Court Says Texas Providers, Carriers Must Pay IRO Fees in Medical Necessity Disputes

August 17, 2004

The Texas Workers’ Compensation Commission reported that the Third Court of Appeals in Austin has upheld the constitutionality of TWCC’s rules regarding fees to be paid to Independent Review Organizations (IROs) by health care providers and insurance carriers for medical necessity reviews.

TWCC rules, including Workers’ Compensation Rule §133.308, adopted after passage of House Bill 2600 by the Texas Legislature in 2001, require that disputes brought by health care providers or insurance carriers based on issues concerning the medical necessity of health care services provided are to be reviewed by an IRO. The rules state that the health care provider or insurance carrier submitting the dispute must pay the fee for the medical necessity review by the IRO. On August 12, the Appeals Court upheld a Travis County 201st Judicial District Court ruling that these fees are constitutional.

In the same ruling, the Appeals Court also upheld a permanent injunction ordered by the district court preventing First Rio Valley Medical, P.A., from filing lawsuits in workers’ compensation medical dispute matters before exhausting administrative remedies with the Commission and the State Office of Administrative Hearings. The Appeals Court found that the Commission has the sole authority to make an initial determination in a medical fee or medical necessity workers’ compensation dispute.

The Appeals Court further upheld the district court’s monetary sanctions against legal counsel for First Rio related to the filing of more than 700 billing dispute lawsuits in Justice of the Peace and county courts in Cameron County.