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Texas agency underpaid Vista Healthcare $40K+ for outpatient surgical care, court rules — 8 details

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The Texas Court of Appeals ruled Aug. 22 the State Office of Risk Management undercompensated Houston-based Vista Healthcare by more than $40,000 for 23 workers' compensation claims. 

Here are eight details:

1. From 2003 to 2007, Vista provided outpatient surgical services to injured employees covered by SORM's insurance policy. Vista submitted 23 claims seeking reimbursement, but no fee guideline existed for the services in question.

At the time, insurance carriers were required to either compensate providers according to Worker's Compensation Commission guidelines, or provide "fair and reasonable reimbursement" if there were no applicable fee guidelines.

2. In the absence of a guideline, SORM calculated reimbursement for Vista using a decade-old rate designed to compensate inpatient providers that was ultimately repealed because it didn't adjust with inflation. SORM reimbursed Vista $1,453.40 per claim.

3. Vista filed a fee dispute with the Division of Workers' Compensation and proposed it should be paid 70 percent of its billed rate. The Division determined Vista didn't prove additional reimbursement was due, and Vista appealed the decision.

4. Based on a fee guideline implemented March 1, 2008, which addressed the outpatient services in dispute, administrative law judges concluded SORM's reimbursement wasn't fair and reasonable.

5. SORM took the decision to district court, which affirmed additional reimbursement was due but that SORM could waive Vista's interest.

6. SORM again appealed the decision, arguing Vista didn't satisfy the "fair-and-reasonable standard." The state appellate court decided Vista provided evidence "that SORM's proposed reimbursement was less than half the billed rate, was inconsistent with reimbursement provided by other patients and their carriers and did not cover the actual cost of performing most of the procedures at issue."

7. The administrative law judges concluded SORM paid Vista less than half of what could be considered "reasonable" and determined Vista was also entitled to interest.

8. The Commission had repeatedly explained "reimbursement based on a generic inpatient per-diem rate will often result in undercompensation of outpatient providers," yet "SORM continued to advocate its increasingly outdated inpatient methodology for the disputed reimbursement," the court said in its decision.

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