Networks and alliances are legal concepts within the Texas workers’ compensation system that refer to restricted provider arrangements designed to control costs.
- Historical origins
These concepts arose out of legislative “reforms” over a decade ago. In response to increased costs within the workers’ compensation system, it was proposed that insurance carriers and employers should be able to restrict access to certain providers by limiting those providers eligible to be paid under specific workers’ compensation policies to those who are “in-network,” analogous to that concept as it is understood in HMO (health maintenance organization) entities within the group health policy scheme.
The Texas legislature passed HB 2600, which allowed the creation of workers’ compensation networks and sourced their oversight to TDI. It then took a few years for the rule-based infrastructure to catch up and for networks to actually be formed and implemented.
- Statutory Framework
The means the Texas Legislature used to implement this new system of Health Care Networks was to take the formation, treatment within, and oversight of these HCN’s outside the normal DWC process. The Labor Code provides that, in addition to and as sort of an overlay to the previous “new law” system for providing healthcare benefits, there is now a system within a system whereby treatment can be governed by certified HCN’s which are subject to TDI regulation and restrict provider access.
The Labor Code provides:
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 provision of medical benefits for injured employees, the establishment and regulation of fees for medical treatments and services, the time frames for payment of medical bills, the operation and regulation of workers' compensation health care networks, the 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.
So not only is there now a system within the system, in relevant ways that system is outside the jurisdiction of normal DWC oversight as it is subject to the TDI through the Insurance Code and does not interface with the DWC dispute resolution process.
As if that were not clear enough, the legislature included a statutory provision in the Insurance Code establishing the same priority:
Sec. 1305.003. LIMITATIONS ON APPLICABILITY. (a) This chapter does not affect the authority of the division of workers' compensation of the department to exercise the powers granted to the division 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 provision of medical benefits for injured employees, the establishment and regulation of fees for medical treatments and services, the time frames for payment of medical bills, the operation and regulation of workers' compensation health care networks, the regulation of health care providers who contract with those networks, or the resolution of disputes regarding medical benefits provided through those networks, this chapter prevails.
This again shows that the intent is to remove HCN’s from DWC direct case-by-case oversight by providing for no adjudication within the DWC system or regulatory framework being imposed by DWC.
- Alliances and HCN’s
“Alliances” are creatures of statute as well, but have a much less defined/regulated existence. These Alliances come to be through the internal relationships of groups subject to Texas Labor Code Sec. 504.053 (political subdivisions). They essentially have the liberty to create by agreement the effect of an HCN without the same strictures and oversight. It is essentially a system of HCN-lite:
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 through a workers' compensation health care network certified under Chapter 1305, Insurance Code, if the governing body of the political subdivision determines that provision of those benefits through a network is available to the employees and practical for the political subdivision. A political subdivision may enter into interlocal agreements and other agreements with other political subdivisions to establish or contract with networks under this section.
(b) If a political subdivision or a pool determines that a workers' compensation health care network certified under Chapter 1305, Insurance Code, is not available or practical for the political subdivision or pool, the political subdivision or pool may provide medical benefits to its injured employees or to the injured employees of the members of the pool:
(1) 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
(2) by directly contracting with health care providers or by contracting through a health benefits pool established under Chapter 172, Local Government Code.
This is not a process or application. This is an election and determination by the political subdivision. Any oversight is thus on the back end, not on the front end as with HCN applications.
The RME exclusion (discussed below) has only limited applicability to networks:
(c) If the political subdivision or pool provides medical benefits in the manner authorized under Subsection (b)(2), the following do not apply:
(1) Sections 408.004and 408.0041, unless use of a required medical examination or designated doctor is necessary to resolve an issue relating to the entitlement to or amount of income benefits under this title;
(2) Subchapter B, Chapter 408, except for Section 408.021;
(3) Chapter 413, except for Section 413.042; and
(4) Chapter 1305, Insurance Code, except for Sections 1305.501, 1305.502, and 1305.503.
An alliance carrier can thus get an RME if it is annexed to an issue of entitlement to or amount of income benefits. An alliance must provide for access to care. The requirement is simply reasonable availability within the service area. Key words: availability, accessibility, adequate:
(d) If the political subdivision or pool provides medical benefits in the manner authorized under Subsection (b)(2), 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;
The Alliance must also provide for an internal review process for medical care denials. In other words, if you don’t like my decision, you can appeal to my supervisor.
(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 contract 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.
Networks exist as a defined list of certified healthcare networks (HCN). Those networks are listed on the TDI-DWC website.[1]
As of writing this, the list of certified HCN’s is as follows:
AIG TX HCN
Argus Provider Network
Broadspire Workers' Compensation Health Care Network (HCN)
Bunch TX HCN-FH
Corvel Healthcare Corporation/Corcare
Coventry Health Care Workers Compensation Inc
Coventry Health Care Workers' Compensation Inc.
(CHCWC)/United Airlines TX HCN
Employers Medical Provider Network
First Health/CSS HCN First Health/Travelers HCN
First Health TX HCN
GENEX American Airlines Group Network
GENEX Health Care Network
GENEX/ Lockheed Martin Aero Employee Select Network (LMAESN)
GENEX Workers' Compensation Health Care Network (WCHCN)
The Hartford Workers Compensation Health Care Network-FH
IMO Med Select Network / Injury Management Organization, Inc.
Liberty Health Care Network
The Lone Star Network
Majoris Health Systems Prime Health Services Inc.
Productivity Edge by AIG TX HCN
Rockport Community Network, Inc. DBA Rockport SelectHealth Network
Sedgwick Claims Management Services, Inc./Sedgwick Preferred Network
Texas Star Network
USA Worker's Injury Network, Inc.
WellComp Managed Care Services, Inc.
WorkWell, TX
Zenith Health Care Network
Zurich Services Corporation Healthcare Network
A review of this list shows that the list is dominated by just a few groups. The idea that this was somehow going to give the system an injection of diversity by having various groups competing for providers is simply not borne out by the facts. There are a few groups that have multiple HCN’s under their control or direction. And more or less each of the major players in writing Texas WC policies has a captive HCN.
The practice shows that this system essentially allows the insurance carriers to dictate a list of eligible providers for employees to see. An even deeper dive shows there is a significant overlap of providers among various networks. In other words, for most of the HCN’s, the provider list is substantially the same. The only difference is a few outlier networks on the more restrictive end have very small lists and substantially restrict access to a few employer-centered clinics.
- Oversight and enforcement
HB 2600 and the resulting statutory/rule based reforms specifically task the TDI with enforcement of the network requirements through regulatory measures. There is no provision for any private right of action under the Labor Code or Insurance Code.
This was something that was raised back during the legislative process. Stakeholders, specifically providers and injured employees, clamored for a means of enforcing the law against networks. There were many questions raised in that initial period when the HCN law was under consideration. Who will enforce network requirements? What if networks have poor provider participation or access? What if an employee cannot find a provider and the network refuses to acknowledge this fact and authorize out of network care? What if out of network care is authorized, but it is geographically inconvenient or is restricted to just one or a handful of specialists in that field?
The legislative response was that oversight was to be done through the blunt instrument of regulatory oversight generally through TDI and not with the scalpel of a private action for dispute resolution through the DWC as with other benefit disputes, or even change of doctor/travel reimbursement (i.e., medical benefit) disputes. What we were told was that the TDI could bring its weight to bear on a particular instance of malfeasance or failure by the HCN through the use of the threat of regulatory enforcement action. In practice what this means is a largely “hands off” policy to oversight.
So the DWC has no jurisdiction to determine a network change of doctor, whether in a particular claim network provider access is inadequate, etc. That is all a matter for “big picture” oversight and regulation.
- Doctor selection
In the absence of a certified HCN or Alliance, selection of doctor is governed by statute. An employee is entitled to an initial selection of treating doctor, which is defined as a choice of treating doctor.
An employee is entitled to change doctor at any point within 60 days after the injury, if treating with an employer-referred doctor, without paperwork or giving a reason for change. The only restriction on that is the doctor must not otherwise be disqualified from participating in the Texas workers’ compensation system.
After sixty days, the same restriction on the doctor applies, but the employee must demonstrate a reason for change that is considered valid by the DWC and does not impinge upon statutory restrictions—namely, the change of doctor must not be made to secure a new medical report or work status.
In HCN situations, an employee is entitled to an initial selection of treating doctor, but after that, any subsequent change is entirely within the discretion of the HCN.
The good is that, unlike a non-network situation, the employee does not have to justify a change of doctor in a HCN. The Labor Code restricts change of doctor to specific enumerated reasons and excludes certain reasons as a reason for change. This can frequently cause change requests to be denied, which results in a BRC/CCH.
In HCN change of doctor situations, the bad is that 1) it is often difficult to determine who is the decisionmaker/point of contact for a change of physician (in most cases it is the adjuster, but this is often not readily apparent from any network documentation) 2) the network/carrier/adjuster often still assume the posture of deigning to “approve” a change when it is simply a statutory election by the claimant 3) there is generally no “paper trail” regarding the change of physician, such that medical bills may later be denied based on the treatment not being by or at the direction of a treating doctor (an especially significant peril for referral physicians, who may be in network but not eligible for payment if the referral is improper).
- Notice of Network Requirements
All of the foregoing assumes notice of network requirements. An employer is required to furnish to the employee a notice of its requirements in order for the network restriction on physicians to be binding and in force.
The responsibility of the employer/insurance carrier is to provide the notice of network requirements (Sec.1305.005 of the Insurance Code):
(d) The insurance carrier shall provide to the employer, and the employer shall provide to the employer's employees, notice of network requirements, including all information required by Section 1305.451. The employer shall:
(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.
It is this notice that triggers the insurance carrier’s non-obligation to pay out of network medical care sought by the injured employee that would otherwise be payable under the Act. Otherwise an employee is not required to go through the HCN for treatment:
(h) An injured employee is not required to comply with the network requirements until the employee receives the notice under Subsection (d), (e), or (g). An insurance carrier that establishes or contracts with a network is liable for the payment of medical care under the requirements of Title 5, Labor Code, for an injured employee who does not receive notice until the employee receives notice of network requirements under this section.
So an employee who has not received notice of HCN requirements may treat and continue treating with a non-network physician under the statutory criteria outlined above and the provider may receive payment. Once the employee receives notice of network requirements, all that changes. The provider is no longer eligible to receive payment (even if the provider has not received the notice) and the employee is required to seek a network physician for treatment.
- Out of network
Out of network treatment is simply a matter of network discretion. The dance is that networks must navigate between restricting access to care (which is their function) and avoiding TDI regulatory action (by a showing that they don’t have adequate provision for care).
Thus the contractual and regulatory lines in WC HCN situations can get complex and crossed. You have the TDI overseeing the HCN. Providers are also subject to TDI regulation. Those providers are in contractual relationship with the HCN. They may also have a relationship directly with employers and insurance carriers. And the providers may have a special contract with the HCN regarding their handling of claims.
Provider access is often difficult to nail down in HCN situations. The HCN may boast that it has dozens of providers on its roster, but a careful review of the roster may reveal that only a handful are not duplicates with offices at multiple locations, Even more, many of those providers may refuse to see claims that are more than X period old (a week, a month, six months, or even may restrict their acceptance of cases to new first time visits). For some networks this can create access to additional providers as a claimant may exhaust the list of possible network providers and the network may be forced to allow an out of network authorization.
Some HCN’s have responded to this by contractual relationships with certain provider groups. A particular provider group may have a contractual relationship with the HCN requiring it to see HCN patients. Please note this does not mean they are required to treat or help those patients, or do anything more than a cursory exam. It is common that those providers who are forced to see patients by contract will do so with it being clear to all involved that the matter is quite under protest. This
- Broader Benefit Implications
- Required Medical Examination Exclusion
Claims subject to a HCN are not subject to required medical examinations for the purpose of reviewing the appropriateness of medical care supplied to the injured employee. Such RME’s are governed by Sec. 408.004 of the Labor Code:
Sec. 408.004. REQUIRED MEDICAL EXAMINATIONS; ADMINISTRATIVE VIOLATION.
(a) The commissioner may require an employee to submit to medical examinations to resolve any question about the appropriateness of the health care received by the employee.
(a-1) A doctor, other than a chiropractor, who performs a required medical examination under this section is subject to Section 408.0043. A chiropractor who performs a required medical examination under this section is subject to Section 408.0045.
(b) The commissioner 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 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. The commissioner 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.
However, the Labor Code provides that this provision does not apply to HCN claims:
(f) This section does not apply to health care provided through a workers' compensation health care network established under Chapter 1305, Insurance Code.
This is important language. The RME provision does not apply to health care “provided through a workers’ compensation health care network.” This refers to the actual provision of health care, not the actual underlying policy or claim. So, for example, a claimant who is out of the network’s geographical presence is considered an out of network claim. Such a claim would be subject to 408.004’s RME requirements. In a situation where the claimant is subject to the network requirements being in that geographical region, butfor whatever provider access reason, the claimant is using an out of network physician authorized by the network to provide care under network requirements, the RME provision would not apply.
- Designated doctor exclusion
The statute providers that a doctor performing a designated doctor examination on a claim cannot be a part of the HCN to which the claim is subject. This is considered a conflict of interest. See Rule 127.140:
(a) A disqualifying association is any association that may reasonably be perceived as having potential to influence the conduct or decision of a designated doctor. Disqualifying associations may include:. . . (6) a contract with the same workers' compensation health care network certified under Chapter 1305, Insurance Code or a contract with the same political subdivision or political subdivision health plan under Labor Code §504.053(b)(2) that is responsible for the provision of medical benefits to the injured employee; or
Again, out of network/geographical issues are important. An employee may be in an area or have an injury where the right network provider is difficult or impossible to locate, and for those reasons the network may allow a non-network treating provider. This does not mean the claimant is not in network and that network information must be listed on the DWC-32 request for designated doctor.
In practice, this is not as significant as one might think, because anecdotally many of the physicians who do frequent DD/RME work have elected to forego the network participation altogether in order to avoid that conflict of interest and remain free to receive lucrative designated doctor assignments.
[1]http://www.tdi.texas.gov/wc/wcnet/wcnetworks.html
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