Is TWCC Headed Back to the Fee Guideline Drawing Board’

The new medical fee guideline approved by the Texas Workers’ Compensation Commission (TWCC) last spring and scheduled to go into effect September 1 was recently stayed by a Travis County judge as part of a lawsuit filed against TWCC by groups opposing the new fee schedule. Since then both supporters of the plan and its opponents have been busy contemplating the next move in the effort to hold down workers’ comp costs in Texas.

The fee guidelines were adopted as part of TWCC’s efforts to that end and would have cut reimbursements by as much as 15 percent to certain doctors for various medical procedures. However, the Texas Medical Association (TMA) and the Texas AFL-CIO jointly filed a lawsuit against the TWCC in July alleging that that TWCC violated the law in basing the fee structure on Medicare reimbursement guidelines. The Austin American-Statesman reported that in halting implementation of the fee schedule, Judge John Dietz ruled that the commission had failed to justify the guidelines.

In July TMA asserted that the fee schedule violates doctors’ legal right to reasonable reimbursement and would force doctors out of the system. In addition to their allegations that the fee schedule illegally tied workers’ comp reimbursement to the fees that Medicare pays for similar medical services to elderly Texans, TMA and the AFL-CIO claimed that TWCC did not develop enough data to be able to set fees that accurately reflect the cost of providing health care. The TMA also alleged that the guidelines cut reimbursements by 17 to 41 percent for surgeons, radiologists, pathologists, internists, and physical medicine specialists who treat injured workers.

TWCC, which was charged by the legislature to develop the fee schedule under House Bill 2600, the workers’ compensation legislation passed by the 77th Texas Legislature, had counted on the implementation of the guidelines. Richard F. (Dick) Reynolds, executive director of the Texas Workers Compensation Comm-ission (TWCC), told insurers at the 2002 Mid-Year Property & Casualty Insurance Symposium held in Austin in July that the medical fee guideline was the most important element of that legislation. “This particular article—the medical fee guideline—in HB 2600 is paramount,” Reynolds said, adding “if it goes down, to me, we’ve got to start all over.” He urged insurers help fight legal challenges to the guidelines.

Asked whether TWCC would appeal Judge Dietz’s ruling, TWCC spokesperson Linda McKee said the agency has received “no copy of the judge’s order yet, so there has not been a decision made.” TWCC has rescheduled to August 29 a public meeting that had originally been set for August 22. The medical fee schedule is expected to be addressed at the meeting.

“We want to ensure that injured workers can count on timely, quality medical care,” TMA’s Merian said in a post-ruling statement. “In anticipation of the fees that were supposed to go into effect Sept. 1, doctors already were pulling out of the workers’ comp system. We hope to see this trend reverse once an appropriate fee schedule is instituted.” Merian asserted that doctors were reluctant to accept new workers’ compensation patients because they did not want to stop seeing a worker with whom they already had a physician/patient relationship. He added that physicians believe that workers’ comp reimbursements in Texas are already too low and that the workers’ comp system is “the most hassle-filled health care system in the state.”

The TWCC guidelines were supported by the Texas Association of Business (TAB), which says workers’ compensation costs for Texas business rose by 50 percent last year. And although most private-sector Texas employers are not required to participate in the workers’ comp system, the TAB asserts that those that do face costs that are 80 percent higher than the national average. According to the Research and Oversight Committee on Workers’ Compensation some 35 percent of the state’s employers don’t offer the insurance.

The TAB is now proposing a set of reforms to Texas’ medical malpractice insurance system, and is urging candidates for governor and lieutenant governor to commit to capping non-economic damages in medical lawsuits.

“Frivolous lawsuits and outrageous jury awards are strangling the delivery of health care in this state. The American Medical Association has identified Texas as one of 12 states that are in serious danger of doctor shortages because of the sharp increase in medical malpractice insurance premiums,” stated TAB President Bill Hammond. He added that the TAB’s proposed reforms are “designed to reverse that trend.”

As proposed by TAB, the highlights of its medical malpractice reform package include:

• Limit non-economic damages, such as pain and suffering, to $200,000 for each claimant and establish in statute that “economic damages” does not include punitive or non-economic damages.

• Ensure the bulk of any award goes to the claimant by establishing a sliding scale for attorney contingency fees of 33 percent for the initial $100,000 in damages, with fees decreasing as the recovery increases.

• Strengthen expert witness requirements that are now being abused, and allow the defense to immediately appeal a decision on expert witness qualifications or a trial judge’s failure to dismiss a lawsuit when expert witness reporting requirements are not met.

Sen. Jane Nelson, R-Lewisville, chair of the Special Senate Committee on Prompt Payment of Health Care Providers; State Rep. John Smithee, chair of the House Insurance Committee; gubernatorial candidates Gov. Rick Perry and Tony Sanchez; and candidates for lieutenant governor David Dewhurst and John Sharp received the proposal. Both Nelson’s and Smithee’s committees are examining the medical malpractice insurance issue and developing recommended legislation in advance of the 2003 Texas Legislature.

Legislation adopted by California in 1975, which has often been cited as a blueprint for solving the medical malpractice crisis, greatly influenced TAB’s reform proposal. TAB indicated that the medical malpractice reforms it is now endorsing are one component of a comprehensive package of proposals the association has developed to make health care more affordable and accessible in Texas.

Topics Texas Legislation Workers' Compensation