408.202. ASSIGNABILITY OF BENEFITS. Benefits are not
assignable, except a legal beneficiary may, with department
[commission] approval, assign the right to death benefits.
SECTION 1.167. Sections 408.221(a), (b), (d)-(g), and (i),
Labor Code, are amended to read as follows:
(a) An attorney's fee, including a contingency fee, for
representing a claimant before the department [commission] or court
under this subtitle must be approved by the department [commission]
or court.
(b) Except as otherwise provided, an attorney's fee under
this section is based on the attorney's time and expenses according
to written evidence presented to the department [commission] or
court. Except as provided by Subsection (c) or Section 408D.159(c)
[408.147(c)], the attorney's fee shall be paid from the claimant's
recovery.
(d) In approving an attorney's fee under this section, the
department [commission] or court shall consider:
(1) the time and labor required;
(2) the novelty and difficulty of the questions
involved;
(3) the skill required to perform the legal services
properly;
(4) the fee customarily charged in the locality for
similar legal services;
(5) the amount involved in the controversy;
(6) the benefits to the claimant that the attorney is
responsible for securing; and
(7) the experience and ability of the attorney
performing the services.
(e) The commissioner [commission] by rule or the court may
provide for the commutation of an attorney's fee, except that the
attorney's fee shall be paid in periodic payments in a claim
involving death benefits if the only dispute is as to the proper
beneficiary or beneficiaries.
(f) The commissioner [commission] by rule shall provide
guidelines for maximum attorney's fees for specific services in
accordance with this section.
(g) An attorney's fee may not be allowed in a case involving
a fatal injury or lifetime income benefit if the insurance carrier
admits liability on all issues and tenders payment of maximum
benefits in writing under this subtitle while the claim is pending
before the department [commission].
(i) Except as provided by Subsection (c) or Section
408D.159(c) [408.147(c)], an attorney's fee may not exceed 25
percent of the claimant's recovery.
SECTION 1.168. Section 408.222, Labor Code, is amended to
read as follows:
Sec. 408.222. ATTORNEY'S FEES PAID TO DEFENSE COUNSEL. (a)
The amount of an attorney's fee for defending an insurance carrier
in a workers' compensation action brought under this subtitle must
be approved by the department [commission] or court and determined
by the department [commission] or court to be reasonable and
necessary.
(b) In determining whether a fee is reasonable under this
section, the department [commission] or court shall consider issues
analogous to those listed under Section 408.221(d). The defense
counsel shall present written evidence to the department
[commission] or court relating to:
(1) the time spent and expenses incurred in defending
the case; and
(2) other evidence considered necessary by the
department [commission] or court in making a determination under
this section.
PART 10. ADOPTION OF CHAPTERS 408A, 408B, AND 408C, LABOR CODE
SECTION 1.201. The heading to Subchapter B, Chapter 408,
Labor Code, and Sections 408.004, 408.0041, 408.006-408.008,
408.021, 408.026, and 408.028-408.030, Labor Code, are designated
as Chapter 408A, Labor Code, and that chapter is amended to read as
follows:
CHAPTER 408A. WORKERS' COMPENSATION
[SUBCHAPTER B. MEDICAL] BENEFITS: GENERAL PROVISIONS REGARDING
MEDICAL BENEFITS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 408A.001 [408.021]. ENTITLEMENT TO MEDICAL BENEFITS.
(a) An employee who sustains a compensable injury is entitled to
all health care reasonably required by the nature of the injury as
and when needed. The employee is specifically entitled to health
care that:
(1) cures or relieves the effects naturally resulting
from the compensable injury;
(2) promotes recovery; or
(3) enhances the ability of the employee to return to
or retain employment.
(b) Medical benefits are payable from the date of the
compensable injury.
(c) Except in an emergency, all health care must be approved
or recommended by the employee's treating doctor.
(d) An insurance carrier's liability for medical benefits
may not be limited or terminated by agreement or settlement.
Sec. 408A.002 [408.004]. REQUIRED MEDICAL EXAMINATIONS;
ADMINISTRATIVE VIOLATION. (a) The commissioner [commission] may
require an employee to submit to medical examinations to resolve
any question about:
(1) the appropriateness of the health care received by
the employee; or
(2) similar issues.
(b) The commissioner [commission] may require an employee
to submit to a medical examination at the request of the insurance
carrier, but only after the insurance carrier has attempted and
failed to receive the permission and concurrence of the employee
for the examination. Except as otherwise provided by this
subsection, the insurance carrier is entitled to the examination
only once in a 180-day period. The commissioner [commission] may
adopt rules that require an employee to submit to not more than
three medical examinations in a 180-day period under specified
circumstances, including to determine whether there has been a
change in the employee's condition, whether it is necessary to
change the employee's diagnosis, and whether treatment should be
extended to another body part or system. The commissioner
[commission] by rule shall adopt a system for monitoring requests
made under this subsection by insurance carriers. That system must
ensure that good cause exists for any additional medical
examination allowed under this subsection that is not requested by
the employee. A subsequent examination must be performed by the
same doctor unless otherwise approved by the commissioner
[commission].
(c) The insurance carrier shall pay for:
(1) an examination required under Subsection (a) or
(b); and
(2) the reasonable expenses incident to the employee
in submitting to the examination.
(d) An injured employee is entitled to have a doctor of the
employee's choice present at an examination required by the
commissioner [commission] at the request of an insurance carrier.
The insurance carrier shall pay a fee set by the commissioner
[commission] to the doctor selected by the employee.
(e) An employee who, without good cause as determined by the
commissioner [commission], fails or refuses to appear at the time
scheduled for an examination under Subsection (a) or (b) commits a
violation. A violation under this subsection is a Class D
administrative violation. An employee is not entitled to temporary
income benefits, and an insurance carrier may suspend the payment
of temporary income benefits, during and for a period in which the
employee fails to submit to an examination under Subsection (a) or
(b) unless the commissioner [commission] determines that the
employee had good cause for the failure to submit to the
examination. The commissioner [commission] may order temporary
income benefits to be paid for the period that the commissioner
[commission] determines the employee had good cause. The
commissioner [commission] by rule shall ensure that an employee
receives reasonable notice of an examination and of the insurance
carrier's basis for suspension of payment, and that the employee is
provided a reasonable opportunity to reschedule an examination
missed by the employee for good cause.
(f) If the report of a doctor selected by an insurance
carrier indicates that an employee can return to work immediately
or has reached maximum medical improvement, the insurance carrier
may suspend or reduce the payment of temporary income benefits on
the 14th day after the date on which the insurance carrier files a
notice of suspension with the department [commission] as provided
by this subsection. [The commission shall hold an expedited
benefit review conference, by personal appearance or by telephone,
not later than the 10th day after the date on which the commission
receives the insurance carrier's notice of suspension. If a
benefit review conference is not held by the 14th day after the date
on which the commission receives the insurance carrier's notice of
suspension, an interlocutory order, effective from the date of the
report certifying maximum medical improvement, is automatically
entered for the continuation of temporary income benefits until a
benefit review conference is held, and the insurance carrier is
eligible for reimbursement for any overpayment of benefits as
provided by Chapter 410. The commission is not required to
automatically schedule a contested case hearing as required by
Section 410.025(b) if a benefit review conference is scheduled
under this subsection. If a benefit review conference is held not
later than the 14th day, the commission may enter an interlocutory
order for the continuation of benefits, and the insurance carrier
is eligible for reimbursement for any overpayments of benefits as
provided by Chapter 410.] The commissioner [commission] shall
adopt rules as necessary to implement this subsection under which:
(1) an insurance carrier is required to notify the
employee and the treating doctor of the suspension of benefits
under this subsection by certified mail or another verifiable
delivery method;
(2) the department [commission] makes a reasonable
attempt to obtain the treating doctor's opinion before the
commissioner or a hearings officer [commission] makes a
determination regarding the entry of an interlocutory order under
this subtitle requiring continuation of benefits; and
(3) the commissioner [commission] may allow
abbreviated contested case hearings by personal appearance or
telephone to consider issues relating to overpayment of benefits
under this section.
(g) An insurance carrier who unreasonably requests a
medical examination under Subsection (b) commits a violation. A
violation under this subsection is a Class B administrative
violation.
Sec. 408A.003 [408.0041]. DESIGNATED DOCTOR EXAMINATION.
(a) At the request of an insurance carrier or an employee, the
commissioner [commission] shall order a medical examination to
resolve any question about:
(1) the impairment caused by the compensable injury;
or
(2) the attainment of maximum medical improvement.
(b) A medical examination requested under Subsection (a)
shall be performed by the next available doctor on the department's
[commission's] list of designated doctors whose credentials are
appropriate for the issue in question and the injured employee's
medical condition. The designated doctor doing the review must be
trained and experienced with the treatment and procedures used by
the doctor treating the patient's medical condition, and the
treatment and procedures performed must be within the scope of
practice of the designated doctor. The department [commission]
shall assign a designated doctor not later than the 10th day after
the date on which the request under Subsection (a) is received, and
the examination must be conducted not later than the 21st day after
the date on which the department [commission] issues the order
under Subsection (a). An examination under this section may not be
conducted more frequently than every 60 days, unless good cause for
more frequent examinations exists, as defined by commissioner
[commission] rules.
(c) The treating doctor and the insurance carrier are both
responsible for sending to the designated doctor all of the injured
employee's medical records relating to the issue to be evaluated by
the designated doctor that are in their possession. The treating
doctor and insurance carrier may send the records without a signed
release from the employee. The designated doctor is authorized to
receive the employee's confidential medical records to assist in
the resolution of disputes. The treating doctor and insurance
carrier may also send the designated doctor an analysis of the
injured employee's medical condition, functional abilities, and
return-to-work opportunities.
(d) To avoid undue influence on a person selected as a
designated doctor under this section, and except as provided by
Subsection (c), only the injured employee or an appropriate member
of the staff of the department [commission] may communicate with
the designated doctor about the case regarding the injured
employee's medical condition or history before the examination of
the injured employee by the designated doctor. After that
examination is completed, communication with the designated doctor
regarding the injured employee's medical condition or history may
be made only through appropriate department [commission] staff
members. The designated doctor may initiate communication with any
doctor who has previously treated or examined the injured employee
for the work-related injury or with peer reviewers identified by
the insurance carrier.
(e) The designated doctor shall report to the department
[commission]. The report of the designated doctor has presumptive
weight unless the great weight of the evidence is to the contrary.
An employer may make a bona fide offer of employment subject to
Sections 408D.053(e) [408.103(e)] and 408D.156(c) [408.144(c)]
based on the designated doctor's report.
(f) If an insurance carrier is not satisfied with the
opinion rendered by a designated doctor under this section, the
insurance carrier may request the commissioner [commission] to
order an employee to attend an examination by a doctor selected by
the insurance carrier. The commissioner [commission] shall allow
the insurance carrier reasonable time to obtain and present the
opinion of the doctor selected under this subsection before the
commissioner [commission] makes a decision on the merits of the
issue in question.
(g) The insurance carrier shall pay for:
(1) an examination required under Subsection (a) or
(f); and
(2) the reasonable expenses incident to the employee
in submitting to the examination.
(h) An employee is not entitled to compensation, and an
insurance carrier is authorized to suspend the payment of temporary
income benefits, during and for a period in which the employee fails
to submit to an examination required by this chapter unless the
commissioner [commission] determines that the employee had good
cause for the failure to submit to the examination. The
commissioner [commission] may order temporary income benefits to be
paid for the period for which the commissioner [commission]
determined that the employee had good cause. The commissioner
[commission] by rule shall ensure that:
(1) an employee receives reasonable notice of an
examination and the insurance carrier's basis for suspension; and
(2) the employee is provided a reasonable opportunity
to reschedule an examination for good cause.
(i) If the report of a designated doctor indicates that an
employee has reached maximum medical improvement, the insurance
carrier may suspend or reduce the payment of temporary income
benefits immediately.
Sec. 408A.004 [408.006]. MENTAL TRAUMA INJURIES. (a) It
is the express intent of the legislature that nothing in this
subtitle shall be construed to limit or expand recovery in cases of
mental trauma injuries.
(b) A mental or emotional injury that arises principally
from a legitimate personnel action, including a transfer,
promotion, demotion, or termination, is not a compensable injury
under this subtitle.
Sec. 408A.005 [408.007]. DATE OF INJURY FOR OCCUPATIONAL
DISEASE. For purposes of this subtitle, the date of injury for an
occupational disease is the date on which the employee knew or
should have known that the disease may be related to the employment.
Sec. 408A.006 [408.008]. COMPENSABILITY OF HEART ATTACKS.
A heart attack is a compensable injury under this subtitle only if:
(1) the attack can be identified as:
(A) occurring at a definite time and place; and
(B) caused by a specific event occurring in the
course and scope of the employee's employment;
(2) the preponderance of the medical evidence
regarding the attack indicates that the employee's work rather than
the natural progression of a preexisting heart condition or disease
was a substantial contributing factor of the attack; and
(3) the attack was not triggered solely by emotional
or mental stress factors, unless it was precipitated by a sudden
stimulus.
Sec. 408A.007 [408.028]. PHARMACEUTICAL SERVICES. (a) A
physician providing care to an injured employee under this subtitle
[subchapter] shall prescribe for the employee any necessary
prescription drugs, and order over-the-counter alternatives to
prescription medications as clinically appropriate and applicable,
in accordance with applicable state law and as provided by
Subsection (b). A doctor providing care may order over-the-counter
alternatives to prescription medications, when clinically
appropriate, in accordance with applicable state law and as
provided by Subsection (b).
(b) The commissioner [commission] by rule shall develop a
closed [an open] formulary under Section 413.011 that requires the
use of generic pharmaceutical medications and clinically
appropriate over-the-counter alternatives to prescription
medications unless otherwise specified by the prescribing doctor,
in accordance with applicable state law.
(c) Except as otherwise provided by this subtitle, an
insurance carrier may not require an injured employee to use
pharmaceutical services designated by the carrier.
(d) The commissioner [commission] shall adopt rules to
allow an injured employee to purchase over-the-counter
alternatives to prescription medications prescribed or ordered
under Subsection (a) or (b) and to obtain reimbursement from the
insurance carrier for those medications.
(e) Notwithstanding Subsection (b), the commissioner
[commission] by rule shall allow an injured employee to purchase a
brand name drug rather than a generic pharmaceutical medication or
over-the-counter alternative to a prescription medication if a
health care provider prescribes a generic pharmaceutical
medication or an over-the-counter alternative to a prescription
medication. The employee shall be responsible for paying the
difference between the cost of the brand name drug and the cost of
the generic pharmaceutical medication or of an over-the-counter
alternative to a prescription medication. The employee may not
seek reimbursement for the difference in cost from an insurance
carrier and is not entitled to use the medical dispute resolution
provisions of Chapter 413 with regard to the prescription. A
payment described by this subsection by an employee to a health care
provider does not violate Section 413.042. This subsection does
not affect the duty of a health care provider to comply with the
requirements of Subsection (b) when prescribing medications or
ordering over-the-counter alternatives to prescription
medications.
Sec. 408A.008 [408.029]. NURSE FIRST ASSISTANT SERVICES.
An insurance carrier may not refuse to reimburse a health care
practitioner solely because that practitioner is a nurse first
assistant, as defined by Section 301.1525, Occupations Code, for a
covered service that a physician providing health care services
under this subtitle has requested the nurse first assistant to
perform.
Sec. 408A.009 [408.030]. REPORTS OF PHYSICIAN VIOLATIONS.
If the department [commission] discovers an act or omission by a
physician that may constitute a felony, a misdemeanor involving
moral turpitude, a violation of a state or federal narcotics or
controlled substance law, an offense involving fraud or abuse under
the Medicare or Medicaid program, or a violation of this subtitle,
the commissioner [commission] shall immediately report that act or
omission to the Texas State Board of Medical Examiners.
Sec. 408A.010 [408.026]. SPINAL SURGERY. Except in a
medical emergency, an insurance carrier is liable for medical costs
related to spinal surgery only as provided by Section 413.014 and
commissioner [commission] rules.
Sec. 408A.011. UNDERSERVED AREAS. The commissioner by rule
shall identify areas of this state in which access to health care
providers is less available and shall adopt appropriate standards
and guidelines regarding health care, including any use of provider
networks, in those areas.
Sec. 408A.012. ELECTRONIC BILLING REQUIREMENTS. (a) The
commissioner by rule shall establish requirements regarding:
(1) the electronic submission and processing of
medical bills by health care providers to insurance carriers; and
(2) the electronic payment of medical bills by
insurance carriers to health care providers.
(b) Insurance carriers shall accept medical bills submitted
electronically by health care providers in accordance with
commissioner rule.
(c) The commissioner shall by rule establish criteria for
granting exceptions to insurance carriers who are not able to
accept medical bills electronically.
Sec. 408A.013. PEER REVIEW. (a) The commissioner shall
adopt rules regarding doctors who perform peer review functions for
insurance carriers. Those rules may include standards for peer
review, imposition of sanctions on doctors performing peer review
functions, including restriction, suspension, or removal of the
doctor's ability to perform peer review on behalf of insurance
carriers in the workers' compensation system, and other issues
important to the quality of peer review, as determined by the
commissioner.
(b) A doctor who performs peer review under this section
must hold the appropriate professional license issued by this
state.
SUBCHAPTER B. PAYMENT OF CLAIMS TO HEALTH CARE PROVIDERS
Sec. 408A.051. CARRIER NOTICE. (a) An insurance carrier
shall simultaneously notify the department, the injured employee,
any representative of the injured employee, and the injured
employee's treating doctor of any disputes regarding
compensability or extent of injury.
(b) An insurance carrier may not deny payment on the ground
of compensability for health care services provided before the date
of the notification required under Subsection (a).
(c) If the insurance carrier successfully contests
compensability, the carrier is liable for a maximum of $7,000.
Sec. 408A.052. RECOVERY FROM HEALTH INSURER. (a) If the
injury is finally determined to be non-compensable, the health care
provider is entitled to recover from the injured employee's group
health insurance company, if any.
(b) A health care provider may not file a claim with the
injured employee's group health insurance company plan until final
adjudication under the workers' compensation system of the
compensability under Subtitle A of the services provided by the
health care provider.
Sec. 408A.053. SUBMISSION OF CLAIM BY PROVIDER. (a) A
health care provider must submit a claim for payment to the
insurance carrier not later than the 95th day after the date on
which the health care services are provided to the injured
employee. Failure by the health care provider to timely remit a
claim constitutes a forfeiture of the provider's right to
reimbursement on the claim.
(b) The insurance carrier shall review the provider's claim
not later than the 65th day after the date on which the claim is
received by the carrier. The carrier may request further
documentation necessary to clarify the provider's charges at any
time during the 65-day period. If the insurance carrier requests
clarification under this subsection, the provider must provide the
requested clarification not later than the 15th day after the date
of receipt of the carrier's request.
(c) An insurance carrier may change the American Medical
Association Current Procedural Terminology (CPT) code assigned to
the services provided based on the additional documentation
provided by the health care provider.
Sec. 408A.054. DEADLINE FOR CARRIER ACTION. (a) The
insurance carrier must pay, reduce, deny, or determine to audit the
health care provider's claim not later than the 65th day after the
date of receipt by the carrier of the provider's claim.
(b) If the insurance carrier elects to audit the claim, the
carrier must complete the audit not later than the 160th day after
the date of receipt by the carrier of the provider's claim, and, not
later than the 160th day after the receipt of the claim, must make a
determination regarding:
(1) the relationship of the health care services
provided to the compensable injury;
(2) the extent of the injury; and
(3) the medical necessity of the services provided.
(c) If the insurance carrier chooses to audit the claim, the
insurance carrier must pay to the health care provider 85 percent
of:
(1) if the health care service is not provided through
a provider network under Chapter 408B, the amount for the health
care service established under the fee guidelines; or
(2) if the health care service is provided through a
provider network under Chapter 408B, the amount of the contracted
rate for that health care service.
(d) If the health care services provided are determined to
be appropriate, the insurance carrier shall pay the health care
provider the remaining 15 percent of the claim not later than the
160th day after the receipt of the claim.
(e) The failure of the insurance carrier under Subsection
(a) to pay, reduce, deny, or notify the health care provider of the
intent to audit the claim by the 65th day after the date of receipt
by the carrier of the provider's claim constitutes a Class C
administrative violation.
(f) The failure of the insurance carrier under Subsection
(b) to pay, reduce, or deny an audited claim by the 160th day after
the date of receipt of the claim constitutes a Class C
administrative violation.
Sec. 408A.055. REIMBURSEMENT BY HEALTH CARE PROVIDER. (a)
If the health care services provided are determined to be
inappropriate, the insurance carrier shall:
(1) notify the health care provider in writing of the
carrier's decision; and
(2) demand a refund by the provider of the portion of
payment on the claim that was received by the provider for the
inappropriate services.
(b) The health care provider may appeal the insurance
carrier's determination under Subsection (a). The provider must
file an appeal under this subsection with the insurance carrier not
later than the 45th day after the date of the insurance carrier's
request for the refund. The insurance carrier must act on the
appeal not later than the 45th day after the date on which the
provider files the appeal.
(c) A health care provider must reimburse the insurance
carrier for payments received by the provider for inappropriate
charges not later than the 65th day after the date of the carrier's
notice. The failure by the health care provider to timely remit
payment to the carrier constitutes a Class D administrative
violation.
SECTION 1.202. Subtitle A, Title 5, Labor Code, is amended
by adding Chapter 408B to read as follows:
CHAPTER 408B. WORKERS' COMPENSATION BENEFITS: REQUIREMENTS
FOR INSURANCE CARRIERS THAT USE PROVIDER NETWORKS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 408B.001. USE OF PROVIDER NETWORK: GENERAL
REQUIREMENTS FOR INSURANCE CARRIER. An insurance carrier may
arrange for health care services for injured employees through a
provider network certified under this chapter. The obligations and
requirements imposed under this chapter apply only to:
(1) an insurance carrier that arranges for health care
services for injured employees through a certified provider
network; and
(2) services provided for compensable injuries for
which the insurance carrier is liable under this chapter.
Sec. 408B.002. USE OF PROVIDER NETWORK PROVIDERS. (a) If
an insurance carrier elects to use a certified provider network, an
injured employee who is covered by that insurance carrier is
required to obtain treatment for a compensable injury within the
provider network if the injured employee lives or works within the
provider network's service area.
(b) Except for emergencies and out-of-network referrals, a
provider network shall provide or arrange for health care services
only through providers or provider groups that are under contract
with or are employed by the provider network.
(c) A network provider who has treated an employee may not
serve as a designated doctor or perform a required medical
examination for that employee for the compensable injury for which
the provider provided treatment.
Sec. 408B.003. GENERAL PROVIDER NETWORK REQUIREMENTS. (a)
Each provider network certified under this chapter must be a
fee-for-service network designed to improve the quality and reduce
the cost of health care provided to injured employees.
(b) Insurance carriers and the provider networks are
prohibited from using capitation as a form of payment for
contracted providers.
(c) Except as provided by Subsection (d), a provider network
is not an insurer and may not use in the provider network's name,
contracts, or informational literature the word "insurance,"
"casualty," "surety," or "mutual" or any other word that is:
(1) descriptive of the insurance, casualty, or surety
business; or
(2) deceptively similar to the name or description of
an insurer or surety corporation engaging in the business of
insurance in this state.
(d) A provider network is subject to Articles 21.28 and
21.28-A, Insurance Code, and is considered to be an insurer or
insurance company, as applicable, for purposes of those laws.
Sec. 408B.004. INSURANCE CARRIER LIABILITY FOR
OUT-OF-NETWORK HEALTH CARE. An insurance carrier that establishes
or contracts with a provider network is not liable for all or part
of the cost of a health care service, other than emergency services,
if the employee obtains the health care service without provider
network approval from:
(1) a network provider other than the employee's
treating doctor or a specialist to whom the employee is referred by
the treating doctor; or
(2) a non-network provider.
Sec. 408B.005. RESTRAINT OF TRADE. (a) A provider network
that contracts with a provider or providers practicing individually
or as a group is not, because of the contract or arrangement,
considered to have entered into a conspiracy in restraint of trade
in violation of Chapter 15, Business & Commerce Code.
(b) Notwithstanding any other law, a person who contracts
under this chapter with one or more providers in the process of
conducting activities that are permitted by law but that do not
require a certificate of authority or other authorization under
this code or the Insurance Code is not, because of the contract,
considered to have entered into a conspiracy in restraint of trade
in violation of Chapter 15, Business & Commerce Code.
Sec. 408B.006. AUTHORITY OF COMMISSIONER. Except as
expressly provided by this chapter, the powers and duties created
by Chapter 36, Insurance Code, Article 21.58D, Insurance Code, and
Sections 843.080, 843.082, 843.102, and 843.151, Insurance Code, do
not apply to this chapter.
Sec. 408B.007. RULES. The commissioner may adopt rules as
necessary to implement this chapter.
SUBCHAPTER B. GENERAL POWERS AND DUTIES OF
INSURANCE CARRIER AND PROVIDER NETWORK
Sec. 408B.051. NOTICE TO EMPLOYEES REQUIRED. (a) An
insurance carrier that uses a certified provider network shall
provide to the employer, and shall ensure that the employer
provides to the employer's employees, notice of the provider
network requirements, including all information required by
Section 408B.052. The insurance carrier shall require the employer
to:
(1) obtain a signed acknowledgment from each employee,
written in English, Spanish, and any other language common to the
employer's employees, that the employee has received information
concerning the provider network and the provider network's
requirements; and
(2) post notice of the provider network's requirements
at each place of employment.
(b) The insurance carrier shall ensure that an employer
provides to each employee hired after the date notice is given under
Subsection (a) the notice and information required under that
subsection not later than the third day after the date of hire.
(c) The insurance carrier shall require the employer to
notify an injured employee of the provider network requirements at
the time the employer receives actual or constructive notice of an
injury.
(d) An injured employee is not required to comply with the
provider network requirements until the employee receives the
notice required under Subsection (a).
(e) Each self-insured employer, employer group, and
governmental entity that qualifies as an insurance carrier and
establishes a certified provider network shall also comply with the
notice obligations established under Subsection (a).
Sec. 408B.052. CONTENTS OF NOTICE. (a) The written notice
required under Section 408B.051(a) must be written in plain
language and in a readable and understandable format, and must be
provided in English, Spanish, and any additional language common to
an employer's employees.
(b) The notice must include, in a clear, complete, and
accurate format:
(1) a statement that, for workers' compensation
purposes, the employer participates in a certified provider network
and that employees must receive health care services through the
certified provider network;
(2) the insurance carrier's toll-free telephone number
and address for obtaining additional information about the
certified provider network, including information about
participating providers;
(3) a statement that in the event of an injury, an
employee must select a treating doctor from a list of all the
treating doctors within the certified provider network that are
located within:
(A) 30 miles of the employee's place of residence
if the employee resides in an urban area; or
(B) 60 miles of the employee's place of residence
if the employee resides in a rural area;
(4) a statement that, except for emergency services,
an employee must obtain all health care and specialist referrals
through the employee's treating doctor;
(5) an explanation that participating providers have
agreed to look only to the insurance carrier and not to employees
for payment of health care services related to the compensable
injury, except as provided by Section 408B.304;
(6) a statement that, except for emergency services,
if the employee obtains health care from non-participating
providers without a referral from the employee's treating doctor,
the carrier may not be liable, and the employee may be liable, for
payment for that health care;
(7) information about how to obtain emergency
services, including emergency care outside the certified provider
network's service area, and after-hours care;
(8) an explanation regarding continuity of care in the
event of the termination of a treating doctor from participation in
the certified provider network;
(9) a description of the complaint system, including a
statement that the insurance carrier is prohibited from retaliating
against:
(A) an employee if the employee files a complaint
against the carrier or appeals a decision of the carrier; or
(B) a health care provider if the provider, on
behalf of an employee, reasonably filed a complaint against the
carrier or appeals a decision of the carrier;
(10) a summary of the insurance carrier's procedures
relating to adverse determinations and the availability of the
independent review process;
(11) a description of where and how to obtain a list of
participating providers that includes:
(A) the names and addresses of the participating
providers;
(B) a statement of limitations of accessibility
and referrals to specialists; and
(C) a disclosure of which treating doctors are
accepting new patients; and
(12) a description of the certified provider network's
service area.
Sec. 408B.053. ACCESS TO CARE; APPLICABILITY TO CLAIMS.
(a) If the insurance carrier has opted to offer workers'
compensation benefits through a certified provider network, all
claims, including claims with a date of injury before, on, or after
September 1, 2005, shall be administered under the provisions of
this subchapter.
(b) Except as provided by Section 408B.054, if the insurance
carrier is responsible for a claim and provides benefits through a
certified provider network, the carrier shall notify an injured
employee at the time a claim is filed that the injured employee must
select a treating doctor and obtain health care services from
participating providers in accordance with the requirements of
Subchapter G.
(c) Except as provided by Section 408B.054, if the insurance
carrier responsible for the claim does not arrange for health care
services through a certified provider network on the date of
injury, but arranges for health care services through a certified
provider network at a later date, the carrier shall notify the
injured employee that, not later than the 30th day after the date on
which the notice is sent, the injured employee must select a
treating doctor and obtain health care services from participating
providers in accordance with the requirements of Subchapter G. If
the injured employee fails to select a treating doctor on or before
the 14th day after the date of receipt of the notice, the carrier
may assign the injured employee a treating doctor within the
certified provider network.
Sec. 408B.054. PRE-EXISTING RELATIONSHIPS; CONTINUITY OF
CARE. (a) In this section:
(1) "Acute condition" means a medical condition that:
(A) involves a sudden onset of symptoms because
of an illness, injury, or other medical problem that requires
prompt medical attention; and
(B) has a duration of, and corresponding
treatment for, not more than 30 days.
(2) "Terminal illness" means an incurable or
irreversible condition that has a high probability of causing death
within one year or less.
(b) This section applies to medical benefits regarding an
existing claim in which:
(1) the insurance carrier has decided to offer
coverage solely through a workers' compensation certified provider
network; or
(2) treatment is being provided by the insurance
carrier through a workers' compensation certified provider network
and the network contract with the injured employee's treating
doctor is being terminated.
(c) The insurance carrier shall provide for completion of
treatment by non-participating providers for injured employees who
are being treated by a treating doctor for:
(1) an acute condition;
(2) a terminal illness; or
(3) performance of a surgical procedure or other
procedure that:
(A) is authorized by the insurance carrier as
part of a documented course of treatment; and
(B) has been recommended and documented by the
health care provider to occur not later than the 30th day after the
date the carrier begins to arrange for health care services through
a certified provider network.
(d) Completion of treatment shall be provided for the
duration of a terminal illness.
(e) Following the determination of the injured employee's
medical condition in accordance with Subsection (c), the insurance
carrier shall notify the injured worker of the determination
regarding the completion of treatment. The notification must be
sent to the injured employee's residence, with a copy of the letter
sent to the non-participating provider.
(f) If the injured employee disputes the medical
determination under Subsection (c), the injured employee shall
request a report from the injured employee's non-participating
provider that addresses whether the injured employee falls within
any of the conditions set forth in Subsection (c).
(g) If the employer or injured employee objects to the
medical determination by the non-participating provider, the
dispute regarding the medical determination made by the
non-participating provider shall be resolved by use of the
carrier's internal reconsideration process, to be followed, if
necessary, by review by an independent review organization. The
non-participating provider shall have the burden of proving that
one of the conditions set forth in Subsection (c) exists.
(h) The independent review organization shall order
transfer of the care to a treating doctor and other participating
providers in accordance with Subchapter G if the documented
evidence fails to establish that one of the conditions set forth in
Subsection (c) exists.
(i) If the non-participating provider agrees with the
carrier's determination that the injured employee's medical
condition does not meet the conditions set forth in Subsection (c),
the transfer of care shall go forward during the dispute resolution
process.
(j) If the non-participating provider does not agree with
the carrier's determination that the injured employee's medical
condition does not meet the conditions set forth in Subsection (c),
the transfer of care may not go forward until the dispute is
resolved. The non-participating provider's performed and
prescribed medical services are subject to carrier
preauthorization while the dispute is pending.
Sec. 408B.055. ACCESSIBILITY AND AVAILABILITY
REQUIREMENTS. (a) All services provided under this chapter must be
provided by a provider who holds an appropriate license, unless the
provider is exempt from license requirements. Each provider
network shall ensure that the provider network's provider panel
includes a broad choice of health care providers, including an
adequate number of treating doctors and specialists, who must be
available and accessible to employees 24 hours a day, seven days a
week, within the provider network's service area. An adequate
number of the treating doctors and specialists must have admitting
privileges at one or more provider network hospitals located within
the provider network's service area to ensure that any necessary
hospital admissions are made.
(b) Hospital services must be available and accessible 24
hours a day, seven days a week, within the provider network's
service area. The provider network shall provide for the necessary
hospital services by contracting with general, special, and
psychiatric hospitals.
(c) Emergency care must be available and accessible 24 hours
a day, seven days a week, without restrictions as to where the
services are rendered.
(d) Except for emergencies, a provider network shall
arrange for services, including referrals to specialists, to be
accessible to employees on a timely basis on request, but not later
than the last day of the third week after the date of the request.
(e) Each provider network shall provide that provider
network services are sufficiently accessible and available as
necessary to ensure that the distance from any point in the provider
network's service area to a point of service by a treating doctor or
general hospital is not greater than 30 miles in nonrural areas and
60 miles in rural areas. For portions of the service area in which
the provider network identifies noncompliance with this
subsection, the provider network must file an access plan with the
department in accordance with Subsection (f).
(f) The provider network shall submit an access plan, as
required by commissioner rules, to the department for approval at
least 30 days before implementation of the plan if any health care
service or a provider network provider is not available to an
employee within the distance specified by Subsection (e) because:
(1) providers are not located within that distance;
(2) the provider network is unable to obtain provider
contracts after good faith attempts; or
(3) providers meeting the provider network's minimum
quality of care and credentialing requirements are not located
within that distance.
(g) The provider network may make arrangements with
providers outside the service area to enable employees to receive a
higher level of skill or specialty not available within the
provider network service area.
(h) The provider network may not be required to expand
services outside the provider network's service area to accommodate
employees who live and work outside the service area.
Sec. 408B.056. TELEPHONE ACCESS. (a) Each provider
network shall have appropriate personnel reasonably available
through a toll-free telephone service at least 40 hours per week
during normal business hours, in both time zones in this state if
applicable, to discuss an employee's care and to allow response to
requests for information, including information regarding adverse
determinations.
(b) A provider network must have a telephone system capable
of accepting, recording, or providing instructions to incoming
calls during other than normal business hours. The provider
network shall respond to those calls not later than two business
days after the date:
(1) the call was received by the provider network; or
(2) the details necessary to respond were received by
the provider network from the caller.
SUBCHAPTER C. CERTIFICATION OF PROVIDER NETWORKS
Sec. 408B.101. APPLICATION FOR CERTIFICATION. (a) An
insurance carrier that seeks to offer workers' compensation
benefits through a certified provider network shall apply to the
department for a certificate to determine the adequacy of the
provider network to provide benefits under this subtitle.
(b) A certificate application must be:
(1) filed with the department in the form prescribed
by the commissioner;
(2) verified by an authorized agent of the insurance
carrier; and
(3) accompanied by a nonrefundable fee set by
commissioner rule.
Sec. 408B.102. CONTENTS OF APPLICATION. Each certificate
application must include:
(1) a description and a map of the insurance carrier's
service area or areas, with key and scale, that identifies each
county or part of a county to be served;
(2) a list of all contracted provider network
providers that demonstrates the adequacy of the provider network to
provide comprehensive health care services sufficient to serve the
population of injured employees within the service area, and maps
that demonstrate that the access and availability standards are
met;
(3) a description of the types of compensation
arrangements made or to be made between the provider network and its
contracted providers in exchange for the provision of, or an
arrangement to provide, health care services to employees;
(4) a description of programs and procedures to be
used, including:
(A) a complaint system, as required under
Subchapter I; and
(B) a quality improvement program, as required
under Section 408B.203; and
(5) any other information determined to be necessary
by the commissioner to establish the adequacy and economic
stability of the provider network.
Sec. 408B.103. COMMISSIONER ACTION ON APPLICATION. (a)
The commissioner shall approve or disapprove an application for
certification of a provider network not later than the 60th day
after the date the completed application is received by the
department. An application is considered complete on receipt of
all information required by this chapter and any commissioner
rules, including receipt of any additional information requested by
the commissioner as needed to make the determination.
(b) Additional information requested by the commissioner
under Subsection (a) may include information derived from an
on-site quality-of-care examination.
(c) The department shall notify the applicant of any
deficiencies in the application and may allow the applicant to
request additional time to revise the application, in which case
the 60-day period for approval or disapproval is tolled. The
commissioner may grant or deny requests for additional time at the
commissioner's discretion.
(d) An order issued by the commissioner disapproving an
application must specify in what respects the application does not
comply with applicable statutes and rules. An applicant whose
application is disapproved may request a hearing not later than the
30th day after the date of the commissioner's disapproval order.
The hearing is a contested case hearing under Chapter 2001,
Government Code.
Sec. 408B.104. TERM OF CERTIFICATE. A certificate issued
under this subchapter is valid until revoked or suspended by the
commissioner.
SUBCHAPTER D. GENERAL REQUIREMENTS RELATING TO CONTRACTS
Sec. 408B.151. GENERAL CONTRACT REQUIREMENTS. (a) Each
carrier-network contract or participating provider contract must
comply with this subchapter, as applicable.
(b) Before entering into a carrier-network contract, an
insurance carrier shall make a reasonable effort to evaluate the
provider network's current and prospective ability to provide or
arrange for health care services through participating providers,
and to perform any functions delegated to the provider network in
accordance with the provisions of this section.
(c) An insurance carrier and a provider network may
negotiate the functions to be delegated to the provider network. A
carrier may not, through a contract with a provider network,
transfer risk.
(d) A provider network is not required to accept an
application for participation in the provider network from a health
care provider who otherwise meets the requirements specified in
this chapter for participation if the provider network determines
that the provider network has contracted with a sufficient number
of qualified health care providers.
(e) An insurance carrier or certified provider network is
not liable for any damages or losses alleged by the health care
provider arising from a decision to withhold designation as a
participating provider. No cause of action related to a refusal to
include a provider in a certified provider network may be
maintained against an insurance carrier or the certified provider
network.
(f) A provider network that employs health care providers
shall obtain from each participating provider network provider a
written agreement that the provider acknowledges and agrees to the
contractual provisions under this subchapter.
Sec. 408B.152. CARRIER NETWORK CONTRACT REQUIREMENTS. A
carrier network contract must include:
(1) a statement that the provider network's role is to
provide the services described under this chapter that have been
delegated by the carrier, subject to the carrier's oversight and
monitoring of the provider network's performance;
(2) a description of the functions that the carrier
delegates to the provider network, consistent with the requirements
of this chapter, and the reporting requirements for each function;
(3) to the extent the carrier delegates one or more of
the functions to the provider network, a statement that the
provider network will perform the obligations of the carrier in:
(A) arranging for the provision of health care
through participating provider contracts that comply with the
requirements of this section;
(B) managing the selection of treating doctors in
accordance with the requirements of Section 408B.302;
(C) complying with the requirements related to
termination of provider contracts under Section 408B.306;
(D) operating a utilization review plan in
accordance with Subchapter H;
(E) operating a quality improvement program in
accordance with the requirements of Section 408B.203; and
(F) performing credentialing functions in
accordance with the requirements of Section 408B.301;
(4) a provision that requires the provider network to
make available to the carrier participating provider contracts;
(5) a statement that the provider network and any
third party to which the provider network subdelegates any function
delegated by the carrier to the provider network will perform
delegated functions in compliance with the requirements of this
subtitle;
(6) a statement that the carrier retains ultimate
responsibility for ensuring that all delegated functions are
performed in accordance with this subchapter and that the contract
may not be construed to limit in any way the carrier's
responsibility to comply with applicable statutory and regulatory
requirements;
(7) a contingency plan under which the carrier would,
in the event of termination of the carrier-network contract or a
failure to perform, reassume one or more functions of the provider
network under the contract, including functions related to:
(A) notification to employees;
(B) quality of care; and
(C) continuity of care, including a plan for
identifying and transitioning injured employees to new providers;
(8) a provision that requires that any agreement by
which the provider network subdelegates to a third party any
function delegated by the carrier to the provider network be in
writing and be approved by the carrier, and that such an agreement
require the delegated third party to be subject to all the
requirements of this subchapter;
(9) a provision that requires the provider network to
provide to the department the license number of any delegated third
party who performs a function that requires a license as a
utilization review agent under Article 21.58A, Insurance Code, or
any other license under the Insurance Code or another insurance law
of this state;
(10) an acknowledgment that:
(A) any third party to which a provider network
subdelegates any function delegated by the carrier to the provider
network must perform in compliance with this subchapter, and that
the third party is subject to the carrier's and the provider
network's oversight and monitoring of its performance; and
(B) if the third party fails to meet monitoring
standards established to ensure that functions delegated to the
third party under the delegation contract are in full compliance
with all statutory and regulatory requirements, the carrier or the
provider network may cancel the delegation of one or more delegated
functions; and
(11) a provision for a quality improvement committee
that shall have the responsibility of:
(A) promoting the delivery of health care
services for employees;
(B) developing and overseeing the implementation
of programs aimed at promoting participating providers'
understanding and application of nationally recognized,
scientifically valid, outcome-based treatment and disability
standards and guidelines applicable to the treatment of injuries;
(C) recommending specific actions, including
provider education and training, for improving the quality of care
provided to employees; and
(D) complying with Section 408B.203.
Sec. 408B.153. CONTRACTS WITH PARTICIPATING PROVIDERS. A
carrier network contract and a participating provider contract must
include:
(1) a provision that the insurance carrier shall
monitor the acts of the provider network or participating provider
through a monitoring plan that must contain, at a minimum, the
requirements set forth in Section 408B.201;
(2) a provision that the contract:
(A) may not be terminated without cause by either
party without 90 days' prior written notice; and
(B) may be terminated immediately if cause
exists;
(3) requirements related to termination of, and appeal
rights of, participating providers in accordance with Section
408B.306;
(4) a continuity of care clause that states that if a
health care provider's status as a participating provider
terminates, the carrier is obligated to continue to reimburse the
provider at the contracted rate for care of an employee with a
life-threatening condition or an acute condition for which
disruption of care would harm the employee if the provider requests
continued care;
(5) billing and reimbursement provisions in
accordance with Sections 408B.154-408B.156;
(6) utilization review requirements in accordance
with Subchapter H;
(7) if the carrier uses a preauthorization process, a
list of health care services that require preauthorization and
information concerning the preauthorization process;
(8) a hold-harmless clause stating that participating
providers may not under any circumstances bill or attempt to
collect any amounts from employees for health care services
rendered for a compensable injury, including the insolvency of the
carrier, except if an employee obtains services from a
participating provider that is not the employee's treating doctor
without a referral from the treating doctor, or a non-participating
provider without approval from the carrier, or the carrier is not
liable for the cost of services because they do not qualify as
compensable benefits under this subtitle;
(9) a statement that the participating provider agrees
to follow treatment guidelines, return-to-work guidelines, and
individual treatment protocols adopted by the insurance carrier
under this subtitle, as applicable to an employee's injury;
(10) a requirement that the participating provider or
provider network provide all necessary information to allow the
insurance carrier or the employer to provide information to
employees as required by Sections 408B.051 and 408B.052;
(11) a requirement that the participating provider or
provider network provide the carrier, in a form usable for audit
purposes, the data necessary for the carrier to comply with
regulatory reporting requirements with respect to any services
provided under the contract;
(12) a provision that any failure by the provider
network or participating provider to comply with this subchapter or
monitoring standards shall allow the carrier to terminate all or
any part of the carrier-network contract or participating provider
contract;
(13) a provision that requires the provider network or
participating provider to provide documentation, except for
information, documents, and deliberations related to peer review
for credentialing purposes that are confidential or privileged
under state or federal law, that relates to:
(A) any regulatory agency's inquiry or
investigation of the provider network or participating provider
that relates to an employee covered by the carrier's workers'
compensation policy; and
(B) the final resolution of any regulatory
agency's inquiry or investigation;
(14) a provision relating to complaints that requires
the provider network or participating provider to ensure that on
receipt of a complaint, a copy of the complaint shall be sent to the
carrier and the department within two business days, except that in
a case in which a complaint involves emergency care, the provider
network or participating provider shall forward the complaint
immediately to the carrier, and provided that nothing in this
paragraph prohibits the provider network or participating provider
from attempting to resolve a complaint;
(15) a statement that a carrier may not engage in
retaliatory action, including limiting coverage, against an
employee because the employee or a person acting on behalf of the
employee has filed a complaint against the carrier or appealed a
decision of the carrier, and a carrier may not engage in retaliatory
action, including refusal to renew or termination of a contract,
against a participating provider because the provider has, on
behalf of an employee, reasonably filed a complaint against the
carrier or appealed a decision of the carrier;
(16) a requirement that a complaint notice be posted
in accordance with Section 408B.405;
(17) a mechanism for the resolution of complaints
initiated by complainants that complies with Subchapter I;
(18) a statement that a provider network or
participating provider may not engage in any of the prohibited
practices listed under Subchapter J;
(19) a statement that the carrier may not use any
financial incentive or make a payment to a health care provider or
certified provider network that acts directly or indirectly as an
inducement to limit medically necessary services;
(20) a clause regarding appeal by the provider of
termination of provider status and applicable written notification
to employees regarding such a termination, including any provisions
required by the commissioner; and
(21) any other provisions required by the commissioner
by rule.
Sec. 408B.154. APPLICATION OF PROMPT PAY REQUIREMENTS. The
prompt payment of health care services provided by the carrier or
certified provider network is subject to Subchapter B, Chapter
408A.
Sec. 408B.155. REIMBURSEMENT. (a) The amount of
reimbursement for services provided by a provider network provider
is determined by the contract between the provider network and the
provider or group of providers.
(b) If a provider network has preauthorized a health care
service, the insurance carrier or provider network or the provider
network's agent or other representative may not deny payment to a
provider except for reasons other than medical necessity.
(c) A provider network shall reimburse out-of-network
providers who provide emergency care or whose referral by a
provider network provider has been approved by the provider network
either at a rate that is agreed to by both the provider network and
the out-of-network provider, or in accordance with Section 413.011.
(d) Subject to Subsection (a), billing by, and
reimbursement to, contracted and out-of-network providers is
subject to standard reimbursement requirements as provided by this
subtitle and applicable rules of the commissioner, as consistent
with this subtitle. This subsection may not be construed to require
application of rules of the commissioner regarding reimbursement if
application of those rules would negate reimbursement amounts
negotiated by the provider network.
(e) An insurance carrier shall notify in writing a provider
network provider if the carrier contests the compensability of the
injury for which the provider provides health care services. A
carrier may not deny payment for health care services provided by a
provider network provider before that notification on the grounds
that the injury was not compensable. The carrier is liable for a
maximum of $7,000 for health care services that were provided
before the notice required in this subsection was given.
Sec. 408B.156. RESTRICTIONS ON PAYMENT AND REIMBURSEMENT.
(a) An insurance carrier or third-party administrator may not
reimburse a doctor or other health care practitioner, an
institutional provider, or an organization of doctors and health
care providers on a discounted fee basis for services that are
provided to an injured employee unless:
(1) the carrier or third-party administrator has
contracted with either:
(A) the doctor or other practitioner,
institutional provider, or organization of doctors and health care
providers; or
(B) a preferred provider organization that has a
network of preferred providers and that has contracted with the
doctor or other practitioner, institutional provider, or
organization of doctors and health care providers;
(2) the doctor or other practitioner, institutional
provider, or organization of doctors and health care providers has
agreed to the contract and has agreed to provide health care
services under the terms of the contract; and
(3) the carrier or third-party administrator has
agreed to provide coverage for those health care services under
this chapter.
(b) A party to a preferred provider contract, including a
contract with a preferred provider organization, may not sell,
lease, or otherwise transfer information regarding the payment or
reimbursement terms of the contract without the express authority
of and prior adequate notification to the other contracting
parties. This subsection does not affect the authority of the
commissioner under this code to request and obtain information.
(c) An insurance carrier or third-party administrator who
violates this section:
(1) commits an unfair claim settlement practice in
violation of Subchapter A, Chapter 542, Insurance Code; and
(2) is subject to administrative penalties under
Chapters 82 and 84, Insurance Code.
SUBCHAPTER E. MONITORING PLAN; QUALITY IMPROVEMENT
Sec. 408B.201. MONITORING PLAN REQUIRED. (a) Each
insurance carrier, or entity contracting with a carrier, that
enters into carrier-network contracts or participating provider
contracts shall monitor the acts of provider networks and
participating providers through a monitoring plan.
(b) The monitoring plan must be set forth in each
carrier-network contract and participating provider contract, and
must contain, at a minimum:
(1) requirements for review of the provider network's
compliance with the requirements for participating provider
contracts as set forth in Subchapter D;
(2) provisions for review of the provider network's or
participating provider's compliance with the terms of the
carrier-network contract or participating provider contract,
respectively, as well as with this chapter affecting the functions
delegated by the carrier under the carrier-network contract;
(3) provisions for review of the provider network's
and participating provider's compliance with the process for
terminating contracts with participating providers, as described
by Section 408B.306;
(4) provisions for review of the provider network's
and participating provider's compliance with the utilization
review processes set forth in Subchapter H;
(5) periodic certification by the provider network on
request by the carrier that the quality improvement program of the
provider network and any third parties contracted with the provider
network to perform quality improvement complies with the standards
under Section 408B.203 to the extent delegated to the provider
network by the carrier;
(6) periodic signed statements provided by the
provider network on request from the carrier, certifying that the
credentialing standards of the provider network and any third
parties contracted with the provider network to perform delegated
credentialing functions comply with the standards under Section
408B.301 to the extent delegated to the provider network by the
carrier;
(7) a process to objectively evaluate the cost of
health care services provided to employees by participating
providers under this chapter;
(8) policies and procedures for conducting a pattern
of practice review;
(9) processes to provide the carrier, in a standard
electronic format agreed to by the parties, the following
information:
(A) the average medical cost per claim for health
care services provided by a participating provider to employees;
(B) the utilization by employees of health care
services provided by a participating provider;
(C) employee release to return-to-work outcomes;
(D) employee satisfaction and health-related
functional outcomes; and
(E) the frequency, duration, and outcome of
disputes regarding medical benefits;
(10) a program of education and training aimed at
ensuring that participating providers are knowledgeable and
skilled in the treatment of occupational injuries and illnesses and
the use of disability guidelines, and familiar with the
requirements and procedures of the workers' compensation system;
and
(11) policies and procedures for protecting the
privacy and confidentiality of patient information.
Sec. 408B.202. COMPLIANCE WITH MONITORING PLAN. (a) An
insurance carrier that becomes aware of any information that
indicates that a provider network or participating provider, or any
third party to which the provider network or participating provider
delegates a function, is not operating in accordance with the
monitoring plan as described by Section 408B.201 or is operating in
a condition that renders the continuance of the carrier's
relationship with the provider network or participating provider
hazardous to employees shall:
(1) notify the provider network or participating
provider in writing of those findings; and
(2) request in writing a written explanation, with
documentation supporting the explanation, of:
(A) the provider network's or participating
provider's apparent noncompliance with the contract; or
(B) the existence of the condition that
apparently renders the continuance of the carrier's relationship
with the provider network or participating provider hazardous to
employees.
(b) A provider network or participating provider shall
respond to a request from a carrier under Subsection (a) in writing
not later than the 30th day after the date the request is received.
The carrier shall reasonably assist the participating provider or
provider network in its efforts to correct any failure to comply
with the monitoring plan or any hazardous condition that forms the
basis of the carrier's findings.
(c) If a carrier does not believe that a provider network or
participating provider has corrected its failure to comply with the
monitoring plan or any hazardous condition by the 90th day after the
date the request under Subsection (a) is received, the carrier
shall notify the commissioner and provide the department with
copies of all notices and requests submitted to the provider
network or participating provider and the responses and other
documentation the carrier generates or receives in response to the
notices and requests.
(d) On receipt of a notice under Subsection (c), or on
receipt of a complaint filed with the department only, the
commissioner or the commissioner's designated representative shall
examine the matters contained in the notice or complaint, as well as
any other matter relating to the provider network's or
participating provider's ability to meet its responsibilities in
connection with any function performed by the provider network or
participating provider.
(e) On completion of the examination, the department shall
report to the provider network or participating provider and the
carrier the results of the examination and any action the
department determines is necessary to ensure that the carrier and
provider network or participating provider meets its
responsibilities under this chapter, and that the provider network
can meet its responsibilities in connection with any function
delegated by the carrier or performed by the provider network or any
third party to which the provider network delegates a function.
(f) The carrier shall respond to the department's report and
submit a corrective plan to the department not later than the 30th
day after the date of receipt of the report.
(g) In connection with an examination and report as
described by Subsections (d)-(f), the commissioner may order a
carrier to take any action the commissioner determines is necessary
to ensure that the carrier can provide health care services under a
workers' compensation insurance policy, including:
(1) reassuming the functions performed by or delegated
to the provider network;
(2) temporarily or permanently ceasing arranging for
services to employees through the noncompliant provider network;
(3) complying with the contingency plan required by
Section 408B.152; or
(4) terminating the carrier's contract with the
provider network or participating provider.
(h) A carrier-network contract or participating provider
contract that is provided to the department in connection with an
examination under this section is confidential and is not subject
to disclosure as public information under Chapter 552, Government
Code.
Sec. 408B.203. QUALITY IMPROVEMENT PROGRAM. (a) A carrier
shall develop and maintain an ongoing quality improvement program
designed to objectively and systematically monitor and evaluate the
quality and appropriateness of care and services and to pursue
opportunities for improvement. The quality improvement program
must include return-to-work and medical case management programs.
(b) The carrier is ultimately responsible for the quality
improvement program. The carrier shall:
(1) appoint a quality improvement committee that
includes participating providers;
(2) approve the quality improvement program;
(3) approve an annual quality improvement plan;
(4) meet at least annually to receive and review
reports of the quality improvement committee or group of
committees, and take action as appropriate;
(5) review the annual written report on the quality
improvement program; and
(6) report the results of the quality improvement
program to the department.
(c) The quality improvement committee or committees shall
evaluate the overall effectiveness of the quality improvement
program.
(d) The quality improvement program must be continuous and
comprehensive and must address both the quality of clinical care
and the quality of services. The carrier shall dedicate adequate
resources, including adequate personnel and information systems,
to the quality improvement program.
(e) The carrier shall develop a written description of the
quality improvement program that outlines the organizational
structure of the program, including functional responsibilities
and design.
(f) Each carrier shall implement a documented process for
the credentialing of participating providers, in accordance with
Section 408B.301.
(g) The quality improvement program must provide for an
effective peer review procedure for participating providers.
SUBCHAPTER F. EXAMINATIONS
Sec. 408B.251. EXAMINATION OF PROVIDER NETWORK. (a) As
often as the commissioner considers necessary, the commissioner or
the commissioner's designated representative may review the
operations of a provider network to determine compliance with this
chapter. The review may include on-site visits to the provider
network's premises.
(b) During on-site visits, the provider network shall make
available to the department all records relating to the provider
network's operations.
Sec. 408B.252. EXAMINATION OF PROVIDER OR THIRD PARTY. If
requested by the commissioner or the commissioner's
representative, each provider, provider group, or third party with
which the provider network has contracted to provide health care
services or any other services delegated to the provider network by
an insurance carrier shall make available for examination by the
department that portion of the books and records of the provider,
provider group, or third party that is relevant to the relationship
with the provider network of the provider, provider group, or third
party.
SUBCHAPTER G. NETWORK PROVIDERS
Sec. 408B.301. CREDENTIALING. Each insurance carrier shall
have processes for credentialing participating providers that
appropriately assess and validate the qualifications and other
relevant information relating to the providers.
Sec. 408B.302. TREATING DOCTORS. (a) An insurance carrier
shall, by contract, require treating doctors to provide, at a
minimum, the functions and services for employees described by this
section.
(b) For each injury, an injured employee shall notify the
employee's employer or carrier under Section 408B.053 of the
employee's selection of a treating doctor from the list of treating
doctors within the certified provider network that are located
within the provider network's service area.
(c) The following doctors do not constitute an initial
choice of treating doctor:
(1) a doctor salaried by the employer;
(2) a doctor recommended by the insurance carrier or
the employer;
(3) any doctor who provides care before the employee
is enrolled in the provider network; or
(4) a doctor providing emergency care.
(d) The participating employer, or the injured employee in a
claim described under Section 408B.053, shall provide notice to the
carrier or the carrier's designee of the selection of a treating
doctor not later than the fifth business day after the date of the
employee's selection.
(e) A treating doctor shall participate in the medical case
management process as required by the carrier or provider network,
including participation in return-to-work planning.
Sec. 408B.303. CHANGE IN TREATING DOCTOR. (a) An employee
who is dissatisfied with the initial choice of a treating doctor is
entitled to select an alternate treating doctor from the provider
network's list of treating doctors whose practice is located within
30 miles of the employee's place of residence if the employee
resides in an urban area or within 60 miles of the employee's place
of residence if the employee resides in a rural area. The provider
network may not deny an initial selection of an alternate treating
doctor.
(b) If the employee is dissatisfied with the employee's
second choice of treating doctor, the employee may notify the
carrier and request permission to select an alternate treating
doctor.
(c) The carrier shall establish procedures and criteria to
be used in authorizing an employee to select an alternate treating
doctor. The criteria must include, at a minimum, whether:
(1) treatment by the current treating doctor is
medically inappropriate;
(2) a conflict exists between the employee and the
current treating doctor to the extent that the doctor-patient
relationship is jeopardized or impaired; or
(3) the employee is receiving appropriate medical care
to reach maximum medical improvement in accordance with the
carrier's or provider network's treatment guidelines.
(d) A change of treating doctor may not be made to secure a
new impairment rating or medical report.
(e) Denial of a request for a change of treating doctor is
subject to the appeal process for a complaint filed under
Subchapter C, Chapter 413.
(f) For purposes of this section, the following does not
constitute the selection of an alternate treating doctor:
(1) a referral made by the treating doctor for health
care services;
(2) the receipt of services ancillary to surgery;
(3) the obtaining of a second or subsequent opinion
only on the appropriateness of the diagnosis or treatment;
(4) the selection of a new treating doctor because the
original treating doctor:
(A) dies;
(B) retires;
(C) changes location outside the service area
distance requirements, as described by Section 408B.055(e); or
(D) terminates the doctor's contract with the
carrier or provider network; or
(5) a change of treating doctor required because of a
change of residence by the employee to a location outside the
service area distance requirements, as described by Section
408B.055(e).
Sec. 408B.304. DESIGNATION OF SPECIALIST AS TREATING
DOCTOR. (a) A provider network shall ensure that an injured
employee with chronic pain or a disabling or life-threatening
illness may apply to the network's medical director to use a
non-primary care specialist as the injured employee's treating
doctor.
(b) The application must:
(1) include information specified by the provider
network, including certification of the medical need for care by a
specialist; and
(2) be signed by the injured employee and the
non-primary care specialist interested in serving as the injured
employee's treating doctor.
(c) To be eligible to serve as the injured employee's
treating doctor, a specialist doctor must:
(1) meet the provider network's requirements for
participation; and
(2) agree to accept the responsibility to coordinate
all of the injured employee's health care needs.
(d) If a provider network denies a request under this
section, the injured employee may appeal the decision through the
network's established complaint and appeals process.
Sec. 408B.305. REFERRALS. (a) A treating doctor shall
provide health care services to an injured employee for the
employee's compensable injury and shall make referrals to other
participating providers, or request from the carrier referrals to
non-participating providers if a health care service is not
available within the certified provider network.
(b) If a medically necessary health care service is not
available within the certified provider network, a carrier shall
allow referral to a non-participating provider on the request of
the treating doctor and within the time appropriate to the
circumstances related to the delivery of the services and the
condition of the employee, but not later than the seventh day after
the date of the treating doctor's request.
(c) Health care services by a non-participating provider
must be arranged by the carrier or certified provider network.
(d) Health care services by a non-participating provider
must be preauthorized by the carrier or certified provider network
and may not be retrospectively reviewed for medical necessity.
(e) If the provider network denies the referral request, the
employee may appeal the decision to an independent review
organization as provided by this subtitle.
Sec. 408B.306. TERMINATION OF CONTRACT. (a) A certified
provider network may decline to renew a contract with a
participating provider for any reason. Before terminating a
participating provider contract, a carrier must provide to the
participating provider 90 days' prior written notice of the
termination.
(b) A certified provider network may terminate a contract
with a participating provider for cause in the case of imminent harm
to patient health, an action taken against the provider's license
to practice, or reasonable cause to suspect fraud or malfeasance,
in which case termination may be immediate.
(c) On request, before the effective date of the termination
and within a period not later than the 60th day after the date the
carrier gave written notice under Subsection (a), a participating
provider is entitled to a review by an advisory review panel of the
carrier's proposed termination, except in a case involving:
(1) imminent harm to patient health;
(2) an action by a state medical or dental board,
another medical or dental licensing board, or another licensing
board or government agency that effectively impairs the
participating provider's ability to provide health care services;
or
(3) reasonable cause to suspect fraud or malfeasance.
(d) On request by the health care provider whose
participation in a certified provider network is being terminated
or who is deselected, the health care provider is entitled to an
expedited review process by the carrier.
Sec. 408B.307. ADVISORY REVIEW PANEL. (a) An advisory
review panel must:
(1) be composed of participating providers who are
appointed to serve on the standing quality improvement committee or
utilization review committee of the carrier; and
(2) include, if available, at least one representative
of the participating provider's specialty or a similar specialty.
(b) The carrier must consider, but is not bound by, the
recommendation of the advisory review panel.
(c) On request, the carrier shall provide to the affected
participating provider a copy of the recommendation of the advisory
review panel and the carrier determination.
Sec. 408B.308. NOTIFICATION OF INJURED EMPLOYEE. (a)
Except as provided by Subsection (b), the carrier must provide
notification of the termination of a participating provider to each
injured employee currently receiving care from the provider being
terminated at least 30 days before the effective date of the
termination.
(b) Notification of termination of a participating provider
for reasons related to imminent harm may be given immediately.
SUBCHAPTER H. UTILIZATION REVIEW
Sec. 408B.351. UTILIZATION REVIEW AGENT. An entity
performing utilization review, including an insurance carrier or a
certified provider network, must be a certified utilization review
agent under Article 21.58A, Insurance Code.
Sec. 408B.352. GENERAL STANDARDS FOR UTILIZATION REVIEW;
UTILIZATION REVIEW PLAN; SCREENING CRITERIA. (a) An entity
performing utilization review shall use a utilization review plan.
The plan must be reviewed and approved by a physician and be
conducted in accordance with standards developed with input from
appropriate providers, including doctors engaged in active
practice.
(b) The utilization review plan must include:
(1) a list of the health care services that require
preauthorization in addition to those in Section 413.014; and
(2) written procedures for:
(A) identification of injured employees whose
injuries or circumstances may not fit the screening criteria and
who thus may require flexibility in the application of screening
criteria through utilization review decisions;
(B) notification of the provider network's
determinations provided in accordance with Section 408B.355;
(C) informing appropriate parties of the process
for reconsideration of an adverse determination, as required by
Section 408B.356;
(D) receiving or redirecting toll-free normal
business hours and after-hours telephone calls, either in person or
by recording, and assurance that a toll-free telephone number is
maintained 40 hours a week during normal business hours;
(E) review, including review of any form used
during the review process and the time frames that must be met
during the review;
(F) ensuring that providers used by the provider
network to perform utilization review:
(i) meet the provider network's
credentialing standards; and
(ii) are appropriately trained to perform
utilization review in accordance with Section 408B.354;
(G) ensuring that any employee-specific
information obtained during the process of utilization review is
kept confidential in accordance with applicable federal and state
laws; and
(H) screening criteria that meet the
requirements of Subsection (c).
(c) Each provider network shall use written medically
acceptable screening criteria and review procedures that are
established and periodically evaluated and updated with
appropriate involvement from providers, including providers
engaged in active practice. Utilization review decisions must be
made in accordance with currently accepted medical or health care
practices, taking into account any special circumstances of a case
that may require deviation from the norm stated in the screening
criteria. The screening criteria may be used only to determine
whether to approve the requested treatment and must be:
(1) objective;
(2) clinically valid;
(3) compatible with established principles of health
care; and
(4) flexible enough to allow deviations from the norm
when justified on a case-by-case basis.
(d) The utilization review plan must provide that denials of
care be referred to an appropriate doctor to determine whether
health care is medically reasonable and necessary.
(e) The written screening criteria and review procedures
must be available for review and inspection as determined necessary
by the commissioner or the commissioner's designated
representative. However, any information obtained or acquired
under the authority of this subtitle related to the screening
criteria and the utilization review plan is confidential and
privileged and is not subject to disclosure under Chapter 552,
Government Code, or to subpoena except to the extent necessary for
the commissioner to enforce this chapter.
Sec. 408B.353. GENERAL STANDARDS FOR RETROSPECTIVE REVIEW;
SCREENING CRITERIA. An entity performing retrospective review
shall use written screening criteria established and periodically
updated with appropriate involvement from physicians, including
practicing physicians, and other health care providers. Except as
provided by this subtitle, the insurance carrier or provider
network's system for retrospective review must be under the
direction of a physician.
Sec. 408B.354. PERSONNEL. (a) Personnel employed by or
under contract with a carrier or a certified provider network to
perform utilization review or retrospective review must be
appropriately trained and qualified and, if applicable,
appropriately licensed. Personnel who obtain information regarding
an injured employee's specific medical condition, diagnosis, and
treatment options or protocols directly from the treating doctor or
other health care provider, either orally or in writing, and who are
not doctors must be nurses, physician assistants, or other health
care providers qualified to provide the service requested by the
provider. This subsection may not be interpreted to require
personnel who perform only clerical or administrative tasks to have
the qualifications prescribed by this subsection.
(b) A carrier or a provider network may not permit or
provide compensation or any thing of value to an employee or agent
of the carrier or provider network, condition employment of a
carrier or provider network employee or agent evaluation, or set
the carrier or provider network's employee or agent performance
standards based, in a manner inconsistent with the requirements of
this subchapter, on:
(1) the amount or volume of adverse determinations;
(2) reductions in or limitations on lengths of stay,
duration of treatment, medical benefits, services, or charges; or
(3) the number or frequency of telephone calls or
other contacts with health care providers or injured employees.
(c) Utilization review conducted by either a carrier or a
provider network must be under the direction of a physician
licensed to practice medicine in this state. The physician may be
employed by or under contract to the carrier or provider network.
Sec. 408B.355. NOTICE OF ADVERSE DETERMINATIONS;
PREAUTHORIZATION REQUIREMENTS. (a) Each carrier, or provider
network if the carrier has delegated utilization review or
retrospective review functions to the provider network, shall
notify the employee or the employee's representative, if any, and
the requesting provider of a determination made in a utilization
review or retrospective review.
(b) Notification of an adverse determination by the
provider network must include:
(1) the principal reasons for the adverse
determination;
(2) the clinical basis for the adverse determination;
(3) a description of, or the source of, the screening
criteria that were used as guidelines in making the determination;
(4) a description of the procedure for the
reconsideration process; and
(5) notification of the availability of independent
review in the form prescribed by the commissioner.
(c) The insurance carrier, or the provider network if the
carrier has delegated utilization review functions to the provider
network, shall specify which health care treatments or services
provided in the provider network require preauthorization or
concurrent review by the insurance carrier or the provider network.
At a minimum, those treatments must include the preauthorization
requirements in Section 413.014. Treatments and services for a
medical emergency do not require preauthorization. On receipt of a
preauthorization request from a provider for proposed services that
require preauthorization, the carrier, or the provider network if
utilization review functions have been delegated to the provider
network, shall issue and transmit a determination indicating
whether the proposed health care services are preauthorized. The
provider network shall respond to requests for preauthorization
within the periods prescribed by this section.
(d) For services not described by Subsection (e) or (f), the
determination under Subsection (c) must be issued and transmitted
not later than the third calendar day after the date the request is
received by the provider network.
(e) If the proposed services are for concurrent
hospitalization care, the carrier or the provider network shall,
within 24 hours of receipt of the request, transmit a determination
indicating whether the proposed services are preauthorized.
(f) If the proposed health care services involve
poststabilization treatment or a life-threatening condition, the
carrier or the provider network shall transmit to the requesting
provider a determination indicating whether the proposed services
are preauthorized within the time appropriate to the circumstances
relating to the delivery of the services and the condition of the
patient, not to exceed one hour from receipt of the request. If the
carrier or the provider network issues an adverse determination in
response to a request for poststabilization treatment or a request
for treatment involving a life-threatening condition, the carrier
or the provider network shall provide to the employee or the
employee's representative, if any, and the employee's treating
provider the notification required under Subsection (a).
(g) For life-threatening conditions, the notification of
adverse determination must include notification of the
availability of independent review in the form prescribed by the
commissioner.
Sec. 408B.356. RECONSIDERATION OF ADVERSE DETERMINATION.
(a) Each carrier, or provider network if the carrier has delegated
utilization review or retrospective review functions to the
provider network, shall maintain and make available a written
description of the carrier's or provider network's reconsideration
procedures involving an adverse determination. The
reconsideration procedures must be reasonable and must include:
(1) a provision stating that reconsideration shall be
performed by a provider other than the provider who made the
original adverse determination;
(2) a provision that an employee, a person acting on
behalf of the employee, or the employee's requesting provider may,
not later than the 30th day after the date of issuance of written
notification of an adverse determination, request reconsideration
of the adverse determination either orally or in writing;
(3) a provision that, not later than the fifth
calendar day after the date of receipt of the request, the provider
network shall send to the requesting party a letter acknowledging
the date of the receipt of the request and that includes a
reasonable list of documents the requesting party is required to
submit;
(4) a provision that, after the carrier or provider
network completes the review of the request for reconsideration of
the adverse determination, the carrier or provider network agent
shall issue a response letter to the employee or person acting on
behalf of the employee and the employee's requesting provider,
that:
(A) explains the resolution of the
reconsideration; and
(B) includes:
(i) a statement of the specific medical or
clinical reasons for the resolution;
(ii) the medical or clinical basis for the
decision;
(iii) the professional specialty of any
provider consulted; and
(iv) notice of the requesting party's right
to seek review of the denial by an independent review organization
and the procedures for obtaining that review; and
(5) written notification to the requesting party of
the determination of the request for reconsideration as soon as
practicable, but not later than the 30th day after the date the
utilization review agent received the request.
(b) In addition to the written request for reconsideration,
the reconsideration procedures must include a method for expedited
reconsideration procedures for denials of proposed health care
services involving poststabilization treatment or life-threatening
conditions, and for denials of continued stays for hospitalized
employees. The procedures must include a review by a provider who
has not previously reviewed the case and who is of the same or a
similar specialty as a provider who typically manages the
condition, procedure, or treatment under review. The period during
which that reconsideration must be completed must be based on the
medical or clinical immediacy of the condition, procedure, or
treatment, but may not exceed one calendar day from the date of
receipt of all information necessary to complete the
reconsideration.
(c) Notwithstanding Subsection (a) or (b), an employee with
a life-threatening condition is entitled to an immediate review by
an independent review organization and is not required to comply
with the procedures for a reconsideration of an adverse
determination.
Sec. 408B.357. DISPUTE RESOLUTION. Fee disputes are
subject to the provider network complaint process under Subchapter
I. Disputes regarding medical necessity are subject to Subchapter
C, Chapter 413.
SUBCHAPTER I. COMPLAINT RESOLUTION
Sec. 408B.401. COMPLAINT SYSTEM REQUIRED. (a) Each
provider network shall implement and maintain a complaint system
that provides reasonable procedures to resolve an oral or written
complaint.
(b) The provider network may require a complainant to file
the complaint not later than the 90th day after the date of the
event or occurrence that is the basis for the complaint.
(c) The complaint system must include a process for the
notice and appeal of a complaint.
(d) The commissioner may adopt rules as necessary to
implement this section.
Sec. 408B.402. COMPLAINT INITIATION AND INITIAL RESPONSE;
DEADLINES FOR RESPONSE AND RESOLUTION. (a) If a complainant
notifies a provider network of a complaint, the provider network,
not later than the seventh calendar day after the date the provider
network receives the complaint, shall respond to the complainant,
acknowledging the date of receipt of the complaint and providing a
description of the provider network's complaint procedures and
deadlines.
(b) The provider network shall investigate and resolve a
complaint not later than the 30th calendar day after the date the
provider network receives the complaint.
Sec. 408B.403. RECORD OF COMPLAINTS. (a) Each provider
network shall maintain a complaint and appeal log regarding each
complaint. The commissioner shall adopt rules designating the
classification of provider network complaints under this section.
(b) Each provider network shall maintain a record of and
documentation on each complaint, complaint proceeding, and action
taken on the complaint until the third anniversary of the date the
complaint was received.
(c) A complainant is entitled to a copy of the provider
network's record regarding the complaint and any proceeding
relating to that complaint.
(d) The department, during any investigation or examination
of a provider network, may review documentation maintained under
this subchapter, including original documentation, regarding a
complaint and action taken on the complaint.
Sec. 408B.404. RETALIATORY ACTION PROHIBITED. A provider
network may not engage in any retaliatory action against an
employer or employee because the employer or employee or a person
acting on behalf of the employer or employee has filed a complaint
against the provider network.
Sec. 408B.405. POSTING OF INFORMATION ON COMPLAINT PROCESS
REQUIRED. (a) A contract between a provider network and a provider
must require the provider to post, in the provider's office, a
notice to injured employees on the process for resolving complaints
with the provider network.
(b) The notice required under Subsection (a) must include
the department's toll-free telephone number for filing a complaint.
SUBCHAPTER J. PROHIBITED PRACTICES
Sec. 408B.451. NO INDUCEMENT TO LIMIT SERVICES. An
insurance carrier may not use any financial incentive or make a
payment to a health care provider that acts directly or indirectly
as an inducement to limit services.
Sec. 408B.452. INDEMNIFICATION; LIABILITY. (a) An
insurance carrier may not require participating providers, by
contract or otherwise, to indemnify the carrier for any liability
in tort resulting from an act or omission of the carrier.
(b) A carrier-network contract or participating provider
contract may not transfer liability for acts of one or more parties
to any other parties. Each entity shall only be responsible for its
own acts, omissions, and decisions relative to the providing of
health care services to employees.
Sec. 408B.453. NO LIMITATION ON PROVIDER COMMUNICATION. An
insurance carrier may not, as a condition of contract with a
participating provider, or in any other manner, prohibit, attempt
to prohibit, or discourage a participating provider from discussing
with or communicating to an employee under the participating
provider's care, information or opinions regarding that employee's
medical condition or treatment options.
Sec. 408B.454. MISLEADING INFORMATION. An employer,
insurance carrier, or agent or representative of an employer or
carrier may not cause or permit the use or distribution to employees
of information that is intentionally untrue or intentionally
misleading.
SUBCHAPTER K. DISCIPLINARY ACTIONS
Sec. 408B.501. DETERMINATION OF VIOLATION; NOTICE. (a) If
the commissioner determines that a provider network, insurance
carrier, or any other person or third party operating under this
chapter, including a third party to which a provider network
delegates a function, is in violation of this chapter, rules
adopted by the commissioner under this chapter, or applicable
provisions of the Insurance Code or rules adopted under that code,
the commissioner or a designated representative may notify the
provider network, insurance carrier, person, or third party of the
alleged violation and may compel the production of any documents or
other information as necessary to determine whether the violation
occurred.
(b) The commissioner's designated representative may
initiate the proceedings under this section.
(c) A proceeding under this section is a contested case
under Chapter 2001, Government Code.
Sec. 408B.502. DISCIPLINARY ACTIONS. If under Section
408B.501 the commissioner determines that a provider network,
insurance carrier, or other person or third party described under
Section 408B.501 has violated or is violating this chapter, rules
adopted by the commissioner under this chapter, or the Insurance
Code or rules adopted under that code, the commissioner may:
(1) suspend or revoke a certificate issued under this
subtitle;
(2) impose sanctions under Chapter 82, Insurance Code;
(3) issue a cease and desist order under Chapter 83,
Insurance Code; or
(4) impose administrative penalties under Chapter 84,
Insurance Code.
CHAPTER 408C. REQUIREMENTS FOR INSURANCE CARRIERS
THAT DO NOT USE PROVIDER NETWORKS
Sec. 408C.001. APPLICABILITY OF CHAPTER. This chapter
applies only to medical benefits provided through an insurance
carrier that does not use a provider network.
Sec. 408C.002 [408.022]. SELECTION OF DOCTOR. (a) An
[Except in an emergency, the commission shall require an employee
to receive medical treatment from a doctor chosen from a list of
doctors approved by the commission. A doctor may perform only those
procedures that are within the scope of the practice for which the
doctor is licensed. The] employee is entitled to the employee's
initial choice of a doctor as provided by this section [from the
commission's list]. The injured employee shall notify the
employer, who shall notify the insurance carrier, of the employee's
choice of treating doctor not later than the later of:
(1) the date on which the employee notifies the
employer of the injury; or
(2) the date of the first non-emergency visit to a
health care provider.
(b) If an employee is dissatisfied with the initial choice
of a doctor [from the commission's list], the employee may notify
the department [commission] and request authority to select an
alternate doctor. The notification must be in writing stating the
reasons for the change, except notification may be by telephone
when a medical necessity exists for immediate change.
(c) The commissioner [commission] shall prescribe criteria
to be used by the department [commission] in granting the employee
authority to select an alternate doctor. The criteria may include:
(1) whether treatment by the current doctor is
medically inappropriate;
(2) the professional reputation of the doctor;
(3) whether the employee is receiving appropriate
medical care to reach maximum medical improvement; and
(4) whether a conflict exists between the employee and
the doctor to the extent that the doctor-patient relationship is
jeopardized or impaired.
(d) A change of doctor may not be made to secure a new
impairment rating or medical report.
(e) For purposes of this section, the following is not a
selection of an alternate doctor:
(1) a referral made by the doctor chosen by the
employee if the referral is medically reasonable and necessary;
(2) the receipt of services ancillary to surgery;
(3) the obtaining of a second or subsequent opinion
only on the appropriateness of the diagnosis or treatment;
(4) the selection of a doctor because the original
doctor:
(A) dies;
(B) retires; or
(C) becomes unavailable or unable to provide
medical care to the employee; or
(5) a change of doctors required because of a change of
residence by the employee.
Sec. 408C.003. TREATING DOCTOR DUTIES. (a)
Notwithstanding Section 4(h), Article 21.58A, Insurance Code, a
utilization review agent that uses doctors to perform reviews of
health care services provided under this subtitle may use doctors
licensed by another state to perform the reviews, but those reviews
must be performed under the direction of a doctor licensed to
practice in this state.
(b) The injured employee's treating doctor is responsible
for the efficient management of medical care as required by Section
408C.005(c) and commissioner rules. The department shall collect
information regarding:
(1) return-to-work outcomes;
(2) patient satisfaction; and
(3) cost and utilization of health care provided or
authorized by a treating doctor.
(c) The commissioner may adopt rules to define the role of
the treating doctor and to specify outcome information to be
collected for a treating doctor.
(d) A doctor who provides health care services under this
chapter may perform only those procedures that are within the scope
of the practice for which the doctor is licensed.
Sec. 408C.004. MEDICAL EXAMINATION BY TREATING DOCTOR TO
DEFINE COMPENSABLE INJURY. (a) The department shall require an
injured employee to submit to a single medical examination to
define the compensable injury on request by the insurance carrier.
(b) A medical examination under this section shall be
performed by the employee's treating doctor. The insurance carrier
shall pay the costs of the examination.
(c) After the medical examination is performed, the
treating doctor shall submit to the insurance carrier a report that
details all injuries and diagnoses related to the compensable
injury, on receipt of which the insurance carrier shall accept all
injuries and diagnoses as related to the compensable injury or
shall dispute the determination of specific injuries and diagnoses.
(d) Any treatment for an injury or diagnosis that is not
accepted by the insurance carrier under Subsection (c) as
compensable at the time of the medical examination under Subsection
(a) must be preauthorized before treatment is rendered. If the
insurance carrier denies preauthorization because the treatment is
for an injury or diagnosis unrelated to the compensable injury, the
injured employee or affected health care provider may file an
extent of injury dispute.
(e) Any treatment for an injury or diagnosis that is
accepted by the insurance carrier under Subsection (c) as
compensable at the time of the medical examination under Subsection
(a) may not be reviewed for compensability, but may be reviewed for
medical necessity.
(f) The commissioner may adopt rules relating to
requirements for a report under this section, including
requirements regarding the contents of a report.
Sec. 408C.005 [408.025]. REPORTS AND RECORDS REQUIRED FROM
HEALTH CARE PROVIDERS. (a) The commissioner [commission] by rule
shall adopt requirements for reports and records that are required
to be filed with the department [commission] or provided to the
injured employee, the employee's attorney, or the insurance carrier
by a health care provider.
(b) The commissioner [commission] by rule shall adopt
requirements for reports and records that are to be made available
by a health care provider to another health care provider to prevent
unnecessary duplication of tests and examinations.
(c) The treating doctor is responsible for maintaining
efficient utilization of health care.
(d) On the request of an injured employee, the employee's
attorney, or the insurance carrier, a health care provider shall
furnish records relating to treatment or hospitalization for which
compensation is being sought. The department [commission] may
regulate the charge for furnishing a report or record, but the
charge may not be less than the fair and reasonable charge for
furnishing the report or record. A health care provider may
disclose to the insurance carrier of an affected employer records
relating to the diagnosis or treatment of the injured employee
without the authorization of the injured employee to determine the
amount of payment or the entitlement to payment.
Sec. 408C.006 [408.027]. PAYMENT OF HEALTH CARE PROVIDER.
(a) An insurance carrier shall pay the fee allowed under Section
413.011 for a service rendered by a health care provider not later
than the 45th day after the date the insurance carrier receives the
charge unless the amount of the payment or the entitlement to
payment is disputed.
(b) If an insurance carrier disputes the amount charged by a
health care provider and requests an audit of the services
rendered, the insurance carrier shall pay 50 percent of the amount
charged by the health care provider not later than the 45th day
after the date the insurance carrier receives the statement of
charge.
(c) If an insurance carrier denies liability or the health
care provider's entitlement to payment and an accident or health
insurance company provides benefits to the employee for medical or
other health care services, the right to recover that amount may be
assigned by the employee to the accident or health insurance
company.
(d) If an insurance carrier disputes the amount of payment
or the health care provider's entitlement to payment, the insurance
carrier shall send to the department [commission], the health care
provider, and the injured employee a report that sufficiently
explains the reasons for the reduction or denial of payment for
health care services provided to the employee[. The insurance
carrier is entitled to a hearing as provided by Section
413.031(d)].
Sec. 408C.007. PREAUTHORIZATION; UTILIZATION REVIEW FOR
OUT-OF-NETWORK CARE. (a) The preauthorization requirements of
Section 413.014 apply to out-of-network care.
(b) For out-of-network care, an insurance carrier may:
(1) perform utilization review itself if the carrier
is a certified utilization review agent under Article 21.58A,
Insurance Code; or
(2) contract for utilization review services with a
certified utilization review agent.
Sec. 408C.008. DISPUTE RESOLUTION FOR OUT-OF-NETWORK CARE.
The medical dispute resolution requirements of Subchapter C,
Chapter 413, apply to a dispute regarding out-of-network care.
SECTION 1.203. The following laws are repealed:
(1) Sections 408.0221-408.0223, Labor Code;
(2) Section 408.023, Labor Code;
(3) Section 408.0231, Labor Code; and
(4) Section 408.024, Labor Code.
SECTION 1.204. Notwithstanding the repeal by this Act of
Sections 408.023 and 408.0231, Labor Code, a doctor who was removed
from the list of approved doctors by the Texas Workers'
Compensation Commission before the effective date of this Act for a
reason described by Section 408.0231(a), Labor Code, as that
section existed prior to repeal by this Act, is ineligible to
provide professional services under Subtitle A, Title 5, Labor
Code, as amended by this Act, except as otherwise provided by rules
adopted under Subtitle A, Title 5, Labor Code, as amended by this
Act, by the commissioner of insurance.
PART 11. ADOPTION OF CHAPTERS 408D AND 408E, LABOR CODE
SECTION 1.251. Subchapters E, F, G, H, and I, Chapter 408,
Labor Code, are redesignated as Chapter 408D, Labor Code, and that
chapter is amended to read as follows:
CHAPTER 408D. WORKERS' COMPENSATION BENEFITS: INCOME BENEFITS
SUBCHAPTER A [E]. INCOME BENEFITS: [IN] GENERAL PROVISIONS
Sec. 408D.001 [408.081]. INCOME BENEFITS. (a) An employee
is entitled to income benefits as provided by [in] this subtitle
[chapter].
(b) Except as otherwise provided by this section or this
subtitle, income benefits shall be paid as required under Section
409.021(a) weekly as and when they accrue without order from the
commissioner [commission]. Interest on accrued but unpaid benefits
shall be paid, without order of the commissioner [commission], at
the time the accrued benefits are paid.
(c) The commissioner [commission] by rule shall establish
requirements for agreements under which income benefits may be paid
monthly. Income benefits may be paid monthly only:
(1) on the request of the employee and the agreement of
the employee and the insurance carrier; and
(2) in compliance with the requirements adopted by the
commissioner [commission].
(d) An employee's entitlement to income benefits under this
chapter terminates on the death of the employee. An interest in
future income benefits does not survive after the employee's death.
Sec. 408D.002 [408.082]. ACCRUAL OF RIGHT TO INCOME
BENEFITS. (a) Income benefits may not be paid under this subtitle
for an injury that does not result in disability for at least one
week.
(b) If the disability continues for longer than one week,
weekly income benefits begin to accrue on the eighth day after the
date of the injury. If the disability does not begin at once after
the injury occurs or within eight days of the occurrence but does
result subsequently, weekly income benefits accrue on the eighth
day after the date on which the disability began.
(c) If the disability continues for 14 days [four weeks] or
longer after the date the disability [it] begins, compensation
shall be computed from the date the disability begins.
(d) This section does not preclude the recovery of medical
benefits as provided by this subtitle [Subchapter B].
Sec. 408D.003 [408.083]. TERMINATION OF RIGHT TO TEMPORARY
INCOME, IMPAIRMENT INCOME, AND SUPPLEMENTAL INCOME BENEFITS. (a)
Except as provided by Subsection (b), an employee's eligibility for
temporary income benefits, impairment income benefits, and
supplemental income benefits terminates on the expiration of 401
weeks after the date of injury.
(b) If an employee incurs an occupational disease, the
employee's eligibility for temporary income benefits, impairment
income benefits, and supplemental income benefits terminates on the
expiration of 401 weeks after the date on which benefits began to
accrue.
Sec. 408D.004 [408.084]. CONTRIBUTING INJURY. (a) At the
request of the insurance carrier, the commissioner [commission] may
order that impairment income benefits and supplemental income
benefits be reduced in a proportion equal to the proportion of a
documented impairment that resulted from earlier compensable
injuries.
(b) The department [commission] shall consider the
cumulative impact of the compensable injuries on the employee's
overall impairment in determining a reduction under this section.
(c) If the combination of the compensable injuries results
in an injury compensable under Section 408D.201 [408.161], the
benefits for that injury shall be paid as provided by Section
408D.202 [408.162].
Sec. 408D.005 [408.085]. ADVANCE OF BENEFITS FOR HARDSHIP.
(a) If there is a likelihood that income benefits will be paid, the
department [commission] may grant an employee suffering financial
hardship advances as provided by this subtitle against the amount
of income benefits to which the employee may be entitled. An
advance may be ordered before or after the employee attains maximum
medical improvement. An insurance carrier shall pay the advance
ordered.
(b) An employee must apply to the department [commission]
for an advance on a form prescribed by the commissioner
[commission]. The application must describe the hardship that is
the grounds for the advance.
(c) An advance under this section may not exceed an amount
equal to four times the maximum weekly benefit for temporary income
benefits as computed under [in] Section 408.061. The department
[commission] may not grant more than three advances to a particular
employee based on the same injury.
(d) The department [commission] may not grant an advance to
an employee who is receiving, on the date of the application under
Subsection (b), at least 90 percent of the employee's net preinjury
wages under Section 408.003 or 408D.109 [408.129].
Sec. 408D.006 [408.086]. DEPARTMENT [COMMISSION]
DETERMINATION OF EXTENDED UNEMPLOYMENT OR UNDEREMPLOYMENT. (a)
During the period that impairment income benefits or supplemental
income benefits are being paid to an employee, the department
[commission] shall determine at least annually whether any extended
unemployment or underemployment is a direct result of the
employee's impairment.
(b) To make this determination, the department [commission]
may require periodic reports from the employee and the insurance
carrier and, at the insurance carrier's expense, may require
physical or other examinations, vocational assessments, or other
tests or diagnoses necessary to perform the department's duties
[its duty] under this section and Subchapter D [H].
SUBCHAPTER B [F]. TEMPORARY INCOME BENEFITS
Sec. 408D.051 [408.101]. TEMPORARY INCOME BENEFITS. (a)
An employee is entitled to temporary income benefits if the
employee has a disability and has not attained maximum medical
improvement.
(b) On the initiation of compensation as provided by Section
409.021, the insurance carrier shall pay temporary income benefits
as provided by this subchapter.
Sec. 408D.052 [408.102]. DURATION OF TEMPORARY INCOME
BENEFITS. (a) Temporary income benefits continue until the
employee reaches maximum medical improvement.
(b) The commissioner [commission] by rule shall establish a
presumption that maximum medical improvement has been reached based
on a lack of medical improvement in the employee's condition.
Sec. 408D.053 [408.103]. AMOUNT OF TEMPORARY INCOME
BENEFITS. (a) Subject to Sections 408.061 and 408.062, the amount
of a temporary income benefit is equal to:
(1) 70 percent of the amount computed by subtracting
the employee's weekly earnings after the injury from the employee's
average weekly wage; or
(2) for the first 26 weeks, 75 percent of the amount
computed by subtracting the employee's weekly earnings after the
injury from the employee's average weekly wage if the employee
earns less than $8.50 an hour.
(b) A temporary income benefit under Subsection (a)(2) may
not exceed the employee's actual earnings for the previous year. It
is presumed that the employee's actual earnings for the previous
year are equal to:
(1) the sum of the employee's wages as reported in the
most recent four quarterly wage reports to the Texas Workforce
[Employment] Commission divided by 52;
(2) the employee's wages in the single quarter of the
most recent four quarters in which the employee's earnings were
highest, divided by 13, if the department [commission] finds that
the employee's most recent four quarters' earnings reported in the
Texas Workforce [Employment] Commission wage reports are not
representative of the employee's usual earnings; or
(3) the amount the department [commission] determines
from other credible evidence to be the actual earnings for the
previous year if the Texas Workforce [Employment] Commission does
not have a wage report reflecting at least one quarter's earnings
because the employee worked outside the state during the previous
year.
(c) A presumption under Subsection (b) may be rebutted by
other credible evidence of the employee's actual earnings.
(d) The Texas Workforce [Employment] Commission shall
provide information required under this section in the manner most
efficient for transferring the information.
(e) For purposes of Subsection (a), if an employee is
offered a bona fide position of employment that the employee is
reasonably capable of performing, given the physical condition of
the employee and the geographic accessibility of the position to
the employee, the employee's weekly earnings after the injury are
equal to the weekly wage for the position offered to the employee.
Sec. 408D.054 [408.104]. MAXIMUM MEDICAL IMPROVEMENT AFTER
SPINAL SURGERY. (a) On application by either the employee or the
insurance carrier, the commissioner [commission] by order may
extend the 104-week period described by Section 401.011(30)(B) if
the employee has had spinal surgery, or has been approved for spinal
surgery under Section 408A.010 [408.026] and commissioner
[commission] rules, within 12 weeks before the expiration of the
104-week period. If an order is issued under this section, the
order shall extend the statutory period for maximum medical
improvement to a date certain, based on medical evidence presented
to the department [commission].
(b) Either the employee or the insurance carrier may dispute
an application for extension made under this section. A dispute
under this subsection is subject to Chapter 410.
(c) The commissioner [commission] shall adopt rules to
implement this section, including rules establishing procedures
for requesting and disputing an extension.
Sec. 408D.055 [408.105]. SALARY CONTINUATION IN LIEU OF
TEMPORARY INCOME BENEFITS. (a) In lieu of payment of temporary
income benefits under this subchapter, an employer may continue to
pay the salary of an employee who sustains a compensable injury
under a contractual obligation between the employer and employee,
such as a collective bargaining agreement, written agreement, or
policy.
(b) Salary continuation may include wage supplementation
if:
(1) employer reimbursement is not sought from the
carrier as provided by Section 408D.107 [408.127]; and
(2) the supplementation does not affect the employee's
eligibility for any future income benefits.
SUBCHAPTER C [G]. IMPAIRMENT INCOME BENEFITS
Sec. 408D.101 [408.121]. IMPAIRMENT INCOME BENEFITS. (a)
An employee's entitlement to impairment income benefits begins on
the day after the date the employee reaches maximum medical
improvement and ends on the earlier of:
(1) the date of expiration of a period computed at the
rate of three weeks for each percentage point of impairment; or
(2) the date of the employee's death.
(b) The insurance carrier shall begin to pay impairment
income benefits not later than the fifth day after the date on which
the insurance carrier receives the doctor's report certifying
maximum medical improvement. Impairment income benefits shall be
paid for a period based on the impairment rating, unless that rating
is disputed under Subsection (c).
(c) If the insurance carrier disputes the impairment rating
used under Subsection (a), the carrier shall pay the employee
impairment income benefits for a period based on the carrier's
reasonable assessment of the correct rating.
Sec. 408D.102 [408.122]. ELIGIBILITY FOR IMPAIRMENT INCOME
BENEFITS; DESIGNATED DOCTOR. (a) A claimant may not recover
impairment income benefits unless evidence of impairment based on
an objective clinical or laboratory finding exists. If the finding
of impairment is made by a doctor chosen by the claimant and the
finding is contested, a designated doctor or a doctor selected by
the insurance carrier must be able to confirm the objective
clinical or laboratory finding on which the finding of impairment
is based.
(b) To be eligible to serve as a designated doctor, a doctor
must meet specific qualifications, including training in the
determination of impairment ratings. The department [executive
director] shall develop qualification standards and administrative
policies to implement this subsection, and the commissioner
[commission] may adopt rules as necessary. If medical benefits are
provided through a provider network, the designated doctor must be
a health care practitioner under the provider network. The
designated doctor doing the review must be trained and experienced
with the treatment and procedures used by the doctor treating the
patient's medical condition, and the treatment and procedures
performed must be within the scope of practice of the designated
doctor. A designated doctor's credentials must be appropriate for
the issue in question and the injured employee's medical condition.
(c) The report of the designated doctor has presumptive
weight, and the department [commission] shall base its
determination of whether the employee has reached maximum medical
improvement on the report unless the great weight of the other
medical evidence is to the contrary.
Sec. 408D.103 [408.123]. CERTIFICATION OF MAXIMUM MEDICAL
IMPROVEMENT; EVALUATION OF IMPAIRMENT RATING. (a) After an
employee has been certified by a doctor as having reached maximum
medical improvement, the certifying doctor shall evaluate the
condition of the employee and assign an impairment rating using the
impairment rating guidelines described by Section 408D.104
[408.124]. If the certification and evaluation are performed by a
doctor other than the employee's treating doctor, the certification
and evaluation shall be submitted to the treating doctor, and the
treating doctor shall indicate agreement or disagreement with the
certification and evaluation.
(b) A certifying doctor shall issue a written report
certifying that maximum medical improvement has been reached,
stating the employee's impairment rating, and providing any other
information required by the department [commission] to:
(1) the department [commission];
(2) the employee; and
(3) the insurance carrier.
(c) If an employee is not certified as having reached
maximum medical improvement before the expiration of 102 weeks
after the date income benefits begin to accrue, the department
[commission] shall notify the treating doctor of the requirements
of this subchapter.
(d) Except as otherwise provided by this section, an
employee's first valid certification of maximum medical
improvement and first valid assignment of an impairment rating is
final if the certification or assignment is not disputed before the
91st day after the date written notification of the certification
or assignment is provided to the employee and the carrier by
verifiable means.
(e) An employee's first certification of maximum medical
improvement or assignment of an impairment rating may be disputed
after the period described by Subsection (d) if:
(1) compelling medical evidence exists of:
(A) a significant error by the certifying doctor
in applying the appropriate American Medical Association
guidelines or in calculating the impairment rating;
(B) a clearly mistaken diagnosis or a previously
undiagnosed medical condition; or
(C) improper or inadequate treatment of the
injury before the date of the certification or assignment that
would render the certification or assignment invalid; or
(2) other compelling circumstances exist as
prescribed by commissioner [commission] rule.
(f) If an employee has not been certified as having reached
maximum medical improvement before the expiration of 104 weeks
after the date income benefits begin to accrue or the expiration
date of any extension of benefits under Section 408D.054 [408.104],
the impairment rating assigned after the expiration of either of
those periods is final if the impairment rating is not disputed
before the 91st day after the date written notification of the
certification or assignment is provided to the employee and the
carrier by verifiable means. A certification or assignment may be
disputed after the 90th day only as provided by Subsection (e).
(g) If an employee's disputed certification of maximum
medical improvement or assignment of impairment rating is finally
modified, overturned, or withdrawn, the first certification or
assignment made after the date of the modification, overturning, or
withdrawal becomes final if the certification or assignment is not
disputed before the 91st day after the date notification of the
certification or assignment is provided to the employee and the
carrier by verifiable means. A certification or assignment may be
disputed after the 90th day only as provided by Subsection (e).
Sec. 408D.104 [408.124]. IMPAIRMENT RATING GUIDELINES.
(a) An award of an impairment income benefit, whether by the
department [commission] or a court, must be based [shall be made] on
an impairment rating determined using the impairment rating
guidelines described by [in] this section.
(b) For determining the existence and degree of an
employee's impairment, the department [commission] shall use
"Guides to the Evaluation of Permanent Impairment," third edition,
second printing, dated February 1989, published by the American
Medical Association.
(c) Notwithstanding Subsection (b), the commissioner
[commission] by rule may adopt the fourth edition of the "Guides to
the Evaluation of Permanent Impairment," published by the American
Medical Association, or a subsequent edition of those guides, for
determining the existence and degree of an employee's impairment.
Sec. 408D.105 [408.125]. DISPUTE AS TO IMPAIRMENT RATING;
ADMINISTRATIVE VIOLATION. (a) If an impairment rating is
disputed, the department [commission] shall direct the employee to
the next available doctor on the department's [commission's] list
of designated doctors, as provided by Section 408.0041.
(b) The designated doctor shall report in writing to the
department [commission].
(c) The report of the designated doctor shall have
presumptive weight, and the department [commission] shall base the
impairment rating on that report unless the great weight of the
other medical evidence is to the contrary. If the great weight of
the medical evidence contradicts the impairment rating contained in
the report of the designated doctor chosen by the department
[commission], the department [commission] shall adopt the
impairment rating of one of the other doctors.
(d) To avoid undue influence on a person selected as a
designated doctor under this section, only the injured employee or
an appropriate member of the staff of the department [commission]
may communicate with the designated doctor about the case regarding
the injured employee's medical condition or history before the
examination of the injured employee by the designated doctor.
After that examination is completed, communication with the
designated doctor regarding the injured employee's medical
condition or history may be made only through appropriate
department [commission] staff members. The designated doctor may
initiate communication with any doctor who has previously treated
or examined the injured employee for the work-related injury.
(e) Notwithstanding Subsection (d), the treating doctor and
the insurance carrier are both responsible for sending to the
designated doctor all the injured employee's medical records that
are in their possession and that relate to the issue to be evaluated
by the designated doctor. The treating doctor and the insurance
carrier may send the records without a signed release from the
employee. The designated doctor is authorized to receive the
employee's confidential medical records to assist in the resolution
of disputes. The treating doctor and the insurance carrier may also
send the designated doctor an analysis of the injured employee's
medical condition, functional abilities, and return-to-work
opportunities.
(f) A violation of Subsection (d) is a Class C
administrative violation.
Sec. 408D.106 [408.126]. AMOUNT OF IMPAIRMENT INCOME
BENEFITS. Subject to Sections 408.061 and 408.062, an impairment
income benefit is equal to 70 percent of the employee's average
weekly wage.
Sec. 408D.107 [408.127]. REDUCTION OF IMPAIRMENT INCOME
BENEFITS. (a) An insurance carrier shall reduce impairment income
benefits to an employee by an amount equal to employer payments made
under Section 408.003 that are not reimbursed or reimbursable under
that section.
(b) The insurance carrier shall remit the amount of a
reduction under this section to the employer who made the payments.
(c) The commissioner [commission] shall adopt rules and
forms to ensure the full reporting and the accuracy of reductions
and reimbursements made under this section.
Sec. 408D.108 [408.128]. COMMUTATION OF IMPAIRMENT INCOME
BENEFITS. (a) An employee may elect to commute the remainder of
the impairment income benefits to which the employee is entitled if
the employee has returned to work for at least three months, earning
at least 80 percent of the employee's average weekly wage.
(b) An employee who elects to commute impairment income
benefits is not entitled to additional income benefits for the
compensable injury.
Sec. 408D.109 [408.129]. ACCELERATION OF IMPAIRMENT INCOME
BENEFITS. (a) On approval by the commissioner [commission] of a
written request received from an employee, an insurance carrier
shall accelerate the payment of impairment income benefits to the
employee. The accelerated payment may not exceed a rate of payment
equal to that of the employee's net preinjury wage.
(b) The commissioner [commission] shall approve the request
and order the acceleration of the benefits if the commissioner
[commission] determines that the acceleration is:
(1) required to relieve hardship; and
(2) in the overall best interest of the employee.
(c) The duration of the impairment income benefits to which
the employee is entitled shall be reduced to offset the increased
payments caused by the acceleration taking into consideration the
discount for present payment computed at the rate provided under
Section 401.023.
(d) The commissioner [commission] may prescribe forms
necessary to implement this section.
SUBCHAPTER D [H]. SUPPLEMENTAL INCOME BENEFITS
Sec. 408D.151 [408.141]. AWARD OF SUPPLEMENTAL INCOME
BENEFITS. An award of a supplemental income benefit, whether by the
department [commission] or a court, shall be made in accordance
with this subchapter.
Sec. 408D.152 [408.142]. SUPPLEMENTAL INCOME BENEFITS.
(a) An employee is entitled to supplemental income benefits if on
the expiration of the impairment income benefit period computed
under Section 408D.101(a)(1) [408.121(a)(1)] the employee:
(1) has an impairment rating of 15 percent or more as
determined by this subtitle from the compensable injury;
(2) has not returned to work or has returned to work
earning less than 80 percent of the employee's average weekly wage
as a direct result of the employee's impairment;
(3) has not elected to commute a portion of the
impairment income benefit under Section 408D.108 [408.128]; and
(4) has complied with the requirements adopted under
Section 408D.153 [attempted in good faith to obtain employment
commensurate with the employee's ability to work].
(b) If an employee is not entitled to supplemental income
benefits at the time of payment of the final impairment income
benefit because the employee is earning at least 80 percent of the
employee's average weekly wage, the employee may become entitled to
supplemental income benefits at any time within one year after the
date the impairment income benefit period ends if:
(1) the employee earns wages for at least 90 days that
are less than 80 percent of the employee's average weekly wage;
(2) the employee meets the requirements of Subsections
(a)(1), (3), and (4); and
(3) the decrease in earnings is a direct result of the
employee's impairment from the compensable injury.
Sec. 408D.153. WORK SEARCH COMPLIANCE STANDARDS. (a) The
commissioner by rule shall adopt compliance standards for
supplemental income benefit recipients that require each recipient
to demonstrate an active effort to obtain employment. To be
eligible to receive supplemental income benefits under this
chapter, a recipient must provide evidence satisfactory to the
department of:
(1) active participation in a vocational
rehabilitation program conducted by the Department of Assistive and
Rehabilitative Services or a private vocational rehabilitation
provider;
(2) active participation in work search efforts
conducted through the Texas Workforce Commission; or
(3) active work search efforts documented by job
applications submitted by the recipient.
(b) In adopting rules under this section, the commissioner
shall:
(1) establish the level of activity that a recipient
should have with the Texas Workforce Commission and the Department
of Assistive and Rehabilitative Services;
(2) define the number of job applications required to
be submitted by a recipient to satisfy the work search
requirements; and
(3) consider factors affecting the availability of
employment, including recognition of access to employment in rural
areas, economic conditions, and other appropriate employment
availability factors.
(c) The commissioner may consult with the Texas Workforce
Commission, the Department of Assistive and Rehabilitative
Services, and other appropriate entities in adopting rules under
this section.
Sec. 408D.154. RETURN-TO-WORK GOALS AND ASSISTANCE. (a)
The department shall assist recipients of supplemental income
benefits to return to the workforce. The department shall develop
improved data sharing, within the standards of federal privacy
requirements, with all appropriate state agencies and workforce
programs to inform the department of changes needed to assist
supplemental income benefit recipients to successfully reenter the
workforce.
(b) The department shall train staff dealing with
supplemental income benefits to respond to questions and assist
injured employees in their effort to return to the workforce. If
the department determines that an injured employee is unable to
ever return to the workforce, the department shall inform the
employee of possible eligibility for other forms of benefits, such
as social security disability income benefits.
(c) As necessary to implement the requirements of this
section, the department shall:
(1) attempt to remove any barriers to successful
employment that are identified at the department, the Texas
Workforce Commission, the Department of Assistive and
Rehabilitative Services, and private vocational rehabilitation
programs;
(2) ensure that data is tracked among the department,
the Texas Workforce Commission, the Department of Assistive and
Rehabilitative Services, and insurance carriers, including outcome
data;
(3) establish a mechanism to refer supplemental income
benefit recipients to the Texas Workforce Commission and local
workforce development centers for employment opportunities; and
(4) develop a mechanism to promote employment success
that includes post-referral contacts by the department with
supplemental income benefit recipients.
Sec. 408D.155 [408.143]. EMPLOYEE STATEMENT. (a) After
the department's [commission's] initial determination of
supplemental income benefits, the employee must file a statement
with the insurance carrier stating:
(1) that the employee has earned less than 80 percent
of the employee's average weekly wage as a direct result of the
employee's impairment;
(2) the amount of wages the employee earned in the
filing period provided by Subsection (b); and
(3) that the employee has complied with the
requirements adopted under Section 408D.153 [in good faith sought
employment commensurate with the employee's ability to work].
(b) The statement required under this section must be filed
quarterly on a form and in the manner provided by the department
[commission]. The department [commission] may modify the filing
period as appropriate to an individual case.
(c) Failure to file a statement under this section relieves
the insurance carrier of liability for supplemental income benefits
for the period during which a statement is not filed.
Sec. 408D.156 [408.144]. COMPUTATION OF SUPPLEMENTAL
INCOME BENEFITS. (a) Supplemental income benefits are calculated
quarterly and paid monthly.
(b) Subject to Section 408.061, the amount of a supplemental
income benefit for a week is equal to 80 percent of the amount
computed by subtracting the weekly wage the employee earned during
the reporting period provided by Section 408D.155(b) [408.143(b)]
from 80 percent of the employee's average weekly wage determined
under Section 408.041, 408.042, 408.043, [or] 408.044, 408.0445, or
408.0446.
(c) For the purposes of this subchapter, if an employee is
offered a bona fide position of employment that the employee is
capable of performing, given the physical condition of the employee
and the geographic accessibility of the position to the employee,
the employee's weekly wages are considered to be equal to the weekly
wages for the position offered to the employee.
Sec. 408D.157 [408.145]. PAYMENT OF SUPPLEMENTAL INCOME
BENEFITS. An insurance carrier shall pay supplemental income
benefits beginning not later than the seventh day after the
expiration date of the employee's impairment income benefit period
and shall continue to pay the benefits in a timely manner.
Sec. 408D.158 [408.146]. TERMINATION OF SUPPLEMENTAL
INCOME BENEFITS; REINITIATION. (a) If an employee earns wages that
are at least 80 percent of the employee's average weekly wage for at
least 90 days during a time that the employee receives supplemental
income benefits, the employee ceases to be entitled to supplemental
income benefits for the filing period.
(b) Supplemental income benefits terminated under this
section shall be reinitiated when the employee:
(1) satisfies the conditions of Section 408D.152(b)
[408.142(b)]; and
(2) files the statement required under Section
408D.155 [408.143].
(c) Notwithstanding any other provision of this section, an
employee who is not entitled to supplemental income benefits for 12
consecutive months ceases to be entitled to any additional income
benefits for the compensable injury.
Sec. 408D.159 [408.147]. CONTEST OF SUPPLEMENTAL INCOME
BENEFITS BY INSURANCE CARRIER; ATTORNEY'S FEES. (a) An insurance
carrier may request a contested case hearing [benefit review
conference] to contest an employee's entitlement to supplemental
income benefits or the amount of supplemental income benefits.
(b) If an insurance carrier fails to [make a] request [for]
a contested case hearing [benefit review conference] within 10 days
after the date of the expiration of the impairment income benefit
period or within 10 days after receipt of the employee's statement,
the insurance carrier waives the right to contest entitlement to
supplemental income benefits and the amount of supplemental income
benefits for that period of supplemental income benefits.
(c) If an insurance carrier disputes a department
[commission] determination that an employee is entitled to
supplemental income benefits or the amount of supplemental income
benefits due and the employee prevails on any disputed issue, the
insurance carrier is liable for reasonable and necessary attorney's
fees incurred by the employee as a result of the insurance carrier's
dispute and for supplemental income benefits accrued but not paid
and interest on that amount, according to Section 408.064.
Attorney's fees awarded under this subsection are not subject to
Sections 408.221(b), (f), and (i).
Sec. 408D.160 [408.148]. EMPLOYEE DISCHARGE AFTER
TERMINATION. The department [commission] may reinstate
supplemental income benefits to an employee who is discharged
within 12 months of the date of losing entitlement to supplemental
income benefits under Section 408D.158(c) [408.146(c)] if the
department [commission] finds that the employee was discharged at
that time with the intent to deprive the employee of supplemental
income benefits.
Sec. 408D.161 [408.149]. STATUS REVIEW; HEARING [BENEFIT
REVIEW CONFERENCE]. (a) Not more than once in each period of 12
calendar months, an employee and an insurance carrier each may
request the department [commission] to review the status of the
employee and determine whether the employee's unemployment or
underemployment is a direct result of impairment from the
compensable injury. The department shall conduct the review not
later than the 10th day after the date on which the department
receives the request.
(b) Either party may request a contested case hearing
[benefit review conference] to contest a determination of the
department [commission] at any time, subject only to the limits
placed on the insurance carrier by Section 408D.159 [408.147].
Sec. 408D.162 [408.150]. VOCATIONAL REHABILITATION. (a)
The department [commission] shall refer an employee to the
Department of Assistive and Rehabilitative Services [Texas
Rehabilitation Commission] with a recommendation for appropriate
services if the department [commission] determines that an employee
entitled to supplemental income benefits could be materially
assisted by vocational rehabilitation or training in returning to
employment or returning to employment more nearly approximating the
employee's preinjury employment. The department [commission]
shall also notify insurance carriers of the need for vocational
rehabilitation or training services. The insurance carrier may
provide services through a private provider of vocational
rehabilitation services under Section 409.012.
(b) An employee who refuses services or refuses to cooperate
with services provided under this section by the Department of
Assistive and Rehabilitative Services [Texas Rehabilitation
Commission] or a private provider loses entitlement to supplemental
income benefits.
Sec. 408D.163 [408.151]. MEDICAL EXAMINATIONS FOR
SUPPLEMENTAL INCOME BENEFITS. (a) On or after the second
anniversary of the date the department [commission] makes the
initial award of supplemental income benefits, an insurance carrier
may not require an employee who is receiving supplemental income
benefits to submit to a medical examination more than annually if,
in the preceding year, the employee's medical condition resulting
from the compensable injury has not improved sufficiently to allow
the employee to return to work.
(b) If a dispute exists as to whether the employee's medical
condition has improved sufficiently to allow the employee to return
to work, the department [commission] shall direct the employee to
be examined by a designated doctor chosen by the department
[commission]. The designated doctor shall report to the department
[commission]. The report of the designated doctor has presumptive
weight, and the department [commission] shall base its
determination of whether the employee's medical condition has
improved sufficiently to allow the employee to return to work on
that report unless the great weight of the other medical evidence is
to the contrary.
(c) The department [commission] may require an employee to
whom Subsection (a) applies to submit to a medical examination
under Section 408.004 only to determine whether the employee's
medical condition is a direct result of impairment from a
compensable injury.
SUBCHAPTER E [I]. LIFETIME INCOME BENEFITS
Sec. 408D.201 [408.161]. LIFETIME INCOME BENEFITS. (a)
Lifetime income benefits are paid until the death of the employee
for:
(1) total and permanent loss of sight in both eyes;
(2) loss of both feet at or above the ankle;
(3) loss of both hands at or above the wrist;
(4) loss of one foot at or above the ankle and the loss
of one hand at or above the wrist;
(5) an injury to the spine that results in permanent
and complete paralysis of both arms, both legs, or one arm and one
leg;
(6) a physically traumatic injury to the brain
resulting in an incurable mental disability or impairment [insanity
or imbecility]; or
(7) third degree burns that cover at least 40 percent
of the body and require grafting, or third degree burns covering the
majority of either both hands or one hand and the face.
(b) For purposes of Subsection (a), the total and permanent
loss of use of a body part is the loss of that body part.
(c) Subject to Section 408.061, the amount of lifetime
income benefits is equal to 75 percent of the employee's average
weekly wage. Benefits being paid shall be increased at a rate of
three percent a year notwithstanding Section 408.061.
(d) An insurance carrier may pay lifetime income benefits
through an annuity if the annuity agreement meets the terms and
conditions for annuity agreements adopted by the commissioner
[commission] by rule. The establishment of an annuity under this
subsection does not relieve the insurance carrier of the liability
under this title for ensuring that the lifetime income benefits are
paid.
Sec. 408D.202 [408.162]. SUBSEQUENT INJURY FUND BENEFITS.
(a) If a subsequent compensable injury, with the effects of a
previous injury, results in a condition for which the injured
employee is entitled to lifetime income benefits, the insurance
carrier is liable for the payment of benefits for the subsequent
injury only to the extent that the subsequent injury would have
entitled the employee to benefits had the previous injury not
existed.
(b) The subsequent injury fund shall compensate the
employee for the remainder of the lifetime income benefits to which
the employee is entitled.
SECTION 1.252. Subchapter J, Chapter 408, Labor Code, is
redesignated as Chapter 408E, Labor Code, and amended to read as
follows:
CHAPTER 408E. WORKERS' COMPENSATION BENEFITS:
[SUBCHAPTER J.] DEATH AND BURIAL BENEFITS
Sec. 408E.001 [408.181]. DEATH BENEFITS. (a) An insurance
carrier shall pay death benefits to the legal beneficiary if a
compensable injury to the employee results in death.
(b) Subject to Section 408.061, the amount of a death
benefit is equal to 75 percent of the employee's average weekly
wage.
(c) The commissioner [commission] by rule shall establish
requirements for agreements under which death benefits may be paid
monthly. Death benefits may be paid monthly only:
(1) on the request of the legal beneficiary and the
agreement of the legal beneficiary and the insurance carrier; and
(2) in compliance with the requirements adopted by the
commissioner [commission].
(d) An insurance carrier may pay death benefits through an
annuity if the annuity agreement meets the terms and conditions for
annuity agreements adopted by the commissioner [commission] by
rule. The establishment of an annuity under this subsection does
not relieve the insurance carrier of the liability under this title
for ensuring that the death benefits are paid.
Sec. 408E.002 [408.182]. DISTRIBUTION OF DEATH BENEFITS.
(a) In this section:
(1) "Eligible child" means a child of a deceased
employee if the child:
(A) is a minor;
(B) is enrolled as a full-time student in an
accredited educational institution and is less than 25 years of
age; or
(C) is a dependent of the deceased employee at
the time of the employee's death.
(2) "Eligible grandchild" means a grandchild of a
deceased employee who is a dependent of the deceased employee and
whose parent is not an eligible child.
(3) "Eligible spouse" means the surviving spouse of a
deceased employee unless the spouse abandoned the employee for
longer than the year preceding the death without good cause, as
determined by the department.
(b) If there is an eligible child or grandchild and an
eligible spouse, half of the death benefits shall be paid to the
eligible spouse and half shall be paid in equal shares to the
eligible children. If an eligible child has predeceased the
employee, death benefits that would have been paid to that child
shall be paid in equal shares per stirpes to the children of the
deceased child.
(c) [(b)] If there is an eligible spouse and no eligible
child or grandchild, all the death benefits shall be paid to the
eligible spouse.
(d) [(c)] If there is an eligible child or grandchild and no
eligible spouse, the death benefits shall be paid to the eligible
children or grandchildren.
(e) [(d)] If there is no eligible spouse, no eligible child,
and no eligible grandchild, the death benefits shall be paid in
equal shares to surviving dependents of the deceased employee who
are parents, stepparents, siblings, or grandparents of the
deceased.
(f) [(e)] If an employee is not survived by legal
beneficiaries, the death benefits shall be paid to the subsequent
injury fund under Section 403.007.
[(f) In this section:
[(1) "Eligible child" means a child of a deceased
employee if the child is:
[(A) a minor;
[(B) enrolled as a full-time student in an
accredited educational institution and is less than 25 years of
age; or
[(C) a dependent of the deceased employee at the
time of the employee's death.
[(2) "Eligible grandchild" means a grandchild of a
deceased employee who is a dependent of the deceased employee and
whose parent is not an eligible child.
[(3) "Eligible spouse" means the surviving spouse of a
deceased employee unless the spouse abandoned the employee for
longer than the year immediately preceding the death without good
cause, as determined by the commission.]
Sec. 408E.003 [408.183]. DURATION OF DEATH BENEFITS. (a)
Entitlement to death benefits begins on the day after the date of an
employee's death.
(b) An eligible spouse is entitled to receive death benefits
for life or until remarriage. On remarriage, the eligible spouse is
entitled to receive 104 weeks of death benefits, commuted as
provided by commissioner [commission] rule.
(c) A child who is eligible for death benefits because the
child is a minor on the date of the employee's death is entitled to
receive benefits until the child attains the age of 18.
(d) A child eligible for death benefits under Subsection (c)
who at age 18 is enrolled as a full-time student in an accredited
educational institution or a child who is eligible for death
benefits because on the date of the employee's death the child is
enrolled as a full-time student in an accredited educational
institution is entitled to receive or to continue to receive, as
appropriate, benefits until the earliest of:
(1) the date the child ceases, for a second
consecutive semester, to be enrolled as a full-time student in an
accredited educational institution;
(2) the date the child attains the age of 25; or
(3) the date the child dies.
(e) A child who is eligible for death benefits because the
child is a dependent of the deceased employee on the date of the
employee's death is entitled to receive benefits until the earlier
of:
(1) the date the child dies; or
(2) if the child is dependent:
(A) because the child is an individual with a
physical or mental disability, the date the child no longer has the
disability; or
(B) because of a reason other than a physical or
mental disability, the date of the expiration of 364 weeks of death
benefit payments.
(f) An eligible grandchild is entitled to receive death
benefits until the earlier of:
(1) the date the grandchild dies; or
(2) if the grandchild is:
(A) a minor at the time of the employee's death,
the date the grandchild ceases to be a minor; or
(B) not a minor at the time of the employee's
death, the date of the expiration of 364 weeks of death benefit
payments.
(g) Any other person entitled to death benefits is entitled
to receive death benefits until the earlier of:
(1) the date the person dies; or
(2) the date of the expiration of 364 weeks of death
benefit payments.
(h) Section 401.011(16) does not apply to the use of the
term "disability" in this section.
Sec. 408E.004 [408.184]. REDISTRIBUTION OF DEATH BENEFITS.
(a) If a legal beneficiary dies or otherwise becomes ineligible for
death benefits, benefits shall be redistributed to the remaining
legal beneficiaries as provided by Sections 408E.002 [408.182] and
408E.003 [408.183].
(b) If a spouse ceases to be eligible because of remarriage,
the benefits payable to the remaining legal beneficiaries remain
constant for 104 weeks. After the 104th week, the spouse's share of
benefits shall be redistributed as provided by Sections 408E.002
[408.182] and 408E.003 [408.183].
(c) If all legal beneficiaries, other than the subsequent
injury fund, cease to be eligible and the insurance carrier has not
made 364 weeks of full death benefit payments, including the
remarriage payment, the insurance carrier shall pay to the
subsequent injury fund an amount computed by subtracting the total
amount paid from the amount that would be paid for 364 weeks of
death benefits.
Sec. 408E.005 [408.185]. EFFECT OF BENEFICIARY DISPUTE;
ATTORNEY'S FEES. On settlement of a case in which the insurance
carrier admits liability for death benefits but a dispute exists as
to the proper beneficiary or beneficiaries, the settlement shall be
paid in periodic payments as provided by law, with a reasonable
attorney's fee not to exceed 25 percent of the settlement, paid
periodically, and based on time and expenses.
Sec. 408E.006 [408.186]. BURIAL BENEFITS. (a) If the
death of an employee results from a compensable injury, the
insurance carrier shall pay to the person who incurred liability
for the costs of burial the lesser of:
(1) the actual costs incurred for reasonable burial
expenses; or
(2) $6,000.
(b) If the employee died away from the employee's usual
place of employment, the insurance carrier shall pay the reasonable
cost of transporting the body, not to exceed the cost of
transporting the body to the employee's usual place of employment.
Sec. 408E.007 [408.187]. AUTOPSY. (a) If in a claim for
death benefits based on an occupational disease an autopsy is
necessary to determine the cause of death, the department
[commission] may, after opportunity for hearing, order the legal
beneficiaries of a deceased employee to permit an autopsy.
(b) A legal beneficiary is entitled to have a representative
present at an autopsy ordered under this section.
(c) The department [commission] shall require the insurance
carrier to pay the costs of a procedure ordered under this section.
PART 12. AMENDMENTS TO CHAPTER 409, LABOR CODE
SECTION 1.301. Section 409.002, Labor Code, is amended to
read as follows:
Sec. 409.002. FAILURE TO FILE NOTICE OF INJURY. Failure to
notify an employer as required by Section 409.001(a) relieves the
employer and the employer's insurance carrier of liability under
this subtitle unless:
(1) the employer, a person eligible to receive notice
under Section 409.001(b), or the employer's insurance carrier has
actual knowledge of the employee's injury;
(2) the department [commission] determines that good
cause exists for failure to provide notice in a timely manner; or
(3) the employer or the employer's insurance carrier
does not contest the claim.
SECTION 1.302. Section 409.003, Labor Code, is amended to
read as follows:
Sec. 409.003. CLAIM FOR COMPENSATION. An employee or a
person acting on the employee's behalf shall file with the
department [commission] a claim for compensation for an injury not
later than one year after the date on which:
(1) the injury occurred; or
(2) if the injury is an occupational disease, the
employee knew or should have known that the disease was related to
the employee's employment.
SECTION 1.303. Section 409.004, Labor Code, is amended to
read as follows:
Sec. 409.004. EFFECT OF FAILURE TO FILE CLAIM FOR
COMPENSATION. Failure to file a claim for compensation with the
department [commission] as required under Section 409.003 relieves
the employer and the employer's insurance carrier of liability
under this subtitle unless:
(1) good cause exists for failure to file a claim in a
timely manner; or
(2) the employer or the employer's insurance carrier
does not contest the claim.
SECTION 1.304. Sections 409.005(d)-(f) and (h)-(k), Labor
Code, are amended to read as follows:
(d) The insurance carrier shall file the report of the
injury on behalf of the policyholder. Except as provided by
Subsection (e), the insurance carrier must electronically file the
report with the department [commission] not later than the seventh
day after the date on which the carrier receives the report from the
employer.
(e) The commissioner [executive director] may waive the
electronic filing requirement under Subsection (d) and allow an
insurance carrier to mail or deliver the report to the department
[commission] not later than the seventh day after the date on which
the carrier receives the report from the employer.
(f) A report required under this section may not be
considered to be an admission by or evidence against an employer or
an insurance carrier in a proceeding before the department
[commission] or a court in which the facts set out in the report are
contradicted by the employer or insurance carrier.
(h) The commissioner [commission] may adopt rules relating
to:
(1) the information that must be contained in a report
required under this section, including the summary of rights and
responsibilities required under Subsection (g); and
(2) the development and implementation of an
electronic filing system for injury reports under this section.
(i) An employer and insurance carrier shall file subsequent
reports as required by commissioner [commission] rule.
(j) The employer shall, on the written request of the
employee, a doctor, the insurance carrier, or the department
[commission], notify the employee, the employee's treating doctor
if known to the employer, and the insurance carrier of the existence
or absence of opportunities for modified duty or a modified duty
return-to-work program available through the employer. If those
opportunities or that program exists, the employer shall identify
the employer's contact person and provide other information to
assist the doctor, the employee, and the insurance carrier to
assess modified duty or return-to-work options.
(k) This section does not prohibit the commissioner
[commission] from imposing requirements relating to return-to-work
under other authority granted to the department [commission] in
this subtitle.
SECTION 1.305. Sections 409.006(b) and (c), Labor Code, are
amended to read as follows:
(b) The record shall be available to the department
[commission] at reasonable times and under conditions prescribed by
the commissioner [commission].
(c) The commissioner [commission] may adopt rules relating
to the information that must be contained in an employer record
under this section.
SECTION 1.306. Section 409.007(a), Labor Code, is amended
to read as follows:
(a) A person must file a claim for death benefits with the
department [commission] not later than the first anniversary of the
date of the employee's death.
SECTION 1.307. Section 409.009, Labor Code, is amended to
read as follows:
Sec. 409.009. SUBCLAIMS. A person may file a written claim
with the department [commission] as a subclaimant if the person
has:
(1) provided compensation, including health care
provided by a health care insurer, directly or indirectly, to or for
an employee or legal beneficiary; and
(2) sought and been refused reimbursement from the
insurance carrier.
SECTION 1.308. Section 409.010, Labor Code, is amended to
read as follows:
Sec. 409.010. INFORMATION PROVIDED TO EMPLOYEE OR LEGAL
BENEFICIARY. Immediately on receiving notice of an injury or death
from any person, the department [commission] shall mail to the
employee or legal beneficiary a clear and concise description of:
(1) the services provided by:
(A) the department; and
(B) the office of injured employee counsel
[commission], including the services of the ombudsman program;
(2) the department's [commission's] procedures under
this subtitle; and
(3) the person's rights and responsibilities under
this subtitle.
SECTION 1.309. Sections 409.011(a) and (c), Labor Code, are
amended to read as follows:
(a) Immediately on receiving notice of an injury or death
from any person, the department [commission] shall mail to the
employer a description of:
(1) the services provided by the department and the
office of injured employee counsel [commission];
(2) the department's [commission's] procedures under
this subtitle; and
(3) the employer's rights and responsibilities under
this subtitle.
(c) The department [commission] is not required to provide
the information to an employer more than once during a calendar
year.
SECTION 1.310. Section 409.012, Labor Code, is amended to
read as follows:
Sec. 409.012. SKILLED CASE MANAGEMENT; VOCATIONAL
REHABILITATION [INFORMATION]. (a) The department shall require an
insurance carrier to evaluate a compensable injury in which the
injured employee sustains an injury that results in lost time from
employment as early as is practicable to determine if skilled case
management is necessary for the injured employee's case.
(b) The department [commission] shall analyze each report
of injury received from an employer under this chapter to determine
whether the injured employee would be assisted by vocational
rehabilitation. [(b)] If the department [commission] determines
that an injured employee would be assisted by vocational
rehabilitation, the department [commission] shall notify:
(1) the injured employee in writing of the services
and facilities available through the Department of Assistive and
Rehabilitative Services [Texas Rehabilitation Commission] and
private providers of vocational rehabilitation; and
(2) [. The commission shall notify] the Department of
Assistive and Rehabilitative Services [Texas Rehabilitation
Commission] and the affected insurance carrier that the injured
employee has been identified as one who could be assisted by
vocational rehabilitation.
(c) The department [commission] shall cooperate with the
office of injured employee counsel, the Department of Assistive and
Rehabilitative Services, [Texas Rehabilitation Commission] and
private providers of vocational rehabilitation in the provision of
services and facilities to employees by the Department of Assistive
and Rehabilitative Services [Texas Rehabilitation Commission].
(d) A private provider of vocational rehabilitation
services may register with the department [commission].
(e) The commissioner [commission] by rule may require that a
private provider of vocational rehabilitation services maintain
certain credentials and qualifications in order to provide services
in connection with a workers' compensation insurance claim.
SECTION 1.311. Section 409.013, Labor Code, is amended to
read as follows:
Sec. 409.013. PLAIN LANGUAGE INFORMATION; NOTIFICATION OF
INJURED EMPLOYEE [WORKER]. (a) The department [commission] shall
develop information for public dissemination about the benefit
process and the compensation procedures established under this
chapter. The information must be written in plain language and must
be available in English and Spanish.
(b) On receipt of a report under Section 409.005, the
department [commission] shall contact the affected employee by mail
or by telephone and shall provide the information required under
Subsection (a) to that employee, together with any other
information that may be prepared by the office of injured employee
counsel or the department [commission] for public dissemination
that relates to the employee's situation, such as information
relating to back injuries or occupational diseases.
SECTION 1.312. Section 409.021, Labor Code, is amended to
read as follows:
Sec. 409.021. INITIATION OF BENEFITS; DUTIES OF INSURANCE
CARRIER [CARRIER'S REFUSAL]; ADMINISTRATIVE VIOLATION. (a) An
insurance carrier shall initiate compensation under this subtitle
promptly. Not later than the 15th day after the date on which an
insurance carrier receives written notice of an injury, the
insurance carrier shall:
(1) begin the payment of benefits as required by this
subtitle; or
(2) notify the department [commission] and the
employee in writing of its refusal to pay and advise the employee
of:
(A) the right to request a contested case hearing
[benefit review conference]; and
(B) the means to obtain additional information
from the department [commission].
(b) [(a-1)] An insurance carrier that fails to comply with
Subsection (a) does not waive the carrier's right to contest the
compensability of the injury as provided by Subsection (e) [(c)]
but commits an administrative violation subject to Subsection (g)
[(e)].
(c) [(a-2)] An insurance carrier is not required to comply
with Subsection (a) if the insurance carrier has accepted the claim
as a compensable injury and income or death benefits have not yet
accrued but will be paid by the insurance carrier when the benefits
accrue and are due.
(d) [(b)] An insurance carrier shall notify the department
[commission] in writing of the initiation of income or death
benefit payments in the manner prescribed by commissioner
[commission] rules.
(e) [(c)] If an insurance carrier does not contest the
compensability of an injury on or before the 60th day after the date
on which the insurance carrier is notified of the injury, the
insurance carrier waives its right to contest compensability. The
initiation of payments by an insurance carrier does not affect the
right of the insurance carrier to continue to investigate or deny
the compensability of an injury during the 60-day period.
(f) [(d)] An insurance carrier may reopen the issue of the
compensability of an injury if there is a finding of evidence that
could not reasonably have been discovered earlier.
(g) [(e)] An insurance carrier commits a violation if the
insurance carrier does not initiate payments or file a notice of
refusal as required by this section. A violation under this
subsection shall be assessed at $500 if the carrier initiates
compensation or files a notice of refusal within five working days
of the date required by Subsection (a), $1,500 if the carrier
initiates compensation or files a notice of refusal more than five
and less than 16 working days of the date required by Subsection
(a), $2,500 if the carrier initiates compensation or files a notice
of refusal more than 15 and less than 31 working days of the date
required by Subsection (a), or $5,000 if the carrier initiates
compensation or files a notice of refusal more than 30 days after
the date required by Subsection (a). The administrative penalties
are not cumulative.
(h) [(f)] For purposes of this section, "written notice" to
a certified self-insurer occurs only on written notice to the
qualified claims servicing contractor designated by the certified
self-insurer under Section 407.061(c).
(i) [(f)] For purposes of this section:
(1) a certified self-insurer receives notice on the
date the qualified claims servicing contractor designated by the
certified self-insurer under Section 407.061(c) receives notice;
and
(2) a political subdivision that self-insures under
Section 504.011, either individually or through an interlocal
agreement with other political subdivisions, receives notice on the
date the intergovernmental risk pool or other entity responsible
for administering the claim for the political subdivision receives
notice.
(j) Each insurance carrier shall establish a single point of
contact in the carrier's office for an injured employee for whom the
carrier receives a notice of injury.
SECTION 1.313. Section 409.023(a), Labor Code, is amended
to read as follows:
(a) An insurance carrier shall continue to pay benefits
promptly as and when the benefits accrue without a final decision,
order, or other action of the commissioner [commission], except as
otherwise provided.
SECTION 1.314. Section 409.0231(b), Labor Code, is amended
to read as follows:
(b) The commissioner [commission] shall adopt rules in
consultation with the [Texas] Department of Information Resources
as necessary to implement this section, including rules prescribing
a period of benefits that is of sufficient duration to allow payment
by electronic funds transfer.
SECTION 1.315. Section 409.024, Labor Code, is amended to
read as follows:
Sec. 409.024. TERMINATION OR REDUCTION OF BENEFITS; NOTICE;
ADMINISTRATIVE VIOLATION. (a) An insurance carrier shall file
with the department [commission] a notice of termination or
reduction of benefits, including the reasons for the termination or
reduction, not later than the 10th day after the date on which
benefits are terminated or reduced.
(b) An insurance carrier commits a violation if the
insurance carrier does not have reasonable grounds to terminate or
reduce benefits, as determined by the department [commission]. A
violation under this subsection is a Class B administrative
violation.
PART 13. AMENDMENTS TO CHAPTER 410, LABOR CODE
SECTION 1.351. Section 410.002, Labor Code, is amended to
read as follows:
Sec. 410.002. LAW GOVERNING LIABILITY PROCEEDINGS. A
proceeding before the department [commission] to determine the
liability of an insurance carrier for compensation for an injury or
death under this subtitle is governed by this chapter.
SECTION 1.352. Section 410.005, Labor Code, is amended by
amending Subsections (a) and (c) and adding Subsection (d) to read
as follows:
(a) Unless the department [commission] determines that good
cause exists for the selection of a different location, a
prehearing [benefit review] conference or a contested case hearing
may not be conducted at a site more than 75 miles from the
claimant's residence at the time of the injury.
(c) An injured employee who is a party to a prehearing
conference may select the department field office at which the
prehearing conference [All appeals panel proceedings] shall be
conducted [in Travis County].
(d) Notwithstanding Subsections (a) and (c), if determined
appropriate by the commissioner, the department may conduct a
prehearing conference telephonically on agreement by the injured
employee.
SECTION 1.353. Section 410.006(a), Labor Code, is amended
to read as follows:
(a) A claimant may be represented at a prehearing [benefit
review] conference, a contested case hearing, or arbitration by an
attorney or may be assisted by an individual of the claimant's
choice who does not work for an attorney or receive a fee. An
employee of an attorney may represent a claimant if that employee:
(1) is a relative of the claimant; and
(2) does not receive a fee.
SECTION 1.354. Subchapter A, Chapter 410, Labor Code, is
amended by adding Sections 410.007 and 410.008 to read as follows:
Sec. 410.007. INFORMATION LIST. (a) The department shall
determine the type of information that is most useful to parties to
help resolve disputes regarding income benefits. That information
may include:
(1) reports regarding the compensable injury;
(2) medical information regarding the injured
employee; and
(3) wage records.
(b) The department shall publish a list developed of the
information under Subsection (a) in appropriate media, including
the department's Internet website, to provide guidance to parties
to a dispute on the type of information they should have available
at a prehearing conference or a contested case hearing.
(c) At the time a prehearing conference is scheduled, the
department shall provide a copy of the list under Subsection (b) to
each party to the dispute.
Sec. 410.008. PRECEDENT MANUAL. (a) The commissioner by
rule shall adopt a precedent manual for workers' compensation
disputes to establish better and more consistent decisions at each
level of the dispute resolution process. In developing the
precedent manual, the commissioner shall use as a model the
precedent manual developed by the Texas Workforce Commission for
appealed unemployment insurance cases.
(b) The commissioner may adopt key contested case decisions
and court decisions as precedent decisions.
(c) The department shall:
(1) publish the decisions adopted under Subsection (b)
in the precedent manual by subject areas; and
(2) make the precedent manual available on the
department's Internet website.
(d) The department shall instruct each department employee
involved in dispute resolution under this subtitle in the use of the
manual and ensure that decisions at each stage of the dispute
resolution process are made based on the precedents, as
appropriate.
SECTION 1.355. The heading to Subchapter B, Chapter 410,
Labor Code, is amended to read as follows:
SUBCHAPTER B. INITIAL DISPUTE RESOLUTION
[BENEFIT REVIEW CONFERENCE]
SECTION 1.356. Subchapter B, Chapter 410, Labor Code, is
amended by adding Sections 410.051, 410.052, and 410.053 to read as
follows:
Sec. 410.051. INFORMAL BENEFIT DISPUTE RESOLUTION. (a)
Before filing a dispute regarding income benefits with the
department, the parties to the dispute, including the claimant,
employer, and insurance carrier, must demonstrate a good faith
effort to resolve the dispute among themselves.
(b) The commissioner shall adopt rules that specify:
(1) the requirements for documentation of attempts
under Subsection (a) to resolve the dispute, including
documentation of telephone calls or written correspondence; and
(2) the standards by which an insurance carrier is
required to reconsider the issue being disputed by the claimant,
including:
(A) the identification of additional information
or explanations necessary to resolve the dispute;
(B) the name of the insurance carrier and
information as to how to contact the insurance carrier
representative who has the authority to resolve income benefit
disputes informally; and
(C) the timeframe and method by which the
insurance carrier representative will contact the claimant to
discuss a possible resolution of the dispute.
(c) If a claimant notifies an insurance carrier of an issue
requiring dispute resolution under this subchapter, the carrier,
not later than the fifth business day after the date of receipt of
the notice, shall notify the claimant acknowledging receipt of the
request for reconsideration.
(d) An insurance carrier shall acknowledge, investigate,
and resolve a request for reconsideration under this section not
later than the 15th calendar day after the date on which the carrier
receives notice of the request for reconsideration from the
claimant.
(e) A claimant may request a contested case hearing under
this subchapter if the claimant has requested reconsideration and:
(1) after reconsideration, the claimant is
dissatisfied with the insurance carrier's proposed resolution; or
(2) the claimant has not received the insurance
carrier's response to the request for reconsideration by the 15th
calendar day after the date the insurance carrier received notice
of the request for reconsideration.
(f) Failure to comply with the requirements of this section
and rules adopted by the commissioner may result, after notice and
hearing, in the determination of an administrative violation and
imposition of sanctions and administrative penalties as provided by
Chapters 82 and 84, Insurance Code.
Sec. 410.052. REQUEST FOR ARBITRATION OR CONTESTED CASE
HEARING. If the parties are unable to timely resolve a dispute
regarding income benefits through the informal dispute resolution
process required under Section 410.051, the claimant may file with
the department a request for:
(1) arbitration under Subchapter C; or
(2) a contested case hearing under Subchapter D.
Sec. 410.053. PAYMENT OF BENEFITS UNDER INTERLOCUTORY
ORDER. If the parties to a dispute regarding income benefits have
filed a request with the department under Section 410.052, the
commissioner may issue an interlocutory order for the payment of
all or part of the benefits during the pendency of the dispute. The
order may address accrued benefits, future benefits, or both
accrued benefits and future benefits.
SECTION 1.357. Section 410.102, Labor Code, is amended to
read as follows:
Sec. 410.102. ARBITRATORS; QUALIFICATIONS. (a) An
arbitrator must be an employee of the department [commission],
except that the department [commission] may contract with qualified
arbitrators on a determination of special need.
(b) An arbitrator must:
(1) be a member of the National Academy of
Arbitrators;
(2) be on an approved list of the American Arbitration
Association or Federal Mediation and Conciliation Service; or
(3) meet qualifications established by the
commissioner [commission] by rule [and be approved by an
affirmative vote of at least two commission members representing
employers of labor and at least two commission members representing
wage earners].
(c) The department [commission] shall require that each
arbitrator have appropriate training in the workers' compensation
laws of this state. The commissioner by rule [commission] shall
establish procedures to carry out this subsection.
SECTION 1.358. Section 410.103, Labor Code, is amended to
read as follows:
Sec. 410.103. DUTIES OF ARBITRATOR. An arbitrator shall:
(1) protect the interests of all parties;
(2) ensure that all relevant evidence has been
disclosed to the arbitrator and to all parties; and
(3) render an award consistent with this subtitle and
the policies of the department [commission].
SECTION 1.359. Section 410.104, Labor Code, is amended to
read as follows:
Sec. 410.104. ELECTION OF ARBITRATION; EFFECT. (a) If
issues remain unresolved after the informal dispute resolution
process required under Section 410.051 [a benefit review
conference], the parties, by agreement, may elect to engage in
arbitration in the manner provided by this subchapter. Arbitration
may be used only to resolve disputed benefit issues and is an
alternative to a contested case hearing. [A contested case hearing
scheduled under Section 410.025(b) is canceled by an election under
this subchapter.]
(b) To elect arbitration, the parties must file the election
with the department on a form prescribed by the commissioner
[commission] not later than the 20th day after the date the
insurance carrier is required to resolve the complaint under
Section 410.051(d) [last day of the benefit review conference. The
commission shall prescribe a form for that purpose].
(c) An election to engage in arbitration under this
subchapter is irrevocable and binding on all parties for the
resolution of all disputes regarding income benefits under this
subtitle arising out of the claims that are under the jurisdiction
of the department [commission].
(d) An agreement to elect arbitration binds the parties to
the provisions of Chapters 408-408E [Chapter 408] relating to
income benefits, and any award, agreement, or settlement after
arbitration is elected must comply with those chapters [that
chapter].
SECTION 1.360. Section 410.105, Labor Code, is amended to
read as follows:
Sec. 410.105. LISTS OF ARBITRATORS. (a) The department
[commission] shall establish regional lists of arbitrators who meet
the qualifications prescribed under Sections 410.102(a) and (b).
Each regional list shall be initially prepared in a random name
order, and subsequent additions to a list shall be added
chronologically.
(b) The department [commission] shall review the lists of
arbitrators annually and determine if each arbitrator is fair and
impartial and makes awards that are consistent with and in
accordance with this subtitle and the rules of the commissioner
[commission]. The commissioner [commission] shall remove an
arbitrator if, after the review, the commissioner determines that
the arbitrator is not fair and impartial or does not make awards
consistent with this subtitle and the commissioner's rules
[arbitrator does not receive an affirmative vote of at least two
commission members representing employers of labor and at least two
commission members representing wage earners].
(c) The department's [commission's] lists are confidential
and are not subject to disclosure under Chapter 552, Government
Code. The lists may not be revealed by any department [commission]
employee to any person who is not a department [commission]
employee. The lists are exempt from discovery in civil litigation
unless the party seeking the discovery establishes reasonable cause
to believe that a violation of the requirements of this section or
Section 410.106, 410.107, 410.108, or 410.109(b) occurred and that
the violation is relevant to the issues in dispute.
SECTION 1.361. Section 410.106, Labor Code, is amended to
read as follows:
Sec. 410.106. SELECTION OF ARBITRATOR. (a) The department
[commission] shall assign the arbitrator for a particular case by
selecting the next name after the previous case's selection in
consecutive order.
(b) The department [commission] may not change the order of
names once the order is established under this subchapter, except
that once each arbitrator on the list has been assigned to a case,
the names shall be randomly reordered.
SECTION 1.362. Section 410.107(a), Labor Code, is amended
to read as follows:
(a) The department [commission] shall assign an arbitrator
to a pending case not later than the 30th day after the date on which
the election for arbitration is filed with the department
[commission].
SECTION 1.363. Section 410.108(a), Labor Code, is amended
to read as follows:
(a) Each party is entitled, in its sole discretion, to one
rejection of the arbitrator in each case. If a party rejects the
arbitrator, the department [commission] shall assign another
arbitrator as provided by Section 410.106.
SECTION 1.364. Section 410.109, Labor Code, is amended to
read as follows:
Sec. 410.109. SCHEDULING OF ARBITRATION. (a) The
arbitrator shall schedule arbitration to be held not later than the
30th day after the date of the arbitrator's assignment and shall
notify the parties and the department [commission] of the scheduled
date.
(b) If an arbitrator is unable to schedule arbitration in
accordance with Subsection (a), the department [commission] shall
appoint the next arbitrator on the applicable list. Each party is
entitled to reject the arbitrator appointed under this subsection
in the manner provided under Section 410.108.
SECTION 1.365. Section 410.110, Labor Code, is amended to
read as follows:
Sec. 410.110. CONTINUANCE. (a) A request by a party for a
continuance of the arbitration to another date must be directed to
the department [director]. The department [director] may grant a
continuance only if the department [director] determines, giving
due regard to the availability of the arbitrator, that good cause
for the continuance exists.
(b) If the department [director] grants a continuance under
this section, the rescheduled date may not be later than the 30th
day after the original date of the arbitration.
(c) Without regard to whether good cause exists, the
department [director] may not grant more than one continuance to
each party.
SECTION 1.366. Section 410.111, Labor Code, is amended to
read as follows:
Sec. 410.111. RULES. The commissioner [commission] shall
adopt rules for arbitration consistent with generally recognized
arbitration principles and procedures.
SECTION 1.367. Section 410.114(b), Labor Code, is amended
to read as follows:
(b) The department [commission] shall make an electronic
recording of the proceeding.
SECTION 1.368. Section 410.118(d), Labor Code, is amended
to read as follows:
(d) The arbitrator shall file a copy of the award as part of
the permanent claim file at the department [commission] and shall
notify the parties in writing of the decision.
SECTION 1.369. Section 410.119(b), Labor Code, is amended
to read as follows:
(b) An arbitrator's award is a final order of the
commissioner [commission].
SECTION 1.370. Sections 410.121(a) and (b), Labor Code, are
amended to read as follows:
(a) On application of an aggrieved party, a court of
competent jurisdiction shall vacate an arbitrator's award on a
finding that:
(1) the award was procured by corruption, fraud, or
misrepresentation;
(2) the decision of the arbitrator was arbitrary and
capricious; or
(3) the award was outside the jurisdiction of the
department [commission].
(b) If an award is vacated, the case shall be remanded to the
department [commission] for another arbitration proceeding.
SECTION 1.371. Section 410.151, Labor Code, is amended to
read as follows:
Sec. 410.151. CONTESTED CASE HEARING; PREHEARING
CONFERENCE REQUIRED [SCOPE]. (a) If arbitration is not elected
under Section 410.104, a party to a claim [for which a benefit
review conference is held or a party eligible to proceed directly to
a contested case hearing as provided by Section 410.024] is
entitled to obtain a contested case hearing by filing a request with
the department in the manner prescribed by the commissioner by rule
not later than the 90th day after the date the insurance carrier is
required to resolve the complaint under Section 410.051(d).
(b) On receipt of a request for a contested case hearing,
the department shall:
(1) direct the parties to meet in a prehearing
conference to establish the disputed issues involved in the claim;
(2) schedule the prehearing conference to be held not
later than the 30th day after the date of receipt of the claimant's
request;
(3) schedule the contested case hearing to be held not
later than the 60th day after the date of receipt of the claimant's
request; and
(4) notify the office of injured employee counsel that
a request for administrative resolution of the dispute has been
filed with the department.
(c) The department shall send written notice of the
prehearing conference and the contested case hearing to the parties
to the claim.
(d) An issue that was not raised at a prehearing [benefit
review] conference [or that was resolved at a benefit review
conference] may not be considered at a contested case hearing under
this subchapter unless:
(1) the parties consent; or
(2) [if the issue was not raised,] the department
[commission] determines that good cause existed for not raising the
issue at the conference.
(e) Notwithstanding Subsection (a), the department may
extend the 90-day period for filing a request for a contested case
hearing if the party to the claim applies for an extension in the
manner prescribed by the commissioner and presents evidence
satisfactory to the department of good cause for the failure to
comply with the 90-day requirement.
SECTION 1.372. Section 410.153, Labor Code, is amended to
read as follows:
Sec. 410.153. APPLICATION OF ADMINISTRATIVE PROCEDURE ACT.
Chapter 2001, Government Code, applies to a contested case hearing
to the extent that the commissioner determines [commission finds]
appropriate, except that the following do not apply:
(1) Section 2001.054;
(2) Sections 2001.061 and 2001.062;
(3) Section 2001.202; and
(4) Subchapters F, G, I, and Z, except for Section
2001.141(c).
SECTION 1.373. Section 410.154, Labor Code, is amended to
read as follows:
Sec. 410.154. SCHEDULING OF HEARING. The department
[commission] shall schedule a contested case hearing in accordance
with Section 410.151 [410.024 or 410.025(b)].
SECTION 1.374. Section 410.155, Labor Code, is amended to
read as follows:
Sec. 410.155. CONTINUANCE. (a) A written request by a
party for a continuance of a contested case hearing to another date
must be directed to the department [commission].
(b) The department [commission] may grant a continuance
only if the department [commission] determines that there is good
cause for the continuance.
SECTION 1.375. Section 410.157, Labor Code, is amended to
read as follows:
Sec. 410.157. RULES. The commissioner [commission] shall
adopt rules governing procedures under which contested case
hearings are conducted.
SECTION 1.376. Section 410.158(a), Labor Code, is amended
to read as follows:
(a) Except as provided by Section 410.162, discovery is
limited to:
(1) depositions on written questions to any health
care provider;
(2) depositions of other witnesses as permitted by the
hearing officer for good cause shown; and
(3) interrogatories as prescribed by the commissioner
[commission].
SECTION 1.377. Section 410.159, Labor Code, is amended to
read as follows:
Sec. 410.159. STANDARD INTERROGATORIES. (a) The
commissioner [commission] by rule shall prescribe standard form
sets of interrogatories to elicit information from claimants and
insurance carriers.
(b) Standard interrogatories shall be answered by each
party and served on the opposing party within the time prescribed by
commissioner [commission] rule, unless the parties agree
otherwise.
SECTION 1.378. Section 410.160, Labor Code, is amended to
read as follows:
Sec. 410.160. EXCHANGE OF INFORMATION. Within the time
prescribed by commissioner [commission] rule, the parties shall
exchange:
(1) all medical reports and reports of expert
witnesses who will be called to testify at the hearing;
(2) all medical records;
(3) any witness statements;
(4) the identity and location of any witness known to
the parties to have knowledge of relevant facts; and
(5) all photographs or other documents that a party
intends to offer into evidence at the hearing.
SECTION 1.379. Section 410.161, Labor Code, is amended to
read as follows:
Sec. 410.161. FAILURE TO DISCLOSE INFORMATION. A party who
fails to disclose information known to the party or documents that
are in the party's possession, custody, or control at the time
disclosure is required by Sections 410.158-410.160 may not
introduce the evidence at any subsequent proceeding before the
department [commission] or in court on the claim unless good cause
is shown for not having disclosed the information or documents
under those sections.
SECTION 1.380. Sections 410.168(c)-(f), Labor Code, are
amended to read as follows:
(c) The hearing officer may enter an interlocutory order for
the payment of all or part of medical benefits or income benefits.
The order may address accrued benefits, future benefits, or both
accrued benefits and future benefits. The order is binding unless a
party seeks judicial review as provided by this chapter [during the
pendency of an appeal to the appeals panel].
(d) On a form prescribed by rule by the commissioner [that
the commission by rule prescribes], the hearing officer shall issue
a separate written decision regarding attorney's fees and any
matter related to attorney's fees. The decision regarding
attorney's fees and the form may not be made known to a jury in a
judicial review of an award, including an appeal.
(e) The commissioner [commission] by rule shall prescribe
the times within which the hearing officer shall [must] file the
decisions with the department after the date the contested case
hearing is concluded. The commissioner may issue an order for
payment of benefits on receipt of the decision [division].
(f) The department [division] shall send a copy of the
decision to each party.
SECTION 1.381. Section 410.169, Labor Code, is amended to
read as follows:
Sec. 410.169. EFFECT OF DECISION. A decision of a hearing
officer regarding benefits is final unless [in the absence of a
timely appeal by] a party seeks judicial review as provided by this
chapter [and is binding during the pendency of an appeal to the
appeals panel].
SECTION 1.382. Subchapter D, Chapter 410, Labor Code, is
amended by adding Sections 410.170-410.173 to read as follows:
Sec. 410.170. CLERICAL ERROR. The commissioner may revise
a decision in a contested case hearing on a finding of clerical
error.
Sec. 410.171. CONTINUATION OF DEPARTMENT JURISDICTION.
During judicial review of a hearing officer's decision on any
disputed issue relating to a workers' compensation claim, the
department retains jurisdiction of all other issues related to the
claim.
Sec. 410.172. JUDICIAL ENFORCEMENT OF ORDER OR DECISION;
ADMINISTRATIVE VIOLATION. (a) If a person refuses or fails to
comply with an interlocutory order, final order, or decision of the
department under this subtitle, the department may bring suit in
Travis County to enforce the order or decision.
(b) If an insurance carrier refuses or fails to comply with
an interlocutory order, final order, or decision of the department
under this subtitle, the claimant may bring suit in the county of
the claimant's residence or the county in which the injury occurred
to enforce the order or decision.
(c) If the department brings suit to enforce an
interlocutory order, final order, or decision, the department is
entitled to reasonable attorney's fees and costs for the
prosecution and collection of the claim, in addition to a judgment
enforcing the order or decision and any other remedy provided by
law.
(d) A claimant who brings suit to enforce an interlocutory
order, final order, or decision of the department under this
subtitle is entitled to a penalty equal to 12 percent of the amount
of benefits recovered in the judgment, interest, and reasonable
attorney's fees for the prosecution and collection of the claim, in
addition to a judgment enforcing the order or decision.
(e) A person commits a violation if the person fails or
refuses to comply with an interlocutory order, final order, or
decision of the department before the 21st day after the date the
order or decision becomes final. A violation under this subsection
is a Class A administrative violation.
Sec. 410.173. REIMBURSEMENT FOR CERTAIN OVERPAYMENTS. The
subsequent injury fund shall reimburse an insurance carrier for any
overpayment of benefits made under an interlocutory order or
decision if that order or decision is reversed or modified by final
arbitration, order, or decision of the commissioner or a court.
SECTION 1.383. Section 410.251, Labor Code, is amended to
read as follows:
Sec. 410.251. EXHAUSTION OF REMEDIES. A party that has
exhausted the party's [its] administrative remedies under this
subtitle and that is aggrieved by a final decision of the department
[appeals panel] may seek judicial review under this subchapter and
Subchapter G, if applicable.
SECTION 1.384. Section 410.252, Labor Code, is amended by
amending Subsections (a) and (b) and adding Subsection (e) to read
as follows:
(a) A party may seek judicial review by filing suit not
later than the 40th day after the date on which the decision of the
hearings officer [appeals panel] was filed with the department
[division].
(b) The party bringing suit to appeal the decision must file
a petition in district [with the appropriate] court in:
(1) the county where the employee resided at the time
of the injury or death, if the employee is deceased; or
(2) in the case of an occupational disease, in the
county where the employee resided on the date disability began or
any county agreed to by the parties.
(e) A district court described by Subsection (b) has
exclusive jurisdiction of a suit described by this section.
SECTION 1.385. Section 410.253, Labor Code, is amended to
read as follows:
Sec. 410.253. SERVICE; NOTICE. (a) A party seeking
judicial review shall simultaneously:
(1) file a copy of the party's petition with the court;
(2) serve any opposing party to the suit; and
(3) provide written notice of the suit or notice of
appeal to the department [commission].
(b) A party may not seek judicial review under Section
410.251 unless the party has provided written notice of the suit to
the department [commission] as required by this section.
SECTION 1.386. Section 410.254, Labor Code, is amended to
read as follows:
Sec. 410.254. DEPARTMENT [COMMISSION] INTERVENTION. On
timely motion initiated by the commissioner [executive director],
the department may [commission shall be permitted to] intervene in
any judicial proceeding under this subchapter or Subchapter G.
SECTION 1.387. Sections 410.256(a), (c), (d), and (f),
Labor Code, are amended to read as follows:
(a) A claim or issue may not be settled contrary to the
provisions of the contested case hearing [an appeals panel]
decision issued on the claim or issue unless a party to the
proceeding has filed for judicial review under this subchapter or
Subchapter G. The trial court must approve a settlement made by the
parties after judicial review of an award is sought and before the
court enters judgment.
(c) A settlement may not provide for:
(1) payment of any benefits in a lump sum except as
provided by Section 408D.108 [408.128]; or
(2) limitation or termination of the claimant's right
to medical benefits under Section 408A.001 [408.021].
(d) A settlement or agreement that resolves an issue of
impairment may not be made before the claimant reaches maximum
medical improvement and must adopt one of the impairment ratings
under Subchapter C [G], Chapter 408D [408].
(f) Settlement of a claim or issue under this section does
not constitute a modification or reversal of the decision awarding
benefits for the purpose of Section 410.173 [410.209].
SECTION 1.388. Sections 410.257(a), (b), (c), and (e),
Labor Code, are amended to read as follows:
(a) A judgment entered by a court on judicial review of a [an
appeals panel] decision of a hearing officer under this subchapter
or Subchapter G must comply with all appropriate provisions of the
law.
(b) A judgment under this section may not provide for:
(1) payment of benefits in a lump sum except as
provided by Section 408D.108 [408.128]; or
(2) the limitation or termination of the claimant's
right to medical benefits under Section 408A.001 [408.021].
(c) A judgment that resolves an issue of impairment may not
be entered before the date the claimant reaches maximum medical
improvement. The judgment must adopt an impairment rating under
Subchapter C [G], Chapter 408D [408], except to the extent Section
410.307 applies.
(e) A judgment under this section based on default or on an
agreement of the parties does not constitute a modification or
reversal of a decision awarding benefits for the purpose of Section
410.173 [410.209].
SECTION 1.389. The heading to Section 410.258, Labor Code,
is amended to read as follows:
Sec. 410.258. NOTIFICATION OF DEPARTMENT [COMMISSION] OF
PROPOSED JUDGMENTS AND SETTLEMENTS; RIGHT TO INTERVENE.
SECTION 1.390. Sections 410.258(a)-(e), Labor Code, are
amended to read as follows:
(a) The party who initiated a proceeding under this
subchapter or Subchapter G must file any proposed judgment or
settlement made by the parties to the proceeding, including a
proposed default judgment, with the department [executive director
of the commission] not later than the 30th day before the date on
which the court is scheduled to enter the judgment or approve the
settlement. The proposed judgment or settlement must be mailed to
the commissioner [executive director] by certified mail, return
receipt requested.
(b) The department [commission] may intervene in a
proceeding under Subsection (a) not later than the 30th day after
the date of receipt of the proposed judgment or settlement.
(c) The commissioner [commission] shall review the proposed
judgment or settlement to determine compliance with all appropriate
provisions of the law. If the commissioner [commission] determines
that the proposal is not in compliance with the law, the department
[commission] may intervene as a matter of right in the proceeding
not later than the 30th day after the date of receipt of the
proposed judgment or settlement. The court may limit the extent of
the department's [commission's] intervention to providing the
information described by Subsection (e).
(d) If the department [commission] does not intervene
before the 31st day after the date of receipt of the proposed
judgment or settlement, the court shall enter the judgment or
approve the settlement if the court determines that the proposed
judgment or settlement is in compliance with all appropriate
provisions of the law.
(e) If the department [commission] intervenes in the
proceeding, the commissioner [commission] shall inform the court of
each reason the commissioner [commission] believes the proposed
judgment or settlement is not in compliance with the law. The court
shall give full consideration to the information provided by the
commissioner [commission] before entering a judgment or approving a
settlement.
SECTION 1.3905. Section 410.301(a), Labor Code, is amended
to read as follows:
(a) Judicial review [of a final decision of a commission
appeals panel] regarding compensability or eligibility for or the
amount of income or death benefits shall be conducted as provided by
this subchapter.
SECTION 1.391. Section 410.302, Labor Code, is amended to
read as follows:
Sec. 410.302. ADMISSIBILITY OF RECORDS; LIMITATION OF
ISSUES. (a) The records of a prehearing conference or contested
case hearing conducted under this chapter are admissible in a trial
under this subchapter.
(b) A trial under this subchapter is limited to issues
decided by the hearing officer at the contested case hearing
[commission appeals panel] and on which judicial review is sought.
The pleadings must specifically set forth the determinations of the
hearing officer [appeals panel] by which the party is aggrieved.
SECTION 1.392. Section 410.304, Labor Code, is amended to
read as follows:
Sec. 410.304. CONSIDERATION OF [APPEALS PANEL] DECISION.
(a) In a jury trial, the court, before submitting the case to the
jury, shall inform the jury in the court's instructions, charge, or
questions to the jury of the hearing officer's [commission appeals
panel] decision on each disputed issue described by Section
410.301(a) that is submitted to the jury.
(b) In a trial to the court without a jury, the court in
rendering its judgment on an issue described by Section 410.301(a)
shall consider the decision of the hearing officer [commission
appeals panel].
SECTION 1.393. Sections 410.306(b) and (c), Labor Code, are
amended to read as follows:
(b) The department [commission] on payment of a reasonable
fee shall make available to the parties a certified copy of the
department's [commission's] record. All facts and evidence the
record contains are admissible to the extent allowed under the
Texas Rules of [Civil] Evidence.
(c) Except as provided by Section 410.307, evidence of
extent of impairment shall be limited to that presented to the
department [commission]. The court or jury, in its determination
of the extent of impairment, shall adopt one of the impairment
ratings under Subchapter C [G], Chapter 408D [408].
SECTION 1.394. Sections 410.307(a) and (d), Labor Code, are
amended to read as follows:
(a) Evidence of the extent of impairment is not limited to
that presented to the department [commission] if the court, after a
hearing, finds that there is a substantial change of condition. The
court's finding of a substantial change of condition may be based
only on:
(1) medical evidence from the same doctor or doctors
whose testimony or opinion was presented to the department
[commission];
(2) evidence that has come to the party's knowledge
since the contested case hearing;
(3) evidence that could not have been discovered
earlier with due diligence by the party; and
(4) evidence that would probably produce a different
result if it is admitted into evidence at the trial.
(d) If the court finds a substantial change of condition
under this section, new medical evidence of the extent of
impairment must be from and is limited to the same doctor or doctors
who made impairment ratings [before the commission] under Section
408C.103 [408.123].
SECTION 1.395. Section 410.308(a), Labor Code, is amended
to read as follows:
(a) The department [commission or the Texas Department of
Insurance] shall furnish any interested party in the claim with a
certified copy of the notice of the employer securing compensation
with the insurance carrier, filed with the department [commission].
SECTION 1.396. The following laws are repealed:
(1) Section 410.001, Labor Code;
(2) Section 410.004, Labor Code;
(3) Sections 410.021-410.034, Labor Code; and
(4) Subchapter E, Chapter 410, Labor Code.
PART 14. AMENDMENTS TO CHAPTER 411, LABOR CODE
SECTION 1.401. Section 411.003(a), Labor Code, is amended
to read as follows:
(a) An insurance company, the agent, servant, or employee of
the insurance company, or a safety consultant who performs a safety
consultation under this chapter [Subchapter D or E] has no
liability for an accident, injury, or occupational disease based on
an allegation that the accident, injury, or occupational disease
was caused or could have been prevented by a program, inspection, or
other activity or service undertaken by the insurance company for
the prevention of accidents in connection with operations of the
employer.
SECTION 1.402. Section 411.011, Labor Code, is amended to
read as follows:
Sec. 411.011. COORDINATION AND ENFORCEMENT OF STATE LAWS
AND RULES. The department [division] shall coordinate and enforce
the implementation of state laws and rules relating to workers'
health and safety issues.
SECTION 1.403. Section 411.012, Labor Code, is amended to
read as follows:
Sec. 411.012. COLLECTION AND ANALYSIS OF INFORMATION. (a)
The department [division] shall collect and serve as a repository
for statistical information on workers' health and safety. The
department [division] shall analyze and use that information to:
(1) identify and assign priorities to safety needs;
and
(2) better coordinate the safety services provided by
public or private organizations, including insurance carriers.
(b) The department [division] shall coordinate or supervise
the collection by state or federal entities of information relating
to job safety, including information collected for the
supplementary data system and the annual survey of the Bureau of
Labor Statistics of the United States Department of Labor.
SECTION 1.404. Section 411.013, Labor Code, is amended to
read as follows:
Sec. 411.013. FEDERAL CONTRACTS AND PROGRAMS. The
department [With the approval of the commission, the division] may:
(1) enter into contracts with the federal government
to perform occupational safety projects; and
(2) apply for federal funds through any federal
program relating to occupational safety.
SECTION 1.405. Section 411.014, Labor Code, is amended to
read as follows:
Sec. 411.014. EDUCATIONAL PROGRAMS; COOPERATION WITH OTHER
ENTITIES. (a) The department [division] shall promote workers'
health and safety through educational and other innovative programs
developed by the department or other state agencies [division].
(b) The department [division] shall cooperate with other
entities in the development and approval of safety courses, safety
plans, and safety programs.
(c) The department [division] shall cooperate with business
and industry trade associations, labor organizations, and other
entities to develop means and methods of educating employees and
employers concerning workplace safety.
SECTION 1.406. Sections 411.015(a), (d), and (e), Labor
Code, are amended to read as follows:
(a) The department [division] shall publish or procure and
issue educational books, pamphlets, brochures, films, videotapes,
and other informational and educational material.
(d) The department [division] shall make specific decisions
regarding the issues and problems to be addressed by the
educational materials after assigning appropriate priorities based
on frequency of injuries, degree of hazard, severity of injuries,
and similar considerations.
(e) The educational materials provided under this section
must include specific references to:
(1) the requirements of state and federal laws and
regulations;
(2) recommendations and practices of business,
industry, and trade associations; and
(3) if needed, recommended work practices based on
recommendations made by the department [division] for the
prevention of injury.
SECTION 1.407. Section 411.016, Labor Code, is amended to
read as follows:
Sec. 411.016. PEER REVIEW SAFETY PROGRAM. The department
[division] shall certify safe employers to provide peer review
safety programs.
SECTION 1.408. Section 411.017, Labor Code, is amended to
read as follows:
Sec. 411.017. ADVISORY SERVICE TO INSURANCE CARRIERS. The
department [division] shall advise insurance carrier loss control
service organizations of safety needs and priorities developed by
the department [division] and of:
(1) hazard classifications, specific employers,
industries, occupations, or geographic regions to which loss
control services should be directed; or
(2) the identity and types of injuries or occupational
diseases and means and methods for prevention of those injuries or
diseases to which loss control services should be directed.
SECTION 1.409. Section 411.018, Labor Code, is amended to
read as follows:
Sec. 411.018. FEDERAL OSHA COMPLIANCE. In accordance with
Section 7(c), Occupational Safety and Health Act of 1970 (29 U.S.C.
Section 656), the department [division] shall:
(1) consult with employers regarding compliance with
federal occupational safety laws and rules; and
(2) collect information relating to occupational
safety as required by federal laws, rules, or agreements.
SECTION 1.410. Section 411.031, Labor Code, is amended to
read as follows:
Sec. 411.031. JOB SAFETY INFORMATION SYSTEM; COOPERATION
WITH OTHER AGENCIES. (a) The department [division] shall maintain
a job safety information system.
(b) The department [division] shall obtain from any
appropriate state agency, including the Texas Workforce Commission
[Department of Insurance], the [Texas] Department of State Health
Services, and the Department of Assistive and Rehabilitative
Services [Texas Employment Commission], data and statistics,
including data and statistics compiled for rate-making purposes.
(c) The department [division] shall consult with the Texas
Workforce [Department of Insurance and the Texas Employment]
Commission in the design of data information and retrieval systems
to accomplish the mutual purposes of the department [those
agencies] and [of] the commission [division].
SECTION 1.411. Section 411.035, Labor Code, is amended to
read as follows:
Sec. 411.035. USE OF INJURY REPORT. A report made under
Section 411.032 may not be considered to be an admission by or
evidence against an employer or an insurance carrier in a
proceeding before the department [commission] or a court in which
the facts set out in the report are contradicted by the employer or
insurance carrier.
SECTION 1.412. Section 411.064, Labor Code, is amended to
read as follows:
Sec. 411.064. INSPECTIONS. (a) The department, in
conjunction with the audits conducted under Section 402.166(g), may
[division shall] conduct inspections [an inspection at least every
two years] to determine the adequacy of the accident prevention
services required by Section 411.061 for each insurance company
writing workers' compensation insurance in this state.
(b) If, after an inspection under Subsection (a), an
insurance company's accident prevention services are determined to
be inadequate, the department [division] shall reinspect the
accident prevention services of the insurance company not earlier
than the 180th day or later than the 270th day after the date the
accident prevention services were determined by the department
[division] to be inadequate.
(c) The insurance company shall reimburse the department
[commission] for the reasonable cost of the reinspection, including
a reasonable allocation of the department's [commission's]
administrative costs incurred in conducting the inspections.
SECTION 1.413. Section 411.065, Labor Code, is amended to
read as follows:
Sec. 411.065. ANNUAL INFORMATION SUBMITTED BY INSURANCE
COMPANY. (a) Each insurance company writing workers' compensation
insurance in this state shall submit to the department [division]
at least once a year detailed information on the type of accident
prevention facilities offered to that insurance company's
policyholders.
(b) The information must include:
(1) the amount of money spent by the insurance company
on accident prevention services;
(2) [the number and qualifications of field safety
representatives employed by the insurance company;
[(3)] the number of site inspections performed;
(3) [(4)] accident prevention services for which the
insurance company contracts;
(4) [(5)] a breakdown of the premium size of the risks
to which services were provided;
(5) [(6)] evidence of the effectiveness of and
accomplishments in accident prevention; and
(6) [(7)] any additional information required by the
department [commission].
SECTION 1.414. Section 411.067, Labor Code, is amended to
read as follows:
Sec. 411.067. DEPARTMENT [COMMISSION] PERSONNEL. [(a)]
The department [commission] shall employ the personnel necessary to
enforce this subchapter, including at least 10 safety inspectors to
perform inspections at a job site and at an insurance company to
determine the adequacy of the accident prevention services provided
by the insurance company.
[(b) A safety inspector must have the qualifications
required for a field safety representative by Section 411.062.]
SECTION 1.415. Section 411.081(a), Labor Code, is amended
to read as follows:
(a) The department [division] shall maintain a 24-hour
toll-free telephone service for reports of violations of
occupational health or safety law.
SECTION 1.416. Section 411.104, Labor Code, is amended to
read as follows:
Sec. 411.104. ADMINISTRATION BY DEPARTMENT. [DIVISION
DUTIES. (a)] The department [division] shall administer this
subchapter.
[(b) In addition to the duties specified in this chapter,
the division shall perform other duties as required by the
commission.]
SECTION 1.417. The following laws are repealed:
(1) Section 411.001(1), Labor Code;
(2) Subchapters D and G, Chapter 411, Labor Code;
(3) Section 411.062, Labor Code;
(4) Section 411.063(b), Labor Code; and
(5) Section 411.102(1), Labor Code.
PART 15. AMENDMENTS TO CHAPTER 412, LABOR CODE
SECTION 1.451. Sections 412.041(g), (i), and (l), Labor
Code, are amended to read as follows:
(g) The director shall act as an adversary before the
department [commission] and courts and present the legal defenses
and positions of the state as an employer and insurer, as
appropriate.
(i) In administering Chapter 501, the director is subject to
the rules, orders, and decisions of the commissioner [commission]
in the same manner as a private employer, insurer, or association.
(l) The director shall furnish copies of all rules to:
(1) [the commission;
[(2)] the commissioner [of the Texas Department of
Insurance]; and
(2) [(3)] the administrative heads of all state
agencies affected by this chapter and Chapter 501.
PART 16. AMENDMENTS TO CHAPTER 413, LABOR CODE
SECTION 1.501. The heading to Subchapter A, Chapter 413,
Labor Code, is amended to read as follows:
SUBCHAPTER A. GENERAL PROVISIONS [DIVISION OF MEDICAL REVIEW]
SECTION 1.502. Section 413.001, Labor Code, is amended to
read as follows:
Sec. 413.001. APPLICABILITY. This chapter applies to the
provision of health care services by insurance carriers who use
provider networks and to insurance carriers who do not use provider
networks. [DEFINITION. In this chapter, "division" means the
division of medical review of the commission.]
SECTION 1.503. Section 413.002, Labor Code, is amended to
read as follows:
Sec. 413.002. [DIVISION OF] MEDICAL REVIEW. (a) [The
commission shall maintain a division of medical review to ensure
compliance with the rules and to implement this chapter under the
policies adopted by the commission.
[(b)] The department [division] shall monitor health care
providers, insurance carriers, and workers' compensation claimants
who receive medical services to ensure the compliance of those
persons with rules adopted by the commissioner [commission]
relating to health care, including medical policies and fee
guidelines.
(b) [(c)] In monitoring health care providers who serve as
designated doctors under this subtitle [Chapter 408], the
department [division] shall evaluate the compliance of those
providers with this subtitle and with rules adopted by the
commissioner [commission] relating to medical policies, fee
guidelines, and impairment ratings.
(c) The department may monitor independent review
organizations to ensure the compliance of those organizations with
rules adopted by the commissioner. In monitoring independent
review organizations who provide services described by this
chapter, the department shall evaluate:
(1) the compliance of those organizations with this
subtitle and with rules adopted by the commissioner relating to
medical policies, fee guidelines, and impairment ratings; and
(2) the quality and timeliness of decisions made under
Section 408.0041, 408D.102, or 413.031.
SECTION 1.504. Section 413.003, Labor Code, is amended to
read as follows:
Sec. 413.003. AUTHORITY TO CONTRACT. The commissioner
[commission] may contract with a private or public entity to
perform a duty or function of the department under this chapter
[division].
SECTION 1.505. Section 413.004, Labor Code, is amended to
read as follows:
Sec. 413.004. COORDINATION WITH PROVIDERS. The department
[division] shall coordinate the department's [its] activities with
health care providers as necessary to perform the department's
[its] duties under this chapter. The coordination may include:
(1) conducting educational seminars on commissioner
[commission] rules and procedures; or
(2) providing information to and requesting
assistance from professional peer review organizations.
SECTION 1.506. Section 413.007, Labor Code, is amended to
read as follows:
Sec. 413.007. INFORMATION MAINTAINED BY DEPARTMENT
[DIVISION]. (a) The department [division] shall maintain a
statewide data base of medical charges, actual payments, and
treatment protocols that may be used by:
(1) the commissioner [commission] in adopting [the]
medical policies and fee guidelines; and
(2) the department [division] in administering [the]
medical policies, fee guidelines, or rules.
(b) The department [division] shall ensure that the data
base:
(1) contains information necessary to detect
practices and patterns in medical charges, actual payments, and
treatment protocols; and
(2) may [can] be used in a meaningful way to allow the
[commission to] control of medical costs as provided by this
subtitle.
(c) The department [division] shall ensure that the data
base is available for public access for a reasonable fee
established by the department [commission]. The identities of
injured employees [workers] and beneficiaries may not be disclosed.
(d) The department [division] shall take appropriate action
to be aware of and to maintain the most current information on
developments in the treatment and cure of injuries and diseases
common in workers' compensation cases.
SECTION 1.507. Sections 413.008(a) and (b), Labor Code, are
amended to read as follows:
(a) On request from the department [commission] for
specific information, an insurance carrier shall provide to the
department [division] any information in the carrier's [its]
possession, custody, or control that reasonably relates to the
department's [commission's] duties under this subtitle and to
health care:
(1) treatment;
(2) services;
(3) fees; and
(4) charges.
(b) The department [commission] shall maintain the
confidentiality of information received under this section [keep
confidential information] that is confidential by law.
SECTION 1.508. Section 413.011, Labor Code, is amended to
read as follows:
Sec. 413.011. REIMBURSEMENT POLICIES FOR NON-NETWORK
HEALTH CARE; FEE [AND] GUIDELINES; MEDICAL POLICIES; TREATMENT
GUIDELINES AND PROTOCOLS. (a) The commissioner [commission] shall
adopt [use] health care reimbursement policies and fee guidelines
for health care that is not provided through a provider network
under Chapter 408B that reflect the standardized reimbursement
structures found in other health care delivery systems, with
minimal modifications to those reimbursement methodologies as
necessary to meet occupational injury requirements. To achieve
standardization, the commissioner may [commission shall] adopt the
most current reimbursement methodologies, models, and values or
weights used by the federal Centers for Medicare & Medicaid
Services [Health Care Financing Administration], including
applicable payment policies relating to coding, billing, and
reporting, and may modify documentation requirements as necessary
to meet the requirements of Section 413.053.
(b) In determining the appropriate fees, the commissioner
[commission] shall also develop conversion factors or other payment
adjustment factors taking into account economic indicators in
health care and the requirements of Subsection (d). The department
[commission] shall also provide for reasonable fees for the
evaluation and management of care as required by Section
408C.005(b) [408.025(c)] and commissioner [commission] rules.
This section does not adopt the Medicare fee schedule, and the
commissioner [commission] shall not adopt conversion factors or
other payment adjustment factors based solely on those factors as
developed by the federal Centers for Medicare & Medicaid Services
[Health Care Financing Administration].
(c) This section may not be interpreted in a manner that
would discriminate in the amount or method of payment or
reimbursement for services in a manner prohibited by Section
1451.104 [3(d), Article 21.52], Insurance Code, or as restricting
the ability of chiropractors to serve as treating doctors as
authorized by this subtitle. The commissioner [commission] shall
also develop guidelines relating to fees charged or paid for
providing expert testimony relating to an issue arising under this
subtitle.
(d) Fee guidelines [Guidelines for medical services fees]
must be fair and reasonable and designed to ensure the quality of
medical care and to achieve effective medical cost control. [The
guidelines may not provide for payment of a fee in excess of the fee
charged for similar treatment of an injured individual of an
equivalent standard of living and paid by that individual or by
someone acting on that individual's behalf. The commission shall
consider the increased security of payment afforded by this
subtitle in establishing the fee guidelines.]
(e) The commissioner [commission] by rule shall [may] adopt
one or more sets of treatment guidelines, including return-to-work
guidelines, and individual treatment protocols, including
protocols for pharmacy benefits. Except as otherwise provided by
this subsection, the treatment guidelines and protocols must be
nationally recognized, scientifically valid, and outcome-based and
designed to reduce excessive or inappropriate medical care while
safeguarding necessary medical care. If a nationally recognized
treatment guideline or protocol is not available for adoption by
the commissioner [commission], the commissioner [commission] may
adopt another treatment guideline or protocol as long as it is
scientifically valid and outcome-based.
(f) The commissioner [commission] by rule may establish
medical policies or treatment guidelines or protocols relating to
necessary treatments for injuries.
(g) Any medical policies or guidelines adopted by the
commissioner [commission] must be:
(1) designed to ensure the quality of medical care and
to achieve effective medical cost control;
(2) designed to enhance a timely and appropriate
return to work; and
(3) consistent with Sections 413.013, 413.020,
413.052, and 413.053.
SECTION 1.509. Section 413.013, Labor Code, is amended to
read as follows:
Sec. 413.013. PROGRAMS. The commissioner [commission] by
rule shall establish:
(1) for health care that is not provided through a
provider network under Chapter 408B:
(A) a program for prospective, concurrent, and
retrospective review and resolution of a dispute regarding health
care treatments and services; and
(B) [(2)] a program for the systematic
monitoring of the necessity of treatments administered and fees
charged and paid for medical treatments or services, including the
authorization of prospective, concurrent, or retrospective review
under the medical policies of the commissioner [commission] to
ensure that the medical policies or guidelines are not exceeded;
(2) [(3)] a program to detect practices and patterns
by insurance carriers, including carriers who use provider
networks, in unreasonably denying authorization of payment for
medical services requested or performed if authorization is
required by the medical policies of the commissioner [commission];
and
(3) [(4)] a program to increase the intensity of
review for compliance with the medical policies or fee guidelines
for any health care provider that has established a practice or
pattern in charges and treatments inconsistent with the medical
policies and fee guidelines.
SECTION 1.510. Section 413.014, Labor Code, is amended by
amending Subsections (b)-(e) and adding Subsection (f) to read as
follows:
(b) The commissioner [commission] by rule shall specify
which health care treatments and services provided by an insurance
carrier who does not use a provider network under Chapter 408B
require express preauthorization or concurrent review by the
insurance carrier. Treatments and services for a medical emergency
do not require express preauthorization.
(c) The commissioner [commission] rules adopted under this
section must provide that preauthorization and concurrent review
are required at a minimum for:
(1) spinal surgery, as provided by Section 408A.010
[408.026];
(2) work-hardening or work-conditioning services
provided by a health care facility that is not credentialed by an
organization recognized by commissioner [commission] rules;
(3) inpatient hospitalization, including any
procedure and length of stay;
(4) outpatient or ambulatory surgical services, as
defined by commissioner [commission] rule; and
(5) any investigational or experimental services or
devices.
(d) The insurance carrier is not liable for those specified
treatments and services requiring preauthorization unless
preauthorization is sought by the claimant or health care provider
and either obtained from the insurance carrier or ordered by the
department [commission].
(e) If a specified health care treatment or service is
preauthorized as provided by this section, that treatment or
service is not subject to retrospective review of the medical
necessity of the treatment or service.
(f) The department [commission] may not prohibit an
insurance carrier and a health care provider from voluntarily
discussing health care treatment and treatment plans and
pharmaceutical services, either prospectively or concurrently, and
may not prohibit an insurance carrier from certifying or agreeing
to pay for health care consistent with those agreements. The
insurance carrier is liable for health care treatment and treatment
plans and pharmaceutical services that are voluntarily
preauthorized and may not dispute the certified or agreed-on
preauthorized health care treatment and treatment plans and
pharmaceutical services at a later date.
SECTION 1.511. Section 413.0141, Labor Code, is amended to
read as follows:
Sec. 413.0141. INITIAL PHARMACEUTICAL COVERAGE. (a) The
commissioner [commission may] by rule shall provide that an
insurance carrier, including a carrier who provides health care
services through a provider network, shall provide for payment of
specified pharmaceutical services sufficient for the first seven
days following the date of injury if the health care provider
requests and receives verification of insurance coverage and a
verbal confirmation of an injury from the employer or from the
insurance carrier [as provided by Section 413.014].
(b) The commissioner rules must [adopted by the commission
shall] provide that an insurance carrier is eligible for
reimbursement for pharmaceutical services paid under this section
from the subsequent injury fund in the event the injury is
determined not to be compensable.
SECTION 1.512. Sections 413.015(a) and (b), Labor Code, are
amended to read as follows:
(a) Insurance carriers who do not provide health care
services through a provider network under Chapter 408B shall make
appropriate payment of charges for medical services provided under
this subtitle. An insurance carrier may contract with a separate
entity to forward payments for medical services. Any payment due
the insurance carrier from the separate entity must be made in
accordance with the contract. The separate entity is subject to the
direction of the insurance carrier, and the insurance carrier is
responsible for the actions of the separate entity under this
subsection. An insurance carrier who provides health care services
through a provider network under Chapter 408B is subject to the
provisions of that chapter.
(b) The commissioner [commission] shall provide by rule for
the review and audit of the payment by insurance carriers subject to
this section of charges for medical services provided under this
subtitle to ensure compliance of health care providers and
insurance carriers with the medical policies and fee guidelines
adopted by the commissioner [commission].
SECTION 1.513. Section 413.017, Labor Code, is amended to
read as follows:
Sec. 413.017. PRESUMPTION OF REASONABLENESS. The following
medical services are presumed reasonable:
(1) medical services consistent with the medical
policies and fee guidelines adopted by the commissioner
[commission]; and
(2) medical services that are provided subject to
prospective, concurrent, or retrospective review as required by the
medical policies of the commissioner [commission] and that are
authorized by an insurance carrier.
SECTION 1.514. Section 413.018, Labor Code, is amended to
read as follows:
Sec. 413.018. REVIEW OF MEDICAL CARE; RETURN TO WORK
PROGRAMS [IF GUIDELINES EXCEEDED]. (a) The commissioner
[commission] by rule shall provide for the periodic review of
medical care provided in claims in which guidelines for expected or
average return to work time frames are exceeded.
(b) The commissioner [division] shall review the medical
treatment provided in a claim that exceeds the guidelines and may
take appropriate action to ensure that necessary and reasonable
care is provided.
(c) The department [commission] shall implement a program
to encourage employers and treating doctors to discuss the
availability of modified duty to encourage the safe and more timely
return to work of injured employees. The department [commission]
may require a treating or examining doctor, on the request of the
employer, insurance carrier, or commissioner [commission], to
provide a functional capacity evaluation of an injured employee and
to determine the employee's ability to engage in physical
activities found in the workplace or in activities that are
required in a modified duty setting.
(d) The department [commission] shall provide through the
department's [commission's] health and safety information [and
medical review outreach] programs information to employers
regarding effective return to work programs.
(e) This section does not require an employer to provide
modified duty or an employee to accept a modified duty assignment.
An employee who does not accept an employer's offer of modified duty
determined by the commissioner [commission] to be a bona fide job
offer is subject to Section 408D.053(e) [408.103(e)].
(f) [(e)] The commissioner [commission] may adopt rules and
forms as necessary to implement this section.
SECTION 1.515. Section 413.020, Labor Code, is amended to
read as follows:
Sec. 413.020. DEPARTMENT [COMMISSION] CHARGES. The
commissioner [commission] by rule shall establish procedures to
enable the department [commission] to charge:
(1) an insurance carrier a reasonable fee for access
to or evaluation of health care treatment, fees, or charges under
this subtitle; and
(2) a health care provider who exceeds a fee or
utilization guideline established under this subtitle or an
insurance carrier who unreasonably disputes charges that are
consistent with a fee or utilization guideline established under
this subtitle a reasonable fee for review of health care treatment,
fees, or charges under this subtitle.
SECTION 1.516. Subchapter C, Chapter 413, Labor Code, is
amended to read as follows:
SUBCHAPTER C. DISPUTE RESOLUTION REGARDING MEDICAL BENEFITS
Sec. 413.031. MEDICAL DISPUTE: RIGHT TO REVIEW
[RESOLUTION]. (a) A party, including a health care provider, is
entitled to a review of a medical service provided or for which
authorization of payment is sought if a health care provider is:
(1) denied payment or paid a reduced amount for the
medical service rendered;
(2) denied authorization for the payment for the
service requested or performed if authorization is required or
allowed by this subtitle or commissioner [commission] rules;
(3) ordered by the commissioner [commission] to refund
a payment received; or
(4) ordered to make a payment that was refused or
reduced for a medical service rendered.
(b) A health care provider who submits a charge in excess of
the fee guidelines or treatment policies is entitled to a review of
the medical service to determine if reasonable medical
justification exists for the deviation. A claimant is entitled to a
review of a medical service for which preauthorization is sought by
the health care provider and denied by the insurance carrier. The
commissioner [commission] shall adopt rules to notify claimants of
their rights under this subsection.
Sec. 413.032. INFORMAL DISPUTE RESOLUTION AT CARRIER. (a)
Before bringing a dispute regarding medical benefits to the
department, the parties to the dispute must try to resolve the
dispute among themselves through an informal process conducted by
the insurance carrier.
(b) If a claimant notifies an insurance carrier of a
complaint requiring dispute resolution under this subchapter, the
carrier, not later than the fifth business day after the date of
receiving the notice, shall send to the claimant a letter
acknowledging receipt of the complaint.
(c) An insurance carrier shall acknowledge, investigate,
and resolve a complaint under this section not later than the 30th
calendar day after the date the carrier receives a written
statement of the complaint from the claimant.
(d) The commissioner shall adopt rules that specify the
requirements for documentation of the initial attempt under
Subsection (a) to resolve the dispute, including documentation of
telephone calls or written correspondence.
Sec. 413.033. FEE DISPUTES. [(c)] In resolving disputes
over the amount of payment due for services determined to be
medically necessary and appropriate for treatment of a compensable
injury, the role of the department [commission] is to adjudicate
the payment given the relevant statutory provisions and
commissioner [commission] rules. The department [commission]
shall publish on its Internet website its medical dispute
decisions, including decisions of independent review
organizations[, and any subsequent decisions by the State Office of
Administrative Hearings]. Before publication, the department
[commission] shall redact only that information necessary to
prevent identification of the injured employee [worker].
Sec. 413.034. REVIEW BY INDEPENDENT REVIEW ORGANIZATION.
(a) If the parties are unable to resolve a dispute regarding
medical benefits through the informal dispute resolution process
required under Section 413.032, either party may file with the
department a request for review by an independent review
organization certified under Article 21.58C, Insurance Code.
(b) An [(d) A review of the medical necessity of a health
care service requiring preauthorization under Section 413.014 or
commission rules under that section shall be conducted by an]
independent review organization shall conduct a review of the
medical necessity of a health care service:
(1) requiring preauthorization under Section 413.014
or commissioner rules under that section; or
(2) provided under this chapter or Chapter 408 or
408A.
(c) An independent review organization shall conduct a
review under this section [Article 21.58C, Insurance Code,] in the
same manner as reviews of utilization review decisions [by health
maintenance organizations]. It is a defense for the insurance
carrier if the carrier timely complies with the decision of the
independent review organization.
(d) In performing a review of medical necessity, the
independent review organization shall consider the department's
health care reimbursement policies adopted under Section 413.011 if
those policies are raised by one of the parties to the dispute. If
the independent review organization's decision is contrary to the
department's policies adopted under Section 413.011, the
independent review organization must indicate in the decision the
specific basis for its divergence in the review of medical
necessity. This subsection does not prohibit an independent review
organization from considering the payment policies adopted under
Section 413.011 in any dispute, regardless of whether those
policies are raised by a party to the dispute.
(e) In performing a review of medical necessity, an
independent review organization may request that the department
order an examination by a designated doctor.
Sec. 413.035. INDEPENDENT REVIEW ORGANIZATION DECISION;
APPEAL. (a) An independent review organization that conducts a
review under this subchapter shall specify the elements on which
the decision of the organization is based. At a minimum, the
decision must include:
(1) a list of all medical records and other documents
reviewed by the organization;
(2) a description and the source of the screening
criteria or clinical basis used in making the decision;
(3) an analysis of and explanation for the decision,
including the findings and conclusions used to support the
decision; and
(4) a description of the qualifications of each
physician or other health care provider who reviews the decision.
(b) The independent review organization shall certify that
each physician or other health care provider who reviews the
decision certifies that no known conflicts of interest exist
between that provider and the injured employee, the injured
employee's employer, and any of the treating doctors or insurance
carrier health care providers who reviewed the case for decision
before referral to the independent review organization.
(c) Either party may appeal the decision of the independent
review organization to district court for judicial review.
Judicial review under this section shall be conducted in the manner
provided for judicial review of contested cases under Subchapter G,
Chapter 2001, Government Code.
Sec. 413.036. ALTERNATIVE PROCESS. [(e) Except as
provided by Subsections (d), (f), and (m), a review of the medical
necessity of a health care service provided under this chapter or
Chapter 408 shall be conducted by an independent review
organization under Article 21.58C, Insurance Code, in the same
manner as reviews of utilization review decisions by health
maintenance organizations. It is a defense for the insurance
carrier if the carrier timely complies with the decision of the
independent review organization.
[(e-1) In performing a review of medical necessity under
Subsection (d) or (e), the independent review organization shall
consider the commission's health care reimbursement policies and
guidelines adopted under Section 413.011 if those policies and
guidelines are raised by one of the parties to the dispute. If the
independent review organization's decision is contrary to the
commission's policies or guidelines adopted under Section 413.011,
the independent review organization must indicate in the decision
the specific basis for its divergence in the review of medical
necessity. This subsection does not prohibit an independent review
organization from considering the payment policies adopted under
Section 413.011 in any dispute, regardless of whether those
policies are raised by a party to the dispute.
[(f)] The commissioner [commission] by rule may prescribe
an alternative [shall specify the appropriate] dispute resolution
process for disputes:
(1) in which a claimant has paid for medical services
and seeks reimbursement; or
(2) regarding medical services costing less than the
cost of a review of the medical necessity of a health care service
by an independent review organization.
Sec. 413.037. PAYMENT OF COSTS. (a) [(g) In performing a
review of medical necessity under Subsection (d) or (e), an
independent review organization may request that the commission
order an examination by a designated doctor under Chapter 408.
[(h)] The insurance carrier shall pay the cost of [the]
review by an independent review organization if the dispute arises
in connection with a request for health care services:
(1) provided through a provider network; or
(2) that require preauthorization under Section
413.014 or commissioner [commission] rules under that section.
(b) [(i)] Except as provided by Subsection (a) [(h)], the
cost of the review shall be paid by the nonprevailing party.
(c) [(j)] Notwithstanding Subsections (a) and (b) [(h) and
(i)], an employee may not be required to pay any portion of the cost
of a review.
(d) The cost of a review under an alternative dispute
resolution process under Section 413.036 shall be paid by the
nonprevailing party.
[(k) Except as provided by Subsection (l), a party to a
medical dispute that remains unresolved after a review of the
medical service under this section is entitled to a hearing. The
hearing shall be conducted by the State Office of Administrative
Hearings within 90 days of receipt of a request for a hearing in the
manner provided for a contested case under Chapter 2001, Government
Code (the administrative procedure law). A party who has exhausted
the party's administrative remedies under this subtitle and who is
aggrieved by a final decision of the State Office of Administrative
Hearings may seek judicial review of the decision. Judicial review
under this subsection shall be conducted in the manner provided for
judicial review of contested cases under Subchapter G, Chapter
2001, Government Code.
[(l) A party to a medical dispute regarding spinal surgery
that remains unresolved after a review by an independent review
organization as provided by Subsections (d) and (e) is entitled to
dispute resolution as provided by Chapter 410.
[(m) The commission by rule may prescribe an alternate
dispute resolution process to resolve disputes regarding medical
services costing less than the cost of a review of the medical
necessity of a health care service by an independent review
organization. The cost of a review under the alternate dispute
resolution process shall be paid by the nonprevailing party.]
SECTION 1.517. Sections 413.041(a), (b), and (d), Labor
Code, are amended to read as follows:
(a) Each health care practitioner shall disclose to the
department [commission] the identity of any health care provider in
which the health care practitioner, or the health care provider
that employs the health care practitioner, has a financial
interest. The health care practitioner shall make the disclosure
in the manner provided by commissioner [commission] rule.
(b) The commissioner [commission] shall require by rule
that a doctor disclose financial interests in other health care
providers [as a condition of registration for the approved doctor
list established under Section 408.023] and shall define "financial
interest" for purposes of this subsection as provided by analogous
federal regulations. The commissioner [commission] by rule shall
adopt the federal standards that prohibit the payment or acceptance
of payment in exchange for health care referrals relating to fraud,
abuse, and antikickbacks.
(d) The department [commission] shall publish all final
disclosure enforcement orders issued under this section on the
department's [commission's] Internet website.
SECTION 1.518. Section 413.042(a), Labor Code, is amended
to read as follows:
(a) A health care provider may not pursue a private claim
against a workers' compensation claimant for all or part of the cost
of a health care service provided to the claimant by the provider
unless:
(1) the injury is finally adjudicated not compensable
under this subtitle; or
(2) the employee violates Section 408C.002 [408.022]
relating to the selection of a doctor and the doctor did not know of
the violation at the time the services were rendered.
SECTION 1.519. Section 413.044, Labor Code, is amended to
read as follows:
Sec. 413.044. SANCTIONS ON DESIGNATED DOCTOR. In addition
to or in lieu of an administrative penalty under Section 415.021 or
a sanction imposed under Section 415.023, the department
[commission] may impose sanctions against a person who serves as a
designated doctor under this subtitle, including a designated
doctor who serves under a provider network, [Chapter 408] who,
after an evaluation conducted under Section 413.002(b)
[413.002(c)], is determined by the department [division] to be out
of compliance with this subtitle or with rules adopted by the
commissioner [commission] relating to medical policies, fee
guidelines, and impairment ratings.
SECTION 1.520. The heading to Subchapter E, Chapter 413,
Labor Code, is amended to read as follows:
SUBCHAPTER E. IMPLEMENTATION OF DEPARTMENT [COMMISSION]
POWERS AND DUTIES
SECTION 1.521. Section 413.051, Labor Code, is amended to
read as follows:
Sec. 413.051. CONTRACTS WITH REVIEW ORGANIZATIONS AND
HEALTH CARE PROVIDERS. (a) In this section, "health care provider
professional review organization" includes an independent review
organization.
(b) The department [commission] may contract with a health
care provider, health care provider professional review
organization, or other entity to develop, maintain, or review
medical policies or fee guidelines or to review compliance with the
medical policies or fee guidelines.
(c) [(b)] For purposes of review or resolution of a dispute
with an insurance carrier that does not use a provider network under
Chapter 408B, as to compliance with the medical policies or fee
guidelines, the department [commission] may contract with a health
care provider, health care provider professional review
organization, or other entity that includes in the review process
health care practitioners who are licensed in the category under
review and are of the same field or specialty as the category under
review.
(d) [(c)] The department [commission] may contract with a
health care provider, health care provider professional review
organization, or other entity for medical consultant services,
including:
(1) independent medical examinations;
(2) medical case reviews; or
(3) establishment of medical policies and fee
guidelines.
(e) [(d)] The commissioner [commission] shall establish
standards for contracts under this section.
[(e) For purposes of this section, "health care provider
professional review organization" includes an independent review
organization.]
SECTION 1.522. Section 413.0511, Labor Code, is amended to
read as follows:
Sec. 413.0511. MEDICAL ADVISOR. (a) The department
[commission] shall employ or contract with a medical advisor, who
must be a physician [doctor as that term is defined by Section
401.011].
(b) The medical advisor shall make recommendations
regarding the adoption of rules to:
(1) develop, maintain, and review guidelines as
provided by Section 413.011, including rules regarding impairment
ratings;
(2) review compliance with those guidelines;
(3) regulate or perform other acts related to medical
benefits as required by the commissioner [commission];
(4) impose sanctions [or delete doctors from the
commission's list of approved doctors under Section 408.023] for[:
[(A) any reason described by Section 408.0231; or
[(B)] noncompliance with commissioner
[commission] rules;
(5) [impose conditions or restrictions as authorized
by Section 408.0231(f);
[(6)] receive, and share with the medical quality
review panel established under Section 413.0512, confidential
information, and other information to which access is otherwise
restricted by law, as provided by Sections 413.0512, 413.0513, and
413.0514 from the Texas State Board of Medical Examiners, the Texas
Board of Chiropractic Examiners, or other occupational licensing
boards regarding a physician, chiropractor, or other type of doctor
[who applies for registration or is registered with the commission
on the list of approved doctors]; and
(6) [(7)] determine minimal modifications to the
reimbursement methodology and model used by the Medicare system as
necessary to meet occupational injury requirements.
SECTION 1.523. Sections 413.0512(a), (c), and (d), Labor
Code, are amended to read as follows:
(a) The commissioner, with the advice of the medical
advisor, shall establish a medical quality review panel of health
care providers to assist the medical advisor in performing the
duties required under Section 413.0511. The panel is [independent
of the medical advisory committee created under Section 413.005 and
is] not subject to Chapter 2110, Government Code.
(c) The medical quality review panel shall recommend to the
medical advisor:
(1) appropriate action regarding doctors, other
health care providers, insurance carriers, [and] utilization
review agents, independent review organizations, and provider
networks; and
(2) the addition or deletion of doctors from the list
of [approved doctors under Section 408.023 or the list of]
designated doctors established under Section 408D.102 [408.122].
(d) A person who serves on the medical quality review panel
is immune from suit and from civil liability for an act performed,
or a recommendation made, within the scope of the person's
functions as a member of the panel if the person acts without malice
and in the reasonable belief that the action or recommendation is
warranted by the facts known to that person. In the event of a civil
action brought against a member of the panel that arises from the
person's participation on the panel, the person is entitled to the
same protections afforded the commissioner or a department employee
[commission member] under Section 34.001, Insurance Code
[402.010].
SECTION 1.524. Section 413.0513, Labor Code, is amended to
read as follows:
Sec. 413.0513. CONFIDENTIALITY REQUIREMENTS. (a)
Information collected, assembled, or maintained by or on behalf of
the department [commission] under Section 413.0511 or 413.0512
constitutes an investigation file for purposes of Section 402.211
[402.092] and may not be disclosed under Section 413.0511 or
413.0512 except as provided by that section.
(b) Confidential information, and other information to
which access is restricted by law, developed by or on behalf of the
department [commission] under Section 413.0511 or 413.0512 is not
subject to discovery or court subpoena in any action other than:
(1) an action to enforce this subtitle brought by the
department [commission], an appropriate licensing or regulatory
agency, or an appropriate enforcement authority; or
(2) a criminal proceeding.
SECTION 1.525. Section 413.0514, Labor Code, is amended to
read as follows:
Sec. 413.0514. INFORMATION SHARING WITH OCCUPATIONAL
LICENSING BOARDS. (a) This section applies only to information
held by or for the department [commission], the Texas State Board of
Medical Examiners, and Texas Board of Chiropractic Examiners that
relates to a person who is licensed or otherwise regulated by any of
those state agencies.
(b) The department [commission] and the Texas State Board of
Medical Examiners on request or on its own initiative, may share
with each other confidential information or information to which
access is otherwise restricted by law. The department [commission]
and the Texas State Board of Medical Examiners shall cooperate with
and assist each other when either agency is conducting an
investigation by providing information to each other that the
sending agency determines is relevant to the investigation. Except
as provided by this section, confidential information that is
shared under this section remains confidential under law and legal
restrictions on access to the information remain in effect.
Furnishing information by the Texas State Board of Medical
Examiners to the department [commission] or by the department
[commission] to the Texas State Board of Medical Examiners under
this subsection does not constitute a waiver of privilege or
confidentiality as established by law.
(c) Information that is received by the department
[commission] from the Texas State Board of Medical Examiners or by
the Texas State Board of Medical Examiners from the department
[commission] remains confidential, may not be disclosed by the
department [commission] except as necessary to further the
investigation, and shall be exempt from disclosure under Sections
402.211 [402.092] and 413.0513.
(d) The department [commission] and the Texas Board of
Chiropractic Examiners, on request or on either agency's [its own]
initiative, may share with each other confidential information or
information to which access is otherwise restricted by law. The
department [commission] and the Texas Board of Chiropractic
Examiners shall cooperate with and assist each other when either
agency is conducting an investigation by providing information to
each other that is relevant to the investigation. Except as
provided by this section, confidential information that is shared
under this section remains confidential under law and legal
restrictions on access to the information remain in effect unless
the agency sharing the information approves use of the information
by the receiving agency for enforcement purposes. Furnishing
information by the Texas Board of Chiropractic Examiners to the
department [commission] or by the department [commission] to the
Texas Board of Chiropractic Examiners under this subsection does
not constitute a waiver of privilege or confidentiality as
established by law.
(e) Information that is received by the department
[commission] from the Texas Board of Chiropractic Examiners or by
the Texas Board of Chiropractic Examiners from the department
remains confidential and may not be disclosed by the department
[commission] except as necessary to further the investigation
unless the agency sharing the information and the agency receiving
the information agree to use of the information by the receiving
agency for enforcement purposes.
(f) The department [commission] and the Texas State Board of
Medical Examiners shall provide information to each other on all
disciplinary actions taken.
(g) The department [commission] and the Texas Board of
Chiropractic Examiners shall provide information to each other on
all disciplinary actions taken.
SECTION 1.526. Section 413.0515, Labor Code, is amended to
read as follows:
Sec. 413.0515. REPORTS OF PHYSICIAN AND CHIROPRACTOR
VIOLATIONS. (a) If the department [commission] or the Texas State
Board of Medical Examiners discovers an act or omission by a
physician that may constitute a felony, a misdemeanor involving
moral turpitude, a violation of state or federal narcotics or
controlled substance law, an offense involving fraud or abuse under
the Medicare or Medicaid program, or a violation of this subtitle,
the agency shall report that act or omission to the other agency.
(b) If the department [commission] or the Texas Board of
Chiropractic Examiners discovers an act or omission by a
chiropractor that may constitute a felony, a misdemeanor involving
moral turpitude, a violation of state or federal narcotics or
controlled substance law, an offense involving fraud or abuse under
the Medicare or Medicaid program, or a violation of this subtitle,
the agency shall report that act or omission to the other agency.
SECTION 1.527. Section 413.052, Labor Code, is amended to
read as follows:
Sec. 413.052. PRODUCTION OF DOCUMENTS; SUBPOENA. The
commissioner [commission] by rule shall establish procedures to
enable the department [commission] to compel the production of
documents under this subtitle. The commissioner shall exercise
subpoena powers under this section in the manner provided by
Subchapter C, Chapter 36, Insurance Code.
SECTION 1.528. Section 413.053, Labor Code, is amended to
read as follows:
Sec. 413.053. STANDARDS OF REPORTING AND BILLING. The
commissioner [commission] by rule shall establish standards of
reporting and billing governing both form and content.
SECTION 1.529. Section 413.054(a), Labor Code, is amended
to read as follows:
(a) A person who performs services for the department
[commission] as a designated doctor, an independent medical
examiner, a doctor performing a medical case review, or a member of
a peer review panel has the same immunity from liability as the
commissioner or a department employee [commission member] under
Section 34.001, Insurance Code [402.010].
SECTION 1.530. Sections 413.055(a) and (b), Labor Code, are
amended to read as follows:
(a) The commissioner [executive director, as provided by
commission rule,] may enter an interlocutory order for the payment
of all or part of medical benefits. The order may address accrued
benefits, future benefits, or both accrued benefits and future
benefits.
(b) The subsequent injury fund shall reimburse an insurance
carrier for any overpayments of benefits made under an order
entered under Subsection (a) if the order is reversed or modified by
final arbitration, order, or decision of the commissioner
[commission] or a court. The commissioner [commission] shall adopt
rules to provide for a periodic reimbursement schedule, providing
for reimbursement at least annually.
SECTION 1.531. The following laws are repealed:
(1) Section 413.005, Labor Code;
(2) Section 413.006, Labor Code; and
(3) Section 413.016, Labor Code.
PART 17. AMENDMENTS TO CHAPTER 414, LABOR CODE
SECTION 1.551. The heading to Chapter 414, Labor Code, is
amended to read as follows:
CHAPTER 414. ENFORCEMENT [DIVISION] OF COMPLIANCE
AND PRACTICE REQUIREMENTS [PRACTICES]
SECTION 1.552. Section 414.002, Labor Code, is amended to
read as follows:
Sec. 414.002. MONITORING DUTIES. (a) The department
[division] shall monitor for compliance with commissioner
[commission] rules, this subtitle, and other laws relating to
workers' compensation the conduct of persons subject to this
subtitle[, other than persons monitored by the division of medical
review]. Persons to be monitored under this chapter include:
(1) persons claiming benefits under this subtitle;
(2) employers;
(3) insurance carriers; [and]
(4) attorneys and other representatives of parties;
(5) health care providers;
(6) independent review organizations; and
(7) provider networks.
(b) The department [division] shall monitor conduct
described by Sections 415.001, 415.002, and 415.003 and refer
persons engaging in that conduct for [to the division of] hearings.
(c) The department [division] shall monitor payments made
to health care providers on behalf of workers' compensation
claimants who receive medical services to ensure that the payments
are made on time as required by Section 408C.006 [408.027].
SECTION 1.553. Section 414.003, Labor Code, is amended to
read as follows:
Sec. 414.003. COMPILATION AND USE OF INFORMATION. (a) The
department [division] shall compile and maintain statistical and
other information as necessary to detect practices or patterns of
conduct by persons subject to monitoring under this chapter that:
(1) violate this subtitle or commissioner
[commission] rules; or
(2) otherwise adversely affect the workers'
compensation system of this state.
(b) The commissioner [commission] shall use the information
compiled under this section to impose appropriate penalties and
other sanctions under Chapters 415 and 416.
SECTION 1.554. Section 414.004, Labor Code, is amended to
read as follows:
Sec. 414.004. PERFORMANCE REVIEW OF INSURANCE CARRIERS.
(a) The department [division] shall review regularly the workers'
compensation records of insurance carriers as required to ensure
compliance with this subtitle.
(b) Each insurance carrier, the carrier's agents, and those
with whom the carrier has contracted to provide, review, or monitor
services under this subtitle shall:
(1) cooperate with the department [division];
(2) make available to the department [division] any
records or other necessary information; and
(3) allow the department [division] access to the
information at reasonable times at the person's offices.
(c) The insurance carrier, other than a governmental
entity, shall pay the reasonable expenses, including travel
expenses, of an auditor who audits for the department an insurance
carrier's workers' compensation records at the office of the
insurance carrier.
SECTION 1.555. Section 414.005, Labor Code, is amended to
read as follows:
Sec. 414.005. WORKERS' COMPENSATION INVESTIGATION UNIT;
FRAUD INVESTIGATIONS. (a) The department [division] shall
maintain an investigation unit to conduct investigations relating
to alleged violations of this subtitle or commissioner [commission]
rules adopted under this subtitle[, with particular emphasis on
violations of Chapters 415 and 416].
(b) The department shall conduct investigations of fraud
involving participants in the workers' compensation system. In
conducting investigations under this subsection, the department
may operate under the insurance fraud unit established under
Chapter 701, Insurance Code.
(c) The department's duties in conducting and prosecuting
fraud investigations under this section are funded through the
maintenance tax assessed under Section 403.002.
SECTION 1.5551. Chapter 414, Labor Code, is amended by
adding Section 414.0055 to read as follows:
Sec. 414.0055. DUTY TO REPORT; ADMINISTRATIVE VIOLATION.
(a) This section applies only to a person who is:
(1) an injured employee or other claimant under this
subtitle;
(2) an insurance carrier;
(3) a doctor or other health care provider who
provides health care services regarding a claim for workers'
compensation benefits; or
(4) an employer.
(b) A person subject to this section who determines that a
fraudulent act has been or is about to be committed by another in
conjunction with a workers' compensation claim shall report the
information in writing to the department not later than the 30th day
after the date the person makes the determination.
(c) A person subject to this section commits a violation if
the person violates Subsection (b). A violation under this
subsection is a Class B administrative violation.
(d) The identity of a person who reports to the department
under Subsection (b) is confidential and is not public information
under Chapter 552, Government Code.
SECTION 1.556. Section 414.006, Labor Code, is amended to
read as follows:
Sec. 414.006. REFERRAL TO OTHER AUTHORITIES. For further
investigation or the institution of appropriate proceedings, the
department [division] may refer the persons involved in a case
subject to an investigation to [:
[(1) the division of hearings; or]
[(2)] other appropriate authorities, including
licensing agencies, district and county attorneys, or the attorney
general.
SECTION 1.557. Section 414.007, Labor Code, is amended to
read as follows:
Sec. 414.007. [REVIEW OF REFERRALS FROM DIVISION OF]
MEDICAL REVIEW. The department [division] shall review information
[and referrals received from the division of medical review]
concerning alleged violations of this subtitle regarding the
provision of medical benefits and, under Sections 414.005 and
414.006 and Chapters 415 and 416, may conduct investigations, make
referrals to other authorities, and initiate administrative
violation proceedings.
SECTION 1.558. Section 414.001, Labor Code, is repealed.
PART 18. AMENDMENTS TO CHAPTER 415, LABOR CODE
SECTION 1.601. Section 415.001, Labor Code, is amended to
read as follows:
Sec. 415.001. ADMINISTRATIVE VIOLATION BY REPRESENTATIVE
OF EMPLOYEE OR LEGAL BENEFICIARY. A representative of an employee
or legal beneficiary commits an administrative violation if the
person wilfully or intentionally:
(1) fails without good cause to attend a dispute
resolution proceeding under this subtitle [within the commission];
(2) attends a dispute resolution proceeding under this
subtitle [within the commission] without complete authority or
fails to exercise authority to effectuate an agreement or
settlement;
(3) commits an act of barratry under Section 38.12,
Penal Code;
(4) withholds from the employee's or legal
beneficiary's weekly benefits or from advances amounts not
authorized to be withheld by the department [commission];
(5) enters into a settlement or agreement without the
knowledge, consent, and signature of the employee or legal
beneficiary;
(6) takes a fee or withholds expenses in excess of the
amounts authorized by the department [commission];
(7) refuses or fails to make prompt delivery to the
employee or legal beneficiary of funds belonging to the employee or
legal beneficiary as a result of a settlement, agreement, order, or
award;
(8) violates the Texas Disciplinary Rules of
Professional Conduct of the State Bar of Texas;
(9) misrepresents the provisions of this subtitle to
an employee, an employer, a health care provider, or a legal
beneficiary;
(10) violates a commissioner [commission] rule; or
(11) fails to comply with this subtitle.
SECTION 1.602. Section 415.002, Labor Code, is amended to
read as follows:
Sec. 415.002. ADMINISTRATIVE VIOLATION BY [AN] INSURANCE
CARRIER. (a) An insurance carrier or its representative commits an
administrative violation if that person wilfully or intentionally:
(1) misrepresents a provision of this subtitle to an
employee, an employer, a health care provider, or a legal
beneficiary;
(2) terminates or reduces benefits without
substantiating evidence that the action is reasonable and
authorized by law;
(3) instructs an employer not to file a document
required to be filed with the department [commission];
(4) instructs or encourages an employer to violate a
claimant's right to medical benefits under this subtitle;
(5) fails to tender promptly full death benefits if a
legitimate dispute does not exist as to the liability of the
insurance carrier;
(6) allows an employer, other than a self-insured
employer, to dictate the methods by which and the terms on which a
claim is handled and settled;
(7) fails to confirm medical benefits coverage to a
person or facility providing medical treatment to a claimant if a
legitimate dispute does not exist as to the liability of the
insurance carrier;
(8) fails, without good cause, to attend a dispute
resolution proceeding under this subtitle [within the commission];
(9) attends a dispute resolution proceeding under this
subtitle [within the commission] without complete authority or
fails to exercise authority to effectuate agreement or settlement;
(10) adjusts a workers' compensation claim in a manner
contrary to license requirements for an insurance adjuster,
including the requirements of Chapter 4101, Insurance Code [407,
Acts of the 63rd Legislature, Regular Session, 1973 (Article
21.07-4, Vernon's Texas Insurance Code)], or commissioner [the]
rules [of the State Board of Insurance];
(11) fails to process claims promptly in a reasonable
and prudent manner;
(12) fails to initiate or reinstate benefits when due
if a legitimate dispute does not exist as to the liability of the
insurance carrier;
(13) misrepresents the reason for not paying benefits
or terminating or reducing the payment of benefits;
(14) dates documents to misrepresent the actual date
of the initiation of benefits;
(15) makes a notation on a draft or other instrument
indicating that the draft or instrument represents a final
settlement of a claim if the claim is still open and pending before
the department [commission];
(16) fails or refuses to pay benefits from week to week
as and when due directly to the person entitled to the benefits;
(17) fails to pay an order awarding benefits;
(18) controverts a claim if the evidence clearly
indicates liability;
(19) unreasonably disputes the reasonableness and
necessity of health care;
(20) violates a commissioner [commission] rule; or
(21) fails to comply with a provision of this
subtitle.
(b) An insurance carrier or its representative does not
commit an administrative violation under Subsection (a)(6) by
allowing an employer to:
(1) freely discuss a claim;
(2) assist in the investigation and evaluation of a
claim; or
(3) attend a proceeding [of the commission] and
participate at the proceeding in accordance with this subtitle.
SECTION 1.603. Section 415.003, Labor Code, is amended to
read as follows:
Sec. 415.003. ADMINISTRATIVE VIOLATION BY HEALTH CARE
PROVIDER. A health care provider commits an administrative
violation if the person wilfully or intentionally:
(1) submits a charge for health care that was not
furnished;
(2) administers improper, unreasonable, or medically
unnecessary treatment or services;
(3) makes an unnecessary referral;
(4) violates the department's [commission's] fee [and
treatment] guidelines;
(5) violates a commissioner [commission] rule; or
(6) fails to comply with a provision of this subtitle.
SECTION 1.604. Sections 415.0035(a), (b), (e), and (f),
Labor Code, are amended to read as follows:
(a) An insurance carrier or its representative commits an
administrative violation if that person:
(1) fails to submit to the department [commission] a
settlement or agreement of the parties;
(2) fails to timely notify the department [commission]
of the termination or reduction of benefits and the reason for that
action; or
(3) denies preauthorization in a manner that is not in
accordance with Chapter 408B or Section 413.014 or with
commissioner rules adopted [by the commission] under Section
413.014.
(b) A health care provider commits an administrative
violation if that person:
(1) fails or refuses to timely file required reports
or records; or
(2) fails to file with the department [commission] the
[annual] disclosure statement required by Section 413.041.
(e) An insurance carrier or health care provider commits an
administrative violation if that person violates this subtitle or a
rule, order, or decision of the commissioner [commission].
(f) A subsequent administrative violation under this
section, after prior notice to the insurance carrier or health care
provider of noncompliance, is subject to penalties as provided by
Section 415.021. Prior notice under this subsection is not
required if the violation was committed wilfully or intentionally,
or if the violation was of a decision or order of the commissioner
[commission].
SECTION 1.605. Section 415.007(a), Labor Code, is amended
to read as follows:
(a) An attorney who represents a claimant before the
department [commission] may not lend money to the claimant during
the pendency of the workers' compensation claim.
SECTION 1.606. Section 415.008(e), Labor Code, is amended
to read as follows:
(e) If an administrative violation proceeding is pending
under this section against an employee or person claiming death
benefits, the department [commission] may not take final action on
the person's benefits.
SECTION 1.607. Sections 415.021(a)-(c), Labor Code, are
amended to read as follows:
(a) The department [commission] may assess an
administrative penalty against a person who commits an
administrative violation. Notwithstanding Subsection (c), the
commissioner [commission] by rule shall adopt a schedule of
specific monetary administrative penalties for specific violations
under this subtitle.
(b) The department [commission] may assess an
administrative penalty not to exceed $10,000 and may enter a cease
and desist order against a person who:
(1) commits repeated administrative violations;
(2) allows, as a business practice, the commission of
repeated administrative violations; or
(3) violates an order or decision of the commissioner
[commission].
(c) In assessing an administrative penalty, the department
[commission] shall consider:
(1) the seriousness of the violation, including the
nature, circumstances, consequences, extent, and gravity of the
prohibited act;
(2) the history and extent of previous administrative
violations;
(3) the demonstrated good faith of the violator,
including actions taken to rectify the consequences of the
prohibited act;
(4) the economic benefit resulting from the prohibited
act;
(5) the penalty necessary to deter future violations;
and
(6) other matters that justice may require.
SECTION 1.608. Section 415.023(b), Labor Code, is amended
to read as follows:
(b) The commissioner [commission] may adopt rules providing
for:
(1) a reduction or denial of fees;
(2) public or private reprimand by the commissioner
[commission];
(3) suspension from practice before the department
[commission];
(4) restriction, suspension, or revocation of the
right to receive reimbursement under this subtitle; or
(5) referral and petition to the appropriate licensing
authority for appropriate disciplinary action, including the
restriction, suspension, or revocation of the person's license.
SECTION 1.609. Section 415.024, Labor Code, is amended to
read as follows:
Sec. 415.024. BREACH OF SETTLEMENT AGREEMENT;
ADMINISTRATIVE VIOLATION. A material and substantial breach of a
settlement agreement that establishes a compliance plan is a Class
A administrative violation. In determining the amount of the
penalty, the department [commission] shall consider the total
volume of claims handled by the insurance carrier.
SECTION 1.610. Section 415.031, Labor Code, is amended to
read as follows:
Sec. 415.031. INITIATION OF ADMINISTRATIVE VIOLATION
PROCEEDINGS. Any person may request the initiation of
administrative violation proceedings by filing a written
allegation with the department [director of the division of
compliance and practices].
SECTION 1.611. Section 415.032, Labor Code, is amended to
read as follows:
Sec. 415.032. NOTICE OF POSSIBLE ADMINISTRATIVE VIOLATION;
RESPONSE. (a) If investigation by the department [division of
compliance and practices] indicates that an administrative
violation has occurred, the department [division] shall notify the
person alleged to have committed the violation in writing of:
(1) the charge;
(2) the proposed penalty;
(3) the right to consent to the charge and the penalty;
and
(4) the right to request a hearing.
(b) Not later than the 20th day after the date on which
notice is received, the charged party shall:
(1) remit the amount of the penalty to the department
[commission]; or
(2) submit to the department [commission] a written
request for a hearing.
SECTION 1.612. Section 415.033, Labor Code, is amended to
read as follows:
Sec. 415.033. FAILURE TO RESPOND. If, without good cause, a
charged party fails to respond as required under Section 415.032,
the penalty is due and the department [commission] shall initiate
enforcement proceedings.
SECTION 1.613. Section 415.034(a), Labor Code, is amended
to read as follows:
(a) On the request of the charged party or the commissioner
[executive director], the State Office of Administrative Hearings
shall set a hearing. The hearing shall be conducted in the manner
provided for a contested case under Chapter 2001, Government Code
[(the administrative procedure law)].
SECTION 1.614. Sections 415.035(b) and (d), Labor Code, are
amended to read as follows:
(b) If an administrative penalty is assessed, the person
charged shall:
(1) forward the amount of the penalty to the
department [executive director] for deposit in an escrow account;
or
(2) post with the department [executive director] a
bond for the amount of the penalty, effective until all judicial
review of the determination is final.
(d) If the court determines that the penalty should not have
been assessed or reduces the amount of the penalty, the department
[executive director] shall:
(1) remit the appropriate amount, plus accrued
interest, if the administrative penalty was paid; or
(2) release the bond.
PART 19. AMENDMENT TO CHAPTER 416, LABOR CODE
SECTION 1.651. Section 416.001, Labor Code, is amended to
read as follows:
Sec. 416.001. CERTAIN CAUSES OF ACTION PRECLUDED. An
action taken by an insurance carrier under an order of the
commissioner [commission or recommendations of a benefit review
officer under Section 410.031, 410.032, or 410.033] may not be the
basis of a cause of action against the insurance carrier for a
breach of the duty of good faith and fair dealing.
PART 20. AMENDMENTS TO CHAPTER 417, LABOR CODE
SECTION 1.701. Sections 417.001(c) and (d), Labor Code, are
amended to read as follows:
(c) If a claimant receives benefits from the subsequent
injury fund, the department [commission] is:
(1) considered to be the insurance carrier under this
section for purposes of those benefits;
(2) subrogated to the rights of the claimant; and
(3) entitled to reimbursement in the same manner as
the insurance carrier.
(d) The department [commission] shall remit money recovered
under this section to the comptroller for deposit to the credit of
the subsequent injury fund.
SECTION 1.702. Section 417.003(b), Labor Code, is amended
to read as follows:
(b) An attorney who represents the claimant and is also to
represent the subrogated insurance carrier shall make a full
written disclosure to the claimant before employment as an attorney
by the insurance carrier. The claimant must acknowledge the
disclosure and consent to the representation. A signed copy of the
disclosure shall be furnished to all concerned parties and made a
part of the department [commission] file. A copy of the disclosure
with the claimant's consent shall be filed with the claimant's
pleading before a judgment is entered and approved by the court.
The claimant's attorney may not receive a fee under this section to
which the attorney is otherwise entitled under an agreement with
the insurance carrier unless the attorney complies with the
requirements of this subsection.
PART 21. ADOPTION OF CHAPTER 419, LABOR CODE
SECTION 1.751. Subtitle A, Title 5, Labor Code, is amended
by adding Chapter 419 to read as follows:
CHAPTER 419. MISUSE OF DEPARTMENT NAME
Sec. 419.001. DEFINITIONS. (a) In this chapter:
(1) "Representation of the department's logo" includes
a nonexact representation that is deceptively similar to the logo
used by the department.
(2) "Representation of the state seal" has the meaning
assigned by Section 17.08(a)(2), Business & Commerce Code.
(b) A term or representation is "deceptively similar" for
purposes of this chapter if:
(1) a reasonable person would believe that the term or
representation is in any manner approved, endorsed, sponsored,
authorized by, the same as, or associated with the department, this
state, or an agency of this state; or
(2) the circumstances under which the term is used
could mislead a reasonable person as to its identity.
Sec. 419.002. MISUSE OF DEPARTMENT'S NAME OR SYMBOLS
PROHIBITED IN RELATION TO WORKERS' COMPENSATION DUTIES OF
DEPARTMENT. (a) Except as authorized by law, a person, in
connection with any impersonation, advertisement, solicitation,
business name, business activity, document, product, or service
made or offered by the person regarding workers' compensation
coverage or benefits, may not knowingly use or cause to be used:
(1) the words "Texas Department of Insurance,"
"Department of Insurance," or "Texas Workers' Compensation";
(2) any term using both "Texas" and "Workers'
Compensation" or any term using both "Texas" and "Workers' Comp";
(3) the initials "T.D.I."; or
(4) any combination or variation of the words or
initials, or any term deceptively similar to the words or initials,
described by Subdivisions (1)-(3).
(b) A person subject to Subsection (a) may not knowingly use
or cause to be used a word, term, or initials described by
Subsection (a) alone or in conjunction with:
(1) the state seal or a representation of the state
seal;
(2) a picture or map of this state; or
(3) the official logo of the department or a
representation of the department's logo.
Sec. 419.003. RULES. The commissioner may adopt rules
relating to the regulation of the use of the department's name and
other rules as necessary to implement this chapter.
Sec. 419.004. CIVIL PENALTY. (a) A person who violates
Section 419.002 or a rule adopted under this chapter is liable for a
civil penalty not to exceed $5,000 for each violation.
(b) The attorney general, at the request of the department,
shall bring an action to collect a civil penalty under this section
in a district court in Travis County.
Sec. 419.005. ADMINISTRATIVE PENALTY. (a) The department
may assess an administrative penalty against a person who violates
Section 419.002 or a rule adopted under this chapter.
(b) An administrative penalty imposed under this section:
(1) may not exceed $5,000 for each violation; and
(2) is subject to the procedural requirements adopted
for administrative penalties imposed under Section 415.021.
Sec. 419.006. INJUNCTIVE RELIEF. (a) At the request of the
commissioner, the attorney general or a district attorney may bring
an action in district court in Travis County to enjoin or restrain a
violation or threatened violation of this chapter on a showing that
a violation has occurred or is likely to occur.
(b) The department may recover the costs of investigating an
alleged violation of this chapter if an injunction is issued.
Sec. 419.007. REMEDIES NOT EXCLUSIVE. The remedies
provided by this chapter are not exclusive and may be sought in any
combination determined by the department as necessary to enforce
this chapter.
ARTICLE 2. AMENDMENTS TO SUBTITLE C, TITLE 5, LABOR CODE
PART 1. AMENDMENTS TO CHAPTER 501, LABOR CODE
SECTION 2.001. Section 501.001(1), Labor Code, is amended
to read as follows:
(1) "Department" ["Commission"] means the Texas
Department of Insurance [Workers' Compensation Commission].
SECTION 2.002. Section 501.002, Labor Code, is amended by
amending Subsections (a) and (c) and adding Subsection (a-1) to
read as follows:
(a) The following provisions of Subtitles A and B apply to
and are included in this chapter except to the extent that they are
inconsistent with this chapter:
(1) Chapter 401, other than Section 401.012 defining
"employee";
(2) Chapter 402;
(3) Chapter 403, other than Sections 403.001-403.005;
(4) Chapters 404 and [Chapter] 405;
(5) Subchapters B and D through H, Chapter 406, other
than Sections 406.071(a), 406.073, and 406.075;
(6) Chapter 408, other than Sections 408.001(b) and
(c);
(7) Chapters 408A, 408C, 408D, and 408E, except as
provided by Subsection (a-1);
(8) Chapters 409 and 410;
(9) [(8)] Subchapters A and G, Chapter 411, other than
Sections 411.003 and 411.004;
(10) [(9)] Chapters 412-417; and
(11) [(10)] Chapter 451.
(a-1) Each state agency shall provide workers' compensation
medical benefits for the agency's employees through a provider
network under Chapter 408B if the commissioner of insurance
determines that provision of those benefits through a network is
available to the employees and practical for the state. To that
extent, Chapter 408B applies to this chapter.
(c) For the purpose of applying the provisions listed by
Subsections [Subsection] (a) and (a-1) to this chapter, "insurer"
or "employer" means "state," "office," "director," or "state
agency," as applicable.
SECTION 2.003. Section 501.026(d), Labor Code, is amended
to read as follows:
(d) A person entitled to benefits under this section may
receive the benefits only if the person seeks medical attention
from a doctor for the injury not later than 48 hours after the
occurrence of the injury or after the date the person knew or should
have known the injury occurred. The person shall comply with the
requirements of Section 409.001 by providing notice of the injury
to the department [commission] or the state agency with which the
officer or employee under Subsection (b) is associated.
SECTION 2.004. Sections 501.050(a), (b), and (d), Labor
Code, are amended to read as follows:
(a) In each case appealed from the department [commission]
to a [county or] district court:
(1) the clerk of the court shall mail to the department
[commission]:
(A) not later than the 20th day after the date the
case is filed, a notice containing the style, number, and date of
filing of the case; and
(B) not later than the 20th day after the date the
judgment is rendered, a certified copy of the judgment; and
(2) the attorney preparing the judgment shall file the
original and a copy of the judgment with the clerk.
(b) An attorney's failure to comply with Subsection (a)(2)
does not excuse the failure of a [county or] district clerk to
comply with Subsection (a)(1)(B).
(d) A [county or] district clerk who violates this section
commits an offense. An offense under this subsection is a
misdemeanor punishable by a fine not to exceed $250.
PART 2. AMENDMENTS TO CHAPTER 502, LABOR CODE
SECTION 2.051. Section 502.001(1), Labor Code, is amended
to read as follows:
(1) "Department" ["Commission"] means the Texas
Department of Insurance [Workers' Compensation Commission].
SECTION 2.052. Section 502.002, Labor Code, is amended by
amending Subsections (a) and (b) and adding Subsection (a-1) to
read as follows:
(a) The following provisions of Subtitle A apply to and are
included in this chapter except to the extent that they are
inconsistent with this chapter:
(1) Chapter 401, other than Section 401.012 defining
"employee";
(2) Chapter 402;
(3) Chapter 403, other than Sections 403.001-403.005;
(4) Chapters 404 and [Chapter] 405;
(5) Sections 406.031-406.033; Subchapter D, Chapter
406; Sections 406.092 and 406.093;
(6) Chapter 408, other than Sections 408.001(b) and
(c);
(7) Chapters 408A, 408C, 408D, and 408E, except as
provided by Subsection (a-1);
(8) Chapters 409 and 410;
(9) [(8)] Subchapters A and G, Chapter 411, other than
Sections 411.003 and 411.004; and
(10) [(9)] Chapters 412-417.
(a-1) Each institution shall provide workers' compensation
medical benefits for the institution's employees through a provider
network under Chapter 408B if the commissioner of insurance
determines that provision of those benefits through a network is
available to the employees and practical for the state. To that
extent, Chapter 408B applies to this chapter.
(b) For the purpose of applying the provisions listed by
Subsections [Subsection] (a) and (a-1) to this chapter, "employer"
means "the institution."
SECTION 2.053. Section 502.041, Labor Code, is amended to
read as follows:
Sec. 502.041. EXHAUSTION OF ANNUAL AND SICK LEAVE. (a) An
employee may elect to use accrued sick leave before receiving
income benefits. If an employee elects to use sick leave, the
employee is not entitled to income benefits under this chapter
until the employee has exhausted the employee's accrued sick leave
[institution may provide that an injured employee may remain on the
payroll until the employee's earned annual and sick leave is
exhausted].
(b) An employee may elect to use all or any number of weeks
of accrued annual leave after the employee's accrued sick leave is
exhausted. If an employee elects to use annual leave, the employee
is not entitled to income benefits under this chapter until the
elected number of weeks of leave have been exhausted. [While an
injured employee remains on the payroll under Subsection (a),
medical services remain available to the employee, but workers'
compensation benefits do not accrue or become payable to the
injured employee.]
SECTION 2.054. The heading to Section 502.063, Labor Code,
is amended to read as follows:
Sec. 502.063. CERTIFIED COPIES OF [COMMISSION] DOCUMENTS.
SECTION 2.055. Sections 502.063(a) and (c), Labor Code, are
amended to read as follows:
(a) The department [commission] shall furnish a certified
copy of an order, award, decision, or paper on file in the
department's [commission's] office to a person entitled to the copy
on written request and payment of the fee for the copy. The fee is
the same as that charged for similar services by the secretary of
state's office.
(c) A fee or salary may not be paid to a department [member
or] employee [of the commission] for making a copy under Subsection
(a) that exceeds the fee charged for the copy.
SECTION 2.056. Section 502.065, Labor Code, is amended to
read as follows:
Sec. 502.065. REPORTS OF INJURIES. (a) In addition to a
report of an injury filed with the department [commission] under
Section 409.005(a), an institution shall file a supplemental report
that contains:
(1) the name, age, sex, and occupation of the injured
employee;
(2) the character of work in which the employee was
engaged at the time of the injury;
(3) the place, date, and hour of the injury; and
(4) the nature and cause of the injury.
(b) The institution shall file the supplemental report on a
form prescribed by the commissioner of insurance [obtained for that
purpose]:
(1) on the termination of incapacity of the injured
employee; or
(2) if the incapacity extends beyond 60 days.
SECTION 2.057. Sections 502.066(a) and (e), Labor Code, are
amended to read as follows:
(a) The department [commission] may require an employee who
claims to have been injured to submit to an examination by the
department [commission] or a person acting under the department's
[commission's] authority at a reasonable time and place in this
state.
(e) The institution shall pay the fee set by the department
for the services [commission] of a physician or chiropractor
selected by the employee under Subsection (b) or (d).
SECTION 2.058. Section 502.067(a), Labor Code, is amended
to read as follows:
(a) The commissioner of insurance [commission] may order or
direct the institution to reduce or suspend the compensation of an
injured employee who:
(1) persists in insanitary or injurious practices that
tend to imperil or retard the employee's recovery; or
(2) refuses to submit to medical, surgical,
chiropractic, or other remedial treatment recognized by the state
that is reasonably essential to promote the employee's recovery.
SECTION 2.059. Section 502.068, Labor Code, is amended to
read as follows:
Sec. 502.068. POSTPONEMENT OF HEARING. If an injured
employee is receiving benefits under this chapter and the
institution is providing hospitalization, medical treatment, or
chiropractic care to the employee, the department [commission] may
postpone the hearing on the employee's claim. An appeal may not be
taken from an [a commission] order of the commissioner of insurance
under this section.
SECTION 2.060. Section 502.069, Labor Code, is amended to
read as follows:
Sec. 502.069. NOTICE OF APPEAL; NOTICE OF TRIAL COURT
JUDGMENT; OFFENSE. (a) In each case appealed from the department
[commission] to a [county or] district court:
(1) the clerk of the court shall mail to the department
[commission]:
(A) not later than the 20th day after the date the
case is filed, a notice containing the style, number, and date of
filing of the case; and
(B) not later than the 20th day after the date the
judgment is rendered, a certified copy of the judgment; and
(2) the attorney preparing the judgment shall file the
original and a copy of the judgment with the clerk.
(b) An attorney's failure to comply with Subsection (a)(2)
does not excuse the failure of a [county or] district clerk to
comply with Subsection (a)(1)(B).
(c) The duties of a [county or] district clerk under
Subsection (a)(1) are part of the clerk's ex officio duties, and the
clerk is not entitled to a fee for the services.
(d) A [county or] district clerk who violates this section
commits an offense. An offense under this section is a misdemeanor
punishable by a fine not to exceed $250.
PART 3. AMENDMENTS TO CHAPTER 503, LABOR CODE
SECTION 2.101. Section 503.001(1), Labor Code, is amended
to read as follows:
(1) "Department" ["Commission"] means the Texas
Department of Insurance [Workers' Compensation Commission].
SECTION 2.102. Section 503.002, Labor Code, is amended by
amending Subsections (a) and (b) and adding Subsection (a-1) to
read as follows:
(a) The following provisions of Subtitle A apply to and are
included in this chapter except to the extent that they are
inconsistent with this chapter:
(1) Chapter 401, other than Section 401.012 defining
"employee";
(2) Chapter 402;
(3) Chapter 403, other than Sections 403.001-403.005;
(4) Chapters 404 and [Chapter] 405;
(5) Sections 406.031-406.033; Subchapter D, Chapter
406; Sections 406.092 and 406.093;
(6) Chapter 408, other than Sections 408.001(b) and
(c);
(7) Chapters 408A, 408C, 408D, and 408E, except as
provided by Subsection (a-1);
(8) Chapters 409 and 410;
(9) [(8)] Subchapters A and G, Chapter 411, other than
Sections 411.003 and 411.004; and
(10) [(9)] Chapters 412-417.
(a-1) Each institution shall provide workers' compensation
medical benefits for the institution's employees through a provider
network under Chapter 408B if the commissioner of insurance
determines that provision of those benefits through a network is
available to the employees and practical for the state. To that
extent, Chapter 408B applies to this chapter.
(b) For the purpose of applying the provisions listed by
Subsections [Subsection] (a) and (a-1) to this chapter, "employer"
means "the institution."
SECTION 2.103. Section 503.041, Labor Code, is amended to
read as follows:
Sec. 503.041. EXHAUSTION OF ANNUAL AND SICK LEAVE. (a) An
employee may elect to use accrued sick leave before receiving
income benefits. If an employee elects to use sick leave, the
employee is not entitled to income benefits under this chapter
until the employee has exhausted the employee's accrued sick leave.
[An institution may provide that an injured employee may remain on
the payroll until the employee's earned annual and sick leave is
exhausted.]
(b) An employee may elect to use all or any number of weeks
of accrued annual leave after the employee's accrued sick leave is
exhausted. If an employee elects to use annual leave, the employee
is not entitled to income benefits under this chapter until the
elected number of weeks of leave have been exhausted. [While an
injured employee remains on the payroll under Subsection (a), the
employee is entitled to medical benefits but income benefits do not
accrue.]
SECTION 2.104. The heading to Section 503.063, Labor Code,
is amended to read as follows:
Sec. 503.063. CERTIFIED COPIES OF [COMMISSION] DOCUMENTS.
SECTION 2.105. Sections 503.063(a) and (c), Labor Code, are
amended to read as follows:
(a) The department [commission] shall furnish a certified
copy of an order, award, decision, or paper on file in the
department's [commission's] office to a person entitled to the copy
on written request and payment of the fee for the copy. The fee is
the same as that charged for similar services by the secretary of
state's office.
(c) A fee or salary may not be paid to a department [member
or] employee [of the commission] for making a copy under Subsection
(a) that exceeds the fee charged for the copy.
SECTION 2.106. Section 503.065, Labor Code, is amended to
read as follows:
Sec. 503.065. REPORTS OF INJURIES. (a) In addition to a
report of an injury filed with the department [commission] under
Section 409.005(a), an institution shall file a supplemental report
that contains:
(1) the name, age, sex, and occupation of the injured
employee;
(2) the character of work in which the employee was
engaged at the time of the injury;
(3) the place, date, and hour of the injury; and
(4) the nature and cause of the injury.
(b) The institution shall file the supplemental report on a
form prescribed by the commissioner of insurance [obtained for that
purpose]:
(1) on the termination of incapacity of the injured
employee; or
(2) if the incapacity extends beyond 60 days.
SECTION 2.107. Sections 503.066(a) and (e), Labor Code, are
amended to read as follows:
(a) The department [commission] may require an employee who
claims to have been injured to submit to an examination by the
department [commission] or a person acting under the department's
[commission's] authority at a reasonable time and place in this
state.
(e) The institution shall pay the fee, as set by the
department [commission], for the services of a physician selected
by the employee under Subsection (b) or (d).
SECTION 2.108. Section 503.067(a), Labor Code, is amended
to read as follows:
(a) The commissioner of insurance [commission] may order or
direct the institution to reduce or suspend the compensation of an
injured employee who:
(1) persists in insanitary or injurious practices that
tend to imperil or retard the employee's recovery; or
(2) refuses to submit to medical, surgical, or other
remedial treatment recognized by the state that is reasonably
essential to promote the employee's recovery.
SECTION 2.109. Section 503.068, Labor Code, is amended to
read as follows:
Sec. 503.068. POSTPONEMENT OF HEARING. If an injured
employee is receiving benefits under this chapter and the
institution is providing hospitalization or medical treatment to
the employee, the department [commission] may postpone the hearing
on the employee's claim. An appeal may not be taken from an [a
commission] order of the commissioner of insurance under this
section.
SECTION 2.110. Section 503.069, Labor Code, is amended to
read as follows:
Sec. 503.069. NOTICE OF APPEAL; NOTICE OF TRIAL COURT
JUDGMENT; OFFENSE. (a) In each case appealed from the department
[commission] to a [county or] district court:
(1) the clerk of the court shall mail to the department
[commission]:
(A) not later than the 20th day after the date the
case is filed, a notice containing the style, number, and date of
filing of the case; and
(B) not later than the 20th day after the date the
judgment is rendered, a certified copy of the judgment; and
(2) the attorney preparing the judgment shall file the
original and a copy of the judgment with the clerk.
(b) An attorney's failure to comply with Subsection (a)(2)
does not excuse the failure of a [county or] district clerk to
comply with Subsection (a)(1)(B).
(c) The duties of a [county or] district clerk under
Subsection (a)(1) are part of the clerk's ex officio duties, and the
clerk is not entitled to a fee for the services.
(d) A [county or] district clerk who violates this section
commits an offense. An offense under this section is a misdemeanor
punishable by a fine not to exceed $250.
SECTION 2.111. Section 503.070(a), Labor Code, is amended
to read as follows:
(a) A party who does not consent to abide by the final
decision of the department [commission] shall file notice with the
department [commission] as required by Section 410.253 and bring
suit in the county in which the injury occurred to set aside the
final decision of the department [commission].
PART 4. AMENDMENTS TO CHAPTER 504, LABOR CODE
SECTION 2.151. Section 504.001, Labor Code, is amended by
amending Subdivision (1) and adding Subdivision (4) to read as
follows:
(1) "Department" ["Commission"] means the Texas
Department of Insurance [Workers' Compensation Commission].
(4) "Pool" means two or more political subdivisions
that collectively self-insure under an interlocal contract entered
into under Chapter 791, Government Code.
SECTION 2.152. Section 504.002, Labor Code, is amended by
amending Subsections (a) and (b) and adding Subsection (a-1) to
read as follows:
(a) The following provisions of Subtitles A and B apply to
and are included in this chapter except to the extent that they are
inconsistent with this chapter:
(1) Chapter 401, other than Section 401.011(18)
defining "employer" and Section 401.012 defining "employee";
(2) Chapter 402;
(3) Chapter 403, other than Sections 403.001-403.005;
(4) Sections 406.006-406.009 and Subchapters B and
D-G, Chapter 406, other than Sections 406.033, 406.034, 406.035,
406.091, and 406.096;
(5) Chapter 408, other than Sections 408.001(b) and
(c);
(6) Chapters 408A, 408C, 408D, and 408E, except as
provided by Subsection (a-1);
(7) Chapters 409-412 [417]; [and]
(8) Chapter 413, except as provided by Section
504.011;
(9) Chapters 414-417; and
(10) [(7)] Chapter 451.
(a-1) Chapter 408B applies to this chapter as provided by
Section 504.011.
(b) For the purpose of applying the provisions listed by
Subsections [Subsection] (a) and (a-1) to this chapter, "employer"
means "political subdivision."
SECTION 2.153. Section 504.011, Labor Code, is amended to
read as follows:
Sec. 504.011. METHOD OF PROVIDING COVERAGE. (a) A
political subdivision shall provide [extend] workers' compensation
benefits to its employees by:
(1) becoming a self-insurer;
(2) providing insurance under a workers' compensation
insurance policy; or
(3) entering into an interlocal agreement with other
political subdivisions providing for self-insurance.
(b) A political subdivision shall provide workers'
compensation medical benefits for the political subdivision's
employees through a provider network under Chapter 408B if the
governing body of the political subdivision determines that
provision of those benefits through a network is available to the
employees and practical for the political subdivision. A political
subdivision may enter into interlocal agreements and other
agreements with other political subdivisions to establish or
contract with provider networks under this section.
(c) If a political subdivision or a pool determines that a
provider network under Chapter 408B is not available or practical
for the political subdivision or pool, the political subdivision or
pool may provide medical benefits to its injured employees or to the
injured employees of the members of the pool:
(1) in the manner provided by Chapter 408, other than
Sections 408.001(b) and (c) and Section 408.002, and by Subchapters
B and C, Chapter 413; or
(2) by directly contracting with health care providers
or by contracting through a health benefits pool established under
Chapter 172, Local Government Code.
(d) The provisions of Chapters 408 and 408A relating to
medical benefits, Chapter 408B, and Chapter 413, do not apply if the
political subdivision or pool provides medical benefits under
Subsection (c)(2).
(e) If the political subdivision or pool provides medical
benefits under Subsection (c)(2), the following standards apply:
(1) the political subdivision or pool must ensure that
workers' compensation medical benefits are reasonably available to
all injured employees of the political subdivision within a
designated service area;
(2) the political subdivision or pool must ensure that
all necessary health care services are provided in a manner that
will ensure the availability of and accessibility to adequate
numbers of health care providers, specialty care providers, and
health care facilities;
(3) the political subdivision or pool must have an
internal review process for resolving complaints relating to the
manner of providing medical benefits, including an appeal to the
governing body or its designee and review by an independent review
organization;
(4) the political subdivision or pool must establish
reasonable procedures for transition of injured employees to
contracting health care providers and for continuity of treatment,
including:
(A) notice of impending termination of a
provider's contract; and
(B) maintenance of a current list of contracting
providers;
(5) the political subdivision or pool shall provide
for emergency care, as defined by Section 401.011, if:
(A) an injured employee is not able to reasonably
reach a contracting provider; and
(B) the care is for:
(i) medical screening or another evaluation
that is necessary to determine whether a medical emergency
condition exists;
(ii) necessary emergency care services
including treatment and stabilization; and
(iii) services originating in a hospital
emergency facility following treatment or stabilization of an
emergency medical condition;
(6) prospective or concurrent review of the medical
necessity and appropriateness of health care services must comply
with Article 21.58A, Insurance Code; and
(7) the political subdivision or pool shall continue
to report data to the appropriate agency as required by Subtitle A.
(f) This section may not be construed as waiving sovereign
immunity or creating a new cause of action.
SECTION 2.154. Sections 504.016(d) and (e), Labor Code, are
amended to read as follows:
(d) A joint insurance fund created under this section may
provide to the department [Texas Department of Insurance] loss data
in the same manner as an insurance company writing workers'
compensation insurance. The department [State Board of Insurance]
shall use the loss data as provided by Subchapter D, Chapter 5,
Insurance Code.
(e) Except as provided by Subsection (d), a joint insurance
fund created under this section is not considered insurance for
purposes of any state statute and is not subject to [State Board of
Insurance] rules adopted by the commissioner of insurance.
SECTION 2.155. Section 504.017, Labor Code, is amended to
read as follows:
Sec. 504.017. FEDERAL AND STATE FUNDED TRANSPORTATION
ENTITIES. An entity is eligible to participate under Section
504.016 or Chapter 791 or 2259, Government Code, if the entity
provides transportation subsidized in whole or in part by and
provided to clients of:
(1) the [Texas] Department of [on] Aging and
Disability Services;
(2) the Department of Assistive and Rehabilitative
Services [Texas Commission on Alcohol and Drug Abuse];
(3) the Department of State Health Services [Texas
Commission for the Blind];
(4) the Texas Cancer Council;
(5) the Department of Family and Protective Services
[Texas Commission for the Deaf and Hard of Hearing];
(6) the Texas Department of Housing and Community
Affairs;
(7) the Health and Human Services Commission [Texas
Department of Human Services]; or
(8) [the Texas Department of Mental Health and Mental
Retardation;
[(9) the Texas Rehabilitation Commission; or
[(10)] the Texas Youth Commission.
SECTION 2.156. The heading to Section 504.018, Labor Code,
is amended to read as follows:
Sec. 504.018. NOTICE TO DEPARTMENT [COMMISSION] AND
EMPLOYEES; EFFECT ON COMMON-LAW OR STATUTORY LIABILITY.
SECTION 2.157. Section 504.018(a), Labor Code, is amended
to read as follows:
(a) A political subdivision shall notify the department
[commission] of the method by which the [its] employees of the
political subdivision will receive benefits, the approximate
number of employees covered, and the estimated amount of payroll.
PART 5. AMENDMENTS TO CHAPTER 505, LABOR CODE
SECTION 2.201. Section 505.002, Labor Code, is amended by
amending Subsections (a) and (b) and adding Subsection (a-1) to
read as follows:
(a) The following provisions of Subtitles A and B apply to
and are included in this chapter except to the extent that they are
inconsistent with this chapter:
(1) Chapter 401, other than Section 401.012, defining
"employee";
(2) Chapter 402;
(3) Chapter 403, other than Sections 403.001-403.005;
(4) Chapters 404 and [Chapter] 405;
(5) Subchapters B, D, E, and H, Chapter 406, other than
Sections 406.071-406.073, and 406.075;
(6) Chapter 408, other than Sections 408.001(b) and
(c);
(7) Chapters 408A, 408C, 408D, and 408E, except as
provided by Subsection (a-1);
(8) Chapters 409 and 410;
(9) [(8)] Subchapters A and G, Chapter 411, other than
Sections 411.003 and 411.004;
(10) [(9)] Chapters 412-417; and
(11) [(10)] Chapter 451.
(a-1) The department shall provide workers' compensation
medical benefits for the department's employees through a provider
network under Chapter 408B if the commissioner of insurance
determines that provision of those benefits through a network is
available to the employees and practical for the state. To that
extent, Chapter 408B applies to this chapter.
(b) For the purpose of applying the provisions listed by
Subsections [Subsection] (a) and (a-1) to this chapter, "employer"
means "department."
SECTION 2.202. The heading to Section 505.053, Labor Code,
is amended to read as follows:
Sec. 505.053. CERTIFIED COPIES OF [COMMISSION] DOCUMENTS.
SECTION 2.203. Sections 505.053(a) and (c), Labor Code, are
amended to read as follows:
(a) The Texas Department of Insurance [commission] shall
furnish a certified copy of an order, award, decision, or paper on
file in that department's [the commission's] office to a person
entitled to the copy on written request and payment of the fee for
the copy. The fee shall be the same as that charged for similar
services by the secretary of state's office.
(c) A fee or salary may not be paid to an employee of the
Texas Department of Insurance [a person in the commission] for
making the copies that exceeds the fee charged for the copies.
SECTION 2.204. Section 505.054(d), Labor Code, is amended
to read as follows:
(d) A physician designated under Subsection (c) who
conducts an examination shall file with the department a complete
transcript of the examination on a form furnished by the
department. The department shall maintain all reports under this
subsection as part of the department's permanent records. A report
under this subsection is admissible in evidence before the Texas
Department of Insurance [commission] and in an appeal from a final
award or ruling of the Texas Department of Insurance [commission]
in which the individual named in the examination is a claimant for
compensation under this chapter. A report under this subsection
that is admitted is prima facie evidence of the facts stated in the
report.
SECTION 2.205. Section 505.055, Labor Code, is amended to
read as follows:
Sec. 505.055. REPORTS OF INJURIES. (a) A report of an
injury filed with the Texas Department of Insurance [commission]
under Section 409.005, in addition to the information required by
[commission] rules of the commissioner of insurance, must contain:
(1) the name, age, sex, and occupation of the injured
employee;
(2) the character of work in which the employee was
engaged at the time of the injury;
(3) the place, date, and hour of the injury; and
(4) the nature and cause of the injury.
(b) In addition to subsequent reports of an injury filed
with the Texas Department of Insurance [commission] under Section
409.005(i) [409.005(e)], the department shall file a subsequent
report on a form prescribed by the commissioner of insurance
[obtained for that purpose]:
(1) on the termination of incapacity of the injured
employee; or
(2) if the incapacity extends beyond 60 days.
SECTION 2.206. Sections 505.056(a) and (d), Labor Code, are
amended to read as follows:
(a) The Texas Department of Insurance [commission] may
require an employee who claims to have been injured to submit to an
examination by that department [the commission] or a person acting
under the [commission's] authority of the commissioner of insurance
at a reasonable time and place in this state.
(d) On the request of an employee or the department, the
employee or the department is entitled to have a physician selected
by the employee or the department present to participate in an
examination under Subsection (a) or Section 408.004. The employee
is entitled to have a physician selected by the employee present to
participate in an examination under Subsection (c). The department
shall pay the fee set by the Texas Department of Insurance for the
services [commission] of a physician selected by the employee under
this subsection.
SECTION 2.207. Section 505.057(a), Labor Code, is amended
to read as follows:
(a) The Texas Department of Insurance [commission] may
order or direct the department to reduce or suspend the
compensation of an injured employee if the employee:
(1) persists in insanitary or injurious practices that
tend to imperil or retard the employee's recovery; or
(2) refuses to submit to medical, surgical, or other
remedial treatment recognized by the state that is reasonably
essential to promote the employee's recovery.
SECTION 2.208. Section 505.058, Labor Code, is amended to
read as follows:
Sec. 505.058. POSTPONEMENT OF HEARING. If an injured
employee is receiving benefits under this chapter and the
department is providing hospitalization or medical treatment to the
employee, the Texas Department of Insurance [commission] may
postpone the hearing of the employee's claim. An appeal may not be
taken from an [a commission] order of the commissioner of insurance
under this section.
SECTION 2.209. Section 505.059, Labor Code, is amended to
read as follows:
Sec. 505.059. NOTICE OF APPEAL; NOTICE OF TRIAL COURT
JUDGMENT; OFFENSE. (a) In each case appealed from the Texas
Department of Insurance [commission] to a [county or] district
court:
(1) the clerk of the court shall mail to the Texas
Department of Insurance [commission]:
(A) not later than the 20th day after the date the
case is filed, a notice containing the style, number, and date of
filing of the case; and
(B) not later than the 20th day after the date the
judgment is rendered, a certified copy of the judgment; and
(2) the attorney preparing the judgment shall file the
original and a copy of the judgment with the clerk.
(b) An attorney's failure to comply with Subsection (a)(2)
does not excuse the failure of a [county or] district clerk to
comply with Subsection (a)(1)(B).
(c) The duties of a [county or] district clerk under
Subsection (a)(1) are part of the clerk's ex officio duties, and the
clerk is not entitled to a fee for the services.
(d) A [county or] district clerk who violates this section
commits an offense. An offense under this section is a misdemeanor
punishable by a fine not to exceed $250.
SECTION 2.210. Section 505.001(a)(1), Labor Code, is
repealed.
ARTICLE 3. CONFORMING AMENDMENTS
PART 1. CONFORMING AMENDMENTS--GOVERNMENT CODE
SECTION 3.001. Section 23.101(a), Government Code, is
amended to read as follows:
(a) The trial courts of this state shall regularly and
frequently set hearings and trials of pending matters, giving
preference to hearings and trials of the following:
(1) temporary injunctions;
(2) criminal actions, with the following actions given
preference over other criminal actions:
(A) criminal actions against defendants who are
detained in jail pending trial;
(B) criminal actions involving a charge that a
person committed an act of family violence, as defined by Section
71.004, Family Code; and
(C) an offense under:
(i) Section 21.11, Penal Code;
(ii) Chapter 22, Penal Code, if the victim
of the alleged offense is younger than 17 years of age;
(iii) Section 25.02, Penal Code, if the
victim of the alleged offense is younger than 17 years of age; or
(iv) Section 25.06, Penal Code;
(3) election contests and suits under the Election
Code;
(4) orders for the protection of the family under
Subtitle B, Title 4, Family Code;
(5) appeals of final rulings and decisions of the
Texas Department of Insurance regarding workers' compensation
claims [Workers' Compensation Commission] and claims under the
Federal Employers' Liability Act and the Jones Act; and
(6) appeals of final orders of the commissioner of the
General Land Office under Section 51.3021, Natural Resources Code.
SECTION 3.002. Section 25.0003(c), Government Code, is
amended to read as follows:
(c) In addition to other jurisdiction provided by law, a
statutory county court exercising civil jurisdiction concurrent
with the constitutional jurisdiction of the county court has
concurrent jurisdiction with the district court in[:
[(1)] civil cases in which the matter in controversy
exceeds $500 but does not exceed $100,000, excluding interest,
statutory or punitive damages and penalties, and attorney's fees
and costs, as alleged on the face of the petition[; and
[(2) appeals of final rulings and decisions of the
Texas Workers' Compensation Commission, regardless of the amount in
controversy].
SECTION 3.003. Section 25.0222(a), Government Code, is
amended to read as follows:
(a) In addition to the jurisdiction provided by Section
25.0003 and other law, a statutory county court in Brazoria County
has concurrent jurisdiction with the district court in:
(1) civil cases in which the matter in controversy
exceeds $500 but does not exceed $100,000, excluding interest,
statutory damages and penalties, and attorney's fees and costs, as
alleged on the face of the petition; and
(2) [appeals of final rulings and decisions of the
Texas Workers' Compensation Commission, regardless of the amount in
controversy; and
[(3)] family law cases and proceedings and juvenile
jurisdiction under Section 23.001.
SECTION 3.004. Section 25.0862(i), Government Code, is
amended to read as follows:
(i) The clerk of the statutory county courts and statutory
probate court shall keep a separate docket for each court. The
clerk shall tax the official court reporter's fees as costs in civil
actions in the same manner as the fee is taxed in civil cases in the
district courts. The district clerk serves as clerk of the county
courts in a cause of action arising under the Family Code [and an
appeal of a final ruling or decision of the Texas Workers'
Compensation Commission], and the county clerk serves as clerk of
the court in all other cases.
SECTION 3.005. Section 25.2222(b), Government Code, as
amended by Chapter 22, Acts of the 72nd Legislature, Regular
Session, 1991, is amended to read as follows:
(b) A county court at law has concurrent jurisdiction with
the district court in:
(1) civil cases in which the matter in controversy
exceeds $500 and does not exceed $100,000, excluding mandatory
damages and penalties, attorney's fees, interest, and costs;
(2) nonjury family law cases and proceedings;
(3) [final rulings and decisions of the Texas Workers'
Compensation Commission, regardless of the amount in controversy;
[(4)] eminent domain proceedings, both statutory and
inverse, regardless of the amount in controversy;
(4) [(5)] suits to decide the issue of title to real or
personal property;
(5) [(6)] suits to recover damages for slander or
defamation of character;
(6) [(7)] suits for the enforcement of a lien on real
property;
(7) [(8)] suits for the forfeiture of a corporate
charter;
(8) [(9)] suits for the trial of the right to property
valued at $200 or more that has been levied on under a writ of
execution, sequestration, or attachment; and
(9) [(10)] suits for the recovery of real property.
SECTION 3.006. Section 551.044(b), Government Code, is
amended to read as follows:
(b) Subsection (a) does not apply to:
(1) the Texas Department of Insurance, as regards
proceedings and activities of the department or commissioner of
insurance under Title 5, Labor Code [Workers' Compensation
Commission]; or
(2) the governing board of an institution of higher
education.
SECTION 3.007. Section 2001.003(7), Government Code, is
amended to read as follows:
(7) "State agency" means a state officer, board,
commission, or department with statewide jurisdiction that makes
rules or determines contested cases. The term includes the State
Office of Administrative Hearings for the purpose of determining
contested cases. The term does not include:
(A) a state agency wholly financed by federal
money;
(B) the legislature;
(C) the courts;
(D) the Texas Department of Insurance, as regards
proceedings and activities of the department or commissioner of
insurance under Title 5, Labor Code [Workers' Compensation
Commission]; or
(E) an institution of higher education.
SECTION 3.008. Section 2002.001(3), Government Code, is
amended to read as follows:
(3) "State agency" means a state officer, board,
commission, or department with statewide jurisdiction that makes
rules or determines contested cases other than:
(A) an agency wholly financed by federal money;
(B) the legislature;
(C) the courts;
(D) the Texas Department of Insurance, as regards
proceedings and activities of the department or commissioner of
insurance under Title 5, Labor Code [Workers' Compensation
Commission]; or
(E) an institution of higher education.
SECTION 3.009. Section 2003.001(4), Government Code, is
amended to read as follows:
(4) "State agency" means:
(A) a state board, commission, department, or
other agency that is subject to Chapter 2001; and
(B) to the extent provided by Title 5, Labor
Code, the Texas Department of Insurance, as regards proceedings and
activities of the department or commissioner of insurance under
Title 5, Labor Code [Workers' Compensation Commission].
SECTION 3.010. Section 2003.021(c), Government Code, is
amended to read as follows:
(c) The office shall conduct hearings under Title 5, Labor
Code, as provided by that title. In conducting hearings under Title
5, Labor Code, the office shall consider the applicable substantive
rules and policies of the Texas Department of Insurance regarding
workers' compensation claims [Workers' Compensation Commission].
The office and the Texas Department of Insurance [Workers'
Compensation Commission] shall enter into an interagency contract
under Chapter 771 to pay the costs incurred by the office in
implementing this subsection.
SECTION 3.011. Section 2054.021(c), Government Code, is
amended to read as follows:
(c) Two groups each composed of three ex officio members
serve on the board on a rotating basis. The ex officio members
serve as nonvoting members of the board. Only one group serves at a
time. The first group is composed of the commissioner of insurance
[executive director of the Texas Workers' Compensation
Commission], the executive commissioner of the Health and Human
Services Commission [health and human services], and the executive
director of the Texas Department of Transportation. Members of the
first group serve for two-year terms that begin February 1 of every
other odd-numbered year and that expire on February 1 of the next
odd-numbered year. The second group is composed of the
commissioner of education, the executive director of the Texas
Department of Criminal Justice, and the executive director of the
Parks and Wildlife Department. Members of the second group serve
for two-year terms that begin February 1 of the odd-numbered years
in which the terms of members of the first group expire and that
expire on February 1 of the next odd-numbered year.
PART 2. CONFORMING AMENDMENTS--INSURANCE CODE
SECTION 3.051. Section 31.002, Insurance Code, is amended
to read as follows:
Sec. 31.002. DUTIES OF DEPARTMENT. In addition to the other
duties required of the Texas Department of Insurance, the
department shall:
(1) regulate the business of insurance in this state;
[and]
(2) administer the workers' compensation system of
this state as provided by Title 5, Labor Code; and
(3) ensure that this code and other laws regarding
insurance and insurance companies are executed.
SECTION 3.052. Section 31.004, Insurance Code, is amended
to read as follows:
Sec. 31.004. SUNSET PROVISION. (a) The Texas Department of
Insurance is subject to Chapter 325, Government Code (Texas Sunset
Act). Unless continued in existence as provided by that chapter,
the department is abolished September 1, 2007.
(b) In conducting its review of the Texas Department of
Insurance as required by Subsection (a), the Sunset Advisory
Commission shall limit its review to the operations of that
department under the Insurance Code. Unless continued as provided
by Chapter 325, Government Code, the duties of the Texas Department
of Insurance under Title 5, Labor Code, expire September 1, 2019, or
another date designated by the legislature.
SECTION 3.053. Section 31.021(b), Insurance Code, is
amended to read as follows:
(b) The commissioner has the powers and duties vested in the
department by:
(1) this code and other insurance laws of this state;
and
(2) Title 5, Labor Code, and other workers'
compensation insurance laws of this state.
SECTION 3.054. Section 33.007(a), Insurance Code, is
amended to read as follows:
(a) A person who served as the commissioner, the general
counsel to the commissioner, or the public insurance counsel, or as
an employee of the State Office of Administrative Hearings who was
involved in hearing cases under this code, [or] another insurance
law of this state, or Title 5, Labor Code, commits an offense if the
person represents another person in a matter before the department
or receives compensation for services performed on behalf of
another person regarding a matter pending before the department
during the one-year period after the date the person ceased to be
the commissioner, the general counsel to the commissioner, the
public insurance counsel, or an employee of the State Office of
Administrative Hearings.
SECTION 3.055. Section 36.104, Insurance Code, is amended
to read as follows:
Sec. 36.104. INFORMAL DISPOSITION OF CERTAIN CONTESTED
CASES [CASE]. (a) The commissioner may, on written agreement or
stipulation of each party and any intervenor, informally dispose of
a contested case in accordance with Section 2001.056, Government
Code, notwithstanding any provision of this code that requires a
hearing before the commissioner.
(b) This section does not apply to a contested case under
Title 5, Labor Code.
SECTION 3.056. Subchapter D, Chapter 36, Insurance Code, is
amended by adding Section 36.2015 to read as follows:
Sec. 36.2015. ACTIONS UNDER TITLE 5, LABOR CODE.
Notwithstanding Section 36.201, a decision, order, rule, form, or
administrative or other ruling of the commissioner under Title 5,
Labor Code, is subject to judicial review as provided by Title 5,
Labor Code.
SECTION 3.057. Section 40.003(c), Insurance Code, is
amended to read as follows:
(c) This chapter does not apply to a proceeding conducted
under Chapter 201 [Article 1.04D] or to a proceeding relating to:
(1) approving or reviewing rates or rating manuals
filed by an individual company, unless the rates or manuals are
contested;
(2) adopting a rule;
(3) adopting or approving a policy form or policy form
endorsement;
(4) adopting or approving a plan of operation for an
organization subject to the jurisdiction of the department; [or]
(5) adopting a presumptive rate under Chapter 1153; or
(6) a workers' compensation claim brought under Title
5, Labor Code [Article 3.53].
SECTION 3.058. Section 81.001(c), Insurance Code, is
amended to read as follows:
(c) This section does not apply to conduct that is:
(1) a violation that is ongoing at the time the
department seeks to impose the sanction, penalty, or fine; [or]
(2) a violation of Subchapter A, Chapter 544 [Article
21.21-6 of this code, as added by Chapter 415, Acts of the 74th
Legislature, Regular Session, 1995], or Section 541.057 [4(7)(a),
Article 21.21 of this code], as those provisions relate to
discrimination on the basis of race or color, regardless of the time
the conduct occurs; or
(3) a violation of Title 5, Labor Code.
SECTION 3.059. Section 84.002, Insurance Code, is amended
by adding Subsection (c) to read as follows:
(c) This chapter applies to a monetary penalty the
department or commissioner imposes under Title 5, Labor Code, only
as provided by that title.
SECTION 3.060. Section 843.101, Insurance Code, is amended
by adding Subsection (e) to read as follows:
(e) A health maintenance organization may serve as a
provider network, as defined by Section 401.011, Labor Code, in
accordance with Chapter 408B, Labor Code.
SECTION 3.061. Section 1301.056(b), Insurance Code, as
effective April 1, 2005, is amended to read as follows:
(b) A party to a preferred provider contract, including a
contract with a preferred provider organization, may not sell,
lease, or otherwise transfer information regarding the payment or
reimbursement terms of the contract without the express authority
of and prior adequate notification to the other contracting
parties. This subsection does not affect the authority of the
commissioner [or the Texas Workers' Compensation Commission] under
this code or Title 5, Labor Code, to request and obtain information.
SECTION 3.062. Subchapter D, Chapter 5, Insurance Code, is
amended by adding Articles 5.55A and 5.55D to read as follows:
Art. 5.55A. WORKERS' COMPENSATION COVERAGE WRITTEN BY GROUP
HEALTH INSURERS AUTHORIZED. (a) A person authorized by the
department to engage in the business of insurance in this state
under a certificate of authority that includes authorization to
write group health insurance may also write workers' compensation
insurance in this state.
(b) A person writing workers' compensation insurance under
this article is, with respect to that insurance, subject to each
duty imposed on a workers' compensation insurer under this code and
under Title 5, Labor Code, including provisions relating to the
payment of premium and maintenance taxes and maintenance of
reserves, and is a member insurer under Article 21.28-C of this
code.
(c) Notwithstanding Subsection (b) of this article, the
commissioner by rule may provide that a person writing workers'
compensation insurance under this article may instead comply with
specified regulatory provisions otherwise applicable to the
person, such as provisions relating to authorized investments and
transactions for a life, health, and accident insurance company, if
the commissioner finds that those provisions provide at least as
much protection to insureds, insurers, creditors, and the public as
the comparable provisions otherwise applicable to a workers'
compensation insurer.
Art. 5.55D. DISCOUNTS FOR CERTAIN PROGRAMS
Sec. 1. DEFINITION. In this article, "insurer" means a
person authorized and admitted by the department to engage in the
business of insurance in this state under a certificate of
authority that includes authorization to write workers'
compensation insurance. The term includes the Texas Mutual
Insurance Company.
Sec. 2. REQUIRED FILING OF DISCOUNT INFORMATION. (a) Each
insurer shall file with the department in the manner prescribed by
the commissioner by rule information regarding any premium
discounts offered by the insurer to an employer who is a
policyholder under a policy of workers' compensation insurance for
the use by the employer of:
(1) return-to-work programs for injured employees;
and
(2) employee safety programs.
(b) The insurer shall include in the filing the percentage
amount discounted from the premium for each program described under
Subsection (a) of this section.
Sec. 3. DEPARTMENT ANALYSIS; RULES. The department shall
analyze the information contained in filings made under this
article and shall determine whether the mandatory use of the
workers' compensation insurance premium discounts would improve
the operation of the workers' compensation system of this state. If
the department does so determine, the commissioner by rule may
establish a mandatory premium discount program under this article.
SECTION 3.063. Article 5.58(b), Insurance Code, is amended
to read as follows:
(b) Standards and Procedures. For purposes of Subsection
(c) of this article, the commissioner shall establish standards and
procedures for categorizing insurance and medical benefits
reported on each workers' compensation claim. The commissioner
shall [consult with the Texas Workers' Compensation Commission and
the Research and Oversight Council on Workers' Compensation in
establishing these standards to] ensure that the data collection
methodology will also yield data necessary for research and medical
cost containment efforts.
SECTION 3.064. Article 5.60A, Insurance Code, is amended to
read as follows:
Art. 5.60A. RATE HEARINGS. (a) The commissioner [Board]
shall conduct a public [an annual] hearing not later than December
1, 2008, to review rates to be charged for workers' compensation
insurance written in this state [under this subchapter]. A public
hearing under this article is not a contested case as defined by
Section 2001.003, Government Code. [The hearing shall be conducted
under the contested case provisions of the Administrative Procedure
and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
Statutes).]
(b) Not later than the 30th day before the date of the public
hearing required under Subsection (a) of this article, each insurer
subject to this subchapter shall file the insurer's rates,
supporting information, and supplementary rating information with
the commissioner [The Board shall conduct a hearing six months
prior to the annual hearing to revise rates to establish the
methodology and sources of data to be used in reviewing rates. The
hearing shall be conducted under the Administrative Procedure and
Texas Register Act (Article 6252-13a, Vernon's Texas Civil
Statutes)].
(c) The commissioner shall review the information submitted
under Subsection (b) of this section to determine the positive or
negative impact of the enactment of House Bill 7, Acts of the 79th
Legislature, Regular Session, 2005, on workers' compensation rates
and premiums. The commissioner may consider other factors,
including relativities under Article 5.60 of this code, in
determining whether a change in rates has impacted the premium
charged to policyholders [To assist the Board in making rates and
to provide additional information on certain trends that may affect
the costs of workers' compensation insurance, the executive
director of the Texas Workers' Compensation Commission or a person
designated by that officer shall testify at any rate hearing
conducted under this article. The testimony shall relate to trends
in:
[(1) claims resolution of workers' compensation cases;
and
[(2) cost components in workers' compensation cases].
(d) The commissioner may implement rules as necessary to
mandate rate reductions or to modify the use of individual risk
variations if the commissioner determines that the rates or
premiums charged by insurers are excessive, as that term is defined
in this code [The testimony of the executive director or designee
is subject to cross-examination by the Board and any party to the
hearing].
(e) The commissioner may adopt rules as necessary to mandate
rate or premium reductions by insurers for the use of
cost-containment strategies that result in savings to the workers'
compensation system, including use of a provider network health
care delivery system, as described by Chapter 408B, Labor Code [The
Board shall consider changes in the workers' compensation laws when
setting workers' compensation insurance rates].
(f) Not later than January 1, 2009, the commissioner shall
submit a report to the governor, the lieutenant governor, the
speaker of the house of representatives, and the members of the 80th
Legislature regarding the information collected from the insurer
filings under this article. The commissioner shall recommend
proposed legislation that reflects the findings of the report and
how that information may be used to lower the rates filed by
insurers and the premium charged to policyholders.
(g) The commissioner may schedule a public hearing to review
rates and premiums to be charged for workers' compensation
insurance each biennium under this article.
(h) This section expires September 1, 2019.
SECTION 3.065. Article 5.65A(a), Insurance Code, is amended
to read as follows:
(a) A company or association that writes workers'
compensation insurance in this state shall notify each policyholder
of any claim that is filed against the policy. Thereafter a company
shall notify the policyholder of any proposal to settle a claim or,
on receipt of a written request from the policyholder, of any
administrative or judicial proceeding relating to the resolution of
a claim[, including a benefit review conference conducted by the
Texas Workers' Compensation Commission].
SECTION 3.066. Sections 8(a), (e), (g)-(i), (k), and (l),
Article 5.76-3, Insurance Code, are amended to read as follows:
(a) The company may make and enforce requirements for the
prevention of injuries to employees of its policyholders or
applicants for insurance under this article. For this purpose,
representatives of the company[, representatives of the
commission,] or representatives of the department on reasonable
notice shall be granted free access to the premises of each
policyholder or applicant during regular working hours.
(e) The policyholder shall obtain the safety consultation
not later than the 30th day after the effective date of the policy
and shall obtain the safety consultation from the department
[division of workers' health and safety of the commission], the
company, or another professional source approved for that purpose
by the department [division of workers' health and safety]. The
safety consultant shall file a written report with the department
[commission] and the policyholder setting out any hazardous
conditions or practices identified by the safety consultation.
(g) The department [division of workers' health and safety
of the commission] may investigate accidents occurring at the work
sites of a policyholder for whom a plan has been developed under
Subsection (f) of this section, and [the division] may otherwise
monitor the implementation of the accident prevention plan as it
finds necessary.
(h) In accordance with rules adopted by the commissioner
[commission], not earlier than 90 days or later than six months
after the development of an accident prevention plan under
Subsection (f) of this section, the department [division of
workers' health and safety of the commission] shall conduct a
follow-up inspection of the policyholder's premises. The
department [commission] may require the participation of the safety
consultant who performed the initial consultation and developed the
safety plan. If the commissioner [division] determines that the
policyholder has complied with the terms of the accident prevention
plan or has implemented other accepted corrective measures, the
commissioner [division] shall so certify. If a policyholder fails
or refuses to implement the accident prevention plan or other
suitable hazard abatement measures, the policyholder may elect to
cancel coverage not later than the 30th day after the date of the
[division] determination. If the policyholder does not elect to
cancel, the company may cancel the coverage or the commissioner
[commission] may assess an administrative penalty not to exceed
$5,000. Each day of noncompliance constitutes a separate violation.
Penalties collected under this section shall be deposited in the
general revenue fund and may be appropriated [to the credit of the
commission or reappropriated] to the department [commission] to
offset the costs of implementing and administering this section.
(i) In assessing an administrative penalty, the
commissioner [commission] may consider any matter that justice may
require and shall consider:
(1) the seriousness of the violation, including the
nature, circumstances, consequences, extent, and gravity of the
prohibited act;
(2) the history and extent of previous administrative
violations;
(3) the demonstrated good faith of the violator,
including actions taken to rectify the consequences of the
prohibited act;
(4) any economic benefit resulting from the prohibited
act; and
(5) the penalty necessary to deter future violations.
(k) The department [commission] shall charge the
policyholder for the reasonable cost of services provided under
Subsections (e), (f), and (h) of this section. The fees for those
services shall be set at a cost-reimbursement level including a
reasonable allocation of the department's [commission's]
administrative costs.
(l) The department [compliance and practices division of
the commission] shall enforce compliance with this section through
the administrative violation proceedings under Chapter 415, Labor
Code.
SECTION 3.067. Sections 9(a), (b), and (e), Article 5.76-3,
Insurance Code, are amended to read as follows:
(a) The company shall develop and implement a program to
identify and investigate fraud and violations of this code relating
to workers' compensation insurance by an applicant, policyholder,
claimant, agent, insurer, health care provider, or other person.
The company shall cooperate with the department [commission] to
compile and maintain information necessary to detect practices or
patterns of conduct that violate this code relating to the workers'
compensation insurance or Subtitle A, Title 5, Labor Code (the
Texas Workers' Compensation Act).
(b) The company may conduct investigations of cases of
suspected fraud and violations of this code relating to workers'
compensation insurance. The company may:
(1) coordinate its investigations with those
conducted by the department [commission] to avoid duplication of
efforts; and
(2) refer cases that are not otherwise resolved by the
company to the department [commission] to:
(A) perform any further investigations that are
necessary under the circumstances;
(B) conduct administrative violation
proceedings; and
(C) assess and collect penalties and
restitution.
(e) Penalties collected under Subsection (b) of this
section shall be deposited in the Texas Department of Insurance
operating account [general revenue fund to the credit of the
commission] and shall be appropriated to the department
[commission] to offset the costs of this program.
SECTION 3.068. Section 10(a), Article 5.76-3, Insurance
Code, is amended to read as follows:
(a) Information maintained in the investigation files of
the company is confidential and may not be disclosed except:
(1) in a criminal proceeding;
(2) in a hearing conducted by the department
[commission];
(3) on a judicial determination of good cause; or
(4) to a governmental agency, political subdivision,
or regulatory body if the disclosure is necessary or proper for the
enforcement of the laws of this or another state or of the United
States.
SECTION 3.069. Section 12(e), Article 5.76-3, Insurance
Code, is amended to read as follows:
(e) The company shall file annual statements with the
department [and the commission] in the same manner as required of
other workers' compensation insurance carriers, and the
commissioner shall include a report on the company's condition in
the commissioner's annual report under Section 32.021 of this code.
SECTION 3.070. Section 16(b), Article 5.76-3, Insurance
Code, is amended to read as follows:
(b) The company shall file with the department [and the
commission] all reports required of other workers' compensation
insurers.
SECTION 3.071. Sections 10(a) and (c), Article 5.76-5,
Insurance Code, are amended to read as follows:
(a) A maintenance tax surcharge is assessed against:
(1) each insurance company writing workers'
compensation insurance in this state;
(2) each certified self-insurer under Chapter 407,
Labor Code [as provided in Chapter D, Article 3, Texas Workers'
Compensation Act (Article 8308-3.51 et seq., Vernon's Texas Civil
Statutes)]; and
(3) the fund.
(c) On determining [receiving notice of] the rate of
assessment [set by the Texas Workers' Compensation Commission]
under Section 403.003, Labor Code [2.23, Texas Workers'
Compensation Act (Article 8308-2.23, Vernon's Texas Civil
Statutes)], the commissioner [State Board of Insurance] shall
increase the tax rate to a rate sufficient to pay all debt service
on the bonds subject to the maximum tax rate established by Section
403.002, Labor Code [2.22, Texas Workers' Compensation Act (Article
8308-2.22, Vernon's Texas Civil Statutes)]. If the resulting tax
rate is insufficient to pay all costs for the department under this
article [Texas Workers' Compensation Commission] and all debt
service on the bonds, the commissioner [State Board of Insurance]
may assess an additional surcharge not to exceed one percent of
gross workers' compensation premiums to cover all debt service on
the bonds. In this code, the maintenance tax surcharge includes the
additional maintenance tax assessed under this subsection and the
surcharge assessed under this subsection to pay all debt service of
the bonds.
SECTION 3.072. Section 3A, Article 21.28, Insurance Code,
is amended to read as follows:
Sec. 3A. WORKERS' COMPENSATION CARRIER: NOTIFICATION [OF
TEXAS WORKERS' COMPENSATION COMMISSION]. (a) The liquidator shall
notify the department [Texas Workers' Compensation Commission]
immediately upon a finding of insolvency or impairment upon any
insurance company which has in force any workers' compensation
coverage in Texas.
(b) The department [Texas Workers' Compensation Commission]
shall, upon said notice, submit to the liquidator a list of active
cases pending before the department [Texas Workers' Compensation
Commission] in which there has been an acceptance of liability by
the carrier, where it appears that no bona fide dispute exists and
where payments were commenced prior to the finding of insolvency or
impairment and where future or past indemnity or medical payments
are due.
(c) Notwithstanding the provisions of Section 3 of this
Article, the liquidator is authorized to commence or continue the
payment of claims based upon the list submitted in Subsection (b)
above.
(d) In order to avoid undue delay in the payment of covered
workers' compensation claims, the liquidator shall contract with
[the Texas Workers' Compensation Pool or] any [other] qualified
organization for claims adjusting. Files and information delivered
by the department [Texas Workers' Compensation Commission] to the
liquidator may be delivered to the [Texas Workers' Compensation
Pool or any] organization with which the liquidator has contracted
for claims adjusting services.
[(e) The Texas Workers' Compensation Commission shall report
to the State Board of Insurance any occasion when a workers'
compensation insurer has committed acts that may indicate insurer
financial impairment, delinquency or insolvency.]
SECTION 3.073. Section 8(d), Article 21.28-C, Insurance
Code, is amended to read as follows:
(d) The association shall investigate and adjust,
compromise, settle, and pay covered claims to the extent of the
association's obligation and deny all other claims. The
association may review settlements, releases, and judgments to
which the impaired insurer or its insureds were parties to
determine the extent to which those settlements, releases, and
judgments may be properly contested. Any judgment taken before the
designation of impairment in which an insured under a liability
policy or the insurer failed to exhaust all appeals, any judgment
taken by default or consent against an insured or the impaired
insurer, and any settlement, release, or judgment entered into by
the insured or the impaired insurer, is not binding on the
association, and may not be considered as evidence of liability or
of damages in connection with any claim brought against the
association or any other party under this Act. Notwithstanding any
other provision of this Act, a covered claim shall not include any
claim filed with the guaranty association on a date that is later
than eighteen months after the date of the order of liquidation,
except that a claim for workers' compensation benefits is governed
by Title 5, Labor Code, and the applicable rules of the commissioner
[Texas Workers' Compensation Commission].
SECTION 3.074. Section 4(l), Article 21.58A, Insurance
Code, is amended to read as follows:
(l) Unless precluded or modified by contract, a utilization
review agent shall reimburse health care providers for the
reasonable costs for providing medical information in writing,
including copying and transmitting any requested patient records or
other documents. A health care provider's charges for providing
medical information to a utilization review agent shall not exceed
the cost of copying set by rule of the commissioner [Texas Workers'
Compensation Commission] for records regarding a workers'
compensation claim and may not include any costs that are otherwise
recouped as a part of the charge for health care.
SECTION 3.075. Section 14(c), Article 21.58A, Insurance
Code, is amended to read as follows:
(c) Except as otherwise provided by this subsection, this
article applies to utilization review of health care services
provided to persons eligible for workers' compensation medical
benefits under Title 5, Labor Code. The commissioner shall
regulate in the manner provided by this article a person who
performs review of a medical benefit provided under Title 5
[Chapter 408], Labor Code. [This subsection does not affect the
authority of the Texas Workers' Compensation Commission to exercise
the powers granted to that commission under Title 5, Labor Code.]
In the event of a conflict between this article and Title 5, Labor
Code, Title 5, Labor Code, prevails. The commissioner [and the
Texas Workers' Compensation Commission] may adopt rules [and enter
into memoranda of understanding] as necessary to implement this
subsection.
SECTION 3.076. The following laws are repealed:
(1) Section 31.006, Insurance Code; and
(2) Section 1(2), Article 5.76-3, Insurance Code.
PART 3. CONFORMING AMENDMENTS--OTHER CODES
SECTION 3.101. Section 92.009, Health and Safety Code, is
amended to read as follows:
Sec. 92.009. COORDINATION WITH TEXAS DEPARTMENT OF
INSURANCE [WORKERS' COMPENSATION COMMISSION]. The department and
the Texas Department of Insurance [Workers' Compensation
Commission] shall enter into a memorandum of understanding which
shall include the following:
(1) the department and the Texas Department of
Insurance [commission] shall exchange relevant injury data on an
ongoing basis notwithstanding Section 92.006;
(2) confidentiality of injury data provided to the
department by the Texas Department of Insurance [commission] is
governed by Subtitle A, Title 5, Labor Code;
(3) confidentiality of injury data provided to the
Texas Department of Insurance [commission] by the department is
governed by Section 92.006; and
(4) cooperation in conducting investigations of
work-related injuries.
SECTION 3.102. Section 91.003(b), Labor Code, is amended to
read as follows:
(b) In particular, the Texas Workforce Commission, the
Texas Department of Insurance, [the Texas Workers' Compensation
Commission,] and the attorney general's office shall assist in the
implementation of this chapter and shall provide information to the
department on request.
SECTION 3.103. Section 160.006(a), Occupations Code, is
amended to read as follows:
(a) A record, report, or other information received and
maintained by the board under this subchapter or Subchapter B,
including any material received or developed by the board during an
investigation or hearing and the identity of, and reports made by, a
physician performing or supervising compliance monitoring for the
board, is confidential. The board may disclose this information
only:
(1) in a disciplinary hearing before the board or in a
subsequent trial or appeal of a board action or order;
(2) to the physician licensing or disciplinary
authority of another jurisdiction, to a local, state, or national
professional medical society or association, or to a medical peer
review committee located inside or outside this state that is
concerned with granting, limiting, or denying a physician hospital
privileges;
(3) under a court order;
(4) to qualified personnel for bona fide research or
educational purposes, if personally identifiable information
relating to any physician or other individual is first deleted; or
(5) to the Texas Department of Insurance [Workers'
Compensation Commission] as provided by Section 413.0514, Labor
Code.
ARTICLE 4. TRANSITION; EFFECTIVE DATE
SECTION 4.001. ABOLITION OF TEXAS WORKERS' COMPENSATION
COMMISSION; GENERAL TRANSFER OF AUTHORITY TO TEXAS DEPARTMENT OF
INSURANCE. (a) The Texas Workers' Compensation Commission is
abolished March 1, 2006.
(b) Except as otherwise provided by this article, all
powers, duties, obligations, rights, contracts, funds, unspent
appropriations, records, real or personal property, and personnel
of the Texas Workers' Compensation Commission shall be transferred
to the Texas Department of Insurance not later than February 28,
2006.
SECTION 4.002. OFFICE OF INJURED EMPLOYEE COUNSEL. (a) The
office of injured employee counsel created under Chapter 404, Labor
Code, as added by this Act, is established September 1, 2005.
(b) The governor shall appoint the injured employee public
counsel of the office of injured employee counsel not later than
October 1, 2005.
(c) The injured employee public counsel of the office of
injured employee counsel shall adopt initial rules for the office
under Section 404.006, Labor Code, as added by this Act, not later
than March 1, 2006.
(d) The Texas Department of Insurance shall provide, in
Austin and in each regional office operated by the department to
administer Subtitle A, Title 5, Labor Code, as amended by this Act,
suitable office space, personnel, computer support, and other
administrative support to the office of injured employee counsel as
required by Chapter 404, Labor Code, as added by this Act. The
department shall provide the facilities and support not later than
October 1, 2005.
(e) All powers, duties, obligations, rights, contracts,
funds, unspent appropriations, records, real or personal property,
and personnel of the Texas Workers' Compensation Commission
relating to the operation of the workers' compensation ombudsman
program under Subchapter C, Chapter 409, Labor Code, as that
subchapter existed before amendment by this Act, shall be
transferred to the office of injured employee counsel not later
than March 1, 2006. An ombudsman transferred to the office of
injured employee counsel under this section shall begin providing
services under Chapter 404, Labor Code, as added by this Act, not
later than March 1, 2006.
SECTION 4.003. INITIAL REPORT OF WORKERS' COMPENSATION
RESEARCH AND EVALUATION GROUP. The workers' compensation research
and evaluation group shall submit the initial report required under
Section 405.0025, Insurance Code, as added by this Act, not later
than September 1, 2008.
SECTION 4.004. CONTINUATION OF CERTAIN POLICIES,
PROCEDURES, OR DECISIONS. (a) A policy, procedure, or decision of
the Texas Workers' Compensation Commission relating to a duty of
that commission that is transferred to the authority of the Texas
Department of Insurance under Subtitle A, Title 5, Labor Code, as
amended by this Act, continues in effect as a policy, procedure, or
decision of the commissioner of insurance until superseded by an
act of the commissioner of insurance.
(b) A policy, procedure, or decision of the Texas Workers'
Compensation Commission relating to a duty of that commission that
is transferred to the authority of the office of injured employee
counsel established under Chapter 404, Labor Code, as added by this
Act, continues in effect as a policy, procedure, or decision of the
office of injured employee counsel until superseded by an act of the
injured employee public counsel.
(c) Except as otherwise provided by this article, the
validity of a plan or procedure adopted, contract or acquisition
made, proceeding begun, grant or loan awarded, obligation incurred,
right accrued, or other action taken by or in connection with the
authority of the Texas Workers' Compensation Commission before that
commission is abolished under Section 4.001 of this article is not
affected by the abolishment.
SECTION 4.005. RULES. (a) The commissioner of insurance
shall adopt rules relating to the transfer of the programs assigned
to the Texas Department of Insurance under Subtitle A, Title 5,
Labor Code, as amended by this Act, not later than December 1, 2005.
(b) The injured employee public counsel of the office of
injured employee counsel established under Chapter 404, Labor Code,
as added by this Act, shall adopt rules relating to the transfer of
the programs assigned to the office of injured employee counsel
under Subtitle A, Title 5, Labor Code, as amended by this Act, not
later than March 1, 2006.
(c) A rule of the Texas Workers' Compensation Commission
relating to a duty of that commission that is transferred to the
authority of the Texas Department of Insurance under Subtitle A,
Title 5, Labor Code, as amended by this Act, continues in effect as
a rule of the commissioner of insurance until the earlier of:
(1) December 1, 2006; or
(2) the date on which the rule is superseded by a rule
adopted by the commissioner of insurance.
(d) A rule of the Texas Workers' Compensation Commission
relating to a duty of that commission that is transferred to the
authority of the office of injured employee counsel under Subtitle
A, Title 5, Labor Code, as amended by this Act, continues in effect
as a rule of the injured employee public counsel of the office of
injured employee counsel until the earlier of:
(1) December 1, 2006; or
(2) the date on which the rule is superseded by a rule
adopted by the injured employee public counsel.
SECTION 4.006. EFFECT ON ACTION OR PROCEEDING. (a) Except
as otherwise provided by this section, any action or proceeding
before the Texas Workers' Compensation Commission or to which the
commission is a party is transferred without change in status to the
Texas Department of Insurance.
(b) Benefit review conferences, as established under
Subchapter B, Chapter 410, Labor Code, as that subchapter existed
before amendment by this Act, are abolished February 28, 2006. A
benefit review officer conducting a benefit review conference that
is in progress on February 28, 2006, shall terminate the conference
and file with the Texas Department of Insurance the written
agreement required under Section 410.034, Labor Code, as that
section existed before repeal by this Act, not later than April 1,
2006. A claimant regarding workers' compensation benefits whose
claim is not heard by a benefit review officer under Subchapter B,
Chapter 410, Labor Code, as that subchapter existed before
amendment by this Act, on or before February 27, 2006, is entitled
to a contested case hearing or arbitration on the claim without
compliance with the informal dispute resolution procedures
established under Chapter 410, Labor Code, as amended by this Act.
If the claimant elects to proceed to a contested case hearing, the
claimant may elect to participate in a prehearing conference under
Section 410.151, Labor Code, as amended by this Act, or may proceed
directly to a contested case hearing. This subsection expires
April 30, 2006.
(c) The workers' compensation appeals panels established
under Subchapter E, Chapter 410, Labor Code, as that subchapter
existed before repeal by this Act, are abolished April 1, 2006, or
on an earlier date specified by the commissioner of insurance. An
appeals panel may not accept a new appeal of the decision of a
hearing officer under Chapter 410, Labor Code, as that chapter
existed before amendment by this Act, on or after February 28, 2006.
A party to a dispute regarding the decision of a hearing officer
that is filed with the Texas Workers' Compensation Commission or
the Texas Department of Insurance on or after February 28, 2006, may
seek judicial review under Chapter 410, Labor Code, as amended by
this Act.
SECTION 4.007. APPEAL. Section 410.252(e), Labor Code, as
added by this Act, and Sections 25.0003, 25.0222, and 25.0862,
Government Code, as amended by this Act, apply only to an appeal
filed on or after the effective date of this Act. An appeal filed
before the effective date of this Act is governed by the law in
effect on the date the appeal was filed, and the former law is
continued in effect for that purpose.
SECTION 4.008. STATE OFFICE OF ADMINISTRATIVE HEARINGS
REVIEW. (a) This section applies to a hearing conducted by the
State Office of Administrative Hearings under Section 413.031(k),
Labor Code, as that subsection existed prior to repeal by this Act.
(b) The State Office of Administrative Hearings shall
conclude on or before February 28, 2006, any hearings pending
before that office regarding medical disputes that remain
unresolved after a review by an independent review organization.
(c) Effective September 1, 2005, the State Office of
Administrative Hearings may not accept for hearing a medical
dispute that remains unresolved after a review by an independent
review organization. A medical dispute that is not pending for a
hearing by the State Office of Administrative Hearings on or before
February 28, 2006, is subject to Section 413.035, Labor Code, as
added by this Act, and is not subject to a hearing before the State
Office of Administrative Hearings.
SECTION 4.009. CHANGE IN CRIMINAL PENALTY. (a) The changes
in law made by this Act apply only to the punishment for an offense
committed on or after the effective date of this Act. For purposes
of this section, an offense is committed before the effective date
of this Act if any element of the offense occurs before the
effective date.
(b) An offense committed before the effective date of this
Act is governed by the law in effect on the date the offense was
committed, and the former law is continued in effect for that
purpose.
SECTION 4.010. ABOLITION OF HEALTH CARE NETWORK ADVISORY
COMMITTEE. (a) The Health Care Network Advisory Committee is
abolished on the effective date of this Act.
(b) Except as otherwise provided by this article, all
powers, duties, obligations, rights, contracts, funds, records,
and real or personal property of the Health Care Network Advisory
Committee shall be transferred to the Texas Department of Insurance
not later than February 28, 2006.
SECTION 4.011. REFERENCE IN LAW. A reference in law to the
Texas Workers' Compensation Commission means the Texas Department
of Insurance or the office of injured employee counsel as
consistent with the respective duties of those state governmental
entities under the Labor Code, the Insurance Code, and other laws of
this state, as amended by this Act.
SECTION 4.012. BUDGET EXECUTION AUTHORITY.
Notwithstanding Section 317.005(e), Government Code, the
Legislative Budget Board may adopt an order under Section 317.005,
Government Code, affecting any portion of the total appropriation
of the Texas Department of Insurance if necessary to implement the
provisions of this Act. This section expires March 31, 2006.
SECTION 4.013. EFFECTIVE DATE. Except as otherwise
provided by this article, this Act takes effect September 1, 2005.