By: Staples, Nelson S.B. No. 5
(In the Senate - Filed January 13, 2005; February 1, 2005,
read first time and referred to Committee on State Affairs;
March 9, 2005, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 9, Nays 0; March 9, 2005,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 5 By: Williams
A BILL TO BE ENTITLED
AN ACT
relating to the continuation and operation of the workers'
compensation system of this state, including changing the name of
the Texas Workers' Compensation Commission to the Texas Department
of Workers' Compensation, the powers and duties of the governing
authority of that department, the provision of workers'
compensation benefits to injured employees, and the regulation of
workers' compensation insurers; providing administrative
penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. ORGANIZATION OF DEPARTMENT
SECTION 1.001. Subchapter A, Chapter 402, Labor Code, is
amended to read as follows:
SUBCHAPTER A. ORGANIZATION
Sec. 402.001. DUTIES OF DEPARTMENT. In addition to the
other duties required of the Texas Department of Workers'
Compensation, the department shall:
(1) regulate the business of workers' compensation in
this state; and
(2) ensure that this title and other laws regarding
workers' compensation are executed.
Sec. 402.002. COMPOSITION OF DEPARTMENT. The department is
composed of the commissioner and other officers and employees as
required to efficiently implement:
(1) this title;
(2) other workers' compensation laws of this state;
and
(3) other laws granting jurisdiction or applicable to
the department or the commissioner.
Sec. 402.003. CHIEF EXECUTIVE. (a) The commissioner is
the department's chief executive and administrative officer. The
commissioner shall administer and enforce this title, other
workers' compensation laws of this state, and other laws granting
jurisdiction to or applicable to the department or the
commissioner.
(b) The commissioner has the powers and duties vested in the
department by this title and other workers' compensation laws of
this state.
Sec. 402.004. APPOINTMENT; TERM. (a) The governor, with
the advice and consent of the senate, shall appoint the
commissioner. The commissioner serves a two-year term that expires
on February 1 of each odd-numbered year.
(b) The governor shall appoint the commissioner without
regard to the race, color, disability, sex, religion, age, or
national origin of the appointee.
Sec. 402.005. QUALIFICATIONS. The commissioner must:
(1) be a competent and experienced administrator;
(2) be well informed and qualified in the field of
workers' compensation; and
(3) have at least five years of experience as an
executive in the administration of business or government or as a
practicing attorney, physician, or certified public accountant.
Sec. 402.006. INELIGIBILITY FOR PUBLIC OFFICE. The
commissioner is ineligible to be a candidate for a public elective
office in this state unless the commissioner has resigned and the
governor has accepted the resignation.
Sec. 402.007. COMPENSATION. The commissioner is entitled
to compensation as provided by the General Appropriations Act.
[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.
[Sec. 402.0015. TRAINING PROGRAM FOR COMMISSION MEMBERS.
(a) Before a member of the commission may assume the member's
duties, the member must complete the training program established
under this section.
[(b) A training program established under this section must
provide information to the member regarding:
[(1) the enabling legislation that created the
commission;
[(2) the programs operated by the commission;
[(3) the role and functions of the commission;
[(4) the rules of the commission, with an emphasis on
the rules that relate to disciplinary and investigatory authority;
[(5) the current budget for the commission;
[(6) the results of the most recent formal audit of the
commission;
[(7) the requirements of:
[(A) the open meetings law, Chapter 551,
Government Code;
[(B) the open records law, Chapter 552,
Government Code; and
[(C) the administrative procedure law, Chapter
2001, Government Code;
[(8) the requirements of the conflict of interest laws
and other laws relating to public officials; and
[(9) any applicable ethics policies adopted by the
commission or the Texas Ethics Commission.
[Sec. 402.002. 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.]
Sec. 402.008 [402.003]. EFFECT OF LOBBYING ACTIVITY. A
person may not serve as commissioner [a member of the commission] or
act as the general counsel to the department [commission] if the
person is required to register as a lobbyist under Chapter 305,
Government Code, because of the person's activities for
compensation on behalf of a profession that is regulated by or that
has fees regulated by the department [commission].
[Sec. 402.004. VOTING REQUIREMENTS. (a) The commission
may take action only by a majority vote of its membership.
[(b) Decisions regarding the employment of an executive
director require the affirmative vote of at least two commissioners
representing employers and two commissioners representing wage
earners.]
Sec. 402.009. GROUNDS FOR REMOVAL. [402.005. REMOVAL OF
COMMISSION MEMBERS.] (a) It is a ground for removal from office if
the commissioner [the commission if a member]:
(1) does not have at the time of appointment the
qualifications required by Section 402.005 [for appointment to the
commission];
(2) does not maintain during service as commissioner
[on the commission] the qualifications required by Section 402.005
[for appointment to the commission];
(3) violates a prohibition established by Section
402.008 [402.003] or 402.012; or
(4) cannot because of illness or incapacity discharge
the commissioner's [member's] duties for a substantial part of the
commissioner's term [for which the member is appointed; or
[(5) is absent from more than half of the regularly
scheduled commission meetings that the member is eligible to attend
during a calendar year].
(b) The validity of an action of the commissioner or the
department [commission] is not affected by the fact that it is taken
when a ground for removal of the commissioner [a commission member]
exists.
[(c) If the executive director of the commission knows that
a potential ground for removal exists, the executive director shall
notify the chairman of the commission of the potential ground. The
chairman shall then notify the governor and the attorney general
that a potential ground for removal exists. If the potential ground
for removal involves the chairman, the executive director shall
notify the next highest officer of the commission, who shall notify
the governor and the attorney general that a potential ground for
removal exists.]
Sec. 402.010 [402.006]. PROHIBITED GIFTS; ADMINISTRATIVE
VIOLATION. [(a)] The commissioner [A member] or an employee of
the department [commission] may not accept a gift, gratuity, or
entertainment from a person having an interest in a matter or
proceeding pending before the department [commission].
[(b) A violation of Subsection (a) is a Class A
administrative violation and constitutes a ground for removal from
office or termination of employment.
[Sec. 402.007. MEETINGS. The commission shall meet at
least once in each calendar quarter and may meet at other times at
the call of the chairman or as provided by the rules of the
commission.
[Sec. 402.008. CHAIRMAN. (a) The governor shall designate
a member of the commission as the chairman of the commission to
serve in that capacity for a two-year term expiring February 1 of
each odd-numbered year. The governor shall alternate the
chairmanship between the members who are employers and the members
who are wage earners.
[(b) The chairman may vote on all matters before the
commission.
[Sec. 402.009. LEAVE OF ABSENCE. (a) An employer may not
terminate the employment of an employee who is appointed as a member
of the commission because of the exercise by the employee of duties
required as a commission member.
[(b) A member of the commission is entitled to a leave of
absence from employment for the time required to perform commission
duties. During the leave of absence, the member may not be
subjected to loss of time, vacation time, or other benefits of
employment, other than salary.]
Sec. 402.011 [402.010]. CIVIL LIABILITY OF THE
COMMISSIONER [MEMBER]. The commissioner [A member of the
commission] is not liable in a civil action for an act performed in
good faith in the execution of duties as commissioner [a commission
member].
[Sec. 402.011. REIMBURSEMENT. (a) A member of the
commission is entitled to reimbursement for actual and necessary
expenses incurred in performing functions as a member of the
commission. Reimbursement under this subsection may not exceed a
limit established in the General Appropriations Act.
[(b) A member is entitled to reimbursement for actual lost
wages or use of leave benefits, if any, for:
[(1) attendance at commission meetings and hearings;
[(2) preparation for a commission meeting, not to
exceed two days in each calendar quarter;
[(3) attendance at a subcommittee meeting, not to
exceed one day each month;
[(4) attendance by the chair or vice chair of the
commission at a legislative committee meeting if attendance is
requested by the committee chair; and
[(5) attendance at a meeting by a member appointed to
the Research and Oversight Council on Workers' Compensation or the
Texas Certified Self-Insured Guaranty Association.
[(c) Reimbursement under Subsection (b) may not exceed $100
a day and $5,000 a year.
[(d) A member of the commission is entitled to reimbursement
for actual and necessary expenses for attendance at not more than
five seminars in a calendar year if:
[(1) the member is invited as a representative of the
commission to participate in a program offered at the seminar; and
[(2) the member's participation is approved by the
chair of the commission.]
Sec. 402.012. CONFLICT OF INTEREST. (a) An officer,
employee, or paid consultant of a Texas trade association whose
members provide services subject to regulation by the department
[commission] or provide services whose fees are subject to
regulation by the department [commission] may not be the
commissioner [a member of the commission] or an employee of the
department [commission] who is exempt from the state's position
classification plan or is compensated at or above the amount
prescribed by the General Appropriations Act for step 1, salary
group A17 [17], of the position classification salary schedule.
(b) On acceptance of appointment as commissioner [to the
commission], a commissioner [an appointee] who is an officer,
employee, or paid consultant of a Texas trade association described
by Subsection (a) must resign the position or terminate the
contract with the trade association.
(c) For the purposes of this section, "Texas trade
association" means a nonprofit, cooperative, and voluntarily
joined association of business or professional competitors in this
state designed to assist its members and its industry or profession
in dealing with mutual business or professional problems and in
promoting their common interest. The term does not include a labor
union or an employees' association.
Sec. 402.013. TRAINING PROGRAM FOR COMMISSIONER. (a) Not
later than the 90th day after the date on which the commissioner
takes office, the commissioner shall complete a training program
that complies with this section.
(b) The training program must provide the commissioner with
information regarding:
(1) the legislation that created the department;
(2) the programs operated by the department;
(3) the role and functions of the department;
(4) the rules of the department, with an emphasis on
the rules that relate to disciplinary and investigatory authority;
(5) the current budget for the department;
(6) the results of the most recent formal audit of the
department;
(7) the requirements of:
(A) the open meetings law, Chapter 551,
Government Code;
(B) the public information law, Chapter 552,
Government Code;
(C) the administrative procedure law, Chapter
2001, Government Code; and
(D) other laws relating to public officials,
including conflict-of-interest laws; and
(8) any applicable ethics policies adopted by the
department or the Texas Ethics Commission.
Sec. 402.014. GENERAL POWERS AND DUTIES OF COMMISSIONER.
(a) The commissioner shall conduct the day-to-day operations of
the department and otherwise implement department policy.
(b) The commissioner may:
(1) investigate misconduct;
(2) hold hearings;
(3) issue subpoenas to compel the attendance of
witnesses and the production of documents;
(4) administer oaths;
(5) take testimony directly or by deposition or
interrogatory;
(6) assess and enforce penalties established under
this title;
(7) enter appropriate orders as authorized by this
title;
(8) institute an action in the department's name to
enjoin the violation of this subtitle;
(9) initiate an action under Section 410.254 to
intervene in a judicial proceeding;
(10) prescribe the form, manner, and procedure for the
transmission of information to the department; and
(11) exercise other powers and perform other duties as
necessary to implement and enforce this title.
(c) The commissioner is the agent for service of process on
out-of-state employers.
SECTION 1.002. Subchapter C, Chapter 402, Labor Code, is
amended to read as follows:
SUBCHAPTER C. DEPARTMENT [EXECUTIVE DIRECTOR AND] PERSONNEL
Sec. 402.041. APPOINTMENTS. (a) Subject to the General
Appropriations Act or other law, the commissioner shall appoint
deputies, assistants, division directors, and other personnel as
necessary to carry out the powers and duties of the commissioner and
the department under this title, other workers' compensation laws
of this state, and other laws granting jurisdiction or applicable
to the department or the commissioner.
(b) A person appointed under this section must have the
professional, administrative, and workers' compensation experience
necessary to qualify the person for the position to which the person
is appointed.
(c) A person appointed as an associate or deputy
commissioner or to hold an equivalent position must have at least
five years of the experience required for appointment as
commissioner under Section 402.005. At least two years of that
experience must be in work related to the position to be held.
Sec. 402.042. DIVISION OF RESPONSIBILITIES. The
commissioner shall develop and implement policies that clearly
define the respective responsibilities of the commissioner and the
staff of the department. [EXECUTIVE DIRECTOR. (a) The executive
director is the executive officer and administrative head of the
commission. The executive director exercises all rights, powers,
and duties imposed or conferred by law on the commission, except for
rulemaking and other rights, powers, and duties specifically
reserved under this subtitle to members of the commission.
[(b) The executive director shall hire personnel as
necessary to administer this subtitle.
[(c) The executive director serves at the pleasure of the
commission.
[(d) The commission shall develop and implement policies
that clearly separate the policymaking responsibilities of the
commission and the management responsibilities of the executive
director and the staff of the commission.
[Sec. 402.042. GENERAL POWERS AND DUTIES OF EXECUTIVE
DIRECTOR. (a) The executive director shall conduct the day-to-day
operations of the commission in accordance with policies
established by the commission and otherwise implement commission
policy.
[(b) The executive director may:
[(1) investigate misconduct;
[(2) hold hearings;
[(3) issue subpoenas to compel the attendance of
witnesses and the production of documents;
[(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 commission; and
[(12) delegate all powers and duties as necessary.
[(c) The executive director is the agent for service of
process on out-of-state employers.
[Sec. 402.043. ADMINISTRATIVE ASSISTANTS. The executive
director shall employ and supervise:
[(1) one person representing wage earners permanently
assigned to act as administrative assistant to the members of the
commission who represent wage earners; and
[(2) one person representing employers permanently
assigned to act as administrative assistant to the members of the
commission who represent employers.]
Sec. 402.043 [402.044]. CAREER LADDER; ANNUAL PERFORMANCE
EVALUATIONS. (a) The commissioner or the commissioner's designee
[executive director] shall develop an intra-agency career ladder
program that addresses opportunities for mobility and advancement
for employees within the department [commission]. The program
shall require intra-agency postings of all positions concurrently
with any public posting.
(b) The commissioner or the commissioner's designee
[executive director] shall develop a system of annual performance
evaluations that are based on documented employee performance. All
merit pay for department [commission] employees must be based on
the system established under this subsection.
Sec. 402.044 [402.045]. EQUAL EMPLOYMENT OPPORTUNITY
POLICY STATEMENT. (a) The commissioner or the commissioner's
designee [executive director] shall prepare and maintain a written
policy statement to ensure implementation of a program of equal
employment opportunity under which all personnel transactions are
made without regard to race, color, disability, sex, religion, age,
or national origin. The policy statement must include:
(1) personnel policies, including policies related to
recruitment, evaluation, selection, appointment, training, and
promotion of personnel that are in compliance with the requirements
of Chapter 21;
(2) a comprehensive analysis of the department
[commission] work force that meets federal and state guidelines;
(3) procedures by which a determination can be made of
significant underuse in the department [commission] work force of
all persons for whom federal or state guidelines encourage a more
equitable balance; and
(4) reasonable methods to appropriately address those
areas of underuse.
(b) A policy statement prepared under this section must:
(1) cover an annual period;
(2) be updated annually;
(3) be reviewed by the civil rights division of the
Texas Workforce Commission [on Human Rights] for compliance with
Subsection (a)(1); and
(4) be filed with the Texas Workforce Commission
[governor's office].
(c) The governor's office shall deliver a biennial report to
the legislature based on the information received under Subsection
(b). The report may be made separately or as part of other biennial
reports made to the legislature.
ARTICLE 2. CONFORMING AMENDMENTS WITHIN CHAPTER 402, LABOR CODE
SECTION 2.001. The heading to Chapter 402, Labor Code, is
amended to read as follows:
CHAPTER 402. TEXAS DEPARTMENT OF WORKERS' COMPENSATION
[COMMISSION]
SECTION 2.002. Section 402.021, Labor Code, is amended to
read as follows:
Sec. 402.021. DEPARTMENT [COMMISSION] DIVISIONS. (a) The
commissioner [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 department [commission] for
effective administration and performance of department
[commission] functions. The commissioner [executive director] may
allocate and reallocate functions among the divisions.
(b) [(c)] The commissioner [executive director] shall
appoint the directors of the divisions of the department
[commission]. The directors serve at the pleasure of the
commissioner [executive director].
(c) A reference in this title or any other law to the
division of workers' health and safety, the division of medical
review, the division of compliance and practices, the division of
hearings, and the division of self-insurance regulation of the
former Texas Workers' Compensation Commission means the
department.
SECTION 2.003. Section 402.022, Labor Code, is amended to
read as follows:
Sec. 402.022. PUBLIC INTEREST INFORMATION. (a) The
commissioner [executive director] shall prepare information of
public interest describing the functions of the department
[commission] and the procedures by which complaints are filed with
and resolved by the department [commission].
(b) The commissioner [executive director] shall make the
information available to the public and appropriate state agencies.
SECTION 2.004. Section 402.023, Labor Code, is amended to
read as follows:
Sec. 402.023. COMPLAINT INFORMATION. (a) The
commissioner [executive director] shall keep an information file
about each written complaint filed with the department [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.
(b) For each written complaint that is unrelated to a
specific workers' compensation claim that the department
[commission] has authority to resolve, the commissioner [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 relating to
complaint investigation and resolution. The commissioner
[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 2.005. Section 402.024, Labor Code, is amended to
read as follows:
Sec. 402.024. PUBLIC PARTICIPATION. (a) The commissioner
[commission] shall develop and implement policies that provide the
public with a reasonable opportunity to appear before the
department [commission] and to speak on issues under the general
jurisdiction of the department [commission].
(b) The department [commission] shall comply with federal
and state laws related to program and facility accessibility.
(c) In addition to compliance with Subsection (a), the
commissioner [executive director] shall prepare and maintain a
written plan that describes how a person who does not speak English
may be provided reasonable access to the department's
[commission's] programs and services.
SECTION 2.006. The heading to Subchapter D, Chapter 402,
Labor Code, is amended to read as follows:
SUBCHAPTER D. GENERAL POWERS AND DUTIES OF DEPARTMENT
[COMMISSION]
SECTION 2.007. Section 402.061, Labor Code, is amended to
read as follows:
Sec. 402.061. ADOPTION OF RULES. The commissioner
[commission] shall adopt rules as necessary for the implementation
and enforcement of this subtitle.
SECTION 2.008. Subsection (a), Section 402.062, Labor Code,
is amended to read as follows:
(a) The department [commission] may accept gifts, grants,
or donations as provided by rules adopted by the commissioner
[commission].
SECTION 2.009. Section 402.064, Labor Code, is amended to
read as follows:
Sec. 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 [commission], including services provided under
Subchapter E.
SECTION 2.010. Section 402.065, Labor Code, is amended to
read as follows:
Sec. 402.065. EMPLOYMENT OF COUNSEL. The commissioner
[commission] may employ counsel to represent the department
[commission] in any legal action the department [commission] is
authorized to initiate.
SECTION 2.011. Section 402.066, Labor Code, is amended to
read as follows:
Sec. 402.066. RECOMMENDATIONS TO LEGISLATURE. (a) The
commissioner [commission] shall consider and recommend to the
legislature changes to this subtitle.
(b) The commissioner [commission] shall forward the
recommended changes to the legislature not later than December 1 of
each even-numbered year.
SECTION 2.012. Section 402.0665, Labor Code, is amended to
read as follows:
Sec. 402.0665. LEGISLATIVE OVERSIGHT. The legislature may
adopt requirements relating to legislative oversight of the
department [commission] and the workers' compensation system of
this state. The department [commission] shall comply with any
requirements adopted by the legislature under this section.
SECTION 2.013. Section 402.067, Labor Code, is amended to
read as follows:
Sec. 402.067. ADVISORY COMMITTEES. The commissioner
[commission] may appoint advisory committees as the commissioner
[it] considers necessary.
SECTION 2.014. Section 402.068, Labor Code, is amended to
read as follows:
Sec. 402.068. DELEGATION OF RIGHTS AND DUTIES. Except as
expressly provided by this subchapter, the department [commission]
may not delegate rights and duties imposed on it by this subchapter.
SECTION 2.015. Section 402.069, Labor Code, is amended to
read as follows:
Sec. 402.069. QUALIFICATIONS AND STANDARDS OF CONDUCT
INFORMATION. The commissioner or the commissioner's designee
[executive director] shall provide to department [members of the
commission and commission] employees, as often as necessary,
information regarding their:
(1) qualifications for office or employment under this
subtitle; and
(2) responsibilities under applicable law relating to
standards of conduct for state officers or employees.
SECTION 2.016. Subsection (a), Section 402.071, Labor Code,
is amended to read as follows:
(a) The commissioner [commission] shall establish
qualifications for a representative and shall adopt rules
establishing procedures for authorization of representatives.
SECTION 2.017. Section 402.072, Labor Code, is amended to
read as follows:
Sec. 402.072. SANCTIONS. Only the commissioner
[commission] may impose:
(1) a sanction that deprives a person of the right to
practice before the department [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 license, certification, or permit required for
practice in the field of workers' compensation.
SECTION 2.018. Subsections (a) and (c), Section 402.073,
Labor Code, are amended to read as follows:
(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)].
(c) In a case in which a hearing is conducted in conjunction
with Section 402.072, 407.046, or 408.023, and in other cases under
this subtitle 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 2.019. Section 402.081, Labor Code, is amended to
read as follows:
Sec. 402.081. DEPARTMENT [COMMISSION] RECORDS. (a) The
commissioner [executive director] is the custodian of the
department's [commission's] records and shall perform the duties of
a custodian required by law, including providing copies and the
certification of records.
(b) The commissioner [executive director] may destroy a
record maintained by the department [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 [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 2.020. Section 402.082, Labor Code, is amended to
read as follows:
Sec. 402.082. INJURY INFORMATION MAINTAINED BY DEPARTMENT
[COMMISSION]. 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.
SECTION 2.021. Subsection (a), Section 402.083, Labor Code,
is amended to read as follows:
(a) Information in or derived from a claim file regarding an
employee is confidential and may not be disclosed by the department
[commission] except as provided by this subtitle or other law.
SECTION 2.022. Subsections (a), (b), and (d), Section
402.084, Labor Code, are amended to read as follows:
(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 department [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.
(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 2.023. Section 402.085, Labor Code, is amended to
read as follows:
Sec. 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, including a research purpose under
Chapter 405;
(2) a legislative committee for legislative purposes;
(3) a state or federal elected official requested in
writing to provide assistance by a constituent who qualifies to
obtain injury information under Section 402.084(b), if the request
for assistance is provided to the department [commission]; or
(4) [the Research and Oversight Council on Workers'
Compensation for research purposes; or
[(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.
(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 2.024. Subsections (a), (b), and (d), Section
402.088, Labor Code, are amended to read as follows:
(a) On receipt of a valid request made under and complying
with Section 402.087, the department [commission] shall review its
records.
(b) If the department [commission] finds that the applicant
has made two or more general injury claims in the preceding five
years, the department [commission] shall release the date and
description of each injury to the employer.
(d) If 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.
SECTION 2.025. Section 402.089, Labor Code, is amended to
read as follows:
Sec. 402.089. FAILURE TO FILE AUTHORIZATION[;
ADMINISTRATIVE VIOLATION]. [(a)] An employer who receives
information by telephone from the department [commission] under
Section 402.088 and who fails to file the necessary authorization
in accordance with Section 402.087 commits an [a Class C]
administrative violation.
[(b) Each failure to file an authorization is a separate
violation.]
SECTION 2.026. Section 402.090, Labor Code, is amended to
read as follows:
Sec. 402.090. STATISTICAL INFORMATION. The department
[commission], the Texas Department of Insurance [research 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 2.027. Subsection (a), Section 402.091, Labor Code,
is amended to read as follows:
(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].
SECTION 2.028. Subsections (a), (b), (d), (e), and (f),
Section 402.092, Labor Code, are amended to read as follows:
(a) 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.
(b) Department [Commission] investigation files are not
open records for purposes of Chapter 552, Government Code.
(d) For purposes of this section, "investigation file"
means any information compiled or maintained by the department
[commission] with respect to a department [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 where the
department [commission] determines a complaint is 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.
ARTICLE 3. GENERAL OPERATION OF WORKERS' COMPENSATION SYSTEM;
CONFORMING AMENDMENTS WITHIN LABOR CODE
SECTION 3.001. Subsection (b), Section 91.003, Labor Code,
is amended to read as follows:
(b) In particular, the Texas Workforce Commission, the
Texas Department of Insurance, the Texas Department of Workers'
Compensation [Commission], the Department of Assistive and
Rehabilitative Services, and the attorney general's office shall
assist in the implementation of this chapter and shall provide
information to the department on request.
SECTION 3.002. Section 401.002, Labor Code, is amended to
read as follows:
Sec. 401.002. APPLICATION OF SUNSET ACT. The Texas
Department of Workers' Compensation [Commission] is subject to
Chapter 325, Government Code (Texas Sunset Act). Unless continued
in existence as provided by that chapter, the department
[commission] is abolished September 1, 2017 [2005].
SECTION 3.003. Subsection (a), Section 401.003, 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 commission's]:
(1) the structure and internal controls of the
department;
(2) the level and quality of service provided by the
department to employers, injured employees, insurance carriers,
self-insured governmental entities, and other participants;
(3) the implementation of statutory mandates by the
department;
(4) employee turnover;
(5) information management systems, including public
access to nonconfidential information;
(6) the adoption and implementation of administrative
rules by the commissioner; and
(7) assessment of administrative violations and the
penalties for those violations.
SECTION 3.004. Section 401.011, Labor Code, is amended by
amending Subdivisions (2), (8), (15), (37), (38), and (39) and by
adding Subdivisions (18-a), (22-a), (45), and (46) to read as
follows:
(2) "Administrative violation" means a violation of
this subtitle, [or] a rule adopted under this subtitle, or an order
or decision of the department that is subject to penalties and
sanctions as provided by this subtitle.
(8) "Commissioner" means the commissioner of workers'
compensation ["Commission" means the Texas Workers' Compensation
Commission].
(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.
(18-a) "Evidence-based medicine" means the use of
current best quality scientific and medical evidence in making
decisions about the care of individual patients. The practice of
evidence-based medicine means integrating best available clinical
scientific evidence with individual clinical expertise.
(22-a) "Health care reasonably required" means health
care that is clinically appropriate and considered effective for
the employee's injury and provided in accordance with best
practices consistent with:
(A) evidence-based medicine, formulated from
credible scientific studies, including peer-reviewed medical
literature and other current scientifically based texts, and
treatment and practice guidelines; or
(B) if that evidence is not available, generally
accepted standards of medical practice recognized in the medical
community.
(37) "Representative" means a person, including an
attorney, authorized by the commissioner [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) "Research center" means the research functions of
the Texas Department of Insurance required [Texas Workers'
Compensation Research Center established] under Chapter 405 [404].
(39) "Sanction" means a penalty or other punitive
action or remedy imposed by the commissioner [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, or decision of the commissioner
[commission].
(45) "Department" means the Texas Department of
Workers' Compensation.
(46) "Violation" means an administrative violation
subject to penalties and sanctions as provided by this subtitle.
SECTION 3.005. 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
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
is governed by Subchapters A and B, Chapter 2002, Government Code,
excluding Sections 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;
(C) an appeals panel proceeding;
(D) arbitration; or
(E) another proceeding involving a determination
on a workers' compensation claim; and
(4) Chapter 552, Government Code, applies to a record
of the department [commission] or a record of the Texas Department
of Insurance regarding workers' compensation [the] research
[center].
SECTION 3.006. Subsection (b), Section 401.023, 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 3.007. Subsections (b), (c), and (d), Section
401.024, 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
[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 3.008. Subchapter C, Chapter 401, Labor Code, is
amended by adding Section 401.025 to read as follows:
Sec. 401.025. REFERENCES TO COMMISSION AND EXECUTIVE
DIRECTOR. (a) A reference in this code or other law to the Texas
Workers' Compensation Commission or the executive director of that
commission means the department or the commissioner as consistent
with the respective duties of the commissioner and the department
under this code and other workers' compensation laws of this state.
(b) A reference in this code or other law to the executive
director of the Texas Workers' Compensation Commission means the
commissioner.
SECTION 3.009. The heading to Chapter 403, Labor Code, is
amended to read as follows:
CHAPTER 403. DEPARTMENT [COMMISSION] FINANCING
SECTION 3.010. Section 403.001, Labor Code, is amended to
read as follows:
Sec. 403.001. DEPARTMENT [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 department [commission].
(b) The money may be spent as authorized by legislative
appropriation on warrants issued by the comptroller under
requisitions made by the department [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 3.011. 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 functions of
the Texas Department of Insurance under Chapter 405 [and oversight
council on workers' compensation]; or
(3) any other revenue or expenditure excluded from
consideration by law.
SECTION 3.012. 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 commissioner
[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 3.013. 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
department [commission].
SECTION 3.014. 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 [an] account in the general revenue fund.
Money in the account may be appropriated only for the purposes of
this section or as provided by other law. [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
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 commissioner [commission]
may make partial payment of insurance carrier claims under
Subsection (b)(3).
SECTION 3.015. 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
commissioner [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 commissioner [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 commissioner's [commission's] actuary or financial
advisor shall report biannually to the Texas Department of
Insurance [Research and Oversight Council on Workers'
Compensation] on the financial condition and projected assets and
liabilities of the subsequent injury fund. The commissioner
[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.
SECTION 3.016. Section 405.001, Labor Code, is amended to
read as follows:
Sec. 405.001. DEFINITIONS [DEFINITION]. In this chapter:
(1) "Commissioner" means the commissioner of
insurance.
(2) "Department"[, "department"] means the Texas
Department of Insurance.
SECTION 3.017. Section 405.002, Labor Code, is amended by
amending Subsection (a) and adding Subsections (d) and (e) to read
as follows:
(a) The department 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) the impact of workers' compensation health care
networks certified under Chapter 1305, Insurance Code, on claims
costs and injured employee outcomes; and
(8) other matters relevant to the cost, quality, and
operational effectiveness of the workers' compensation system.
(d) In accordance with Subchapter K, Chapter 1305,
Insurance Code, the department shall:
(1) biennially evaluate the cost and quality of health
care provided by workers' compensation health care networks; and
(2) issue annual consumer report cards comparing
workers' compensation health care networks certified by the
department under Chapter 1305, Insurance Code.
(e) The commissioner of insurance shall adopt rules as
necessary to establish data reporting requirements to support the
research duties of the department under this chapter.
SECTION 3.018. Chapter 405, Labor Code, is amended by
adding Section 405.0021 to read as follows:
Sec. 405.0021. RESEARCH AGENDA. (a) The department 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.
SECTION 3.019. Section 406.004, Labor Code, is amended to
read as follows:
Sec. 406.004. EMPLOYER NOTICE TO DEPARTMENT [COMMISSION;
ADMINISTRATIVE VIOLATION]. (a) An employer who does not obtain
workers' compensation insurance coverage shall notify the
department [commission] in writing, in the time and as prescribed
by commissioner [commission] rule, that the employer elects not to
obtain coverage.
(b) The commissioner [commission] shall prescribe forms to
be used for the employer notification and shall require the
employer to provide reasonable information to the department
[commission] about the employer's business.
(c) The department [commission] may contract with the Texas
Workforce [Employment] Commission or the comptroller for
assistance in collecting the notification required under this
section. Those agencies shall cooperate with the department
[commission] in enforcing this section.
(d) The employer notification filing required under this
section shall be filed with the department [commission] in
accordance with Section 406.009.
(e) An employer commits a violation if the employer fails to
comply with this section. [A violation under this subsection is a
Class D administrative violation. Each day of noncompliance
constitutes a separate violation.]
SECTION 3.020. Subsections (c) and (e), Section 406.005,
Labor Code, are 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.
(e) An employer commits a violation if the employer fails to
comply with this section. [A violation under this subsection is a
Class D administrative violation.]
SECTION 3.021. Subsections (a), (b), and (c), Section
406.006, 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, a workers' compensation self-insurance group under
Chapter 407A, 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, a certified self-insurer, a
workers' compensation self-insurance group under Chapter 407A, or a
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 3.022. Subsections (a), (b), and (c), Section
406.007, 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 3.023. 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 3.024. Section 406.009, Labor Code, is amended to
read as follows:
Sec. 406.009. COLLECTING AND MAINTAINING INFORMATION;
MONITORING AND ENFORCING COMPLIANCE. (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 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. The
commissioner [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 department [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.
(e) An employer or insurance carrier commits a violation if
that person fails to comply with Subsection (d). [A violation under
this subsection is a Class C administrative violation.]
SECTION 3.025. Subsections (c) and (d), Section 406.010,
Labor Code, is amended to read as follows:
(c) The commissioner [commission] by rule shall further
specify the requirements of this section.
(d) A person commits a violation if the person violates a
rule adopted under this section. [A violation under this
subsection is a Class C administrative violation. Each day of
noncompliance constitutes a separate violation.]
SECTION 3.026. Section 406.011, Labor Code, is amended to
read as follows:
Sec. 406.011. AUSTIN REPRESENTATIVE; ADMINISTRATIVE
VIOLATION. (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 agent constitutes notice to the
insurance carrier.
(b) A person commits a violation if the person violates a
rule adopted under this section. [A violation under this
subsection is a Class C administrative violation. Each day of
noncompliance constitutes a separate violation.]
SECTION 3.027. Subsection (c), Section 406.051, Labor Code,
is amended to read as follows:
(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 3.028. Subsections (b) and (c), Section 406.073,
Labor Code, are amended to read as follows:
(b) The employer shall file the agreement with the
department [executive director] on request.
(c) A person commits a violation if the person violates
Subsection (b). [A violation under this subsection is a Class D
administrative violation.]
SECTION 3.029. Subsections (a) and (b), Section 406.074,
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 3.030. Subsection (b), Section 406.093, 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 3.031. Subsection (b), Section 406.095, 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 3.032. Subsection (g), Section 406.123, Labor Code,
is amended to read as follows:
(g) A general contractor who enters into an agreement with a
subcontractor under this section commits a violation if the contractor
fails to file a copy of the agreement as required by Subsection (f). [A
violation under this subsection is a Class B administrative violation.]
SECTION 3.033. Subsections (c) and (d), Section 406.144,
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 3.034. Subsections (a) through (d) and (f), Section
406.145, 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 3.035. Subsection (b), Section 406.162, Labor Code,
is amended to read as follows:
(b) The comptroller shall prepare a consumer price index for
this state and shall certify the applicable index factor to the
department [commission] before October 1 of each year. The
department [commission] shall adjust the gross annual payroll
requirement under Subsection (a)(2)(B) accordingly.
SECTION 3.036. Subdivision (3), Section 407.001, Labor
Code, is 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.
SECTION 3.037. Section 407.021, Labor Code, is amended to
read as follows:
Sec. 407.021. DIVISION. The division of self-insurance
regulation is a division of the department [commission].
SECTION 3.038. Section 407.022, Labor Code, is amended to
read as follows:
Sec. 407.022. DIRECTOR. (a) The commissioner [executive
director of the commission] shall appoint the director of the
division.
(b) The director shall exercise all the rights, powers, and
duties imposed or conferred on the department [commission] by this
chapter, other than by Section 407.023.
SECTION 3.039. Section 407.023, Labor Code, is amended to
read as follows:
Sec. 407.023. EXCLUSIVE POWERS AND DUTIES OF COMMISSIONER
[COMMISSION]. (a) The commissioner [commission, by majority
vote,] shall:
(1) approve or deny a recommendation by the director
concerning the issuance or revocation of a certificate of authority
to self-insure; and
(2) certify that a certified self-insurer has
suspended payment of compensation or has otherwise become an
impaired employer.
(b) The commissioner [commission] may not delegate the
powers and duties imposed by this section.
SECTION 3.040. Subsections (a), (b), and (c), Section
407.041, 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 director shall recommend approval or
denial of the application to the department [commission].
SECTION 3.041. Section 407.042, Labor Code, is amended to
read as follows:
Sec. 407.042. ISSUANCE OF CERTIFICATE. 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 3.042. 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 commissioner [commission] shall
notify the applicant in writing of the commissioner's [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 3.043. Subsection (a), Section 407.044, Labor Code,
is amended to read as follows:
(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].
SECTION 3.044. 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 3.045. Subsections (a), (b), and (d), Section
407.046, 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 3.046. Subsection (b), Section 407.047, 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 3.047. Subsections (a), (c), (e), and (f), Section
407.061, 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 commissioner
[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
commissioner [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 3.048. 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 commissioner [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 [commission] finds appropriate; and
(8) any other information considered appropriate by
the commissioner [commission].
SECTION 3.049. Subsection (a), Section 407.063, 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 commissioner [commission] of a total
unmodified workers' compensation insurance premium in this state in
the calendar year of application of at least $500,000.
SECTION 3.050. Subsection (b), Section 407.064, Labor Code,
is amended to read as follows:
(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.
SECTION 3.051. Subsection (d), Section 407.067, Labor Code,
is amended to read as follows:
(d) A person commits a violation if the person violates
Subsection (c). [A violation under this subsection is a Class B
administrative violation. Each day of noncompliance constitutes a
separate violation.]
SECTION 3.052. Subsections (a) through (d), (f), and (g),
Section 407.081, 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 department [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 department [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 3.053. Subsections (a), (c), (d), and (e), Section
407.082, 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.
(e) An unreasonable refusal on the part of a certified
self-insurer to make available for inspection the books, records,
payroll information, or other required information constitutes
grounds for the revocation of the certificate of authority to
self-insure and is an [a Class A] administrative violation. [Each
day of noncompliance constitutes a separate violation.]
SECTION 3.054. Subsection (b), Section 407.101, 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 3.055. 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 3.056. Subsections (a) and (d), Section 407.103,
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.
(d) In setting the rate of maintenance tax assessment for
insurance companies, the commissioner [commission] may not
consider revenue or expenditures related to the division.
SECTION 3.057. Subsections (b) through (e), Section
407.104, 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
department [commission].
(d) A certified self-insurer commits a violation if the
self-insurer does not pay the taxes and fee imposed under Sections
407.102 and 407.103 in a timely manner. [A violation under this
subsection is a Class B administrative violation. Each day of
noncompliance constitutes a separate violation.]
(e) If the certificate of authority to self-insure of a
certified self-insurer is terminated, the insurance commissioner
or the commissioner [executive director of the commission] shall
proceed immediately to collect taxes due under this subtitle, using
legal process as necessary.
SECTION 3.058. Subsections (b) and (c), Section 407.122,
Labor Code, are amended to read as follows:
(b) The board of directors is composed of the following
voting members:
(1) three certified self-insurers;
(2) one member designated by 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.
(c) The [executive director of the commission and the]
director of the division of self-insurance regulation serves
[serve] as a nonvoting member [members] of the board of directors.
SECTION 3.059. Subsection (b), Section 407.123, Labor Code,
is amended to read as follows:
(b) Rules adopted by the board are subject to the approval
of the commissioner [commission].
SECTION 3.060. Subsections (a) and (c), Section 407.124,
Labor Code, are amended to read as follows:
(a) On determination by the commissioner [commission] that
a certified self-insurer has become an impaired employer, the
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.
(c) A certified self-insurer designated as an impaired
employer is exempt from assessments beginning on the date of the
designation until the commissioner [commission] determines that
the employer is no longer impaired.
SECTION 3.061. Subsection (d), Section 407.126, 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 3.062. Subsection (a), Section 407.127, 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 director.
SECTION 3.063. Subsection (a), Section 407.133, 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 director.
SECTION 3.064. Subsection (d), Section 407A.053, 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 of the Texas Department of Workers' Compensation
[executive director of the commission] under a trust document
acceptable to the commissioner of insurance. 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 3.065. Subsection (c), Section 407A.201, 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 Texas Department of Workers' Compensation
[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 Texas Department of Workers' Compensation [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 3.066. The heading to Section 407A.301, Labor Code,
is amended to read as follows:
Sec. 407A.301. MAINTENANCE TAX FOR DEPARTMENT OF WORKERS'
COMPENSATION [COMMISSION] AND RESEARCH FUNCTIONS OF DEPARTMENT OF
INSURANCE [AND OVERSIGHT COUNCIL].
SECTION 3.067. Subsection (a), Section 407A.301, Labor
Code, is 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 Texas Department of
Workers' Compensation [commission];
(2) the prosecution of workers' compensation insurance
fraud in this state; and
(3) the research functions of the department under
Chapter 405 [Research and Oversight Council on Workers'
Compensation].
SECTION 3.068. Section 407A.303, Labor Code, is amended to
read as follows:
Sec. 407A.303. COLLECTION AND PAYMENT OF TAXES. (a) The
group shall remit the taxes for deposit in the state treasury to the
credit of the Texas Department of Workers' Compensation
[commission].
(b) A group commits a violation if the group does not pay the
taxes imposed under Sections 407A.301 and 407A.302 in a timely
manner. [A violation under this subsection is a Class B
administrative violation. Each day of noncompliance constitutes a
separate violation.]
(c) If the certificate of approval of a group is terminated,
the commissioner of insurance or the commissioner [executive
director] of the Texas Department of Workers' Compensation
[commission] shall immediately notify the comptroller to collect
taxes as directed under Sections 407A.301 and 407A.302.
SECTION 3.069. Subsection (b), Section 407A.357, 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 member designated by the commissioner of the
Texas Department of Workers' Compensation [one commission member
who represents wage earners];
(3) one member designated by the insurance
commissioner; and
(4) the public counsel of the office of public
insurance counsel.
SECTION 3.070. Subsection (c), Section 408.003, Labor Code,
is amended to read as follows:
(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 3.071. Section 408.004, Labor Code, is amended by
amending Subsections (a), (b), and (d) through (g), and by adding
Subsection (h) to read as follows:
(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 and[,] 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].
(d) An injured employee is entitled to have a doctor of the
employee's choice present at an examination required by the
department [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 commission determines that the employee had good
cause for the failure to submit to the examination. The commission
may order temporary income benefits to be paid for the period that
the 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) This section does not apply to health care provided
through a workers' compensation health care network established
under Chapter 1305, Insurance Code [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
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
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 commission makes a reasonable attempt to
obtain the treating doctor's opinion before the commission makes a
determination regarding the entry of an interlocutory order; and
[(3) the 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.]
(h) A person who makes a frivolous request for a medical
examination under Subsection (b), as determined by the
commissioner, commits a violation. A violation under this
subsection is a Class B administrative violation.
SECTION 3.072. Section 408.0041, Labor Code, is amended to
read as follows:
Sec. 408.0041. DESIGNATED DOCTOR EXAMINATION. (a) At the
request of an insurance carrier or an employee, or on the
commissioner's own order, the commissioner may [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;
(3) the extent of the employee's compensable injury;
(4) whether the injured employee's disability is a
direct result of the work-related injury;
(5) the ability of the employee to return to work; or
(6) issues similar to those described by Subdivisions
(1)-(5).
(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 as determined by commissioner rule. [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
commissioner [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 department's staff [of the 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 preponderance [great weight] of the evidence is
to the contrary. An employer may make a bona fide offer of
employment subject to Sections 408.103(e) and 408.144(c) based on
the designated doctor's report.
(f) Unless otherwise ordered by the department, the
insurance carrier shall pay benefits based on the opinion of the
designated doctor during the pendency of any dispute. 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 commission shall allow the insurance carrier
reasonable time to obtain and present the opinion of the doctor
selected under this subsection before the commission makes a
decision on the merits of the issue in question.]
(g) Except as otherwise provided by this subsection, an
injured employee is entitled to have a doctor of the employee's
choice present at an examination requested by an insurance carrier
under Subsection (f). The insurance carrier shall pay a fee set by
the commissioner to the doctor selected by the employee. If the
injured employee is subject to a workers' compensation health care
network under Chapter 1305, Insurance Code, the doctor must be the
employee's treating doctor.
(h) 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.
(i) [(h)] An employee who, without good cause as determined
by the commissioner, fails or refuses to appear at the time
scheduled for an examination under Subsection (a) or (f), commits a
violation. A violation under this subsection is a Class D
administrative violation.
(j) An employee is not entitled to temporary income benefits
[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
Subsection (a) or (f) [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.
(k) [(i)] If the report of a designated doctor indicates
that an employee has reached maximum medical improvement or is
otherwise able to return to work immediately, the insurance carrier
may suspend or reduce the payment of temporary income benefits
immediately.
(l) A person who makes a frivolous request for a medical
examination under Subsection (a) or (f), as determined by the
commissioner, commits a violation. A violation under this
subsection is a Class B administrative violation.
SECTION 3.073. Subsection (e), Section 408.005, Labor Code,
is amended to read as follows:
(e) The director of the division of hearings shall approve a
settlement if the 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 commissioner
[commission]; and
(3) under the law and facts, the settlement is in the
best interest of the claimant.
SECTION 3.074. Section 408.022, Labor Code, is amended by
amending Subsections (a), (b), and (c) and adding Subsection (f) to
read as follows:
(a) Except in an emergency, the department [commission]
shall require an employee to receive medical treatment from a
doctor chosen from a list of doctors approved by the commissioner
[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 from the department's [commission's] list.
(b) If an employee is dissatisfied with the initial choice
of a doctor from the department's [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.
(f) This section does not apply to requirements regarding
the selection of a doctor under a workers' compensation health care
network established under Chapter 1305, Insurance Code, except as
provided by that chapter.
SECTION 3.075. Section 408.023, Labor Code, is amended to
read as follows:
Sec. 408.023. LIST OF APPROVED DOCTORS; DUTIES OF TREATING
DOCTORS. (a) The department [commission] shall develop a list of
doctors licensed in this state who are approved to provide health
care services under this subtitle. A [Each] doctor [licensed in
this state on September 1, 2001,] is eligible to be included on the
department's [commission's] list of approved doctors if the doctor:
(1) registers with the department [commission] in the
manner prescribed by commissioner [commission] rules; and
(2) complies with the requirements adopted by the
commissioner [commission] under this section.
(b) The commissioner [commission] by rule shall establish
reasonable requirements for doctors and health care providers
financially related to those doctors regarding training,
impairment rating testing, and disclosure of financial interests as
required by Section 413.041, and for monitoring of those doctors
and health care providers as provided by Sections 408.0231 and
413.0512. The commissioner [commission] by rule shall provide a
reasonable period, not to exceed 18 months after the adoption of
rules under this section, for doctors to comply with the
registration and training requirements of this subchapter. Except
as otherwise provided by this section, the requirements under this
subsection apply to doctors and other health care providers who:
(1) provide health care services as treating doctors;
(2) provide health care services as authorized by this
chapter;
(3) perform medical peer review under this subtitle;
(4) perform utilization review of medical benefits
provided under this subtitle; or
(5) provide health care services on referral from a
treating doctor, as provided by commissioner [commission] rule.
(c) The department [commission] shall issue to a doctor who
is approved by the commissioner [commission] a certificate of
registration. In determining whether to issue a certificate of
registration, the commissioner [commission] may consider and
condition [its] approval on any practice restrictions applicable to
the applicant that are relevant to services provided under this
subtitle. The commissioner [commission] may also consider the
practice restrictions of an applicant when determining appropriate
sanctions under Section 408.0231.
(d) A certificate of registration issued under this section
is valid, unless revoked, suspended, or revised, for the period
provided by commissioner [commission] rule and may be renewed on
application to the department [commission]. The department
[commission] shall provide notice to each doctor on the approved
doctor list of the pending expiration of the doctor's certificate
of registration not later than the 60th day before the date of
expiration of the certificate.
(e) Notwithstanding other provisions of this section, a
doctor not licensed in this state but licensed in another state or
jurisdiction who treats employees or performs utilization review of
health care for an insurance carrier may apply for a certificate of
registration under this section to be included on the department's
[commission's] list of approved doctors.
(f) A doctor who contracts with a workers' compensation
health care network certified under Chapter 1305, Insurance Code,
is not subject to the registration requirements of this section for
the purpose of treating injured employees who are required to seek
medical care from a network. However, a doctor who contracts with a
workers' compensation health care network shall:
(1) comply with the requirements of Section 413.041
regarding the disclosure of financial interests; and
(2) if the doctor intends to provide certifications of
maximum medical improvement or assign impairment ratings, comply
with the impairment rating training and testing requirements
established by commissioner rule.
(g) A person required to comply with Subsection (f) who does
not comply commits a violation. A violation under this subsection
is a Class B administrative violation.
(h) An insurance carrier may not use a certification of
maximum medical improvement or an impairment rating assigned by a
doctor who fails to comply with Subsection (f)(2) for the purpose of
suspending temporary income benefits or computing impairment
income benefits.
(i) Except in an emergency or for immediate post-injury
medical care as defined by commissioner [commission] rule, or as
provided by Subsection (f), (k), [(h)] or (l) [(i)], each doctor who
performs functions under this subtitle, including examinations
under this chapter, must hold a certificate of registration and be
on the department's list of approved doctors in order to perform
services or receive payment for those services.
(j) [(g)] The commissioner [commission] by rule shall
modify registration and training requirements for doctors who
infrequently provide health care or[,] who perform utilization
review or peer review functions for insurance carriers[, or who
participate in regional networks established under this
subchapter,] as necessary to ensure that those doctors are informed
of the regulations that affect health care benefit delivery under
this subtitle.
(k) [(h)] 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 the reviews must be performed under the direction of a
doctor licensed to practice in this state.
(l) [(i)] The commissioner [commission] may grant
exceptions to the requirement imposed under Subsection (i) [(f)] as
necessary to ensure that:
(1) employees have access to health care; and
(2) insurance carriers have access to evaluations of
an employee's health care and income benefit eligibility as
provided by this subtitle.
(m) [(j)] The injured employee's treating doctor is
responsible for the efficient management of medical care as
required by Section 408.025(c) and commissioner [commission]
rules. The department [commission] 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 on the list of approved doctors.
(n) [(k)] The commissioner [commission] may adopt rules to
define the role of the treating doctor and to specify outcome
information to be collected for a treating doctor.
SECTION 3.076. Section 408.0231, Labor Code, is amended to
read as follows:
Sec. 408.0231. MAINTENANCE OF LIST OF APPROVED DOCTORS;
SANCTIONS AND PRIVILEGES RELATING TO HEALTH CARE. (a) The
commissioner [executive director] shall delete from the list of
approved doctors a doctor:
(1) who fails to register with the department
[commission] as provided by this chapter and commissioner
[commission] rules;
(2) who is deceased;
(3) whose license to practice in this state is
revoked, suspended, or not renewed by the appropriate licensing
authority; or
(4) who requests to be removed from the list.
(b) The commissioner [commission] by rule shall establish
criteria for:
(1) deleting or suspending a doctor from the list of
approved doctors;
(2) imposing sanctions on a doctor or an insurance
carrier as provided by this section;
(3) monitoring of utilization review agents, as
provided by a memorandum of understanding between the department
[commission] and the Texas Department of Insurance; and
(4) authorizing increased or reduced utilization
review and preauthorization controls on a doctor.
(c) Rules adopted under Subsection (b) are in addition to,
and do not affect, the rules adopted under Section 415.023(b). The
criteria for deleting a doctor from the list or for recommending or
imposing sanctions may include anything the commissioner
[commission] considers relevant, including:
(1) a sanction of the doctor by the commissioner
[commission] for a violation of Chapter 413 or Chapter 415;
(2) a sanction by the Medicare or Medicaid program
for:
(A) substandard medical care;
(B) overcharging;
(C) overutilization of medical services; or
(D) any other substantive noncompliance with
requirements of those programs regarding professional practice or
billing;
(3) evidence from the department's [commission's]
medical records that the applicable insurance carrier's
utilization review practices or the doctor's charges, fees,
diagnoses, treatments, evaluations, or impairment ratings are
substantially different from those the commissioner [commission]
finds to be fair and reasonable based on either a single
determination or a pattern of practice;
(4) a suspension or other relevant practice
restriction of the doctor's license by an appropriate licensing
authority;
(5) professional failure to practice medicine or
provide health care, including chiropractic care, in an acceptable
manner consistent with the public health, safety, and welfare;
(6) findings of fact and conclusions of law made by a
court, an administrative law judge of the State Office of
Administrative Hearings, or a licensing or regulatory authority; or
(7) a criminal conviction.
(d) The commissioner [commission] by rule shall establish
procedures under which a doctor may apply for:
(1) reinstatement to the list of approved doctors; or
(2) restoration of doctor practice privileges removed
by the commissioner [commission] based on sanctions imposed under
this section.
(e) The commissioner [commission] shall act on a
recommendation by the medical advisor selected under Section
413.0511 and, after notice and the opportunity for a hearing, may
impose sanctions under this section on a doctor or an insurance
carrier or may recommend action regarding a utilization review
agent. The department [commission] and the Texas Department of
Insurance shall enter into a memorandum of understanding to
coordinate the regulation of insurance carriers and utilization
review agents as necessary to ensure:
(1) compliance with applicable regulations; and
(2) that appropriate health care decisions are reached
under this subtitle and under Article 21.58A, Insurance Code.
(f) The sanctions the commissioner [commission] may
recommend or impose under this section include:
(1) reduction of allowable reimbursement;
(2) mandatory preauthorization of all or certain
health care services;
(3) required peer review monitoring, reporting, and
audit;
(4) deletion or suspension from the approved doctor
list and the designated doctor list;
(5) restrictions on appointment under this chapter;
(6) conditions or restrictions on an insurance carrier
regarding actions by insurance carriers under this subtitle in
accordance with the memorandum of understanding adopted between the
department [commission] and the Texas Department of Insurance
regarding Article 21.58A, Insurance Code; and
(7) mandatory participation in training classes or
other courses as established or certified by the department
[commission].
(g) 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.
SECTION 3.077. Section 408.024, Labor Code, is amended to
read as follows:
Sec. 408.024. NONCOMPLIANCE WITH SELECTION REQUIREMENTS.
Except as otherwise provided, and after notice and an opportunity
for hearing, the commissioner [commission] may relieve an insurance
carrier of liability for health care that is furnished by a health
care provider or another person selected in a manner inconsistent
with the requirements of this subchapter.
SECTION 3.078. Subsections (a), (b), and (d), Section
408.025, Labor Code, are amended to read as follows:
(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.
(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.
SECTION 3.079. Subchapter B, Chapter 408, Labor Code, is
amended by adding Section 408.0251 to read as follows:
Sec. 408.0251. 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 and health care providers
who are unable to submit or accept medical bills electronically.
SECTION 3.080. Section 408.026, Labor Code, is amended to
read as follows:
Sec. 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.
SECTION 3.081. Subsection (d), Section 408.027, Labor Code,
is amended to read as follows:
(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).
SECTION 3.082. Subsections (b), (d), and (e), Section
408.028, Labor Code, are amended to read as follows:
(b) The commissioner [commission] by rule shall require
[develop 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. The department by rule may
adopt a closed formulary under Section 413.011. Rules adopted by
the department shall allow an appeals process for claims in which a
treating doctor determines and documents that a drug not included
in the formulary is necessary to treat an injured employee's
compensable injury.
(d) The commissioner [commission] shall adopt rules to
allow an 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 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.
SECTION 3.083. Section 408.030, Labor Code, is amended to
read as follows:
Sec. 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 department [commission] shall immediately report that act or
omission to the Texas State Board of Medical Examiners.
SECTION 3.084. Subchapter B, Chapter 408, Labor Code, is
amended by adding Section 408.031 to read as follows:
Sec. 408.031. WORKERS' COMPENSATION HEALTH CARE NETWORKS.
(a) Notwithstanding any other provision of this chapter, an
injured employee may receive benefits under a workers' compensation
health care network established under Chapter 1305, Insurance Code,
in the manner provided by that chapter.
(b) In the event of a conflict between this title and
Chapter 1305, Insurance Code, as to the operation and regulation of
workers' compensation health care networks, regulation of the
health care providers who contract with those networks, or the
resolution of disputes regarding medical benefits provided through
those networks, Chapter 1305, Insurance Code, prevails.
SECTION 3.085. Subsection (c), Section 408.041, 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 commissioner
[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 3.086. Subsections (d), (f), and (g), Section
408.042, 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 commissioner [commission] determines that
computing the average weekly wage for an employee as provided by
Subsection (c) is impractical or unreasonable, the commissioner
[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 3.087. Subsection (c), Section 408.043, 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
commissioner [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 3.088. Subsection (b), Section 408.0445, Labor
Code, is amended to read as follows:
(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 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 commissioner [commission].
SECTION 3.089. Subsections (d) and (e), Section 408.0446,
Labor Code, are amended to read as follows:
(d) If the commissioner [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 commissioner [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 3.090. Section 408.045, Labor Code, is amended to
read as follows:
Sec. 408.045. NONPECUNIARY WAGES. The commissioner
[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 3.091. Section 408.047, Labor Code, is amended to
read as follows:
Sec. 408.047. STATE AVERAGE WEEKLY WAGE. (a) On and after
October 1, 2006, the state average weekly wage is equal to 85
percent of the average weekly wage in covered employment computed
by the Texas Workforce Commission under Section 207.002(c).
(b) The state average weekly wage for the period [fiscal
year] beginning September 1, 2005 [2003], and ending September 30,
2006 [August 31, 2004], is $540 [$537, and for the fiscal year
beginning September 1, 2004, and ending August 31, 2005, is $539].
This subsection expires October 1, 2006.
SECTION 3.092. Subsection (f), Section 408.061, Labor Code,
is amended to read as follows:
(f) The commissioner [commission] shall compute the maximum
weekly income benefits for each state fiscal year not later than
October [September] 1 of each year.
SECTION 3.093. Subsection (b), Section 408.062, Labor Code,
is amended to read as follows:
(b) The commissioner [commission] shall compute the minimum
weekly income benefit for each state fiscal year not later than
October [September] 1 of each year.
SECTION 3.094. Subsections (a) and (c), Section 408.063,
Labor Code, are 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.
(c) An employer who fails to file a wage statement in
accordance with Subsection (b) commits a violation. [A violation
under this subsection is a Class D administrative violation.]
SECTION 3.095. Subsections (b) and (c), Section 408.081,
Labor Code, are amended to read as follows:
(b) Except as otherwise provided by this section or this
subtitle, income benefits shall be paid 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].
SECTION 3.096. Subsection (c), Section 408.082, Labor Code,
is amended to read as follows:
(c) If the disability continues for two [four] weeks or
longer after the date it begins, compensation shall be computed
from the date the disability begins.
SECTION 3.097. Subsections (a) and (b), Section 408.084,
Labor Code, are amended to read as follows:
(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 commissioner [commission] shall consider the
cumulative impact of the compensable injuries on the employee's
overall impairment in determining a reduction under this section.
SECTION 3.098. Section 408.085, Labor Code, is amended to
read as follows:
Sec. 408.085. ADVANCE OF BENEFITS FOR HARDSHIP. (a) If
there is a likelihood that income benefits will be paid, the
commissioner [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 in Section 408.061. The commissioner
[commission] may not grant more than three advances to a particular
employee based on the same injury.
(d) The commissioner [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 408.129.
SECTION 3.099. Section 408.086, Labor Code, is amended to
read as follows:
Sec. 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 commissioner [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 commissioner
[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 commissioner's
[its] duty under this section and Subchapter H.
SECTION 3.100. Subsection (b), Section 408.102, Labor Code,
is amended to read as follows:
(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.
SECTION 3.101. Subsection (b), Section 408.103, Labor Code,
is amended to read as follows:
(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 commissioner [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 commissioner [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.
SECTION 3.102. Subsections (a) and (c), Section 408.104,
Labor Code, are amended to read as follows:
(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 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 commissioner [commission].
(c) The commissioner [commission] shall adopt rules to
implement this section, including rules establishing procedures
for requesting and disputing an extension.
SECTION 3.103. Subchapter G, Chapter 408, Labor Code, is
amended by amending Section 408.122 and adding Section 408.1225 to
read as follows:
Sec. 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.
Sec. 408.1225. DESIGNATED DOCTOR. (a) [(b)] To be
eligible to serve as a designated doctor, a doctor must meet
specific qualifications, including training in the determination
of impairment ratings and demonstrated expertise in performing
examinations and making evaluations as described by Section
408.0041. The commissioner [executive director] shall develop
qualification standards and administrative policies to implement
this subsection[,] and [the commission] may adopt rules as
necessary.
(b) The commissioner shall ensure the quality of designated
doctor decisions and reviews through active monitoring of the
decisions and reviews, and may take action as necessary to:
(1) restrict the participation of a designated doctor;
or
(2) remove a doctor from inclusion on the department's
list of designated doctors. [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 preponderance [great weight]
of the other medical evidence is to the contrary.
(d) The commissioner shall develop rules to ensure that a
designated doctor called on to conduct an examination under Section
408.0041 has no conflict of interest in serving as a designated
doctor in performing any examination.
SECTION 3.104. Section 408.123, Labor Code, is amended and
reenacted to read as follows:
Sec. 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 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 commissioner [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 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).
SECTION 3.105. Section 408.124, Labor Code, is amended to
read as follows:
Sec. 408.124. IMPAIRMENT RATING GUIDELINES. (a) An award
of an impairment income benefit, whether by the commissioner
[commission] or a court, shall be made on an impairment rating
determined using the impairment rating guidelines described in this
section.
(b) For determining the existence and degree of an
employee's impairment, the commissioner [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, for determining the existence and degree of an
employee's impairment.
SECTION 3.106. Subsections (a) through (d) and (f), Section
408.125, Labor Code, are amended to read as follows:
(a) If an impairment rating is disputed, the commissioner
[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 preponderance [great
weight] of the other medical evidence is to the contrary. If the
preponderance [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.
(f) A violation of Subsection (d) is an [a Class C]
administrative violation.
SECTION 3.107. Subsection (c), Section 408.127, Labor Code,
is amended to read as follows:
(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.
SECTION 3.108. Subsections (a), (b), and (d), Section
408.129, Labor Code, are amended to read as follows:
(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.
(d) The commissioner [commission] may prescribe forms
necessary to implement this section.
SECTION 3.109. Section 408.141, Labor Code, is amended to
read as follows:
Sec. 408.141. AWARD OF SUPPLEMENTAL INCOME BENEFITS. An
award of a supplemental income benefit, whether by the commissioner
[commission] or a court, shall be made in accordance with this
subchapter.
SECTION 3.110. Subsections (a) and (b), Section 408.143,
Labor Code, are amended to read as follows:
(a) After the commissioner'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 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 commissioner
[commission]. The commissioner [commission] may modify the filing
period as appropriate to an individual case.
SECTION 3.111. Subsection (c), Section 408.147, Labor Code,
is amended to read as follows:
(c) If an insurance carrier disputes the commissioner's [a
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).
SECTION 3.112. Section 408.148, Labor Code, is amended to
read as follows:
Sec. 408.148. EMPLOYEE DISCHARGE AFTER TERMINATION. The
commissioner [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 408.146(c) if the commissioner [commission] finds that the
employee was discharged at that time with the intent to deprive the
employee of supplemental income benefits.
SECTION 3.113. Section 408.149, Labor Code, is amended to
read as follows:
Sec. 408.149. STATUS REVIEW; 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 commissioner
[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.
(b) Either party may request a benefit review conference to
contest a determination of the commissioner [commission] at any
time, subject only to the limits placed on the insurance carrier by
Section 408.147.
SECTION 3.114. Section 408.150, Labor Code, is amended to
read as follows:
Sec. 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.
SECTION 3.115. Section 408.151, Labor Code, is amended to
read as follows:
Sec. 408.151. MEDICAL EXAMINATIONS FOR SUPPLEMENTAL INCOME
BENEFITS. (a) On or after the second anniversary of the date the
commissioner [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 commissioner [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 preponderance [great weight] of the other
medical evidence is to the contrary.
[(c) The 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.]
SECTION 3.116. Subsection (d), Section 408.161, Labor Code,
is amended to read as follows:
(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.
SECTION 3.117. Subsections (c) and (d), Section 408.181,
Labor Code, are amended to read as follows:
(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.
SECTION 3.118. Subsection (f), Section 408.182, Labor Code,
is amended to read as follows:
(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 department [commission].
SECTION 3.119. Subsection (b), Section 408.183, Labor Code,
is amended to read as follows:
(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.
SECTION 3.120. Subsection (c), Section 408.187, Labor Code,
is amended to read as follows:
(c) The commissioner [commission] shall require the
insurance carrier to pay the costs of a procedure ordered under this
section.
SECTION 3.121. 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 the commissioner's
[commission] approval, assign the right to death benefits.
SECTION 3.122. Subsections (a) through (g), Section
408.221, 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 commissioner
[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 408.147(c),
the attorney's fee shall be paid from the claimant's recovery.
(c) An insurance carrier that seeks judicial review under
Subchapter G, Chapter 410, of a final decision of a department
[commission] appeals panel regarding compensability or eligibility
for, or the amount of, income or death benefits is liable for
reasonable and necessary attorney's fees as provided by Subsection
(d) incurred by the claimant as a result of the insurance carrier's
appeal if the claimant prevails on an issue on which judicial review
is sought by the insurance carrier in accordance with the
limitation of issues contained in Section 410.302. If the carrier
appeals multiple issues and the claimant prevails on some, but not
all, of the issues appealed, the court shall apportion and award
fees to the claimant's attorney only for the issues on which the
claimant prevails. In making that apportionment, the court shall
consider the factors prescribed by Subsection (d). This subsection
does not apply to attorney's fees for which an insurance carrier may
be liable under Section 408.147. An award of attorney's fees under
this subsection is not subject to commissioner [commission] rules
adopted under Subsection (f). [This subsection expires September
1, 2005.]
(d) In approving an attorney's fee under this section, the
commissioner [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].
SECTION 3.123. 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 commissioner [commission] or court
and determined by the commissioner [commission] or court to be
reasonable and necessary.
(b) In determining whether a fee is reasonable under this
section, the commissioner [commission] or court shall consider
issues analogous to those listed under Section 408.221(d). The
defense counsel shall present written evidence to the commissioner
[commission] or court relating to:
(1) the time spent and expenses incurred in defending
the case; and
(2) other evidence considered necessary by the
commissioner [commission] or court in making a determination under
this section.
SECTION 3.124. 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 commissioner [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 3.125. 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 3.126. Section 409.004, Labor Code, is amended to
read as follows:
Sec. 409.004. 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 3.127. Subsections (d), (e), (f), and (h) through
(l), Section 409.005, 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 commissioner
[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.
(l) A person commits a violation if the person fails to
comply with this section unless good cause exists. [A violation
under this subsection is a Class D administrative violation.]
SECTION 3.128. Subsections (b), (c), and (e), Section
409.006, 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.
(e) A person commits a violation if the person fails to
comply with this section. [A violation under this subsection is a
Class D administrative violation.]
SECTION 3.129. Subsection (a), Section 409.007, 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 3.130. 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 3.131. 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 the department
[commission], including the services of the ombudsman program;
(2) the department's [commission's] procedures; and
(3) the person's rights and responsibilities under
this subtitle.
SECTION 3.132. Subsections (a) and (c), Section 409.011,
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
[commission];
(2) the department's [commission's] procedures; 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 3.133. Section 409.012, Labor Code, is amended to
read as follows:
Sec. 409.012. VOCATIONAL REHABILITATION INFORMATION.
(a) The commissioner [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 commissioner [commission] determines that an
injured employee would be assisted by vocational rehabilitation,
the department [commission] shall notify 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. The department [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
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.
(f) The department and the Department of Assistive and
Rehabilitative Services shall report to the legislature not later
than August 1, 2006, on their actions to improve access to and the
effectiveness of vocational rehabilitation programs for injured
employees. The report must include:
(1) a description of the actions each agency has taken
to improve communication regarding and coordination of vocational
rehabilitation programs;
(2) an analysis identifying the population of injured
employees that have the poorest return-to-work outcomes and are in
the greatest need for vocational rehabilitation services;
(3) any changes recommended to improve the access to
and effectiveness of vocational rehabilitation programs for the
populations identified in Subdivision (2); and
(4) a plan to implement these changes.
SECTION 3.134. Section 409.013, Labor Code, is amended to
read as follows:
Sec. 409.013. PLAIN LANGUAGE INFORMATION; NOTIFICATION OF
INJURED 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 department [commission] for
public dissemination that relates to the employee's situation, such
as information relating to back injuries or occupational diseases.
SECTION 3.135. Subsections (a) and (b), Section 409.021,
Labor Code, are amended to read as follows:
(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 benefit review
conference; and
(B) the means to obtain additional information
from the department [commission].
(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.
SECTION 3.136. Subsection (c), Section 409.022, Labor Code,
is amended to read as follows:
(c) An insurance carrier commits a violation if the
insurance carrier does not have reasonable grounds for a refusal to
pay benefits, as determined by the commissioner [commission. A
violation under this subsection is a Class B administrative
violation].
SECTION 3.137. Subsections (a), (c), and (d), Section
409.023, Labor Code, are 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.
(c) An insurance carrier commits a violation if the
insurance carrier fails to comply with this section. [A violation
under this subsection is a Class B administrative violation. Each
day of noncompliance constitutes a separate violation.]
(d) An insurance carrier that commits multiple violations
of this section commits an additional [a Class A] administrative
violation and is subject to:
(1) the sanctions provided under Section 415.023; and
(2) revocation of the right to do business under the
workers' compensation laws of this state.
SECTION 3.138. Subsection (b), Section 409.0231, 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 3.139. 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 commissioner [commission. A
violation under this subsection is a Class B administrative
violation].
SECTION 3.140. Subsection (a), Section 409.041, Labor Code,
is amended to read as follows:
(a) The department [commission] shall maintain an ombudsman
program as provided by this subchapter to assist injured workers
and persons claiming death benefits in obtaining benefits under
this subtitle.
SECTION 3.141. Subsections (a) and (c), Section 409.042,
Labor Code, are amended to read as follows:
(a) At least one specially qualified employee in each
department [commission] office shall be designated an ombudsman who
shall perform the duties under this section as the person's primary
responsibility.
(c) The commissioner [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, 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.
SECTION 3.142. Section 409.043, Labor Code, is amended to
read as follows:
Sec. 409.043. EMPLOYER NOTIFICATION; ADMINISTRATIVE
VIOLATION. (a) Each employer shall notify its employees of the
ombudsman program in a manner prescribed by the commissioner
[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.]
SECTION 3.143. Section 409.044, Labor Code, is amended to
read as follows:
Sec. 409.044. PUBLIC INFORMATION. The department
[commission] shall widely disseminate information about the
ombudsman program.
SECTION 3.144. 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 3.145. Section 410.004, Labor Code, is amended to
read as follows:
Sec. 410.004. DIVISION OF HEARINGS. The division shall
conduct benefit review conferences, contested case hearings,
arbitration, and appeals within the department [commission]
related to workers' compensation claims.
SECTION 3.146. Subsection (a), Section 410.005, Labor Code,
is amended to read as follows:
(a) Unless the commissioner [commission] determines that
good cause exists for the selection of a different location, a
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.
SECTION 3.147. Section 410.021, Labor Code, is amended to
read as follows:
Sec. 410.021. PURPOSE. A benefit review conference is a
nonadversarial, informal dispute resolution proceeding designed
to:
(1) explain, orally and in writing, the rights of the
respective parties to a workers' compensation claim and the
procedures necessary to protect those rights;
(2) discuss the facts of the claim, review available
information in order to evaluate the claim, and delineate the
disputed issues; and
(3) mediate and resolve disputed issues by agreement
of the parties in accordance with this subtitle and the policies of
the department [commission].
SECTION 3.148. Subsections (b) and (c), Section 410.022,
Labor Code, are amended to read as follows:
(b) A benefit review officer must:
(1) be an employee of the department [commission]; and
(2) be trained in the principles and procedures of
dispute mediation.
(c) The department [commission] shall institute and
maintain an education and training program for benefit review
officers and shall consult or contract with the Federal Mediation
and Conciliation Service or other appropriate organizations for
this purpose.
SECTION 3.149. Section 410.023, Labor Code, is amended to
read as follows:
Sec. 410.023. REQUEST FOR BENEFIT REVIEW CONFERENCE. On
receipt of a request from a party or on its own motion, the
department [commission] may direct the parties to a disputed
workers' compensation claim to meet in a benefit review conference
to attempt to reach agreement on disputed issues involved in the
claim.
SECTION 3.150. Section 410.024, Labor Code, is amended to
read as follows:
Sec. 410.024. BENEFIT REVIEW CONFERENCE AS PREREQUISITE TO
FURTHER PROCEEDINGS ON CERTAIN CLAIMS. (a) Except as otherwise
provided by law or commissioner [commission] rule, the parties to a
disputed compensation claim are not entitled to a contested case
hearing or arbitration on the claim unless a benefit review
conference is conducted as provided by this subchapter.
(b) The commissioner [commission] by rule shall adopt
guidelines relating to claims that do not require a benefit review
conference and may proceed directly to a contested case hearing or
arbitration.
SECTION 3.151. Section 410.025, Labor Code, is amended to
read as follows:
Sec. 410.025. SCHEDULING OF BENEFIT REVIEW CONFERENCE;
NOTICE. (a) The commissioner [commission] by rule shall prescribe
the time within which a benefit review conference must be
scheduled.
(b) At the time a benefit review conference is scheduled,
the department [commission] shall schedule a contested case hearing
to be held not later than the 60th day after the date of the benefit
review conference if the disputed issues are not resolved at the
benefit review conference.
(c) The department [commission] shall send written notice
of the benefit review conference to the parties to the claim and the
employer.
(d) The commissioner [commission] by rule shall provide for
expedited proceedings in cases in which compensability or liability
for essential medical treatment is in dispute.
SECTION 3.152. Subsection (a), Section 410.026, Labor Code,
is amended to read as follows:
(a) A benefit review officer shall:
(1) mediate disputes between the parties and assist in
the adjustment of the claim consistent with this subtitle and the
policies of the department [commission];
(2) thoroughly inform all parties of their rights and
responsibilities under this subtitle, especially in a case in which
the employee is not represented by an attorney or other
representative; and
(3) ensure that all documents and information relating
to the employee's wages, medical condition, and any other
information pertinent to the resolution of disputed issues are
contained in the claim file at the conference, especially in a case
in which the employee is not represented by an attorney or other
representative.
SECTION 3.153. Subsection (a), Section 410.027, Labor Code,
is amended to read as follows:
(a) The commissioner [commission] shall adopt rules for
conducting benefit review conferences.
SECTION 3.154. Subsection (b), Section 410.028, Labor Code,
is amended to read as follows:
(b) A party commits a violation if the party fails to attend
a benefit review conference without good cause as determined by the
benefit review officer. [A violation under this subsection is a
Class D administrative violation.]
SECTION 3.155. Section 410.030, Labor Code, is amended to
read as follows:
Sec. 410.030. BINDING EFFECT OF AGREEMENT. (a) An
agreement signed in accordance with Section 410.029 is binding on
the insurance carrier through the conclusion of all matters
relating to the claim, unless the department [commission] or a
court, on a finding of fraud, newly discovered evidence, or other
good and sufficient cause, relieves the insurance carrier of the
effect of the agreement.
(b) The agreement is binding on the claimant, if represented
by an attorney, to the same extent as on the insurance carrier. If
the claimant is not represented by an attorney, the agreement is
binding on the claimant through the conclusion of all matters
relating to the claim while the claim is pending before the
department [commission], unless the commissioner [commission] for
good cause relieves the claimant of the effect of the agreement.
SECTION 3.156. Subsection (b), Section 410.034, Labor Code,
is amended to read as follows:
(b) The commissioner [commission] by rule shall prescribe
the times within which the agreement and report must be filed.
SECTION 3.157. 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 [commission] shall establish
procedures to carry out this subsection.
SECTION 3.158. 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 3.159. Subsections (b) and (c), Section 410.104,
Labor Code, are amended to read as follows:
(b) To elect arbitration, the parties must file the election
with the department [commission] not later than the 20th day after
the last day of the benefit review conference. The commissioner
[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 arising out of the claims that are under
the jurisdiction of the department [commission].
SECTION 3.160. 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 commissioner [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 commission shall remove an arbitrator if after
review the 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 3.161. Section 410.106, Labor Code, is amended to
read as follows:
Sec. 410.106. SELECTION OF ARBITRATOR. 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. 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 3.162. Subsection (a), Section 410.107, 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 3.163. Subsection (a), Section 410.108, 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 3.164. 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 3.165. 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 3.166. Subsection (b), Section 410.112, Labor Code,
is amended to read as follows:
(b) A party commits a violation if the party, without good
cause as determined by the arbitrator, fails to comply with
Subsection (a). [A violation under this subsection is a Class D
administrative violation.]
SECTION 3.167. Subsection (b), Section 410.113, Labor Code,
is amended to read as follows:
(b) A party commits a violation if the party does not attend
the arbitration unless the arbitrator determines that the party had
good cause not to attend. [A violation under this subsection is a
Class D administrative violation.]
SECTION 3.168. Subsection (b), Section 410.114, Labor Code,
is amended to read as follows:
(b) The department [commission] shall make an electronic
recording of the proceeding.
SECTION 3.169. Subsection (d), Section 410.118, 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 3.170. Subsection (b), Section 410.119, Labor Code,
is amended to read as follows:
(b) An arbitrator's award is a final order of the department
[commission].
SECTION 3.171. Subsections (a) and (b), Section 410.121,
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 3.172. Subsection (b), Section 410.151, Labor Code,
is amended to read as follows:
(b) An issue that was not raised at a benefit review
conference or that was resolved at a benefit review conference may
not be considered unless:
(1) the parties consent; or
(2) if the issue was not raised, the commissioner
[commission] determines that good cause existed for not raising the
issue at the conference.
SECTION 3.173. 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 [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 3.174. 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 410.024 or 410.025(b).
SECTION 3.175. 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 commissioner [commission].
(b) The commissioner [commission] may grant a continuance
only if the commissioner [commission] determines that there is good
cause for the continuance.
SECTION 3.176. Subsection (b), Section 410.156, Labor Code,
is amended to read as follows:
(b) A party commits a violation if the party, without good
cause as determined by the hearing officer, does not attend a
contested case hearing. [A violation under this subsection is a
Class C administrative violation.]
SECTION 3.177. 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 3.178. Subsection (a), Section 410.158, 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 3.179. 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 3.180. 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 3.181. 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 3.182. Subsections (d) and (e), Section 410.168,
Labor Code, are amended to read as follows:
(d) On a form that the commissioner [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 must file the decisions
with the division.
SECTION 3.183. Subsection (d), Section 410.203, Labor Code,
is amended to read as follows:
(d) A hearing on remand shall be accelerated and the
commissioner [commission] shall adopt rules to give priority to the
hearing over other proceedings.
SECTION 3.184. Subsection (b), Section 410.204, Labor Code,
is amended to read as follows:
(b) A copy of the decision of the appeals panel shall be sent
to each party not later than the seventh day after the date the
decision is filed with the department [commission].
SECTION 3.185. Section 410.206, Labor Code, is amended to
read as follows:
Sec. 410.206. CLERICAL ERROR. The commissioner [executive
director] may revise a decision in a contested case hearing on a
finding of clerical error.
SECTION 3.186. Section 410.207, Labor Code, is amended to
read as follows:
Sec. 410.207. CONTINUATION OF DEPARTMENT [COMMISSION]
JURISDICTION. During judicial review of an appeals panel decision
on any disputed issue relating to a workers' compensation claim,
the department [commission] retains jurisdiction of all other
issues related to the claim.
SECTION 3.187. Section 410.208, Labor Code, is amended to
read as follows:
Sec. 410.208. 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
commissioner [commission], the department [commission] 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, a final order, or a decision of the
commissioner [commission], 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 [commission] brings suit to enforce an
interlocutory order, final order, or decision of the commissioner
[commission], the department [commission] 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 commissioner [commission] 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 commissioner [commission] within 20 days after the
date the order or decision becomes final. [A violation under this
subsection is a Class A administrative violation.]
SECTION 3.188. Section 410.209, Labor Code, is amended to
read as follows:
Sec. 410.209. REIMBURSEMENT FOR OVERPAYMENT. The
subsequent injury fund shall reimburse an insurance carrier for any
overpayments 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 [commission] or
a court. The commissioner [commission] shall adopt rules to
provide for a periodic reimbursement schedule, providing for
reimbursement at least annually.
SECTION 3.189. 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 3.190. Section 410.254, Labor Code, is amended to
read as follows:
Sec. 410.254. [COMMISSION] INTERVENTION. On timely motion
initiated by the commissioner [executive director], the department
[commission] shall be permitted to intervene in any judicial
proceeding under this subchapter or Subchapter G.
SECTION 3.191. 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 3.192. Subsections (a) through (e), Section
410.258, 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 commissioner [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 department [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 3.193. Subsection (a), Section 410.301, Labor Code,
is amended to read as follows:
(a) Judicial review of a final decision of a department
[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 3.194. Section 410.302, Labor Code, is amended to
read as follows:
Sec. 410.302. LIMITATION OF ISSUES. A trial under this
subchapter is limited to issues decided by the department
[commission] appeals panel and on which judicial review is sought.
The pleadings must specifically set forth the determinations of the
appeals panel by which the party is aggrieved.
SECTION 3.195. 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 department [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 department [commission] appeals
panel.
SECTION 3.196. Subsections (b) and (c), Section 410.306,
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 G, Chapter 408.
SECTION 3.197. Subsections (a) and (d), Section 410.307,
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 department [commission]
under Section 408.123.
SECTION 3.198. Subsection (a), Section 410.308, 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 3.199. Subdivision (1), Section 411.001, Labor
Code, is amended to read as follows:
(1) "Division" means the division of workers' health
and safety of the department [commission].
SECTION 3.200. Section 411.013, Labor Code, is amended to
read as follows:
Sec. 411.013. FEDERAL CONTRACTS AND PROGRAMS. With the
approval of the commissioner [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 3.201. Section 411.032, Labor Code, is amended to
read as follows:
Sec. 411.032. EMPLOYER INJURY AND OCCUPATIONAL DISEASE
REPORT; ADMINISTRATIVE VIOLATION. (a) An employer shall file with
the department [commission] a report of each:
(1) on-the-job injury that results in the employee's
absence from work for more than one day; and
(2) occupational disease of which the employer has
knowledge.
(b) The commissioner [commission] shall adopt rules and
prescribe the form and manner of reports filed under this section.
(c) An employer commits an administrative violation if the
employer fails to report to the department [commission] as required
under Subsection (a) unless good cause exists, as determined by the
commissioner [commission], for the failure. [A violation under
this subsection is a Class D administrative violation.]
SECTION 3.202. 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 3.203. Section 411.0415, Labor Code, is amended to
read as follows:
Sec. 411.0415. EXEMPTION FOR CERTAIN EMPLOYERS; HEARING.
(a) The commissioner [executive director] may exclude from
identification as a hazardous employer an employer who presents
evidence satisfactory to the commissioner [commission] that the
injury frequencies of the employer substantially exceed those that
may reasonably be expected in that employer's business or industry
only because of a fatality that:
(1) occurred because of factors beyond the employer's
control; or
(2) was outside the course and scope of the deceased
individual's employment.
(b) The commissioner [commission] by rule shall analyze and
list fatalities that may not be related to the work environment,
including:
(1) heart attacks;
(2) common diseases of life;
(3) homicides;
(4) suicides;
(5) vehicle accidents involving a third party;
(6) common carrier accidents; and
(7) natural events.
(c) If the commissioner [commission] determines that the
case history of the employee's fatality indicates that the employer
or the work environment was a proximate cause of the fatality, the
commissioner [commission] may request a hearing under Section
411.049. If the hearing establishes that a proximate cause of the
fatality was a factor or factors within the employer's control and
was within the course and scope of the employment, the commissioner
[commission] may identify the employer for the hazardous employer
program if that fatality causes the employer to be designated as a
hazardous employer.
SECTION 3.204. Subsection (b), Section 411.042, Labor Code,
is amended to read as follows:
(b) The commissioner [commission] by rule shall require a
minimum interval of at least six months before a subsequent audit to
identify an employer who was previously identified as a hazardous
employer.
SECTION 3.205. Subsection (b), Section 411.043, Labor Code,
is amended to read as follows:
(b) The safety consultant shall file a written report with
the department [commission] and the employer setting out any
hazardous conditions or practices identified by the safety
consultation.
SECTION 3.206. Subsection (a), Section 411.045, Labor Code,
is amended to read as follows:
(a) Not earlier than six months or later than nine months
after the formulation of an accident prevention plan under Section
411.043, the division shall conduct a follow-up inspection of the
employer's premises. The department [commission] may require the
participation of the safety consultant who performed the initial
consultation and formulated the safety plan.
SECTION 3.207. Subsection (b), Section 411.046, Labor Code,
is amended to read as follows:
(b) A violation under Subsection (a) is an [a Class B]
administrative violation. [Each day of noncompliance constitutes a
separate violation.]
SECTION 3.208. Section 411.048, Labor Code, is amended to
read as follows:
Sec. 411.048. COSTS CHARGED TO EMPLOYER. (a) The
department [commission] shall charge an employer that is a
political subdivision for reimbursement of the reasonable cost of
services provided by the division, including a reasonable
allocation of the department's [commission's] administrative
costs, in formulating and monitoring the implementation of a plan
under Section 411.043 or 411.047, investigating an accident under
Section 411.044, or in conducting a follow-up inspection under
Section 411.045.
(b) The department [commission] shall charge a private
employer for reimbursement of the reasonable cost of services
provided by the division, including a reasonable allocation of the
department's [commission's] administrative costs, in providing
safety and health services under this program at the request of the
private employer. This subsection does not apply to services
provided to the employer under Section 411.018.
SECTION 3.209. Subsection (a), Section 411.049, Labor Code,
is amended to read as follows:
(a) An employer may request a hearing to contest findings
made by the department [commission] under this subchapter.
SECTION 3.210. Section 411.050, Labor Code, is amended to
read as follows:
Sec. 411.050. ADMISSIBILITY OF IDENTIFICATION AS HAZARDOUS
EMPLOYER. The identification of an employer as a hazardous
employer under this subchapter is not admissible in any judicial
proceeding unless:
(1) the department [commission] has determined that
the employer is not in compliance with this subchapter; and
(2) that determination has not been reversed or
superseded at the time of the event giving rise to the judicial
proceeding.
SECTION 3.211. Section 411.062, Labor Code, is amended to
read as follows:
Sec. 411.062. FIELD SAFETY REPRESENTATIVE; QUALIFICATIONS.
(a) The commissioner [commission] by rule shall establish
qualifications for field safety representatives. The rules must
include education and experience requirements for those
representatives.
(b) Each field safety representative must meet the
qualifications established by the commissioner [commission].
SECTION 3.212. Subsection (c), Section 411.064, Labor Code,
is amended to read as follows:
(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 3.213. Subsection (b), Section 411.065, Labor Code,
is amended to read as follows:
(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;
(4) accident prevention services for which the
insurance company contracts;
(5) a breakdown of the premium size of the risks to
which services were provided;
(6) evidence of the effectiveness of and
accomplishments in accident prevention; and
(7) any additional information required by the
department [commission].
SECTION 3.214. The heading to Section 411.067, Labor Code,
is amended to read as follows:
Sec. 411.067. DEPARTMENT [COMMISSION] PERSONNEL.
SECTION 3.215. Subsection (a), Section 411.067, Labor Code,
is amended to read as follows:
(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.
SECTION 3.216. Subsection (b), Section 411.068, Labor Code,
is amended to read as follows:
(b) A violation under Subsection (a) is an [a Class B]
administrative violation. [Each day of noncompliance constitutes a
separate violation.]
SECTION 3.217. Subsection (b), Section 411.081, Labor Code,
is amended to read as follows:
(b) Each employer shall notify its employees of this service
in a manner prescribed by the department [commission].
SECTION 3.218. Section 411.092, Labor Code, is amended to
read as follows:
Sec. 411.092. ENFORCEMENT; RULES. The commissioner
[commission] shall enforce Section 411.091 and may adopt rules for
that purpose.
SECTION 3.219. Subsection (b), Section 411.104, Labor Code,
is amended to read as follows:
(b) In addition to the duties specified in this chapter, the
division shall perform other duties as required by the department
[commission].
SECTION 3.220. Section 411.105, Labor Code, is amended to
read as follows:
Sec. 411.105. CONFIDENTIAL INFORMATION; PENALTY. (a) The
department [commission] and its employees may not disclose at a
public hearing or otherwise information relating to secret
processes, methods of manufacture, or products.
(b) The commissioner [A member] or an employee of the
department [commission] commits an offense if the commissioner
[member] or employee wilfully discloses or conspires to disclose
information made confidential under this section. An offense under
this subsection is a misdemeanor punishable by a fine not to exceed
$1,000 and by forfeiture of the person's appointment as
commissioner [a member] or as an employee of the department
[commission].
SECTION 3.221. Section 411.106, Labor Code, is amended to
read as follows:
Sec. 411.106. SAFETY CLASSIFICATION. (a) To establish a
safety classification for employers, the department [commission]
shall:
(1) obtain medical and compensation cost information
regularly compiled by the Texas Department of Insurance in
performing that agency's rate-making duties and functions
regarding employer liability and workers' compensation insurance;
and
(2) collect and compile information relating to:
(A) the frequency rate of accidents;
(B) the existence and implementation of private
safety programs;
(C) the number of work-hour losses because of
injuries; and
(D) other facts showing accident experience.
(b) From the information obtained under Subsection (a), the
department [commission] shall classify employers as appropriate to
implement this subchapter.
SECTION 3.222. Section 411.107, Labor Code, is amended to
read as follows:
Sec. 411.107. ELIMINATION OF SAFETY IMPEDIMENTS. The
department [commission] may endeavor to eliminate an impediment to
occupational or industrial safety that is reported to the
department [commission] by an affected employer. In attempting to
eliminate an impediment the department [commission] may advise and
consult with an employer, or a representative of an employer, who is
directly involved.
SECTION 3.223. Section 411.108, Labor Code, is amended to
read as follows:
Sec. 411.108. ACCIDENT REPORTS. The department
[commission] may require an employer and any other appropriate
person to report accidents, personal injuries, fatalities, or other
statistics and information relating to accidents on forms
prescribed by and covering periods designated by the department
[commission].
SECTION 3.224. Subsections (g), (i), and (l), Section
412.041, 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 department [commission];
(2) the commissioner of the Texas Department of
Insurance; and
(3) the administrative heads of all state agencies
affected by this chapter and Chapter 501.
SECTION 3.225. Section 413.001, Labor Code, is amended to
read as follows:
Sec. 413.001. DEFINITION. In this chapter, "division"
means the division of medical review of the department
[commission].
SECTION 3.226. Section 413.002, Labor Code, is amended to
read as follows:
Sec. 413.002. DIVISION OF MEDICAL REVIEW. (a) The
department [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 department [commission].
(b) The division shall monitor health care providers,
insurance carriers, [and] workers' compensation claimants who
receive medical services, and independent review organizations to
ensure the compliance of those persons with rules adopted by the
commissioner [commission] relating to health care, including
medical policies and fee guidelines.
(c) In monitoring health care providers who serve as
designated doctors under Chapter 408 and independent review
organizations who provide services described by this chapter, the
division shall evaluate:
(1) [the] compliance [of those providers] with this
subtitle and with rules adopted by the commissioner [commission]
relating to medical policies, fee guidelines, treatment
guidelines, return-to-work guidelines, and impairment ratings; and
(2) the quality and timeliness of decisions made under
Section 408.0041, 408.122, 408.151, or 413.031.
(d) The division shall report the results of the monitoring
of independent review organizations under Subsection (c) to the
Texas Department of Insurance on at least a quarterly basis.
(e) If the commissioner of the Texas Department of Insurance
determines that an independent review organization is in violation
of this chapter, rules adopted by the commissioner under this
chapter, or applicable provisions of this code, or rules adopted
under this code, or applicable provisions of the Insurance Code or
rules adopted under that code, the commissioner of the Texas
Department of Insurance or a designated representative shall notify
the independent review organization of the alleged violation and
may compel the production of any documents or other information as
necessary to determine whether the violation occurred.
SECTION 3.227. Section 413.003, Labor Code, is amended to
read as follows:
Sec. 413.003. AUTHORITY TO CONTRACT. The department
[commission] may contract with a private or public entity to
perform a duty or function of the division.
SECTION 3.228. Section 413.004, Labor Code, is amended to
read as follows:
Sec. 413.004. COORDINATION WITH PROVIDERS. The division
shall coordinate its activities with health care providers as
necessary to perform 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 3.229. Section 413.006, Labor Code, is amended to
read as follows:
Sec. 413.006. ADVISORY COMMITTEES. The commissioner
[commission] may appoint advisory committees [in addition to the
medical advisory committee] as the commissioner [it] considers
necessary.
SECTION 3.230. Subsections (a) and (c), Section 413.007,
Labor Code, are amended to read as follows:
(a) The division shall maintain a statewide data base of
medical charges, actual payments, and treatment protocols that may
be used by:
(1) the department [commission] in adopting the
medical policies and fee guidelines; and
(2) the division in administering the medical
policies, fee guidelines, or rules.
(c) The division shall ensure that the data base is
available for public access for a reasonable fee established by the
commissioner [commission]. The identities of injured workers and
beneficiaries may not be disclosed.
SECTION 3.231. Section 413.008, Labor Code, is amended to
read as follows:
Sec. 413.008. INFORMATION FROM INSURANCE CARRIERS;
ADMINISTRATIVE VIOLATION. (a) On request from the department
[commission] for specific information, an insurance carrier shall
provide to the division any information in 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 keep confidential
information that is confidential by law.
(c) An insurance carrier commits a violation if the
insurance carrier fails or refuses to comply with a request or
violates a rule adopted to implement this section. [A violation
under this subsection is a Class C administrative violation. Each
day of noncompliance constitutes a separate violation.]
SECTION 3.232. Section 413.011, Labor Code, is amended to
read as follows:
Sec. 413.011. REIMBURSEMENT POLICIES AND GUIDELINES;
TREATMENT GUIDELINES AND PROTOCOLS. (a) The department
[commission] shall use health care reimbursement policies and
guidelines 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 department [commission] shall adopt the most
current reimbursement methodologies, models, and values or weights
used by the federal Centers for Medicare and 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
commissioner [commission] shall also provide for reasonable fees
for the evaluation and management of care as required by Section
408.025(c) and commissioner [commission] rules. This section does
not adopt the Medicare fee schedule, and the commissioner may
[commission shall] not adopt conversion factors or other payment
adjustment factors based solely on those factors as developed by
the federal Centers for Medicare and 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) 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 commissioner [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
treatment guidelines and [, including] return-to-work guidelines,
and may adopt individual treatment protocols. Treatment [Except as
otherwise provided by this subsection, the treatment] guidelines
and protocols must be evidence-based [nationally recognized],
scientifically valid, and outcome-focused [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 commission, the commission may adopt another treatment
guideline or protocol as long as it is scientifically valid and
outcome-based].
(f) In addition to complying with the requirements of
Subsection (e), [The 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.
(g) The commissioner may adopt rules relating to disability
management that are designed to promote appropriate health care at
the earliest opportunity after the injury to maximize injury
healing and improve stay-at-work and return-to-work outcomes
through appropriate management of work-related injuries or
conditions. The commissioner by rule may identify claims in which
application of disability management activities is required and
prescribe at what point in the claim process a treatment plan is
required. The determination may be based on any factor considered
relevant by the commissioner. Rules adopted under this subsection
do not apply to claims subject to workers' compensation health care
networks under Chapter 1305, Insurance Code.
(h) A dispute involving a treatment plan required under
Subsection (g) may be appealed to an independent review
organization in the manner described by Section 413.031.
SECTION 3.233. Section 413.013, Labor Code, is amended to
read as follows:
Sec. 413.013. PROGRAMS. The commissioner [commission] by
rule shall establish:
(1) a program for prospective, concurrent, and
retrospective review and resolution of a dispute regarding health
care treatments and services;
(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 department [commission] to ensure that the medical
policies or guidelines are not exceeded;
(3) a program to detect practices and patterns by
insurance carriers in unreasonably denying authorization of
payment for medical services requested or performed if
authorization is required by the medical policies of the department
[commission]; and
(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 3.234. Subsections (b) through (e), Section
413.014, Labor Code, are amended to read as follows:
(b) The commissioner [commission] by rule shall specify
which health care treatments and services 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's [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 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
commissioner [commission].
(e) The commissioner [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 3.235. Section 413.0141, Labor Code, is amended to
read as follows:
Sec. 413.0141. INITIAL PHARMACEUTICAL COVERAGE. The
commissioner [commission] may by rule provide that an insurance
carrier 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. The rules adopted by the commissioner
[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 3.236. Subsection (b), Section 413.015, Labor Code,
is amended to read as follows:
(b) The commissioner [commission] shall provide by rule for
the review and audit of the payment by insurance carriers 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 3.237. Subsection (b), Section 413.016, Labor Code,
is amended to read as follows:
(b) If the division determines that an insurance carrier has
paid medical charges that are inconsistent with the medical
policies or fee guidelines adopted by the commissioner
[commission], the division shall refer the insurance carrier
alleged to have violated this subtitle to the division of
compliance and practices. If the insurance carrier reduced a
charge of a health care provider that was within the guidelines, the
insurance carrier shall be directed to submit the difference to the
provider unless the reduction is in accordance with an agreement
between the health care provider and the insurance carrier.
SECTION 3.238. 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 department [commission] and that are
authorized by an insurance carrier.
SECTION 3.239. Subsections (a), (c), (d), and (e), Section
413.018, Labor Code, are amended to read as follows:
(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.
(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 department [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. 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 department
[commission] to be a bona fide job offer is subject to Section
408.103(e).
(e) The commissioner [commission] may adopt rules and forms
as necessary to implement this section.
SECTION 3.240. 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 3.241. Subsections (a), (d), and (e), Section
413.021, Labor Code, are amended to read as follows:
(a) An insurance carrier shall, with the agreement of a
participating employer, provide the employer with return-to-work
coordination services as necessary to facilitate an employee's
return to employment. 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. These
services may be offered by insurance carriers in conjunction with
the accident prevention services provided under Section 411.061.
Nothing in this section supersedes the provisions of a collective
bargaining agreement between an employer and the employer's
employees, 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) 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.
(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 3.242. Subchapter B, Chapter 413, Labor Code, is
amended by adding Section 413.022 to read as follows:
Sec. 413.022. RETURN-TO-WORK PILOT PROGRAM FOR SMALL
EMPLOYERS; FUND. (a) In this section:
(1) "Account" means the workers' compensation
return-to-work account.
(2) "Eligible employer" means any employer, other than
this state or a political subdivision subject to Subtitle C, who
employs at least two but not more than 50 employees on each business
day during the preceding calendar year and who has workers'
compensation insurance coverage.
(b) The commissioner shall establish by rule a
return-to-work pilot program designed to promote the early and
sustained return to work of an injured employee who sustains a
compensable injury.
(c) The pilot program shall reimburse from the account an
eligible employer for expenses incurred by the employer to make
workplace modifications necessary to accommodate an injured
employee's return to modified or alternative work. Reimbursement
under this section to an eligible employer may not exceed $2,500.
The expenses must be incurred to allow the employee to perform
modified or alternative work within doctor-imposed work
restrictions. Allowable expenses may include:
(1) physical modifications to the worksite;
(2) equipment, devices, furniture, or tools; and
(3) other costs necessary for reasonable
accommodation of the employee's restrictions.
(d) The account is established as a special account in the
general revenue fund. From administrative penalties received by
the department under this subtitle, the commissioner shall deposit
in the account an amount not to exceed $100,000 annually. Money in
the account may be spent by the department, on appropriation by the
legislature, only for the purposes of implementing this section.
(e) An employer who wilfully applies for or receives
reimbursement from the account under this section knowing that the
employer is not an eligible employer commits a violation. A
violation under this subsection is a Class B administrative
violation.
(f) Notwithstanding Subsections (a)-(e), this section may
be implemented only to the extent funds are available.
(g) This section expires September 1, 2009.
SECTION 3.243. Section 413.031, Labor Code, is amended by
amending Subsections (a) through (d), (e-1), (f), (g), (h), (k),
and (m) and by adding Subsection (n) to read as follows:
(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.
(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 worker.
(d) A review of the medical necessity of a health care
service requiring preauthorization under Section 413.014 or
commissioner [commission] rules under that section or Section
413.011(g) 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 department's [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 department's [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 shall specify the
appropriate dispute resolution process for disputes in which a
claimant has paid for medical services and seeks reimbursement.
(g) In performing a review of medical necessity under
Subsection (d) or (e), an independent review organization may
request that the commissioner [commission] order an examination by
a designated doctor under Chapter 408.
(h) The insurance carrier shall pay the cost of the review
if the dispute arises in connection with:
(1) a request for health care services that require
preauthorization under Section 413.014 or commissioner
[commission] rules under that section; or
(2) a treatment plan under Section 413.011(g) or
commissioner rules under that section.
(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. The department
is not considered to be a party to the medical dispute for purposes
of this subsection. 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.
(m) The decision of an independent review organization
under Subsection (d) is binding during the pendency of a dispute.
(n) The commissioner [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 3.244. Subsections (a), (b), and (d), Section
413.041, 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 3.245. Subsection (b), Section 413.042, Labor Code,
is amended to read as follows:
(b) A health care provider commits a violation if the
provider violates Subsection (a). [A violation under this
subsection is a Class B administrative violation.]
SECTION 3.246. Section 413.044, Labor Code, is amended to
read as follows:
Sec. 413.044. SANCTIONS ON DESIGNATED DOCTOR. (a) In
addition to or in lieu of an administrative penalty under Section
415.021 or a sanction imposed under Section 415.023, the
commissioner [commission] may impose sanctions against a person who
serves as a designated doctor under Chapter 408 who, after an
evaluation conducted under Section 413.002(c), is determined by the
division to be out of compliance with this subtitle or with rules
adopted by the commissioner [commission] relating to:
(1) medical policies, fee guidelines, and impairment
ratings; or
(2) the quality of decisions made under Section
408.0041 or Section 408.122.
(b) Sanctions imposed under Subsection (a) may include:
(1) removal or suspension from the department list of
designated doctors; or
(2) restrictions on the reviews made by the person as a
designated doctor.
SECTION 3.247. Subsections (a) through (d), Section
413.051, Labor Code, are amended to read as follows:
(a) 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.
(b) For purposes of review or resolution of a dispute 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.
(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.
(d) The commissioner [commission] shall establish standards
for contracts under this section.
SECTION 3.248. 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 doctor as that term is defined by Section 401.011.
(b) The medical advisor shall make recommendations
regarding the adoption of rules and policies 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
department's [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 department
[commission] on the list of approved doctors; [and]
(7) determine minimal modifications to the
reimbursement methodology and model used by the Medicare system as
necessary to meet occupational injury requirements; and
(8) monitor the quality and timeliness of decisions
made by designated doctors and independent review organizations,
and the imposition of sanctions regarding those decisions.
SECTION 3.249. Subsection (c), Section 413.0512, Labor
Code, is amended to read as follows:
(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, and independent review organizations; 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 408.1225 [408.122].
SECTION 3.250. 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
402.092 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 3.251. 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
402.092 and 413.0513.
(d) The department [commission] and the Texas Board of
Chiropractic 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 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 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 3.252. 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 3.253. Section 413.052, Labor Code, is amended to
read as follows:
Sec. 413.052. PRODUCTION OF DOCUMENTS. The commissioner
[commission] by rule shall establish procedures to enable the
department [commission] to compel the production of documents.
SECTION 3.254. 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 3.255. Subsection (a), Section 413.054, 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 [a commission member] under Section 402.011
[402.010].
SECTION 3.256. Subsections (a) and (b), Section 413.055,
Labor Code, are amended to read as follows:
(a) The department [executive director], as provided by
commissioner [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 3.257. Subsection (a), Section 414.002, Labor Code,
is amended to read as follows:
(a) The 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 include:
(1) persons claiming benefits under this subtitle;
(2) employers;
(3) insurance carriers; and
(4) attorneys and other representatives of parties.
SECTION 3.258. Section 414.003, Labor Code, is amended to
read as follows:
Sec. 414.003. COMPILATION AND USE OF INFORMATION. (a) The
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, commissioner [or
commission] rules, or a commissioner order or decision; or
(2) otherwise adversely affect the workers'
compensation system of this state.
(b) The department [commission] shall use the information
compiled under this section to impose appropriate penalties and
other sanctions under Chapters 415 and 416.
SECTION 3.259. Section 414.005, Labor Code, is amended to
read as follows:
Sec. 414.005. INVESTIGATION UNIT. The division shall
maintain an investigation unit to conduct investigations relating
to alleged violations of this subtitle, commissioner [or
commission] rules, or a commissioner order or decision, with
particular emphasis on violations of Chapters 415 and 416.
SECTION 3.260. Section 414.007, Labor Code, is amended to
read as follows:
Sec. 414.007. REVIEW OF REFERRALS FROM DIVISION OF MEDICAL
REVIEW. The division shall review information and referrals
received from the division of medical review concerning alleged
violations of this subtitle, commissioner rules, or a commissioner
order or decision, 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 3.261. 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,
regardless of the person's mental state, the person [wilfully or
intentionally]:
(1) fails without good cause to attend a dispute
resolution proceeding within the department [commission];
(2) attends a dispute resolution proceeding within the
department [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 3.262. 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, regardless of the person's mental
state, 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 within the department [commission];
(9) attends a dispute resolution proceeding within the
department [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 the rules of the
commissioner [State Board] of insurance [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) makes a statement denying all future medical care
for a compensable injury; or
(22) 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 department [commission]
and participate at the proceeding in accordance with this subtitle.
SECTION 3.263. 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, regardless of the person's mental state, 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 3.264. Subsections (a), (b), (e), and (f), Section
415.0035, Labor Code, are amended to read as follows:
(a) An insurance carrier or its representative commits an
administrative violation if, regardless of the person's mental
state, 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 rules adopted by the commissioner [commission]
under Section 413.014.
(b) A health care provider commits an administrative
violation if, regardless of the person's mental state, 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 3.265. The heading to Section 415.005, Labor Code,
is amended to read as follows:
Sec. 415.005. OVERCHARGING BY HEALTH CARE PROVIDERS
PROHIBITED[; ADMINISTRATIVE VIOLATION].
SECTION 3.266. Subsection (b), Section 415.005, Labor Code,
is amended to read as follows:
(b) A violation under this section is an [a Class B]
administrative violation. A health care provider may be liable for
an administrative penalty regardless of whether a criminal action
is initiated under Section 413.043.
SECTION 3.267. The heading to Section 415.006, Labor Code,
is amended to read as follows:
Sec. 415.006. EMPLOYER CHARGEBACKS PROHIBITED[;
ADMINISTRATIVE VIOLATION].
SECTION 3.268. Subsection (c), Section 415.006, Labor Code,
is amended to read as follows:
(c) A person commits a violation if the person violates
Subsection (a). [A violation under this subsection is a Class C
administrative violation.]
SECTION 3.269. Subsection (a), Section 415.007, 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 3.270. Subsection (e), Section 415.008, 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 3.271. Subsection (a), Section 415.009, Labor Code,
is amended to read as follows:
(a) A person commits a violation if, regardless of the
person's mental state, the person [knowingly] brings, prosecutes,
or defends an action for benefits under this subtitle or requests
initiation of an administrative violation proceeding that does not
have a basis in fact or is not warranted by existing law or a good
faith argument for the extension, modification, or reversal of
existing law.
SECTION 3.272. Subsection (a), Section 415.010, Labor Code,
is amended to read as follows:
(a) A party to an agreement approved by the department
[commission] commits a violation if, regardless of the person's
mental state, the person [knowingly] breaches a provision of the
agreement.
SECTION 3.273. Section 415.021, Labor Code, is amended to
read as follows:
Sec. 415.021. ASSESSMENT OF ADMINISTRATIVE PENALTIES.
(a) In addition to any other provisions in this subtitle relating
to violations, a person commits an administrative violation if the
person violates, fails to comply with, or refuses to comply with
this subtitle or a rule, order, or decision of the department. In
addition to any sanctions, administrative penalty, or other remedy
authorized by this subtitle, the commissioner [The commission] may
assess an administrative penalty against a person who commits an
administrative violation. The administrative penalty shall not
exceed $25,000 per day per occurrence. Each day of noncompliance
constitutes a separate violation. The commissioner's authority
under this chapter is in addition to any other authority to enforce
a sanction, penalty, fine, forfeiture, denial, suspension, or
revocation otherwise authorized by law [Notwithstanding Subsection
(c), the commission by rule shall adopt a schedule of specific
monetary administrative penalties for specific violations under
this subtitle].
(b) The commissioner [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:
(1) [,] the commissioner [commission] shall consider:
(A) [(1)] the seriousness of the violation,
including the nature, circumstances, consequences, extent, and
gravity of the prohibited act;
(B) [(2)] the history and extent of previous
administrative violations;
(C) [(3)] the demonstrated good faith of the
violator, including actions taken to rectify the consequences of
the prohibited act;
(D) [(4) the economic benefit resulting from the
prohibited act;
[(5)] the penalty necessary to deter future
violations; and
(E) [(6)] other matters that justice may
require; and
(2) the commissioner shall, to the extent reasonable,
consider the economic benefit resulting from the prohibited act.
(d) A penalty may be assessed only after the person charged
with an administrative violation has been given an opportunity for
a hearing under Subchapter C.
SECTION 3.274. Subsection (b), Section 415.023, 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 commissioner
[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 3.275. 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 an [a
Class A] administrative violation. In determining the amount of
the penalty, the commissioner [commission] shall consider the total
volume of claims handled by the insurance carrier.
SECTION 3.276. Subsection (b), Section 415.032, Labor Code,
is amended to read as follows:
(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 3.277. 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 3.278. Subsection (a), Section 415.034, 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 3.279. Subsections (b) and (d), Section 415.035,
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
commissioner [executive director] for deposit in an escrow account;
or
(2) post with the commissioner [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
commissioner [executive director] shall:
(1) remit the appropriate amount, plus accrued
interest, if the administrative penalty was paid; or
(2) release the bond.
SECTION 3.280. 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.
SECTION 3.281. Subsections (c) and (d), Section 417.001,
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 3.282. Subsection (b), Section 417.003, 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.
SECTION 3.283. Subdivisions (1) and (5), Section 501.001,
Labor Code, are amended to read as follows:
(1) "Department" ["Commission"] means the Texas
Department of Workers' Compensation [Commission].
(5) "Employee" means a person who is:
(A) in the service of the state pursuant to an
election, appointment, or express oral or written contract of hire;
(B) paid from state funds but whose duties
require that the person work and frequently receive supervision in
a political subdivision of the state;
(C) a peace officer employed by a political
subdivision, while the peace officer is exercising authority
granted under:
(i) Article 2.12 [12], Code of Criminal
Procedure; or
(ii) Articles 14.03(d) and (g), Code of
Criminal Procedure;
(D) a member of the state military forces, as
defined by Section 431.001, Government Code, who is engaged in
authorized training or duty; or
(E) a Texas Task Force 1 member, as defined by
Section 88.301, Education Code, who is activated by the governor's
division of emergency management or is injured during any training
session sponsored or sanctioned by Texas Task Force 1.
SECTION 3.284. Subsection (d), Section 501.026, 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 3.285. Subsection (a), Section 501.050, Labor Code,
is 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.
SECTION 3.286. The heading to Chapter 502, Labor Code, is
amended to read as follows:
CHAPTER 502. WORKERS' COMPENSATION INSURANCE COVERAGE FOR
EMPLOYEES OF THE TEXAS A&M UNIVERSITY SYSTEM
AND EMPLOYEES OF INSTITUTIONS OF THE TEXAS A&M UNIVERSITY SYSTEM
SECTION 3.287. Subdivision (1), Section 502.001, Labor
Code, is amended to read as follows:
(1) "Department" means the Texas Department of
Workers' Compensation ["Commission" means the Texas Workers'
Compensation Commission].
SECTION 3.288. Subsection (b), Section 502.002, Labor Code,
is amended to read as follows:
(b) For the purpose of applying the provisions listed by
Subsection (a) to this chapter, "employer" means "the institution,"
and "system" means the insurance carrier under Section 502.022.
SECTION 3.289. Subsection (a), Section 502.021, Labor Code,
is amended to read as follows:
(a) The system [institution] shall pay benefits as provided
by this chapter to an employee with a compensable injury.
SECTION 3.290. 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 3.291. Subsections (a) and (c), Section 502.061,
Labor Code, are amended to read as follows:
(a) The system [Each institution] shall administer this
chapter.
(c) The system [institution] may:
(1) adopt and publish rules and prescribe and furnish
forms necessary for the administration of this chapter; and
(2) adopt and enforce rules necessary for the
prevention of accidents and injuries.
SECTION 3.292. Section 502.063, Labor Code, is amended to
read as follows:
Sec. 502.063. CERTIFIED COPIES OF DEPARTMENT [COMMISSION]
DOCUMENTS. (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.
(b) The system or an [An] institution may obtain certified
copies under this section without charge.
(c) A fee or salary may not be paid to an [a member or]
employee of the department [commission] for making a copy under
Subsection (a) that exceeds the fee charged for the copy.
SECTION 3.293. Subsection (a), Section 502.065, Labor Code,
is amended to read as follows:
(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.
SECTION 3.294. Subsections (a), (b), (d), and (e), Section
502.066, 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.
(b) On the request of an employee or the system
[institution], the employee, [or] the institution, or the system is
entitled to have a physician or chiropractor selected by the
employee, [or] the institution, or the system, as appropriate,
present to participate in an examination under Subsection (a) or
Section 408.004.
(d) The system or the institution may have an injured
employee examined at a reasonable time and at a place suitable to
the employee's condition and convenient and accessible to the
employee by a physician or chiropractor selected by the system or
the institution. The system or the institution shall pay for an
examination under this subsection and for the employee's reasonable
expenses incident to the examination. The employee is entitled to
have a physician or chiropractor selected by the employee present
to participate in an examination under this subsection.
(e) The system or the institution shall pay the fee set by
the department [commission] of a physician or chiropractor selected
by the employee under Subsection (b) or (d).
SECTION 3.295. Subsection (a), Section 502.067, Labor Code,
is amended to read as follows:
(a) The commissioner of the Texas Department of Workers'
Compensation [commission] may order or direct the system or 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 3.296. 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 system or
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 a department [commission] order under this section.
SECTION 3.297. Subsection (a), Section 502.069, Labor Code,
is 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.
SECTION 3.298. The heading to Chapter 503, Labor Code, is
amended to read as follows:
CHAPTER 503. WORKERS' COMPENSATION INSURANCE COVERAGE FOR
EMPLOYEES OF THE UNIVERSITY OF TEXAS SYSTEM AND
EMPLOYEES OF INSTITUTIONS OF THE UNIVERSITY OF TEXAS SYSTEM
SECTION 3.299. Section 503.001, Labor Code, is amended by
amending Subdivision (1) and by adding Subdivision (1-a) to read as
follows:
(1) "Commissioner" means the commissioner of the Texas
Department of Workers' Compensation ["Commission" means the Texas
Workers' Compensation Commission].
(1-a) "Department" means the Texas Department of
Workers' Compensation.
SECTION 3.300. Subsection (b), Section 503.002, Labor Code,
is amended to read as follows:
(b) For the purpose of applying the provisions listed by
Subsection (a) to this chapter, "employer" means "the institution,"
and "system" means the insurance carrier under Section 503.022.
SECTION 3.301. Subsection (a), Section 503.021, Labor Code,
is amended to read as follows:
(a) The system [institution] shall pay benefits as provided
by this chapter to an employee with a compensable injury.
SECTION 3.302. Section 503.022, Labor Code, is amended to
read as follows:
Sec. 503.022. AUTHORITY TO SELF-INSURE. An institution may
self-insure as part of a system insurance plan.
SECTION 3.303. 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 3.304. Subsections (a) and (c), Section 503.061,
Labor Code, are amended to read as follows:
(a) The system [Each institution] shall administer this
chapter.
(c) The system [institution] may:
(1) adopt and publish rules and prescribe and furnish
forms necessary for the administration of this chapter; and
(2) adopt and enforce rules necessary for the
prevention of accidents and injuries.
SECTION 3.305. Section 503.063, Labor Code, is amended to
read as follows:
Sec. 503.063. CERTIFIED COPIES OF DEPARTMENT [COMMISSION]
DOCUMENTS. (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.
(b) The system or the institution may obtain certified
copies under this section without charge.
(c) A fee or salary may not be paid to an [a member or]
employee of the department [commission] for making a copy under
Subsection (a) that exceeds the fee charged for the copy.
SECTION 3.306. Subsection (a), Section 503.065, Labor Code,
is amended to read as follows:
(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.
SECTION 3.307. Subsections (a), (b), (d), and (e), Section
503.066, 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.
(b) On the request of an employee, the system, or the
institution, the employee, the system, or the institution is
entitled to have a physician selected by the employee, the system,
or the institution, as appropriate, present to participate in an
examination under Subsection (a) or Section 408.004.
(d) The system or the institution may have an injured
employee examined at a reasonable time and at a place suitable to
the employee's condition and convenient and accessible to the
employee by a physician selected by the system or the institution.
The system or the institution shall pay for an examination under
this subsection and for the employee's reasonable expenses incident
to the examination. The employee is entitled to have a physician
selected by the employee present to participate in an examination
under this subsection.
(e) The system or the institution shall pay the fee, as set
by the department [commission], of a physician selected by the
employee under Subsection (b) or (d).
SECTION 3.308. Subsection (a), Section 503.067, Labor Code,
is amended to read as follows:
(a) The commissioner [commission] may order or direct the
system or 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 3.309. 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 system or
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 a
commissioner [commission] order under this section.
SECTION 3.310. Subsection (a), Section 503.069, Labor Code,
is 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.
SECTION 3.311. Subsection (a), Section 503.070, Labor Code,
is amended to read as follows:
(a) A party who does not consent to abide by the final
decision of the commissioner [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 commissioner [commission].
SECTION 3.312. Section 504.001, Labor Code, is amended by
amending Subdivision (1) and adding Subdivision (4) to read as
follows:
(1) "Department" means the Texas Department of
Workers' Compensation ["Commission" means the Texas Workers'
Compensation Commission].
(4) "Pool" means two or more political subdivisions
collectively self-insuring under an interlocal contract under
Chapter 791, Government Code.
SECTION 3.313. Subsection (a), Section 504.002, Labor Code,
is amended 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 409-412 [409-417]; [and]
(7) Chapter 413, except as provided by Section
504.053;
(8) Chapters 414-417; and
(9) Chapter 451.
SECTION 3.314. 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 3.315. Subsection (a), Section 504.018, Labor Code,
is amended to read as follows:
(a) A political subdivision shall notify the department
[commission] of the method by which its employees will receive
benefits, the approximate number of employees covered, and the
estimated amount of payroll.
SECTION 3.316. Subchapter C, Chapter 504, Labor Code, is
amended by adding Section 504.053 to read as follows:
Sec. 504.053. ELECTION. (a) A political subdivision that
self-insures either individually or collectively shall provide
workers' compensation medical benefits to the injured employees of
the political subdivision or the injured employees of the members
of a pool:
(1) in the manner provided by Chapter 1305, Insurance
Code;
(2) 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
(3) by direct contracting with health care providers
or by contracting through a health benefits pool established under
Chapter 172, Local Government Code.
(b) Chapter 1305, Insurance Code, and the provisions of
Chapter 408 relating to medical benefits and Chapter 413 of this
code, do not apply if the political subdivision or pool provides
medical benefits in the manner authorized under Subsection (a)(3).
(c) If the political subdivision or pool provides medical
benefits in the manner authorized under Subsection (a)(3), the
following standards apply:
(1) the political subdivision or pool must ensure that
workers' compensation medical benefits are reasonably available to
all injured workers of the political subdivision or the injured
workers of the members of the pool within a designed 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
health care providers, specialty care, and 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 appeal to an independent review
organization;
(4) the political subdivision or pool must establish
reasonable procedures for the transition of injured workers to
contract providers and for the continuity of treatment, including
notice of impending termination of providers and a current list of
contract providers;
(5) the political subdivision or pool shall provide
for emergency care if an injured worker cannot reasonably reach a
contact provider and the care is for medical screening or other
evaluation that is necessary to determine whether a medical
emergency condition exists, necessary emergency care services
including treatment and stabilization, and 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;
(7) the political subdivision or pool shall continue
to report data to the appropriate agency as required by Title 5 of
this code and Chapter 1305, Insurance Code; and
(8) a political subdivision or pool is subject to the
requirements under Sections 1305.501, 1305.502, and 1305.503,
Insurance Code.
(d) Nothing in this chapter waives sovereign immunity or
creates a new cause of action.
SECTION 3.317. The heading to Section 505.053, Labor Code,
is amended to read as follows:
Sec. 505.053. CERTIFIED COPIES OF TEXAS DEPARTMENT OF
WORKERS' COMPENSATION [COMMISSION] DOCUMENTS.
SECTION 3.318. Subsections (a) and (c), Section 505.053,
Labor Code, are amended to read as follows:
(a) The Texas Department of Workers' Compensation
[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 a person in the Texas
Department of Workers' Compensation [commission] for making the
copies that exceeds the fee charged for the copies.
SECTION 3.319. Subsection (d), Section 505.054, 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 Workers' Compensation [commission] and in an appeal
from a final award or ruling of that department [the 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 3.320. 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 Workers' Compensation
[commission] under Section 409.005, in addition to the information
required by commissioner of workers' compensation [commission]
rules, 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 Workers' Compensation [commission]
under Section 409.005(e), the department shall file a subsequent
report on a form obtained for that purpose:
(1) on the termination of incapacity of the injured
employee; or
(2) if the incapacity extends beyond 60 days.
SECTION 3.321. Subsections (a) and (d), Section 505.056,
Labor Code, are amended to read as follows:
(a) The Texas Department of Workers' Compensation
[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 that department 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 commissioner of the Texas Department of
Workers' Compensation [commission] of a physician selected by the
employee under this subsection.
SECTION 3.322. Subsection (a), Section 505.057, Labor Code,
is amended to read as follows:
(a) The commissioner of the Texas Department of Workers'
Compensation [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 3.323. 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 Workers' Compensation
[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 the Texas Department of Workers' Compensation under
this section.
SECTION 3.324. Subsection (a), Section 505.059, Labor Code,
is amended to read as follows:
(a) In each case appealed from the Texas Department of
Workers' Compensation [commission] to a county or district court:
(1) the clerk of the court shall mail to the Texas
Department of Workers' Compensation [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.
ARTICLE 4. PROVISION OF WORKERS' COMPENSATION MEDICAL BENEFITS
THROUGH PROVIDER NETWORKS
SECTION 4.01. The heading to Subtitle D, Title 8, Insurance
Code, as effective April 1, 2005, is amended to read as follows:
SUBTITLE D. [PREFERRED] PROVIDER [BENEFIT] PLANS
SECTION 4.02. Subtitle D, Title 8, Insurance Code, as
effective April 1, 2005, is amended by adding Chapter 1305 to read
as follows:
CHAPTER 1305. WORKERS' COMPENSATION HEALTH CARE NETWORKS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1305.001. SHORT TITLE. This chapter may be cited as
the Workers' Compensation Health Care Network Act.
Sec. 1305.002. PURPOSE. The purpose of this chapter is to:
(1) authorize the establishment of workers'
compensation health care networks for the provision of workers'
compensation medical benefits; and
(2) provide standards for the certification,
administration, evaluation, and enforcement of the delivery of
health care services to injured employees by networks contracting
with or established by:
(A) workers' compensation insurance carriers;
(B) employers certified to self-insure under
Chapter 407, Labor Code;
(C) groups of employers certified to self-insure
under Chapter 407A, Labor Code; and
(D) governmental entities that self-insure,
either individually or collectively.
Sec. 1305.003. LIMITATIONS ON APPLICABILITY. (a) This
chapter does not affect the authority of the Texas Department of
Workers' Compensation to exercise the powers granted to that agency
under Title 5, Labor Code, that do not conflict with this chapter.
(b) In the event of a conflict between Title 5, Labor Code,
and this chapter as to the operation and regulation of health care
networks that provide workers' compensation medical benefits or the
provision of health care to injured employees who are subject to
workers' compensation health care networks, this chapter prevails.
Sec. 1305.004. DEFINITIONS. (a) In this chapter, unless
the context clearly indicates otherwise:
(1) "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
employee are not medically necessary or appropriate.
(2) "Affiliate" means a person that directly, or
indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person
specified.
(3) "Capitation" means a method of compensation for
arranging for or providing health care services to employees for a
specified period that is based on a predetermined payment for each
employee for the specified period, without regard to the quantity
of services provided for the compensable injury.
(4) "Complainant" means a person who files a complaint
under this chapter. 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.
(5) "Complaint" means any dissatisfaction expressed
orally or in writing by a complainant to a network regarding any
aspect of the network's operation. The term includes
dissatisfaction relating to medical fee disputes and 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.
(6) "Credentialing" means the review, under
nationally recognized standards to the extent that those standards
do not conflict with other laws of this state, of qualifications and
other relevant information relating to a health care provider who
seeks a contract with a network.
(7) "Emergency" means either a medical or mental
health emergency.
(8) "Employee" has the meaning assigned by Section
401.012, Labor Code.
(9) "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.
(10) "Health care facility" means a general or
specialty hospital, emergency clinic, outpatient clinic, or other
facility providing health care.
(11) "Health care provider" or "provider" means:
(A) a doctor or other person licensed to practice
one or more of the healing arts within the scope of the license of
the license holder;
(B) a health care facility; or
(C) an entity providing health care that is
covered under this chapter.
(12) "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.
(13) "Independent review organization" means an
entity that is certified by the commissioner to conduct independent
review under Article 21.58C and rules adopted by the commissioner.
(14) "Life-threatening" has the meaning assigned by
Section 2, Article 21.58A.
(15) "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) placing the patient's health or bodily
functions in serious jeopardy; or
(B) serious dysfunction of any body organ or
part.
(16) "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.
(17) "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.
(18) "Network" or "workers' compensation health care
network" means an organization that is:
(A) formed as a health care provider network to
provide health care services to injured employees;
(B) certified in accordance with this chapter and
commissioner rules; and
(C) established by, or operates under contract
with, an insurance carrier.
(19) "Nurse" has the meaning assigned by Section 2,
Article 21.58A.
(20) "Person" means any natural or artificial person,
including an individual, partnership, association, corporation,
organization, trust, hospital district, community mental health
center, mental retardation center, mental health and mental
retardation center, limited liability company, or limited
liability partnership.
(21) "Preauthorization" means the process required to
request approval from the network to provide a specific treatment
or service before the treatment or service is provided.
(22) "Quality improvement program" means a system
designed to continuously examine, monitor, and revise processes and
systems that support and improve administrative and clinical
functions.
(23) "Retrospective review" means the process of
reviewing the medical necessity and reasonableness of health care
that has been provided to an injured employee.
(24) "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.
(25) "Screening criteria" means the written policies,
decision rules, medical protocols, and treatment guidelines used by
a network as part of utilization review or retrospective review.
(26) "Service area" means a geographic area within
which health care services from network providers are available and
accessible to employees who live within that geographic area.
(27) "Texas Workers' Compensation Act" means Subtitle
A, Title 5, Labor Code.
(28) "Transfer of risk" means, for purposes of this
chapter only, an insurance carrier's transfer of financial risk for
the provision of health care services to a network through
capitation or other means.
(29) "Utilization review" has the meaning assigned by
Section 2, Article 21.58A.
(30) "Utilization review agent" has the meaning
assigned by Article 21.58A.
(31) "Utilization review plan" means the screening
criteria and utilization review procedures of a workers'
compensation health care network or utilization review agent.
(b) In this chapter, the following terms have the meanings
assigned by Section 401.011, Labor Code:
(1) "compensable injury";
(2) "doctor";
(3) "employer";
(4) "health care";
(5) "injury";
(6) "insurance carrier"; and
(7) "treating doctor."
Sec. 1305.005. PARTICIPATION IN NETWORK; NOTICE OF NETWORK
REQUIREMENTS. (a) An employer that elects to provide workers'
compensation insurance coverage under the Texas Workers'
Compensation Act may receive workers' compensation health care
services for the employer's injured employees through a workers'
compensation health care network.
(b) An insurance carrier may establish or contract with
networks certified under this chapter to provide health care
services under the Texas Workers' Compensation Act. If an employer
elects to contract with an insurance company for the provision of
health care services through a network, or if a self-insured
employer under Chapter 407, Labor Code, a group of employers
certified to self-insure under Chapter 407A, Labor Code, or a
public employer under Subtitle C, Title 5, Labor Code, elects to
establish or contract with a network, the employer's employees who
live within the network's service area are required to obtain
medical treatment for a compensable injury within the network,
except as provided by Section 1305.006(a)(1) and (3).
(c) The insurance carrier shall provide to the employer, and
shall ensure that the employer provides to the employer's
employees, notice of network requirements, including all
information required by Section 1305.451. The 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 network and the network's requirements; and
(2) post notice of the network requirements at each
place of employment.
(d) The insurance carrier shall ensure that an employer
provides to each employee hired after the notice is given under
Subsection (c) the notice and information required under that
subsection not later than the third day after the date of hire.
(e) An injured employee who has received notice of network
requirements but refuses to sign the acknowledgment form required
under Subsection (c) remains subject to the network requirements
established under this chapter.
(f) The insurance carrier shall require the employer to
notify an injured employee of the network requirements at the time
the employer receives actual or constructive notice of an injury.
(g) An injured employee is not required to comply with the
network requirements until the employee receives the notice under
Subsection (c) or (d).
(h) The commissioner may adopt rules as necessary to
implement this section.
Sec. 1305.006. INSURANCE CARRIER LIABILITY FOR
OUT-OF-NETWORK HEALTH CARE. (a) An insurance carrier that
establishes or contracts with a network is liable for the following
out-of-network health care that is provided to an injured employee:
(1) emergency care;
(2) health care provided to an injured employee who
does not live within the service area of any network established by
the insurance carrier or with which the insurance carrier has a
contract; and
(3) health care provided by an out-of-network provider
pursuant to a referral from the injured employee's treating doctor
that has been approved by the network pursuant to Section 1305.103.
(b) If an accident or health insurance carrier or other
person obligated for the cost of health care services has paid for
health care services for an employee for an injury for which a
workers' compensation insurance carrier denies compensability, and
the injury is later determined to be compensable, the accident or
health insurance carrier or other person may recover the amounts
paid for such services from the workers' compensation insurance
carrier.
Sec. 1305.007. RULES. The commissioner may adopt rules as
necessary to implement this chapter.
[Sections 1305.008-1305.050 reserved for expansion]
SUBCHAPTER B. CERTIFICATION
Sec. 1305.051. CERTIFICATION REQUIRED. (a) A person may
not operate a workers' compensation health care network in this
state unless the person holds a certificate issued under this
chapter and rules adopted by the commissioner.
(b) A person may not perform any act of a workers'
compensation health care network except in accordance with the
specific authorization of this chapter or rules adopted by the
commissioner.
(c) A health maintenance organization regulated under
Chapter 843 or an organization of physicians and providers that
operates as a preferred provider benefit plan, as defined by
Chapter 1301, may obtain a certification as a workers' compensation
health care network in the same manner as any other person if that
entity meets the requirements of this chapter and rules adopted by
the commissioner under this chapter.
Sec. 1305.052. CERTIFICATE APPLICATION. (a) A person who
seeks to operate as a workers' compensation health care network
shall apply to the department for a certificate to organize and
operate as a network.
(b) A certificate application must be:
(1) filed with the department in the form prescribed
by the commissioner;
(2) verified by the applicant or an officer or other
authorized representative of the applicant; and
(3) accompanied by a nonrefundable fee set by
commissioner rule.
Sec. 1305.053. CONTENTS OF APPLICATION. Each certificate
application must include:
(1) a description or a copy of the applicant's basic
organizational structure documents and other related documents,
including organizational charts or lists that show:
(A) the relationships and contracts between the
applicant and any affiliates of the applicant; and
(B) the internal organizational structure of the
applicant's management and administrative staff;
(2) biographical information regarding each person
who governs or manages the affairs of the applicant, accompanied by
information sufficient to allow the commissioner to determine the
competence, fitness, and reputation of each officer or director of
the applicant or other person having control of the applicant;
(3) a copy of the form of any contract between the
applicant and any provider or group of providers, and with any third
party performing services on behalf of the applicant under
Subchapter D;
(4) a copy of the form of each contract with an
insurance carrier, as described by Section 1305.154;
(5) a financial statement, current as of the date of
the application, that is prepared using generally accepted
accounting practices and includes:
(A) a balance sheet that reflects a solvent
financial position;
(B) an income statement;
(C) a cash flow statement; and
(D) the sources and uses of all funds;
(6) a statement acknowledging that lawful process in a
legal action or proceeding against the network on a cause of action
arising in this state is valid if served in the manner provided by
Chapter 804 for a domestic company;
(7) a description and a map of the applicant's service
area or areas, with key and scale, that identifies each county or
part of a county to be served;
(8) a description of programs and procedures to be
utilized, including:
(A) a complaint system, as required under
Subchapter I;
(B) a quality improvement program, as required
under Subchapter G; and
(C) the utilization review and retrospective
review programs described in Subchapter H;
(9) a list of all contracted network providers that
demonstrates the adequacy of the 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 under Subchapter G are met;
and
(10) any other information that the commissioner
requires by rule to implement this chapter.
Sec. 1305.054. ACTION ON APPLICATION; RENEWAL OF
CERTIFICATION. (a) The commissioner shall approve or disapprove
an application for certification as a 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.
(e) A certificate issued under this subchapter is valid
until revoked or suspended.
Sec. 1305.055. USE OF CERTAIN INSURANCE TERMS BY NETWORK
PROHIBITED. A network is not an insurer and may not use in the
network's name 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.
Sec. 1305.056. RESTRAINT OF TRADE; APPLICATION OF CERTAIN
LAWS. (a) A 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 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.
(c) A network is subject to Articles 21.28 and 21.28-A and
is considered an insurer or insurance company, as applicable, for
purposes of those laws.
[Sections 1305.057-1305.100 reserved for expansion]
SUBCHAPTER C. GENERAL POWERS AND DUTIES OF WORKERS' COMPENSATION
HEALTH CARE NETWORKS
Sec. 1305.101. PROVIDING OR ARRANGING FOR HEALTH CARE.
(a) Except for emergencies and out-of-network referrals, a
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 network.
(b) A network doctor may not serve as a designated doctor or
perform a required medical examination, as those terms are used
under the Texas Workers' Compensation Act, for an employee
receiving medical care through a network with which the doctor
contracts or is employed.
(c) Notwithstanding any other provision of this chapter,
prescription medication or services, as defined by Section
401.011(19)(E), Labor Code, may not be delivered through a workers'
compensation health care network. Prescription medication and
services shall be reimbursed as provided by the Texas Workers'
Compensation Act and applicable rules of the commissioner of the
Texas Department of Workers' Compensation.
Sec. 1305.102. MANAGEMENT CONTRACTS. (a) A network may
not enter into a contract with another entity for management
services unless the proposed contract is first filed with the
department and approved by the commissioner.
(b) The commissioner shall approve or disapprove the
contract not later than the 30th day after the date the contract is
filed, or within a reasonable extended period that the commissioner
specifies by notice given within the 30-day period.
(c) The contract must state that:
(1) the contract may not be canceled without cause
without at least 90 days' prior written notice;
(2) notice of any cancellation must be sent
simultaneously to the commissioner by certified mail; and
(3) the network is responsible for ensuring that all
functions delegated by the contract are performed in accordance
with applicable statutes and rules, subject to the carrier's
oversight and monitoring of the network's performance.
(d) The management contractor proposing to contract shall
provide to the commissioner information sufficient to allow the
commissioner to determine the competence, fitness, or reputation of
each of the contractor's officers and directors or other person
having control of the contractor, including criminal history
information demonstrating that none of those individuals has been
convicted of a felony involving moral turpitude or breach of
fiduciary duty.
(e) The commissioner shall disapprove the proposed contract
if the commissioner determines that the contract authorizes a
person who is not sufficiently trustworthy, competent,
experienced, and free from conflict of interest to manage the
network with due regard for the interests of employers, employees,
creditors, or the public.
(f) The commissioner may not approve a proposed management
contract unless the management contractor has in force in the
management contractor's own name a fidelity bond on the
contractor's officers and employees in the amount of $250,000 or a
greater amount prescribed by the commissioner.
(g) The fidelity bond must be issued by an insurer
authorized to engage in business in this state and must be filed
with the department. If the commissioner determines that a
fidelity bond is not available from an insurer authorized to engage
in business in this state, the management contractor may obtain a
fidelity bond procured by a surplus lines agent under Chapter 981.
(h) The fidelity bond must obligate the surety to pay any
loss of money or other property or damage that the network sustains
because of an act of fraud or dishonesty by an employee or officer
of the management contractor during the period that the management
contract is in effect.
(i) In lieu of a fidelity bond, and at the commissioner's
discretion, the management contractor may deposit with the
comptroller cash or readily marketable liquid securities
acceptable to the commissioner. The deposit must be maintained in
the amount of, and is subject to the same conditions required for, a
fidelity bond under this section.
(j) A management contract approved by the commissioner
under this section may not be assigned to any other entity.
(k) A management contract filed with the department under
this section is confidential and is not subject to disclosure as
public information under Chapter 552, Government Code.
Sec. 1305.103. TREATING DOCTOR; REFERRALS. (a) A network
shall determine the specialty or specialties of doctors who may
serve as treating doctors.
(b) For each injury, an injured employee shall select a
treating doctor from the list of all treating doctors under
contract with the network in that service area.
(c) An employee being treated by a non-network provider for
an injury that occurred before the employer's insurance carrier
contracted with the network shall select a network treating doctor
on notification by the carrier that health care services are being
provided through the network. The carrier shall provide to the
employee all information required by Section 1305.451. If the
employee fails to select a treating doctor on or before the 14th day
after the date of receipt of the information required by Section
1305.451, the network may assign the employee a network treating
doctor.
(d) Each network shall, by contract, require treating
doctors to provide, at a minimum, the functions and services for
injured employees described by this section.
(e) A treating doctor shall provide health care to the
employee for the employee's compensable injury and shall make
referrals to other network providers, or request referrals to
out-of-network providers if medically necessary services are not
available within the network. Referrals to out-of-network
providers must be approved by the network. The network shall
approve a referral to an out-of-network provider not later than the
seventh day after the date on which the referral is requested, or
sooner if circumstances and the condition of the employee require
expedited approval. If the network denies the referral request,
the employee may appeal the decision through the network's
complaint process under Subchapter I.
(f) The treating doctor shall participate in the medical
case management process as required by the network, including
participation in return-to-work planning.
Sec. 1305.104. SELECTION OF TREATING DOCTOR. (a) An
injured employee is entitled to the employee's initial choice of a
treating doctor from the list provided by the network of all
treating doctors under contract with the network who provide
services within the service area in which the injured employee
lives. The following does not constitute an initial choice of
treating doctor:
(1) a doctor salaried by the employer;
(2) a doctor providing emergency care; or
(3) any doctor who provides care before the employee
is enrolled in the network, except for a doctor selected under
Section 1305.105.
(b) An employee who is dissatisfied with the initial choice
of a treating doctor is entitled to select an alternate treating
doctor from the network's list of treating doctors who provide
services within the service area in which the injured employee
lives by notifying the network in the manner prescribed by the
network. The network may not deny a selection of an alternate
treating doctor.
(c) An employee who is dissatisfied with an alternate
treating doctor must obtain authorization from the network to
select any subsequent treating doctor. The network shall establish
procedures and criteria to be used in authorizing an employee to
select subsequent treating doctors. The criteria must include, at
a minimum, whether:
(1) treatment by the current treating doctor is
medically inappropriate;
(2) the employee is receiving appropriate medical care
to reach maximum medical improvement or medical care in compliance
with the network's treatment guidelines; and
(3) a conflict exists between the employee and the
current treating doctor to the extent that the doctor-patient
relationship is jeopardized or impaired.
(d) Denial of a request for any subsequent treating doctor
is subject to the appeal process for a complaint filed under
Subchapter I.
(e) For purposes of this section, the following do not
constitute the selection of an alternate or any subsequent treating
doctor:
(1) a referral made by the treating doctor, including
a referral for a second or subsequent opinion;
(2) the selection of a treating doctor because the
original treating doctor:
(A) dies;
(B) retires; or
(C) leaves the network; or
(3) 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
1305.302(g).
(f) A network shall provide that an injured employee with a
chronic, life-threatening injury or chronic pain related to a
compensable injury may apply to the network's medical director to
use a nonprimary care physician specialist that is in the network as
the injured employee's treating doctor.
(g) An application under Subsection (f) must:
(1) include information specified by the network,
including certification of the medical need provided by the
nonprimary care physician specialist; and
(2) be signed by the injured employee and the
nonprimary care physician specialist interested in serving as the
injured employee's treating doctor.
(h) To be eligible to serve as the injured employee's
treating doctor, a physician specialist must agree to accept the
responsibility to coordinate all of the injured employee's health
care needs.
(i) If a network denies a request under Subsection (f), the
injured employee may appeal the decision through the network's
established complaint resolution process under Subchapter I.
Sec. 1305.105. TREATMENT BY A PRIMARY CARE PROVIDER UNDER
CHAPTER 843. (a) Notwithstanding any other provision of this
chapter, an injured employee required to receive health care
services within a network may select as the employee's treating
doctor a doctor who the employee selected, prior to injury, as the
employee's primary care provider under Chapter 843.
(b) A doctor serving as an employee's treating doctor under
Subsection (a) must agree to abide by the terms of the network's
contract and comply with the provisions of this subchapter and
Subchapters D and G. Services provided by such a doctor are
considered to be network services and are subject to Subchapters H
and I.
(c) Any change of doctor requested by an employee being
treated by a doctor under Subsection (a) must be to a network doctor
and is subject to the requirements of this chapter.
Sec. 1305.106. PAYMENT OF HEALTH CARE PROVIDER. (a) A
health care provider shall submit a charge to an insurance carrier
not later than the 95th day after the date the provider provides the
service for which the charge relates. In the case of a workers'
compensation health care network, the parties may agree by contract
to extend the 95-day period.
(b) Not later than 45th day after the date on which an
insurance carrier receives a charge for services rendered by a
health care provider, the carrier shall:
(1) pay the fee allowed under Section 413.011, Labor
Code, or, in the case of a provider contracted with a workers'
compensation health care network, the amount agreed to by contract;
(2) if the carrier disputes the amount charged by the
health care provider and intends to audit the services or the
charge, notify the provider and pay 85 percent of the amount or, in
the case of a provider contracted with a workers' compensation
health care network, 85 percent of the contracted rate;
(3) if the carrier determines that a portion of the
charge is payable, pay the portion that is not in dispute and notify
the health care provider why the remaining amount will not be paid;
or
(4) if the carrier determines that the charge is not
payable, notify the provider in writing why the claim will not be
paid.
(c) If the insurance carrier denies liability for a claim,
the carrier may not deny payment for health care services on the
grounds that the injury was not compensable until the carrier
notifies the health care provider in writing that the carrier has
contested compensability.
(d) If the 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.
(e) If an insurance carrier disputes the amount of the
charge or the health care provider's entitlement to payment, the
carrier shall send to 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), Labor Code.
(f) An insurance carrier shall complete the audit under
Subsection (b)(2) not later than the 180th day after the date it
receives the charge. Following completion of an audit, any
additional payment due a health care provider or any refund due the
carrier shall be made not later than the 30th day after the date the
health care provider receives notice of the audit results.
(g) An insurance carrier that does not comply with
Subsection (b) is liable to the health care provider for the fee
allowed under Section 413.011, Labor Code, or, if the provider is
contracted with a workers' compensation health care network, for
the contracted amount, plus a penalty in the amount of 18 percent a
year.
Sec. 1305.107. TELEPHONE ACCESS. (a) Each 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 network must have a telephone system capable of
accepting or recording or providing instructions to incoming calls
during other than normal business hours. The network shall respond
to those calls not later than two business days after the date:
(1) the call was received by the network; or
(2) the details necessary to respond were received by
the network from the caller.
[Sections 1305.108-1305.150 reserved for expansion]
SUBCHAPTER D. CONTRACTING PROVISIONS
Sec. 1305.151. TRANSFER OF RISK. A contract under this
subchapter may not involve a transfer of risk.
Sec. 1305.152. NETWORK CONTRACTS WITH PROVIDERS. (a) A
network shall enter into a written contract with each provider or
group of providers that participates in the network. A provider
contract under this section is confidential and is not subject to
disclosure as public information under Chapter 552, Government
Code.
(b) A network is not required to accept an application for
participation in the network from a health care provider who
otherwise meets the requirements specified in this chapter for
participation if the network determines that the network has
contracted with a sufficient number of qualified health care
providers.
(c) Provider contracts and subcontracts must include, at a
minimum, the following provisions:
(1) a hold-harmless clause stating that the network
and the network's contracted providers are prohibited from billing
or attempting to collect any amounts from employees for health care
services under any circumstances, including the insolvency of the
insurance carrier or the network, except as provided by Section
1305.451(b)(6);
(2) a statement that the provider agrees to follow
treatment guidelines adopted by the network under Section 1305.304,
as applicable to an employee's injury;
(3) a continuity of treatment clause that states that
if a provider leaves the network, the insurance carrier or network
is obligated to continue to reimburse the provider for a period not
to exceed 90 days 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;
(4) a clause regarding appeal by the provider of
termination of provider status and applicable written notification
to employees regarding such a termination, including provisions
determined by the commissioner; and
(5) any other provisions required by the commissioner
by rule.
(d) Continued care as described by Subsection (c)(3) must be
requested by a provider. A dispute involving continuity of care is
subject to the dispute resolution process under Subchapter I.
(e) An insurance carrier and a network 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 medically
necessary services.
Sec. 1305.153. PROVIDER REIMBURSEMENT. (a) The amount of
reimbursement for services provided by a network provider is
determined by the contract between the network and the provider or
group of providers.
(b) If a network has preauthorized a health care service,
the insurance carrier or network or the network's agent or other
representative may not deny payment to a provider except for
reasons other than medical necessity.
(c) Out-of-network providers who provide care as described
by Section 1305.006(a) shall be reimbursed as provided by the Texas
Workers' Compensation Act and applicable rules of the commissioner
of the Texas Department of Workers' Compensation.
(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 the
Texas Workers' Compensation Act and applicable rules of the
commissioner of the Texas Department of Workers' Compensation, as
consistent with this chapter. This subsection may not be construed
to require application of rules of the commissioner of the Texas
Department of Workers' Compensation regarding reimbursement if
application of those rules would negate reimbursement amounts
negotiated by the network.
(e) An insurance carrier shall notify in writing a 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 network
provider before that notification on the grounds that the injury
was not compensable.
(f) If an insurance carrier contests the compensability of
an injury and the injury is determined not to be compensable, the
carrier may recover the amounts paid for health care services from
the employee's accident or health insurance carrier or any other
person who may be obligated for the cost of the health care
services.
Sec. 1305.154. NETWORK-CARRIER CONTRACTS. (a) Except for
emergencies and out-of-network referrals, a network may provide
services to employees only through a written contract with an
insurance carrier. A network-carrier contract under this section
is confidential and is not subject to disclosure as public
information under Chapter 552, Government Code.
(b) A carrier and a network may negotiate the functions to
be provided by the network, except that the network shall contract
with providers for the provision of health care functions related
to the operation of a quality improvement program, and
credentialing in accordance with the requirements of this chapter.
(c) A network's contract with a carrier must include:
(1) a description of the functions that the carrier
delegates to the network, consistent with the requirements of
Subsection (b), and the reporting requirements for each function;
(2) a statement that the network and any management
contractor or third party to which the network delegates a function
will perform all delegated functions in full compliance with all
requirements of this chapter, the Texas Workers' Compensation Act,
and rules of the commissioner of insurance or the commissioner of
the Texas Department of Workers' Compensation;
(3) a provision that the contract:
(A) may not be terminated without cause by either
party without 90 days' prior written notice; and
(B) must be terminated immediately if cause
exists;
(4) a hold-harmless provision stating that the
network, a management contractor, a third party to which the
network delegates a function, and the network's contracted
providers are prohibited from billing or attempting to collect any
amounts from employees for health care services under any
circumstances, including the insolvency of the carrier or the
network, except as provided by Section 1305.451(b)(6);
(5) a statement that the carrier retains ultimate
responsibility for ensuring that all delegated functions and all
management contractor functions are performed in accordance with
applicable statutes and rules and that the contract may not be
construed to limit in any way the carrier's responsibility,
including financial responsibility, to comply with all statutory
and regulatory requirements;
(6) a statement that the network's role is to provide
the services described under Subsection (b) as well as any other
services or functions delegated by the carrier, including functions
delegated to a management contractor, subject to the carrier's
oversight and monitoring of the network's performance;
(7) a requirement that the network provide the
carrier, at least monthly and in a form usable for audit purposes,
the data necessary for the carrier to comply with reporting
requirements of the department and the Texas Department of Workers'
Compensation with respect to any services provided under the
contract, as determined by commissioner rules;
(8) a requirement that the carrier, the network, any
management contractor, and any third party to which the network
delegates a function comply with the data reporting requirements of
the Texas Workers' Compensation Act and rules of the commissioner
of the Texas Department of Workers' Compensation;
(9) a contingency plan under which the carrier would,
in the event of termination of the contract or a failure to perform,
reassume one or more functions of the network under the contract,
including functions related to:
(A) payments to providers and notification to
employees;
(B) quality of care;
(C) utilization review;
(D) retrospective review; and
(E) continuity of care, including a plan for
identifying and transitioning employees to new providers;
(10) a provision that requires that any agreement by
which the network delegates any function to a management contractor
or any third party be in writing, and that such an agreement require
the delegated third party or management contractor to be subject to
all the requirements of this subchapter;
(11) a provision that requires the network to provide
to the department the license number of a management contractor or
any delegated third party who performs a function that requires a
license as a utilization review agent under Article 21.58A or any
other license under this code or another insurance law of this
state;
(12) an acknowledgment that:
(A) any management contractor or third party to
whom the network delegates a function must perform in compliance
with this chapter and other applicable statutes and rules, and that
the management contractor or third party is subject to the
carrier's and the network's oversight and monitoring of its
performance; and
(B) if the management contractor or the third
party fails to meet monitoring standards established to ensure that
functions delegated to the management contractor or the third party
under the delegation contract are in full compliance with all
statutory and regulatory requirements, the carrier or the network
may cancel the delegation of one or more delegated functions;
(13) a requirement that the network and any management
contractor or third party to which the network delegates a function
provide all necessary information to allow the carrier to provide
information to employees as required by Section 1305.451; and
(14) a provision that requires the network, in
contracting with a third party directly or through another third
party, to require the third party to permit the commissioner to
examine at any time any information the commissioner believes is
relevant to the third party's financial condition or the ability of
the network to meet the network's responsibilities in connection
with any function the third party performs or has been delegated.
(d) An insurance carrier, a network, and any management
contractor or third party to which the network delegates a function
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 medically necessary services.
Sec. 1305.155. COMPLIANCE REQUIREMENTS. (a) An insurance
carrier that becomes aware of any information that indicates that
the network, any management contractor, or any third party to which
the network delegates a function is not operating in accordance
with the contract or is operating in a condition that renders the
continuance of the network's business hazardous to employees shall:
(1) notify the network in writing of those findings;
(2) request in writing a written explanation, with
documentation supporting the explanation, of:
(A) the network's apparent noncompliance with
the contract; or
(B) the existence of the condition that
apparently renders the continuance of the network's business
hazardous to employees; and
(3) notify the commissioner and provide the department
with copies of all notices and requests submitted to the network and
the responses and other documentation the carrier generates or
receives in response to the notices and requests.
(b) A network 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.
(c) The carrier shall cooperate with the network to correct
any failure by the network to comply with any regulatory
requirement of the department.
(d) On receipt of a notice under Subsection (a), or if a
complaint is filed with the department, on receipt of that
complaint, 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 financial
solvency of the network or the network's ability to meet its
responsibilities in connection with any function performed by the
network or delegated to the network by the carrier.
(e) Except as provided by this subsection, on completion of
the examination, the department shall report to the network and the
carrier the results of the examination and any action the
department determines is necessary to ensure that the carrier meets
its responsibilities under this chapter, this code, and rules
adopted by the commissioner, and that the network can meet the
network's responsibilities in connection with any function
delegated by the carrier or performed by the network, any
management contractor, or any third party to which the network
delegates a function. The department may not report to the carrier
any information regarding fee schedules, prices, cost of care, or
other information not relevant to the monitoring plan.
(f) The network and 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) The commissioner may order a carrier to take any action
the commissioner determines is necessary to ensure that the carrier
can provide all health care services under the Texas Workers'
Compensation Act, including:
(1) reassuming the functions performed by or delegated
to the network, including claims payments for services previously
provided to injured employees;
(2) temporarily or permanently ceasing coverage of
employees through the network;
(3) complying with the contingency plan required by
Section 1305.154(c)(9), including permitting an injured employee
to select a treating doctor in the manner provided by Section
408.022, Labor Code; or
(4) terminating the carrier's contract with the
network.
(h) The carrier retains ultimate responsibility for
ensuring that all delegated functions and all management contractor
functions are performed in accordance with applicable statutes and
rules and nothing in this section may be construed to limit in any
way the carrier's responsibility, including financial
responsibility, to comply with all statutory and regulatory
requirements.
[Sections 1305.156-1305.200 reserved for expansion]
SUBCHAPTER E. FINANCIAL REQUIREMENTS
Sec. 1305.201. NETWORK FINANCIAL REQUIREMENTS. (a) Each
network shall prepare financial statements in accordance with
generally accepted accounting standards, which must include
adequate provisions for liabilities, including incurred but not
reported obligations relating to providing benefits or services.
(b) Each network shall file the financial statement under
Subsection (a) with the department in the manner prescribed by
commissioner rule.
[Sections 1305.202-1305.250 reserved for expansion]
SUBCHAPTER F. EXAMINATIONS
Sec. 1305.251. EXAMINATION OF NETWORK. (a) As often as
the commissioner considers necessary, the commissioner or the
commissioner's designated representative may review the operations
of a network to determine compliance with this chapter. The review
may include on-site visits to the network's premises.
(b) During on-site visits, the network must make available
to the department all records relating to the network's operations.
Sec. 1305.252. 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 network has contracted to provide health care services or
any other services delegated to the 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 network of the
provider, provider group, or third party.
[Sections 1305.253-1305.300 reserved for expansion]
SUBCHAPTER G. PROVISION OF SERVICES BY NETWORK; QUALITY
IMPROVEMENT PROGRAM
Sec. 1305.301. NETWORK ORGANIZATION; SERVICE AREAS.
(a) The chief executive officer, operations officer, or governing
body of a network is responsible for:
(1) the development, approval, implementation, and
enforcement of:
(A) administrative, operational, personnel, and
patient care policies; and
(B) network procedures; and
(2) the development of any documents necessary for the
operation of the network.
(b) Each network shall have a chief executive officer or
operations officer who:
(1) is accountable for the day-to-day administration
of the network; and
(2) shall ensure compliance with all applicable
statutes and rules pertaining to the operation of the network.
(c) Each network shall have a medical director, who must be
an occupational medicine specialist or employ or contract with an
occupational medicine specialist, and who must be licensed to
practice medicine in the United States. The medical director
shall:
(1) be available at all times to address complaints,
clinical issues, and any quality improvement issues on behalf of
the network;
(2) be actively involved in all quality improvement
activities; and
(3) comply with the network's credentialing
requirements.
(d) The network shall establish one or more service areas
within this state. For each defined service area, the network must:
(1) demonstrate to the satisfaction of the department
the ability to provide continuity, accessibility, availability,
and quality of services;
(2) specify the counties and zip code areas, or any
parts of a county or zip code area, included in the service area;
and
(3) provide a complete provider directory to all
employers in the service area.
Sec. 1305.302. ACCESSIBILITY AND AVAILABILITY
REQUIREMENTS. (a) All services specified by this section must be
provided by a provider who holds an appropriate license, unless the
provider is exempt from license requirements.
(b) The network shall ensure that the network's provider
panel includes 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 network's service area.
An adequate number of the treating doctors and specialists must
have admitting privileges at one or more network hospitals located
within the network's service area to ensure that any necessary
hospital admissions are made.
(c) Hospital services must be available and accessible 24
hours a day, seven days a week, within the network's service area.
The network shall provide for the necessary hospital services by
contracting with general, special, and psychiatric hospitals.
(d) Physical and occupational therapy services and
chiropractic services must be available and accessible within the
network's service area.
(e) Emergency care must be available and accessible 24 hours
a day, seven days a week, without restrictions as to where the
services are rendered.
(f) Except for emergencies, a 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.
(g) Each network shall provide that network services are
sufficiently accessible and available as necessary to ensure that
the distance from any point in the 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 and that
the distance from any point in the network's service area to a point
of service by a specialist or specialty hospital is not greater than
75 miles in nonrural areas and 75 miles in rural areas. For
portions of the service area in which the network identifies
noncompliance with this subsection, the network must file an access
plan with the department in accordance with Subsection (h).
(h) The 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
network provider is not available to an employee within the
distance specified by Subsection (g) because:
(1) providers are not located within that distance;
(2) the network is unable to obtain provider contracts
after good faith attempts; or
(3) providers meeting the network's minimum quality of
care and credentialing requirements are not located within that
distance.
(i) The network may make arrangements with providers
outside the service area to enable employees to receive a skill or
specialty not available within the network service area.
(j) The network may not be required to expand services
outside the network's service area to accommodate employees who
live outside the service area.
Sec. 1305.303. QUALITY OF CARE REQUIREMENTS. (a) A
network 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 network's governing body is ultimately responsible
for the quality improvement program. The governing body shall:
(1) appoint a quality improvement committee that
includes network 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; and
(5) review the annual written report on the quality
improvement program.
(c) The quality improvement committee or committees shall
evaluate the overall effectiveness of the quality improvement
program as determined by commissioner rules.
(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 network shall dedicate adequate
resources, including adequate personnel and information systems,
to the quality improvement program.
(e) The network shall develop a written description of the
quality improvement program that outlines the organizational
structure of the program, the functional responsibilities of the
program, and the frequency of committee meetings.
(f) The network shall develop an annual quality improvement
work plan designed to reflect the type of services and the
populations served by the network in terms of age groups, disease or
injury categories, and special risk status, such as type of
industry.
(g) The network shall prepare an annual written report to
the department on the quality improvement program. The report must
include:
(1) completed activities;
(2) the trending of clinical and service goals;
(3) an analysis of program performance; and
(4) conclusions regarding the effectiveness of the
program.
(h) Each network shall implement a documented process for
the selection and retention of contracted providers, in accordance
with rules adopted by the commissioner.
(i) The quality improvement program must provide for a peer
review action procedure for providers, as described by Section
151.002, Occupations Code.
(j) The network shall have a medical case management program
with certified case managers. Case managers shall work with
treating doctors, referral providers, and employers to facilitate
cost-effective care and employee return-to-work.
Sec. 1305.304. GUIDELINES AND PROTOCOLS. Each network
shall adopt treatment guidelines, return-to-work guidelines, and
individual treatment protocols. The treatment guidelines and
individual treatment protocols must be evidence-based,
scientifically valid, and outcome-focused and be designed to reduce
inappropriate or unnecessary health care while safeguarding
necessary care.
[Sections 1305.305-1305.350 reserved for expansion]
SUBCHAPTER H. UTILIZATION REVIEW; RETROSPECTIVE REVIEW
Sec. 1305.351. UTILIZATION REVIEW AND RETROSPECTIVE REVIEW
IN NETWORK. (a) The requirements of Article 21.58A apply to
utilization review conducted in relation to claims in a workers'
compensation health care network. In the event of a conflict
between Article 21.58A and this chapter, this chapter controls.
(b) Any screening criteria used for utilization review or
retrospective review related to a workers' compensation health care
network must be consistent with the network's treatment guidelines.
Sec. 1305.352. GENERAL STANDARDS FOR RETROSPECTIVE REVIEW.
(a) Retrospective review of a health care service shall be based
on written screening criteria established and periodically updated
with appropriate involvement from doctors, including actively
practicing doctors, and other health care providers.
(b) Retrospective review must be performed under the
direction of a physician.
Sec. 1305.353. NOTICE OF CERTAIN UTILIZATION REVIEW
DETERMINATIONS; PREAUTHORIZATION REQUIREMENTS. (a) The entity
performing utilization review or retrospective review 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 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) On receipt of a preauthorization request from a provider
for proposed services that require preauthorization, the
utilization review agent shall issue and transmit a determination
indicating whether the proposed health care services are
preauthorized. The utilization review agent shall respond to
requests for preauthorization within the periods prescribed by this
section.
(d) For services not described under 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.
(e) If the proposed services are for concurrent
hospitalization care, the utilization review agent 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
utilization review agent 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
utilization review agent issues an adverse determination in
response to a request for poststabilization treatment or a request
for treatment involving a life-threatening condition, the
utilization review agent 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. 1305.354. RECONSIDERATION OF ADVERSE DETERMINATION.
(a) A utilization review agent shall maintain and make available a
written description of the reconsideration procedures involving an
adverse determination. The reconsideration procedures must be
reasonable and must include:
(1) a provision stating that reconsideration must 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 network
shall send to the requesting party a letter acknowledging the date
of the receipt of the request that includes a reasonable list of
documents the requesting party is required to submit;
(4) a provision that, after completion of the review
of the request for reconsideration of the adverse determination,
the utilization review 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 shall 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. 1305.355. INDEPENDENT REVIEW OF ADVERSE
DETERMINATION. (a) The utilization review agent shall:
(1) permit the employee or person acting on behalf of
the employee and the employee's requesting provider whose
reconsideration of an adverse determination is denied to seek
review of that determination within the period prescribed by
Subsection (b) by an independent review organization assigned in
accordance with Article 21.58C and commissioner rules; and
(2) provide to the appropriate independent review
organization, not later than the third business day after the date
the utilization review agent receives notification of the
assignment of the request to an independent review organization:
(A) any medical records of the employee that are
relevant to the review;
(B) any documents used by the utilization review
agent in making the determination;
(C) the response letter described by Section
1305.354(a)(4);
(D) any documentation and written information
submitted in support of the request for reconsideration; and
(E) a list of the providers who provided care to
the employee and who may have medical records relevant to the
review.
(b) A request for independent review under Subsection (a)
must be timely filed by the requestor as follows:
(1) for a request for preauthorization or concurrent
review by an independent review organization, not later than the
45th day after the date of denial of a reconsideration for health
care requiring preauthorization or concurrent review; or
(2) for a request for retrospective medical necessity
review, not later than the 45th day after the denial of
reconsideration.
(c) The insurance carrier shall pay for the independent
review provided under this subchapter.
(d) The department shall assign the review request to an
independent review organization.
(e) A party to a medical dispute that remains unresolved
after a review under this section may seek judicial review of the
decision. The department is not considered a party to the medical
dispute.
(f) A determination of an independent review organization
related to a request for preauthorization or concurrent review is
binding during the pendency of any appeal, and the carrier and
network shall comply with the determination.
(g) If judicial review is not sought under this section, the
carrier and network shall comply with the independent review
organization's determination.
[Sections 1305.356-1305.400 reserved for expansion]
SUBCHAPTER I. COMPLAINT RESOLUTION
Sec. 1305.401. COMPLAINT SYSTEM REQUIRED. (a) Each
network shall implement and maintain a complaint system that
provides reasonable procedures to resolve an oral or written
complaint.
(b) The 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. 1305.402. COMPLAINT INITIATION AND INITIAL RESPONSE;
DEADLINES FOR RESPONSE AND RESOLUTION. (a) If a complainant
notifies a network of a complaint, the network, not later than the
seventh calendar day after the date the network receives the
complaint, shall respond to the complainant, acknowledging the date
of receipt of the complaint and providing a description of the
network's complaint procedures and deadlines.
(b) The network shall investigate and resolve a complaint
not later than the 30th calendar day after the date the network
receives the complaint.
Sec. 1305.403. RECORD OF COMPLAINTS. (a) Each network
shall maintain a complaint and appeal log regarding each complaint.
The commissioner shall adopt rules designating the classification
of network complaints under this section.
(b) Each 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 network's
record regarding the complaint and any proceeding relating to that
complaint.
(d) The department, during any investigation or examination
of a network, may review documentation maintained under this
subchapter, including original documentation, regarding a
complaint and action taken on the complaint.
Sec. 1305.404. RETALIATORY ACTION PROHIBITED. A 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
network.
Sec. 1305.405. POSTING OF INFORMATION ON COMPLAINT PROCESS
REQUIRED. (a) A contract between a 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
network.
(b) The notice required under Subsection (a) must include
the department's toll-free telephone number for filing a complaint.
[Sections 1305.406-1305.450 reserved for expansion]
SUBCHAPTER J. EMPLOYEE INFORMATION AND RESPONSIBILITIES
Sec. 1305.451. EMPLOYEE INFORMATION; RESPONSIBILITIES OF
EMPLOYEE. (a) An insurance carrier that establishes or contracts
with a network shall provide to employers, and ensure that the
employer provides to its employees, an accurate written description
of the terms and conditions for obtaining health care within the
network's service area.
(b) The written description required under Subsection (a)
must be in English, Spanish, and any additional language common to
an employer's employees, must be in plain language and in a readable
and understandable format, and must include, in a clear, complete,
and accurate format:
(1) a statement that the entity providing health care
to employees is a workers' compensation health care network;
(2) the network's toll-free number and address for
obtaining additional information about the network, including
information about network providers;
(3) a statement that in the event of an injury, the
employee must select a treating doctor:
(A) from a list of all the network's treating
doctors who have contracts with the network in that service area; or
(B) as described by Section 1305.105;
(4) a statement that, except for emergency services,
the employee shall obtain all health care and specialist referrals
through the employee's treating doctor;
(5) an explanation that network providers have agreed
to look only to the network or insurance carrier and not to
employees for payment of providing health care, except as provided
by Subdivision (6);
(6) a statement that if the employee obtains health care
from non-network providers without network approval or as provided by
Section 1305.006(a), the insurance carrier may not be liable, and the
employee may be liable, for payment for that health care;
(7) information about how to obtain emergency care
services, including emergency care outside the service area, and
after-hours care;
(8) a list of the health care services for which the
network requires preauthorization;
(9) an explanation regarding continuity of treatment
in the event of the termination from the network of a treating
doctor;
(10) a description of the network's complaint system,
including a statement that the network is prohibited from
retaliating against:
(A) an employee if the employee files a complaint
against the network or appeals a decision of the network; or
(B) a provider if the provider, on behalf of an
employee, reasonably files a complaint against the network or
appeals a decision of the network;
(11) a summary of the network's procedures relating to
adverse determinations and the availability of the independent
review process;
(12) a list of network providers updated at least
quarterly, including:
(A) the names and addresses of the providers;
(B) a statement of limitations of accessibility
and referrals to specialists; and
(C) a disclosure of which providers are accepting
new patients; and
(13) a description of the network's service area.
(c) The network and the network's representatives and
agents may not cause or knowingly permit the use or distribution to
employees of information that is untrue or misleading.
(d) A network that contracts with an insurance carrier shall
provide all the information necessary to allow the carrier to
comply with this section.
[Sections 1305.452-1305.500 reserved for expansion]
SUBCHAPTER K. EVALUATION OF NETWORKS; CONSUMER REPORT CARD
Sec. 1305.501. EVALUATION OF NETWORKS. (a) In accordance
with the research duties assigned to the department under Chapter
405, Labor Code, the department shall:
(1) objectively evaluate the cost and the quality of
medical care provided by networks certified under this chapter; and
(2) report the department's findings to the governor,
the lieutenant governor, the speaker of the house of
representatives, and the members of the legislature not later than
September 1 of each even-numbered year.
(b) At the minimum, the report required under Subsection (a)
must evaluate:
(1) the average medical and indemnity cost per claim
for health care services provided through networks;
(2) the access to care and utilization by injured
employees of health care provided through networks;
(3) injured employee return-to-work outcomes;
(4) injured employee satisfaction and health-related
functional outcomes; and
(5) the frequency, duration, and outcome of disputes
regarding medical benefits.
(c) The department shall include in the report a comparison
of the administrative burdens incurred by health care providers who
provide workers' compensation medical benefits through networks
with those incurred by providers who provide analogous medical
benefits outside the network structure.
Sec. 1305.502. CONSUMER REPORT CARDS. (a) The department
shall annually issue consumer report cards that identify and
compare, on an objective basis, the networks certified by the
department under this chapter.
(b) The department shall ensure that consumer report cards
issued by the department 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 to obtain a paper copy of consumer report cards.
Sec. 1305.503. CONFIDENTIALITY REQUIREMENTS. (a) As
necessary to implement this subchapter, the department is entitled
to information that is otherwise confidential under any law of this
state, including the Texas Workers' Compensation Act.
(b) Confidential information provided to or obtained by the
department under this section remains confidential and is not
subject to disclosure under Chapter 552, Government Code. The
department may not release, and a person may not gain access to, any
information that:
(1) could reasonably be expected to reveal the
identity of an injured employee; or
(2) discloses provider discounts or differentials
between payments and billed charges for individual providers or
networks.
(c) Information that is in the possession of the department
and that relates to an individual injured employee, and any
compilation, report, or analysis produced from the information that
identifies an individual injured employee, are not:
(1) subject to discovery, subpoena, or other means of
legal compulsion for release to any person; or
(2) admissible in any civil, administrative, or
criminal proceeding.
[Sections 1305.504-1305.550 reserved for expansion]
SUBCHAPTER L. DISCIPLINARY ACTIONS
Sec. 1305.551. DETERMINATION OF VIOLATION; NOTICE. (a) If
the commissioner determines that a network, insurance carrier, or
any other person or third party operating under this chapter,
including a third party to which a network delegates a function, or
any third party with which a network contracts for management
services, is in violation of this chapter, rules adopted by the
commissioner under this chapter, or applicable provisions of the
Labor Code or rules adopted under that code, the commissioner or a
designated representative may notify the 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. 1305.552. DISCIPLINARY ACTIONS. If under Section
1305.551 the commissioner determines that a network, insurance
carrier, or other person or third party described under Section
1305.551 has violated or is violating this chapter, rules adopted
by the commissioner under this chapter, or the Labor Code or rules
adopted under that code, the commissioner may:
(1) suspend or revoke a certificate issued under this
code;
(2) impose sanctions under Chapter 82;
(3) issue a cease and desist order under Chapter 83;
(4) impose administrative penalties under Chapter 84;
or
(5) take any combination of these actions.
ARTICLE 5. RATES AND UNDERWRITING REQUIREMENTS
SECTION 5.01. Section 1, Article 5.55, Insurance Code, is
amended by amending Subdivision (2) and adding Subdivision (2-a) to
read as follows:
(2) "Insurer" means a person authorized and admitted
by the department [Texas Department of Insurance] to engage in the
[do insurance] business of insurance in this state under a
certificate of authority that includes authorization to write
workers' compensation insurance. The term includes:
(A) the Texas Mutual Insurance Company;
(B) a Lloyd's plan under Chapter 941 of this
code;
(C) a reciprocal and interinsurance exchange
under Chapter 942 of this code; and
(D) a workers' compensation self-insurance group
required to file rates under Chapter 407A, Labor Code.
(2-a) "Premium" means the amount charged for a
workers' compensation insurance policy, including any
endorsements, after the application of individual risk variations
based on loss or expense considerations.
SECTION 5.02. Subsections (b) and (d), Section 2, Article
5.55, Insurance Code, are amended to read as follows:
(b) In setting rates, an insurer shall consider:
(1) past and prospective loss cost experience;
(2) operation expenses;
(3) investment income;
(4) a reasonable margin for profit and contingencies;
[and]
(5) the effect on premiums of individual risk
variations based on loss or expense considerations; and
(6) any other relevant factors.
(d) Rates and premiums established under this article may
not be excessive, inadequate, or unfairly discriminatory.
SECTION 5.03. Section 3, Article 5.55, Insurance Code, is
amended by adding Subsections (e) through (h) to read as follows:
(e) Not later than December 1 of each even-numbered year,
the commissioner shall report to the governor, lieutenant governor,
and speaker of the house of representatives regarding the impact
that legislation enacted during the regular session of the 79th
Legislature reforming the workers' compensation system of this
state has had on the affordability and availability of workers'
compensation insurance for the employers of this state. The report
must include an analysis of:
(1) the projected workers' compensation premium
savings realized by employers as a result of the reforms;
(2) the impact of the reforms on:
(A) the percentage of employers who provide
workers' compensation insurance coverage for their employees; and
(B) to the extent possible, economic development
and job creation;
(3) the effects of the reforms on market competition
and carrier financial solvency, including an analysis of how
carrier loss ratios, combined ratios, and use of individual risk
variations have changed since implementation of the reforms; and
(4) the extent of participation in workers'
compensation health care networks by small and medium-sized
employers.
(f) If the commissioner determines that workers'
compensation rate filings or premium levels analyzed by the
department do not appropriately reflect the savings associated with
the reforms described by Subsection (e) of this section, the
commissioner shall include in the report required under Subsection
(e) of this section any recommendations, including any recommended
legislative changes, necessary to identify the tools needed by the
department to more effectively regulate workers' compensation
rates.
(g) At the request of the department, each insurer shall
submit to the department all data and other information considered
necessary by the commissioner to generate the report required under
Subsection (e) of this section. Failure by an insurer to submit the
data and information in a timely fashion, as determined by
commissioner rule, constitutes grounds for sanctions under Chapter
82 of this code.
(h) In reviewing rates under this article, the commissioner
shall consider any state or federal legislation that has been
enacted and that may impact rates and premiums for workers'
compensation insurance coverage in this state.
SECTION 5.04. Subsection (b), Section 6, Article 5.55,
Insurance Code, is amended to read as follows:
(b) The disapproval order must be issued not later than the
15th day after the close of a hearing and must specify how the rate
fails to meet the requirements of this article. The disapproval
order must state the date on which the further use of that rate is
prohibited. [A disapproval order does not affect a policy made or
issued in accordance with this code before the expiration of the
period established in the order.]
SECTION 5.05. Section 7, Article 5.55, Insurance Code, is
amended to read as follows:
Sec. 7. EFFECT OF DISAPPROVAL; PENALTY. (a) If a policy is
issued and the commissioner [board] subsequently disapproves the
rate or filing that governs the premium charged on the policy:
(1) the policyholder may continue the policy at the
original rate;
(2) the policyholder may cancel the policy without
penalty; or
(3) the policyholder and the insurer may agree to
amend the policy to reflect the premium that would have been charged
based on the insurer's most recently approved rate; the amendment
may not take effect before the date on which further use of the rate
is prohibited under the disapproval order.
(b) If a policy is issued and the commissioner subsequently
disapproves the rate or filing on which the premium is based, the
commissioner, after notice and the opportunity for a hearing, may:
(1) impose sanctions under Chapter 82 of this code;
(2) issue a cease and desist order under Chapter 83 of
this code;
(3) impose administrative penalties under Chapter 84
of this code; or
(4) take any combination of these actions [If the
board determines, based on a pattern of charges for premiums, that
an insurer is consistently overcharging or undercharging, the board
may assess an administrative penalty. The penalty shall be
assessed in accordance with Article 10, Texas Workers' Compensation
Act (Article 8308-10.01 et seq., Vernon's Texas Civil Statutes),
and set by the board in an amount reasonable and necessary to deter
the overcharging or undercharging of policyholders].
SECTION 5.06. Subchapter D, Chapter 5, Insurance Code, is
amended by adding Article 5.55A to read as follows:
Art. 5.55A. UNDERWRITING GUIDELINES
Sec. 1. DEFINITIONS. In this article:
(1) "Insurer" has the meaning assigned by Section
1(2), Article 5.55, of this code.
(2) "Underwriting guideline" means a rule, standard,
guideline, or practice, whether written, oral, or electronic, that
is used by an insurer or its agent to decide whether to accept or
reject an application for coverage under a workers' compensation
insurance policy or to determine how to classify those risks that
are accepted for the purpose of determining a rate.
Sec. 2. UNDERWRITING GUIDELINES. Each underwriting
guideline used by an insurer in writing workers' compensation
insurance must be sound, actuarially justified, or otherwise
substantially commensurate with the contemplated risk. An
underwriting guideline may not be unfairly discriminatory.
Sec. 3. ENFORCEMENT. This article may be enforced in the
manner provided by Section 38.003(g) of this code.
Sec. 4. FILING REQUIREMENTS. Each insurer shall file with
the department a copy of the insurer's underwriting guidelines.
The insurer shall update its filing each time the underwriting
guidelines are changed. If a group of insurers files one set of
underwriting guidelines for the group, the group shall identify
which underwriting guidelines apply to each insurer in the group.
Sec. 5. APPLICABILITY OF SECTION 38.003. Section 38.003 of
this code applies to this article to the extent consistent with this
article.
SECTION 5.07. Subsection (b), Article 5.58, 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 Department of 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.
ARTICLE 6. REPEALER
SECTION 6.001. The following provisions of the Labor Code
are repealed:
(1) Section 402.025;
(2) Subsection (b), Section 402.062;
(3) Sections 402.063 and 402.070;
(4) Subsection (c), Section 402.091;
(5) Section 406.012;
(6) Subsection (g), Section 408.004;
(7) Sections 408.0221, 408.0222, and 408.0223;
(8) Subsection (d), Section 411.034;
(9) Section 413.005;
(10) Subsection (b), Section 413.043;
(11) Subsections (c) and (d), Section 415.0035;
(12) Section 415.004;
(13) Subsection (b), Section 415.008;
(14) Subsection (b), Section 415.009;
(15) Subsection (b), Section 415.010;
(16) Section 415.022; and
(17) Subdivision (1), Section 505.001.
ARTICLE 7. TRANSITION; EFFECTIVE DATE
SECTION 7.001. EFFECT OF CHANGE IN DESIGNATION. The change
in designation of the Texas Workers' Compensation Commission to the
Texas Department of Workers' Compensation does not affect or impair
any act done or taken, any rule, standard, or rate adopted, any
order or certificate issued, or any form approved by the Texas
Workers' Compensation Commission as a state agency, or any penalty
assessed by the Texas Workers' Compensation Commission as a state
agency before the change in designation made by this Act.
SECTION 7.002. ABOLITION OF TEXAS WORKERS' COMPENSATION
COMMISSION. (a) The Texas Workers' Compensation Commission is
abolished on the effective date of this Act. The term of a person
who is serving on the Texas Workers' Compensation Commission on the
effective date of this Act expires on the date the commissioner of
workers' compensation is appointed.
(b) All appropriations made by the legislature for the use
and benefit of the Texas Workers' Compensation Commission are
available for the use and benefit of the Texas Department of
Workers' Compensation.
(c) The divisions of the Texas Workers' Compensation
Commission established under Section 402.021, Labor Code, as that
section existed prior to amendment by this Act, are abolished on the
effective date of this Act.
SECTION 7.003. COMMISSIONER. The governor shall appoint
the commissioner of workers' compensation not later than September
30, 2005.
SECTION 7.004. RULES REGARDING MEDICAL EXAMINATIONS. The
commissioner of workers' compensation shall adopt rules to
implement the changes in law made to Sections 408.004 and 408.0041,
Labor Code, as amended by this Act, on or before February 1, 2006.
The changes in law made to Sections 408.004 and 408.0041, Labor
Code, are effective on the date provided by commissioner rule.
SECTION 7.005. ELECTRONIC BILLING RULES. The commissioner
of workers' compensation shall adopt rules under Section 408.0251,
Labor Code, as added by this Act, not later than January 1, 2006.
SECTION 7.006. ACCRUAL OF RIGHT TO INCOME BENEFITS.
Subsection (c), Section 408.082, Labor Code, as amended by this
Act, applies only to a claim for workers' compensation benefits
based on a compensable injury that occurs on or after the effective
date of this Act. A claim based on a compensable injury that occurs
before that date is governed by the law in effect on the date that
the compensable injury occurred, and the former law is continued in
effect for that purpose.
SECTION 7.007. ELIGIBILITY FOR PILOT PROGRAM. The pilot
program established under Section 413.022, Labor Code, as added by
this Act, takes effect January 1, 2006.
SECTION 7.008. REPORTS. (a) Not later than October 1,
2006, the commissioner of workers' compensation shall report to the
governor, the lieutenant governor, the speaker of the house of
representatives, and the members of the 79th Legislature regarding
the implementation of Section 408.1225, Labor Code, as added by
this Act.
(b) Not later than October 1, 2008, the commissioner of
workers' compensation shall report to the governor, the lieutenant
governor, the speaker of the house of representatives, and the
members of the legislature regarding the implementation of the
pilot program established by Section 413.022, Labor Code, as added
by this Act, and the results of the pilot program. The report must
include any recommendations regarding the continuation of the pilot
program, including any changes required to enhance the
effectiveness of the program.
(c) The commissioner of insurance shall submit the initial
report required under Subsection (e), Section 3, Article 5.55,
Insurance Code, as added by this Act, not later than December 1,
2006.
(d) The commissioner of insurance shall submit to the
governor, the lieutenant governor, the speaker of the house of
representatives, and the members of the legislature the first
report under Subsection (a), Section 1305.501, Insurance Code, as
added by this Act, not later than December 1, 2008.
SECTION 7.009. ABOLITION OF MEDICAL ADVISORY COMMITTEE.
The medical advisory committee established under Section 413.005,
Labor Code, as that section existed prior to repeal by this Act, is
abolished on the effective date of this Act.
SECTION 7.010. STATE OFFICE OF ADMINISTRATIVE HEARINGS
REVIEW. (a) This section applies to a hearing conducted by the
State Office of Administrative Hearings under Subsection (k),
Section 413.031, Labor Code, as that subsection existed prior to
amendment by this Act.
(b) The State Office of Administrative Hearings shall
conclude on or before December 31, 2005, 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
August 31, 2005, is subject to Subsection (k), Section 413.031,
Labor Code, as amended by this Act, and is not subject to a hearing
before the State Office of Administrative Hearings.
SECTION 7.011. IMPLEMENTATION OF PROVIDER NETWORKS.
(a) The commissioner of insurance and the commissioner of workers'
compensation shall adopt rules as necessary to implement Chapter
1305, Insurance Code, as added by this Act, not later than December
1, 2005. The Texas Department of Insurance shall accept
applications from a network seeking certification under Chapter
1305, Insurance Code, as added by this Act, beginning December 15,
2005.
(b) An insurance carrier may begin to offer workers'
compensation medical benefits through a network under Chapter 1305,
Insurance Code, as added by this Act, on certification of the
network by the commissioner of insurance.
SECTION 7.012. CONSUMER REPORT CARD. The Texas Department
of Insurance shall issue the first annual workers' compensation
consumer report card under Section 1305.502, Insurance Code, as
added by this Act, not later than 18 months after the date on which
that department certifies the first workers' compensation health
care network under Chapter 1305, Insurance Code, as added by this
Act.
SECTION 7.013. APPLICATION TO MEDICAL BENEFITS.
(a) Article 4 of this Act applies to a claim for workers'
compensation medical benefits based on a compensable injury
incurred by an employee whose employer elects to provide workers'
compensation insurance coverage if the insurance carrier of the
employer enters into a contract to provide workers' compensation
medical benefits through a network certified under Chapter 1305,
Insurance Code, as added by this Act.
(b) A claim for workers' compensation medical benefits
based on a compensable injury that occurs on or after the effective
date of a contract described by Subsection (a) of this section is
subject to the provisions of Chapter 1305, Insurance Code, as added
by this Act.
(c) Notwithstanding Subsection (a) of this section, an
injured employee who receives workers' compensation medical
benefits based on a compensable injury that occurs before the
effective date of this Act is subject to the provisions of Chapter
1305, Insurance Code, as added by this Act, and must receive
treatment through a network health care provider if the insurer
liable for the payment of benefits on that claim elects to use a
workers' compensation health care network to provide medical
benefits and the claimant lives in a network service area. The
insurer shall notify affected injured employees in writing of the
election.
SECTION 7.014. APPLICATION TO SANCTIONS AND VIOLATIONS.
(a) The changes in law made by this Act apply only to a penalty or
sanction for an offense or violation committed on or after the
effective date of this Act.
(b) For purposes of this section, an offense or violation is
committed before the effective date of this Act if any element of
the offense occurs before that date.
(c) An offense committed before the effective date of this
Act is governed by the law in effect when the offense was committed,
and the former law is continued in effect for that purpose.
SECTION 7.015. EFFECT OF UPDATE ACT. To the extent of any
conflict, this Act prevails over another Act of the 79th
Legislature, Regular Session, 2005, relating to nonsubstantive
additions to and corrections in enacted codes (the General Code
Update bill).
SECTION 7.016. EFFECTIVE DATE. This Act takes effect
September 1, 2005.
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