TDI Clarifies Rules on Voluntary, Informal Work Comp Networks

The Texas Department of Insurance reported that it has received a number of inquiries from interested parties and legislative offices related to the continued existence of informal or voluntary workers’ compensation networks after the passage of House Bill 7 during the 79th Legislature, Regular Session, 2005.

TDI is providing this clarification to Bulletin No. B-0071-05 (Voluntary Networks or “Informal Networks”) regarding an insurance carrier’s responsibilities under the law.

Many of the inquiries received recently by the department focus on whether insurance carriers may continue to contract through other entities, such as preferred provider organizations, to obtain contracted fee arrangements with health care providers.

Section 413.011(d), Labor Code allows an insurance carrier to contract with a health care provider to provide health care services under a specific fee arrangement that is different from the fee guidelines of the Division of Workers’ Compensation (DWC). Consistent with Section 413.011(d), Labor Code, an insurance carrier may utilize a third party as its authorized agent to obtain a contractual fee arrangement that is different from the Division’s fee guidelines. However, if the carrier chooses to use a third party as its authorized agent to obtain a contractual fee arrangement, there should be:

–A contract between the carrier and the third party that authorizes the third party to contract with health care providers on the carrier’s behalf; and
–A contract or contract amendment between the third party, as authorized agent for the carrier, and the provider that names the carrier and clearly states the fee arrangement is between the health care provider and the third party as authorized agent on the carrier’s behalf.

For medical fee disputes that arise regarding non-network and out-of-network care, the DWC may request that copies of the contracts under which fees are being paid be submitted to the Division under rule 28 TAC §133.307(l) for review. The insurance carrier, pursuant to Section 413.011(d), Labor Code, may be required to pay in accordance with the DWC’s medical fee guidelines if the contract:

–Is not provided;
–Does not include a specific fee schedule; or
–Does not clearly state that the contractual fee arrangement is between the health care provider and the named insurance carrier or the named insurance carrier’s authorized agent.

Carriers that contract for fee arrangements that are not consistent with Section 413.011(d), Labor Code may be subject to enforcement action and charges under Sections 415.002 and 413.020, Labor Code. Additionally, any person operating or performing the acts of a workers’ compensation network that has not applied to be certified as a workers compensation health care network with TDI may be subject to disciplinary action under Chapter 1305, Insurance Code.

Questions regarding this bulletin should be directed to: Margaret Lazaretti, Deputy Commissioner, Health and WC Network Certification & QA Division, Texas Department of Insurance, at wcnet@tdi.state.tx.us.

Topics Carriers Agencies Workers' Compensation