Texas Performance Based Oversight (11/2/2011)

Texas Performance Based Oversight (11/2/2011)

The Division is evaluating the current criteria Performance Based Oversight (PBO) committee meetings and seeking additional measures.  The Division is also accepting input on the weights given to the various measures, a re-assessment opportunity, procedure to challenge or provide additional evidence regarding compliance, and finally, incentives to insurance carriers.

The Division currently assesses performance based on four measures: timely initial payment of temporary income benefits (TIBs), timely payment of medical bills, timely filing initial payments through EDI, and timely filing medical payments through M-EDI.

PBO Measures

The carrier community encouraged the Division to keep the same four measures.  Stakeholders noted carriers have struggled to find valid measures for more than five years and the current set of measures is a good balance between what can be measured and what should be measured.  However, it appears the Division wants to add at least one measure.

The most likely new measure is the timely processing of requests for reconsideration of medical bills.  Carriers are urged to review their own work flows, policies, procedures, and ask the same of their vendors to ensure timely process of requests for reconsideration.  It is suggested more than 20% of requests for reconsideration are not timely processed by carriers.

Included as a measure, DWC will likely include and report the timely processing of requests for reconsideration measure with the existing timely processing of medical bill measure.  Stakeholders requested DWC independently report the new measure so carriers would know if they were timely processing requests for reconsideration at the same rate they are timely processing medical bills.  However, the overall weight for medical criteria should remain the same as it currently exists.

DWC and stakeholders discussed other measures.  For example, the medical community suggested DWC measure the accuracy of medical reimbursement payments made by carriers.  DWC reviewed three large billing codes (by volume) for accurate medical reimbursement.  DWC examined cases where carriers have reduced the medical bill solely to fee guidelines (and for no other reason) but paid less than the fee guideline amount.   Stakeholders largely agree this is an important issue.  But, PBO is not the appropriate vehicle to review performance. For example, this measure could not be used with carriers that use a WCHCN.  Carriers are urged to review their procedures and calculations of the proper payment of medical benefits pursuant to the fee guidelines.  Carriers may wish to audit their vendors to ensure Carriers are paying the proper reimbursement considering the service provided and the geographic location of the provided service.  DWC is likely to audit carriers to ensure accurate medical reimbursements.

Carrier Response to DWC’s Initial Findings

Stakeholders applauded the Division’s decision during the last performance review allowing carriers to provide additional information.  Stakeholders are requesting examples of evidence the Division has previously accepted as evidence of compliance.  Some carriers expressed concern that they provided sufficient evidence only to be rejected by the Division with little or no explanation.  The Division is considering a more detailed explanation of why such evidence was insufficient.  Some Stakeholders  suggest a face-to-face meeting to discuss the evidence before the Division determines if such evidence is sufficient evidence of compliance.

Reassessment or Appeal Option

Some stakeholders request a reassessment option and others an appeal option.  The reassessment would occur if the carrier is on the cusp of the next higher tier level.  Some believe the reassessment should only be allowed if there is an event beyond its control (i.e. a hurricane).  The criteria and procedures for such a reassessment were only discussed in very broad terms.  Some believe a reassessment should be available to carriers as an appellate process if they believe the Division inappropriately or improperly determined payment was not made timely (or an EDI filing was not made timely).  Others believe the reassessment or appellate procedures are too difficult or cumbersome and the Division does not have the resources.  Others feel that a targeted appellate or reassessment process would be feasible and that carriers should pay for the reassessment.  A carrier-pay provision would potentially limit the number of carriers who would seek an appeal to those that truly felt the evidence supported their position.


Carriers believe the Division and the Department are too quick to provide administrative violations, even for high performers.  In fact, the Division/Department treats a high tier level is only a mitigating factor as opposed to a central component of enforcement and monitoring.

Some Stakeholders suggest that a high performer should not be fined.  Not assessing monetary fines against a high performer carrier for each criteria measured during the next two years is a more likely approach.  Carriers believe the Division/Department should offer more “carrots” for good performance and less “sticks” to punish those that perform well. If indeed the Division increases the size of the carrot, carriers would have a significant financial incentive to expend considerable resources in this economy to obtain the 95% compliance rate required for a high performer designation.

Some Stakeholders suggest the Division lower its current 95% high tier threshold to 90% (or even 92%.)  It is noted that Texas requires the highest level of performance in the nation.  No other state requires 95%.  However, the Division does not appear interested in altering the current tier status to a more appropriate level. 

Performance Time Frame

Parties expect the Division to review carrier’s performance between January 1 and June 30, 2012.  Carriers are encouraged to review their internal procedures as well as the performance of its vendors, including all third party administrators and bill payers.