Court Cripples Insurers’ Med. Bill Audits

A Texas appellate court has ruled that insurers have no authority to audit medical bills, a move that could hobble their ability to prevent fraud and keep down workers’ compensation costs, according to the American Alliance of Insurers. In the case, Patient Advocates of Texas v. Texas Workers’ Compensation Commission, the Court affirmed a lower court ruling that sided with the TWCC on all but one issue—insurers’ ability to audit medical bills. The court agreed with Patient Advocates’ argument that TWCC’s rules on medical dispute resolution are void because they are an improper delegation of the audit authority to private persons or entities. Such audits were set into place by the state’s 1989 Workers’ Compensation Act. TWCC set limits on medical fees and developed dispute resolution and auditing procedures of physicians’ bills by insurers. In conducting these reviews, insurers were given the authority to conduct onsite audits of health care providers. The rules also require that, during an onsite audit, the health care provider must give the carrier all notes, reports, test results, narratives, and other documentation relating to the claims identified as being the subject of the audit. A spokesperson for the Alliance noted that although “it’s not clear whether the appellate court’s decision applies only to onsite audits,” the ruling “casts a cloud over all audit activities under the current rule.”

Topics Carriers Texas Workers' Compensation