Insurer must reimburse medical center additional $20K for treatment

A workers compensation insurer failed to show that an administrative law judge erred in holding that it bore the burden of proof in a reimbursement dispute with a medical center.

In Patients Medical Center v. Facility Insurance Corp., the Texas Supreme Court on Friday reversed an appellate court’s decision after ruling that the insurer failed to show that a medical provider was not entitled to an additional $20,000 in reimbursement for the treatment of an injured worker.

In 2009, Patients Medical Center in Pasadena, Texas, requested preauthorization from Austin, Texas-based workers comp insurer Facility Insurance Corp. to perform surgery on a covered worker. The insurer issued a preauthorization letter, and after the surgery was conducted, Patients billed the insurer $94,640.

The insurer contended that most of the billed charges exceeded the scope of the preauthorization and reimbursed the medical center $2,354 — or about 3% of what Patients said it was owed. The insurer also denied Patients’ requests for reconsideration.

The medical center than submitted a request to the Texas Division of Workers Compensation for review, contending that the insurer failed to pay the proper reimbursement for the services it rendered. The division ordered the insurer to pay Patients an additional $20,000, and Facility appealed the decision to the Texas State Office of Administrative Hearings.

An administrative law judge affirmed the division’s decision, holding that the insurer “failed to carry its burden of proving that Patients Medical Center was not entitled” to the additional reimbursement. The insurer appealed again, arguing that the administrative law judge erred in placing the burden of proof on the insurer in the hearing, and an appellate court agreed and remanded the case.

The Texas Supreme Court, which agreed to hear the case, reversed the appellate court’s decision, holding that the administrative judge properly applied the Division of Workers Compensation’s rules in allocating the burden of proof.

The court held that since the insurer had requested the hearing to challenge the division’s initial decision, that it bore the burden of proof, and reversed and remanded the case.