The Texas Department of Insurance is currently analyzing HB 7 and drafting language for rules for workers’ compensation networks. In order to obtain input from as many stakeholders as possible, a meeting will be held from 1 p.m. to 3 p.m. July 12 in Room 100 at the Texas Department of Insurance. Those who are unable to attend or prefer to communicate with the department in writing, may e-mail comments to WCNet@tdi.state.tx.us until July 20, 2005.
Internet connections to the live Web cast (www.tdi.state.tx.us) of this hearing will be limited. If you are unable to connect or you see an error message (“file not found”), please try again later or listen to the archive version. The archive file should be ready an hour or two after the hearing ends. Note that the live Web cast link works only at the time of the hearing.
In addition to general comments, staff requests comments on the following specific issues:
HB 7 requires network applicants seeking TDI certification to submit a “nonrefundable fee set by commissioner rule.” In determining the amount of this network certification fee, TDI staff has reviewed other licensing fees charged to entities regulated by TDI, as well as workers’ compensation network certification fees charged by other states.
Licensing fees range from $500 for a Third Party Administrator (TPA), an entity that doesn’t typically require an onsite examination, to $7,500 for an HMO, which is a more complex organization requiring regular onsite examinations. Because a workers’ compensation network applicant may require an onsite examination, in addition to a desk review at the department, staff recommends a licensing fee of $3,000 for workers’ compensation networks. This is a one-time certification fee since HB 7 does not require networks to be re-certified periodically.
Definition of “Live”
In the Insurance Code Chapter 1305 portion of HB 7, which relates to workers’ compensation networks, there are numerous references to where an employee “lives”. An example of this language is found at Sec. 1305.005 (page 278, line 27): “…the employer’s employees who live within the network’s service area are required to obtain medical treatment for a compensable injury within the network…” (emphasis supplied). TDI staff has researched a definition of “live”, and has not found a legal definition for the term. In Black’s Law Dictionary (8th ed.), a related term, “residence” is defined as “The place where one actually lives, as distinguished from a domicile” “Domicile” is defined as “The place at which a person a person has been physically present and that the person regards as home; a person’s true, fixed, principal, and permanent home, to which that person intends to return and remain even though currently residing elsewhere.”
Staff has identified several situations pertaining to where an employee lives which suggest a definition of “live” should be included in the workers’ compensation network rule for the purposes of clarification and consistency.
Some examples of different circumstances include:
–an employee whose domicile is outside the network’s service area;
–an employee who is temporarily residing outside the service area because his/her normal work duties involve travel (for example, a truck driver), or because he/she is on temporary assignment outside the service area; or
–an employee whose domicile is inside the service area but who is residing with a caretaker outside the service area to recuperate from an injury.
Staff seeks comments and suggestions regarding a definition of “live” in the rule.
Disputes Regarding Whether an Injured Worker “Lives” Within the Network Service Area
HB 7 states that employees are required to seek medical care for work-related injuries within a workers’ compensation health care network if the employee “lives” within the network service area. There may be instances where there is a disagreement between the employer or insurance carrier and the employee regarding whether the worker “lives” in the network service area. The results of these disagreements can be significant since an employee who is subject to the network, but seeks medical care outside of the network, may be liable for the payment of medical care.
Staff is seeking comments and/or concerns about a dispute resolution process for disputes regarding whether an employee “lives” within the network service area.
Because of TDI’s experience with other health care networks, staff is aware that carriers and workers’ compensation networks may develop and design networks differently, resulting in a variety of configurations of network plans. For example, a carrier could choose to contract with multiple networks within a service area. The multiple networks could have different contracted rates or variations in the types of services available, which could lead to different marketing strategies.
Another configuration variation could be the creation of a subnetwork, or a preferred network, smaller than the entire certified network’s panel of providers and based on carrier or employer preference. The smaller network would need to meet the same network adequacy requirements as the larger network, but could be considered “preferred” because of cost-savings or better return-to-work outcomes.
Staff is seeking comments and/or concerns regarding any of the potential network design variations.
Network Report Card
HB 7 requires TDI to develop and publish an annual consumer report card comparing workers’ compensation networks no later than eighteen months after the date the first network is certified by TDI. By statute, this report card must include a risk-adjusted evaluation of employee access to care, return-to-work outcomes, health-related outcomes, employee satisfaction with medical care, and health care costs and utilization of care.
Additionally, HB 7 also requires TDI to issue a biennial report to the legislature comparing the cost and quality of medical care provided to injured employees inside and outside of networks. TDI plans to work with various stakeholders and legislative offices over the coming months to develop a report card and a format for the biennial report that meets these statutory requirements. In an effort to reduce administrative burdens and costs for carriers, networks and providers,
TDI plans to first utilize existing data sources including workers’ compensation medical billing data, medical dispute resolution data and injured worker survey information collected by TDI to produce information for both the report card and the biennial report; however, additional data collection may be needed to identify network participants.
In addition to these opportunities to provide your comments, the department is working to present its draft language as an informal proposal for comment and will request comments on the formal proposed rule when published in the Texas Register. HB 7 requires that rules related to workers’ compensation networks be adopted no later than Dec. 1, 2005, and that applications for certification as a workers’ compensation network be accepted by TDI starting Jan. 1, 2006.
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