BILL ANALYSIS
By: Solomons
BACKGROUND AND PURPOSE
Prior to 2005, insurance carriers and employers were prohibited by statute to direct employees to specific health care providers for treatment of a workers’ compensation injury. However, carriers and employers had utilized discount fee contracts with certain providers which were referred to as “voluntary networks.” Although the employers and carriers were prohibited from directing an employee to see a particular provider in that network, if the employee chose to receive care from one of those providers, the provider would be paid the contractual fee discount rather than the fee dictated by the professional fee guideline adopted by the Texas Workers’ Compensation Commission.
Until 2001, voluntary networks were not mentioned in statute. In 77R H.B. 2600, an attempt was made at creating regional healthcare networks for workers’ compensation injuries. Although they were never implemented, a specific exemption was included in the language that the term regional healthcare networks did not include “voluntary networks” as long as those networks did not direct care of the employee to specific providers. This was the first time that voluntary networks were mentioned in the Labor Code and the provision stayed in statute until last session.
During the 79th legislative session, the legislature passed 79R H.B. 7 which, among other things, allowed certified healthcare networks for workers’ compensation by adding Chapter 1305 of the Insurance Code, which specifically states that in 1305.051 “A person may not operate a workers’ compensation healthcare network in this state unless the person holds a certificate issued under this chapter and rules adopted by the commissioner.” Further, the language which had been adopted in 77R H.B. 2600 on regional healthcare networks, including the language regarding voluntary networks, was deleted. In addition to the creation of healthcare networks, 79R H.B. 7 provided that an insurance carrier may pay an amount different from the professional fee guideline if the carrier has a contract with the provider.
After the effective date of H.B. 7 carriers requested guidance from the Texas Department of Insurance on the legality of voluntary networks arguing that although the references to a voluntary network had been eliminated, there was no prohibition either. The Texas Department of Insurance issued Bulletin B-0071-05 which stated that under the provisions of H.B. 7, all networks must be certified by the Texas Department of Insurance.
Immediately, the carriers requested further clarification of whether voluntary networks were allowed in light of a provision added by H.B. 7 in Labor Code 413.011(d) which stated that deviations from the medical fee guideline were allowed as long as a contract existed between the carrier and the provider with a specific fee schedule. The Texas Department of Insurance then issued Bulletin B-0005-06, which states a voluntary network could continue to exist as long as it contracted for a fee discount only — if any management of the claims existed then certification was required.
The original intent of the language in Labor Code 413.001(d) was to allow a deviation from the fee guideline to treat an individual injured worker in a non-network situation if the carrier was having difficulty securing necessary medical treatment within the fee guidelines. H.B. 473 clarifies Labor Code 413.0011(d) to the original intent and closes the loophole under which voluntary networks have been operating.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 473 amends Section 413.011(d), Labor Code, by authorizing a deviation for payment above the fee guidelines in workers’ compensation cases only to secure healthcare for an individual injured employee if access to medically necessary and reasonable treatment is hindered by application of the fee guideline, and the carrier has a contract with the provider to treat that injured worker for an amount above the fee guideline.
EFFECTIVE DATE
Upon passage, or, if the Act does not receive the necessary vote, the Act takes effect September 1, 2007.
Committee Amendment No. 1 adds language to clarify that Section 413.011, Labor Code, applies to Workers’ Compensation Networks for out-of-network services only, which is consistent with current provisions in Insurance Code, Sections 1305.003 and 1305.153.