Comp reimbursement request was reasonable: Court

Workers compensation reimbursement rates sought by a health care system were “fair and reasonable,” a Texas appellate court held on Thursday.

In Facility Insurance Co. v. Vista Hospital of Dallas, a three-judge panel of the Texas Court of Appeals, Third District in Austin unanimously affirmed a decision made by the State Office of Administrative Hearings ordering a group of insurers to reimburse the health system at the requested rate.

Vista Hospital of Dallas and its affiliates filed a complaint against a group of certified self-insured companies who provide workers compensation coverage in Texas, alleging that the insurers engaged in a “systematic underpayment” of workers compensation claims beginning in 2002. Vista provided outpatient medical services to injured workers from 2002 to 2008 under policies issued by the insurers, and the insurers paid some, but not all of the amounts requested, which were generally between payment of 70% to 100% of its billed charges. When they refused, Vista sought medical dispute resolution through the Texas Division of Workers Compensation, where the health care system argued that “fair and reasonable” reimbursement required compensation no less than 70% of its billed charges. The division determined that Vista was not entitled to any reimbursement beyond what the insures had already paid, and the health system ultimately filed 53 separate disputes over reimbursement.

In 2008, the division wrote new fee guidelines for outpatient-services reimbursement, tying it to a percentage of federally proscribed Medicare reimbursement, making an outpatient facility’s ultimate reimbursement under the guideline roughly two times the Medicare-prescribed amount for the services performed, plus any outlier payment. Going forward, Vista recalculated its reimbursement requests to apply the 200% allowed under the guideline, but the insurers rejected that request. 

In 2015, a panel of State Office of Administrative Hearings judges awarded the reimbursement based on the revised calculations and a trial court affirmed the decision, holding that “Vista met its burden of proving by a preponderance of the evidence that it had not been reimbursed a fair and reasonable amount by the carriers for the services provided.”

The insurers appealed, arguing that the reimbursement the insurers offered to Vista was “fair and reasonable.”

The appellate court, however, dismissed the insurers’ argument and affirmed the decision.

The insurers alleged that Vista failed to timely submit its new bills, failed to request reconsideration of its altered bills and failed to submit complete bills, and that therefore, it violated a statutory provision and the State Office of Administrative Hearings judges ruling could not stand.

The appellate court, however, held that Vista’s changes to its bills to reflect the new guidelines did not constitute new bills, and that as a result, they were not untimely. The court also found that Vista’s reconsideration requests were timely and that the bills, since they were not new, were complete since the prior bills had the additional information before they were amended to reflect the guidelines.

The appellate court also found that the reimbursement sought by Vista “has always” been fair and reasonable, and because the insurers’ payments fell short of the 2008 fee guideline rates, there was “more than scintilla of evidence for (the judges) to conclude that the carriers’ payments to Vista did not result in ‘fair and reasonable’ reimbursement.”