Howell v. Texas Workers' Compensation Commission

143 S.W.3d 416, 2004 Tex. App. LEXIS 7164, 2004 WL 1792008
CourtCourt of Appeals of Texas
DecidedAugust 12, 2004
Docket03-03-00381-CV
StatusPublished
Cited by223 cases

This text of 143 S.W.3d 416 (Howell v. Texas Workers' Compensation Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Howell v. Texas Workers' Compensation Commission, 143 S.W.3d 416, 2004 Tex. App. LEXIS 7164, 2004 WL 1792008 (Tex. Ct. App. 2004).

Opinion

OPINION

JAN P. PATTERSON, Justice.

In this case, we must decide whether, when a health care provider provides medical treatment to a workers’ compensation claimant and subsequently disputes the adequacy of payment by a workers’ compensation insurance carrier, the health care provider must first exhaust administrative remedies within the workers’ compensation system before seeking to resolve the dispute in a court. We must also determine whether, after one party files a declaratory judgment action in a Travis County district court, that court obtains jurisdiction to grant a counterclaimant’s request for an anti-suit injunction prohibiting the original party from pursuing related suits in the courts of another Texas county.

Appellants Robert S. Howell, D.C. and First Rio Valley Medical, P.A. (collectively, “First Rio”) appeal a judgment rendered in favor of appellees Texas Workers’ Compensation Commission; Envoy Medical Systems, L.L.C.; Texas Mutual Insurance Company; State Office of Risk Management; and Continental Casualty Insurance Company. The district court rendered judgment that First Rio must first exhaust administrative remedies before seeking judicial review of a dispute with a carrier and that the independent review organization (“IRO”) fees for medical necessity reviews are constitutional. Pursuant to the declaratory action, the district court awarded attorney’s fees to the Commission, Texas Mutual, and Continental Casualty. 1 The district court further enjoined First Rio from prosecuting the approximately 723 billing dispute lawsuits that it had filed in Cameron County and from filing a new lawsuit until it has received a final, non-appealable decision in its favor through the administrative process and the carrier has refused to pay.

In nine issues, First Rio asserts that (i) the district court was without jurisdiction to enter the anti-suit injunction; (ii) the district court erred in finding that First Rio, when disputing adequacy of payment, must exhaust administrative remedies within the workers’ compensation system before seeking review in a court; (iii) the district court abused its discretion in denying First Rio’s demand for a jury trial; (iv) the district court erred in granting declaratory relief because the declaratory action was an improper vehicle for attorney’s fees; (v) the district court erred in granting declaratory relief because it was an improper advisory opinion; (vi) the district court erred in finding that Dr. Howell is a proper party to appellees’ counterclaims; (vii) some of the district court’s rulings violated the United States and Texas Constitutions; (viii) the district court erred in *427 finding that First Rio and Dr. Howell are vexatious litigants; and (ix) the district court erred in finding that the IRO fee is constitutional. We do not find any error pertaining to these issues.

In a separate issue, appellants Keith Gilbert, William Maxwell, and Gilbert & Maxwell, P.L.L.C. (collectively, “the law firm”), counsel for First Rio, assert that the district court abused its discretion by twice imposing sanctions on them. The district court first imposed $13,000 in sanctions pursuant to Texas Mutual’s motion for sanctions and second sua sponte imposed $3,200 in sanctions after counsel for First Rio did not appear at the hearing on the motion for judgment. As to Texas Mutual’s motion for sanctions, because we affirm the grounds for the sanctions only in part, we remand the issue for recalculation of attorney’s fees sanctions in accordance with this opinion. As to the $3,200 award, although the district court did not afford the law firm an opportunity for notice and hearing before imposing those sanctions, the law firm failed to preserve error by not affording the district court an opportunity to correct its mistake.

Because only the Commission and the State Office of Risk Management sought permanent injunctive relief, and pursuant to Continental Casualty’s request, we reform the judgment to delete the reference to Continental Casualty as one of the parties seeking a permanent injunction. We affirm the judgment in all other respects.

FACTUAL AND PROCEDURAL BACKGROUND

Changes to Commission’s Administrative Review Process

First Rio’s causes of action arise from the 2002 changes in the Commission’s administrative review of an insurance carrier’s denial or reduction in payment of a medical bill. To put the events giving rise to this case in context, we will begin with some background concerning the 2002 amendments.

When a health care provider seeks payment from an insurance carrier for treatment of a workers’ compensation claimant, it must first submit the medical bill to the carrier. 28 Tex. Admin. Code § 134.801(a) (2004). 2 If the carrier denies or reduces the payment and the health care provider is dissatisfied with the carrier’s action, the health care provider is entitled to a review of the medical service. Tex. Lab.Code Ann. § 413.031(a)(1) (West Supp.2004). Before pursuing further action, the health care provider must first send a request for reconsideration to the carrier. 28 Tex. Admin. Code § 133.304(k), (m) (2004). If still dissatisfied with the carrier’s action, the health care provider may request medical dispute resolution. Id. § 133.304(m). The Commission shall by rule establish “a program for ... resolution of a dispute regarding health care treatments and services.” Tex. Lab.Code Ann. § 413.013(1) (West 1996).

Until January 1, 2002, the Commission’s medical review division handled all medical dispute resolution matters, falling into two categories: medical fee disputes and medical necessity disputes. See 25 Tex. Reg. 2128 (2000) (codified at 28 Tex. Admin. Code § 133.305) (adopted Mar. 10, 2000). After that date, pursuant to House Bill 2600 passed in the 2001 legislative session, IROs began to conduct medical necessity reviews of health care provided to workers’ *428 compensation claimants. 3 The medical review division continued to handle medical fee disputes. See 28 Tex. Admin. Code § 133.307(2004).

IROs were created in 1997 to perform reviews of medical necessity in disputes between medical insurance carriers and persons insured by employer-provided health benefit plans. 4 The Texas Department of Insurance regulates IROs. Tex. Ins.Code Ann. art. 21.58C (West Supp. 2004). Concerning the role of an IRO in the workers’ compensation system, a health care provider seeking review of a medical necessity dispute involving denial or reduction of payment for medical services must file its request with the carrier and the medical review division of the Commission. 28 Tex. Admin. Code § 133.308(d) (2004). The review of the medical necessity of medical services already provided, which is the type of review at issue in this case, is called a “retrospective necessity dispute.” Id. § 133.305(a)(4) (2004).

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Cite This Page — Counsel Stack

Bluebook (online)
143 S.W.3d 416, 2004 Tex. App. LEXIS 7164, 2004 WL 1792008, Counsel Stack Legal Research, https://law.counselstack.com/opinion/howell-v-texas-workers-compensation-commission-texapp-2004.