dwc-11-0016 indemnity insurance texas department of workers comp

8/7/2019 DWC-11-0016 Indemnity Insurance Texas Department of Workers Comp

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NO._flWC1 I OO i 6

OFFKL4L ORDERof the

COMMISSIONER OF WORKERS COMPENSATIONof the

STATE OF TEXASAUSTIN, TEXAS

Date:

_________________________

Subject Considered:

iNDEMNiTY INSURANCE COMPANY OF NORTH AMERICA436 Walnut Street

Philadelphia, Pennsylvania 19105

CONSENT ORDERDISCIPLiNARY ACTION

TDI ENFORCEMENT FILE NO. 58286

General remarks and official action taken:

On this date came on for consideration Lw the Commissioner of Workers Compensation. thematter of whether disciplinary action should be taken against Indemnity Insurance Company ofNorth America (1ndemnity). The Texas Department of Insurance, Division of WorkersCompensation Staff (Division Staff) alleges that Indemnity violated the Texas Labor Code andthat such conduct constitutes grounds for imposition of sanctions pursuant to TEx. LAB. CoDEANN. ch. 415.

Division Staff and Indemnity announce that they have compromised and settled all claims andagree to the entry of this Consent Order. The parties request that the Commissioner of WorkersCompensation informally dispose of this case pursuant to TEx. Govi CODE ANN. 2001.056,TEx. LAB. CODE ANx. 401.02 1 and 402.00 128(b)(7). and 28 Tix. ADMIx. CoDE 180.26(h).


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M M I O N ERS ORI)ER

indemnitY insurance Company of North America: Cl S No. 58286ia o e o

JU RIS DI CTI ONDW C 1 1 0 0 1 6

[he Comm is sion er o f Workers Com pe nsa tion has juri sd i c tio n ov er th is m att er pur sua n t to TEX.LAB. CODE A . 40 2.0 01 . 402.0 01 11. 40 2.0 011 4, 402.001 16. 402.0 01 28. 408. 027 . 408 . 081 .4 0 8 .l 01 .40 8 .1 4 4.4 0 8 .1 45 .40 9 .0 2 1. 4 09 .02 3 .4 1 0.1 69 .4 13 .0T 1. 413 .015 . 4 15 .00 2 . 4 1 5. 0 21 . and

28 TEx. ADMIN. CODE 124.2. 124.7. 129.3, 130.107. 133.240, 133.250. 134.202. 134 .40 3 .134,600. and 152.1: and TEN, Go vT Coi w ANN, 2001,051 2001,178.

WAIVE R

Indemnit ack no w le dge s the exist enc e of certain rights prov ide d by the Te xas Lab or Code andother app lic able law, incl udi ng the right to rec eiv e a wr itte n notice of po ssib le adm in is tra tiv evio latio ns as pro vid ed for by TEN. LAB. CODE ANN. 415 .03 2. the right to req ues t a he arin g asprovided for by TEx. LAB. CoDE ANN. 415 ,03 4. and the right to judi cial rev iew of the decis ionas pro vid ed for by TEx. LAB. CODE ANN. 4 15 .03 5 . In dem nit y In sur anc e Co mp any of NorthAm er ica waiv es all of thes e rights, as well as any oth er pr oce dur al ri ght s tha t mig ht ot her wis eap ply , in con side rati on o f the entr y of th i s Conse nt Or der .

F IN DIN GS OF FACT

The Com mis sio ner of Workers Com pe nsa tion m ak es th e follo wi ng find ing s of fact:

Sy stem P ar tici p an t

I. Ind emn ity is a f or ei gn pro per ty and casu alty insu ran ce co mp any cu rr entl y hol din g a

cert ific ate of auth or i ty issued by the Texa s Depa rtm ent of In sura nc e on Jan ua ry 1. 1901,to tra nsa ct th e bu s in e ss o f insurance pur sua nt to TEx. INS. CODE A . $01.05 1-80 1.0 53 . and is licensed to wri te mult iple lines o f insurance, inc l ud i ng workers

co mp ens alio n,e rnp loy ers liability.2. In de m ni ty w as as sess ed as an ave rage tier p e rfo rm e r in the 2007 and 20 09 Pe rfo rma nc e

Base d Overs ig ht (PBO asse ssm ent s.

F ai lure to Tim ely Pa y At torn ey s Fee s O rd e re d by the D iv is io n

3. In dem ni ty failed to tim el y com pl y w ith a Division o rde r to pay attor ney s fees (InjuredEm plo yee : W. IL; Carr ier Nu mb er : C7MECO 142076: C laim N um ber: xx xx2 O 66 : CIS No.898551).

a. On or abo ut Ja nu ary 23 , 20 06. In de m n it y re ceiv ed an o rder , num be red 3, for

a tto rne y s fee s in th e am oun t of$ 1 ,2 19. 00.

Th e o rde r was to he paid at 25% o f the inj.ured em plo ye es ind emn ity he nel it s.

c. On March 13. 2006. In dem nit y issued a chec k to the injured em plo yee forind em nity bene fits.


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OMMISSiONFR ORDER1ndemnit InsuranceCompan of 1orth America CTS No . 58286

D W C 1 1 O O 16

d. Therefore. indemnity \\as required to make a pa\ment of attornes fees on thesame date.

C 1ndemni1 R%ued a check u the allorne\ 1.381 da late on December 22. 2009.

f. Attorney fee order numbers 5. 6. and 7 e r e also paid late.

Failure to Pay for Preauthorized Medical Services

4. indemnit failed to pay for preauthorized medical services (Injured Employee: 1.W.:Carrier Number: 1606094X1 Claim Number: xxxx8l 54 ; CIS No. 912072).

a. On or about March 1, 2010, a medical bill was submitted to atd received byIndemnity for date of service February 23 , 201 0.

b. In response, on March 23, 2010, Indemnity denied payment for the services

stating 1 97-Precertification/authorization/notification absent.

c. This vas not a sufficient reason for the denial because services werepreauthorized on January 21. 2010.

d. After re-review. Indemnity issued payment on April 28, 2010 in the amount of$111.66.

5. Indemnity failed to pay (hr preauthorized medical services (Injured Employee: T.V.:Carrier Number: 1606094X 1: Claim Number: xxxx8 154: CIS No. 909579).

a. On or about I-ebruarv I. 2010. a medical bill as submitted to and received by

Indemnity for date of service January 27. 2010.

h. In response. on February 19. 2010, indemnity denied pay merit for the servicesstating 197-Precertification/authorization/noti fication absent.

c. I his was not a sufficient reason for the denial because ser ices werepreauthorized on January 21. 2010.

d. After re-review, Indemnity issued payment on March 26. 2010 in the amount of$73.64.

6. Indemnity failed to pay for preauthorized medical services (Injured Employee: R.C..

Carrier Number: 1414649X1: Claim Number: xxxx63l6: (IS No .919956).

a. On or about January 4. 2010. a medical bill vas submitted to and received byIndemnity for dates of service December 16. 2009 through December 23. 2009.


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lndemniu Insurance Company oiNorth America: CTS No. 58286P a e 4 o f 13

b. In response, On January 29, 2010, Indemnity denied payment fir the servicesstating 39-Services denied at the time authorization/pre-certification wasrequested

c. This was not a sufficient reason for the denial because services werepreauthoriLed on November 23 . 2009.

d. After re-review, Indemnity issued payment on July 21. 2010 in the amount ofS891 MO.

7. indemnity failed to pay lbr preauthorized medical services (Injured Employee: C.D.;Carrier Number: C135C717199X: Claim Number: xxxx6O65:C1S No. 926902).

a. On or about June 1, 2010, medical bills were submitted to and received byIndemnity for dates of service April 26, 2010 through May 7, 2010.

h. In response. on June 16, 2010, Indemnity denied payment for the services statingAdjuster disputes charges as medically necessity and reasonable 100%.

c. This was no t a sufficient reason for the denial because services werepreauthorized on April 23. 2010

d. After re-review, Indemnity issued payment on September 28, 2010 in the amountof $7.500.00.

Failure to Timely Pay Temporary Income Benefits (TIBs)

8. Indemnity failed to timely pay or dispute initial TIBs (Injured Employee: G,R.; CarrierNumber: 949013680; Claim Number: xxxx3748; CIS No. 902590).

a. On or about August 3, 2009, Indemnity received a first Notice of Injury for theinjured employee.

h. The first day of disahi1it as September 25. 2009, and the eighth day ofdisability accrued on October 2. 2009.

c. Therefore. the due date to initiate TIBs was no later thanOctober 9, 2009.

d. Indemnity issued payment in the amount of $2.68125 on November 12, 2009. or34 days late.

e. In addition, lndemnity failed to timely issue 1 lBs for the benefit periods ofSeptember 25, 2009 through October 1, 2009, October 9, 2009 through October15, 2009, October 16, 2009 through October 22, 2009, October 23. 2009 throughOctober 29, 2009. and October 30. 2009 through November 5. 2009.


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D W C .l l O O 1 6\ I 5J( L R

lndemnit Insurance Company of North America: C I S No. 58286Page 5 of 13

F ai lu re to T im el y P ay S up p lem en tal In co m e B en efi ts ( S IB s)

9. Indemnity failed to tim e ly pay SIBs (In ju red Emplo yee : J.S.; C arr ie r Number:

YLLC5 1254: Claim Num be r: x xx x i34 3; CIS No. 92 057 1 ).

a. Inde m n ity rec eiv ed the DWC Forrn-52 fo rth e third qu art er on Jan ua ry25 . 2010.

b. Pay me nt was due by th e later o f the I 0 da y a fte r In d em ni ty rec e iv ed the DWCFor m -5 2 , or the se ven th da y o f the quar ter, or Feb rua ry 8, 2010 .

c. In demn ity issued pa ment for the first month o f the third qu art e r o f S1Bs onFeb rua ry 22, 2010. or 14 days late.

10. Inde mnity failed to tim el y pa y SJBs (I n jur ed Employee: J.S.; C ar rier N um be r:YLLC5 1254; Claim N um ber: xxxx 1343; CIS No. 906 10 5 ).

a. In dem nit y re cei ved the Ap pli cati on fhr Su ppl eme nta l Income Benefits (DWCFo rm -52 ) for the fourth quar te r on May 20, 2010.

b. P aym en t for the se con d month o f tile fourth quar te r was due by the 3 7 day of thequarte r. or June 9.2 010 .

c. Indemnity issued pa ym en t for the se con d mo nth o f th e fourth qu art er o f SIRs onJu ne 24, 2010, or 15 day s late.

d. In ad di t ion , Ind em nity failed to tim ely issue pay m en t for the third m onth of thefourth qu arte r of SIBs.

F a il ur e to T im e ly P ro ces s M edi cal Bills

11. In dem ni ty failed to tim e ly pr o ce ss and tak e final actio n on a pr ope rly co m p lete d m ed ica lbill (In jured Employ ee: E.H.; Carr ie r N umb er: C498 C 1587289; Claim N um be r:xx xx8 86 4 ; CJS No. 916 766 ),

a. On or about Janua ry 16. 2010, Indemnity rece iv ed a p rop e rly com p let ed medicalbill from the health care p rov ider in the am ount o f $2 ,23 8.00 for medic al se rvic e spro vid ed to the injured emp loy ee on Ja nua ry 5. 2010.

b. In de m n it y w as re qui red to tak e ac tion reg a rd in g p ay m en t o r d en ial on the me dic albill no later than th e

4 5thda y aft er re ce ipt o f th e bill, or M arc h 2, 2010.

C. Inde mnity took action 106 days late on Ju ne 16. 2010. hen it issued payment inthe amoun t o f $640.60.


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D W C1 1 O O 1 6(OMMISSIONERS ORDERindemnity Insurance Company of North America; CTS No. 58286

Page 6 of 13

12. Indemnity Failed to timely process and take final action on a properly completed medicalbill (Erured Emploee: L.S.: Carrier Number: 002850001292WC01: Claim Number:xxxxl 154: CIS No. 926943).

a. On or about June 24. 2010. Indemnity received a properly completed medical billfrom the health care proider in the amount of $640.25 for medical sericesprovided to the injured employee on June 21. 2010.

b. Indemnity was required to take action regarding payment or denia lon the medicalbill no later than the 45tH day after receipt of the bill, or August 9. 2010.

c. Indemnity took action 46 days late on September 24, 2010, when it issuedpayment in the amount of $621.08.

Failure to Provide Sufficient Explanation for Reduction or Denial of Medical Services

13. Indemnity failed to provide sufficient explanation for reduction or denial of medicalservices (Injured Employee: G.B.: Carrie r Numbe r: 003658000279WC01: ClaimNumber: xxxxOl34: CIS No. 917926).

a. On or about November 24. 2009, indemnity received a properly completedmedical bill from the health care provider for date of service October 29. 2009.

h. On or about December 7. 2009, indemnity denied payment stating that the claimlacks information which is needed for adjudication.

c. I his was not a sufficient reason for the action because necessary documentationwas provided by the health care provider with the medical bill.

d. After additional review, Indemnity issued payment on July 6. 2010 in the amountof $644.16.

Failure to Timely Respond to a Request for Reconsideration

14. Indemnity failed to timely respond to a request for reconsideration (Injured Employee:E.A.: Carrier Number: 6450190318; Claim Number: xxxx3O6O:CIS No. 913227).

a. On or about March 18, 2010. Indemnity received a complete request forreconsideration of a medical bil l from the health care provider for dates of serviceJune 15, 2009 through June 26, 2009.

indemnit as required to take action regarding payment or denial of thereconsideration request no later than April 8, 2010.

c indemnity took action 1 3 1 day late on ugust 17. 2010. hen it k%Oed anexplanation of benefits to the health care provider.


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COMMISSIONERS ORI)ERDW C 1 1 0 0 1 6

indemnity insurance Company of North America; CIS No . 58286Page 7 of 13

d. In addition. Indemnity fiuiled to tinieiv take action on the request forreconsideration for dates of service June 22. 2009. June 23. 2009. June 25. 2009.and June 26. 2009,

15, Indemnity failed to timely respond to a request for reconsideration (injured Employee:A.A.; Carrier Number: A86703415800010167; Claim Number: xxxx5 153; CIS No.914149).

a. On or about November 5. 2009, Indemnity received a complete request forreconsideration of a medical bill from the health care provider for dates of serviceAugust 4, 2009 and August 5. 2009.

b. Indemnity was required to take action regarding payment or denial of thereconsideration request no later than November 30, 2009.

c. Indemnity took action 21 8 days late on July 6, 2010, when it issued a payment to

the health care provider.

Failure to Pay Medical Bills in Accordance with Division Medical Fee Guidelines

16. indemnity failed to pay a medical bill in accordance with Division Medical FeeGuidelines (Injured Employee: M.A.: Carrier Number: 00288500043 IWCO1: ClaimNumber: xxxx7296: CIS No. 905714).

a. On December 9, 2009, the health care provider provided medical services to theinjured employee.

b. indemnity received a complete medical bill for said date of service for HCPCScodes 99456 (W5) (WP). 99456 (W8), and 99080 (73).

c. On February 4. 2010, Indemnity issued an inaccurate payment of $715.00according to the Division Medical Fee Guidelines in effect at the time the serviceswere provided.

d. After rereview, indemnity issued an additional payment of $300.00 on March 3,2010.

17. Indemnity failed to pay a medical bill in accordance with Division Medical FeeGuidelines (Injured Employee: L.L: Carrier N umber: 478CBA8L 1795; Claim Number:xxxx8483; CIS No . 908298).

a. On .1anuar 11. 2010. the health care pr o ide r proided medical ser ices to theinjured employee.

h. Indemnity received a complete medical bill fo r sa id date of service for HCPCScodes 99456W5-WP. 99456-W8, and 9908043.


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DWC11O6COMMISSIONEWS ORDERindemnity Insurance Company of North America; CTS No . 58286Page 8 of 13

c. On February 27 , 2010, Indemnity issued an inaccurate payment of $850.00 forHCPCS codes 99456-W5-WP and 99456-W8 according to the Division MedicalFee Guidelines in effect at the time the services were provided.

d. After rereview, Indemnity issued an additional payment of $600.00 on March 20,2010.

Failure to Submit Accurate Initial Payment of TIBs Data by Electronic Data Interchange

18. Indemnity inaccurately reported initial payment of TIBs data to the Division (InjuredEmployee J.S., Carrier Number: 186048474001, Claim Number: xxxx24l7; CIS No.923922).

a. The actual initial benefit payment date was December 21, 2009.

h. Indemnity incorrectly reported the initial benefit payment date as December 30,2009.

CONCLUSIONS OF LAW

Based upon the firegoing findings of fact, the Commissioner of Workers Compensation makesthe following conclusions of law:

I. The Commissioner of Workers Compensation has jurisdiction over this matter pursuantto TEx. LAB. CODE ANN. 402.001, 402.00111, 402.00114, 402.00116, 402.00128,408.027. 408.081, 408.101, 408.144, 408.145, 409.021, 409.023, 410.169, 413.011,413.015. 415.002. 415.021, and 28 TEx. ADMIii. CODE 124.2, 124.7, 129.3. 130.107,

133.240, 133.250, 134.202, 134.403, 134.600,and 152.1; and TEx. GovT CoDE ANN. 2001.051 2001.178.

2. The Commissioner of Workers Compensation has authority to informally dispose of thismatter as set forth herein under TEx. Govr CoDE ANN. 2001.056, TEx, LAB. CODEANN. 401.021 and 402.00 128(b)(7), and 28 TEx. ADMIN. CoDE 180.26(h).

3. Indemnity has knowingly and voluntarily waived all procedural rights to which they mayhave been entitled regarding the entry of this Order, including, but not limited to, writtennotice of possible administrative violations, a hearing, and judicial review.

4. in aceordan.ee with TEx. LAB, CODE AN1.r, 415 02 I, the Com.missioner oi WorkersCompensation may assess an administrative penalty against a person who commits anadministrative violation.

5. In accordance with TEx. LAB, CoDE ANN, 415.021, in addition to any other provisionsin this subtitle relating to violations a person commits an administratie violation if the


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DW C 1 IO O 1 6CO\JMISSIONLWS ORDERIndemnity InsuranceCompany of North America Cl S No . 58286Page9of 13

person violates, fails to comply sith. or refuses to comply tsith this subtitle or a rule,order. or decision of the commissioner.

6. indemnhly ioiated T- v. Lxii. (DE 415.021 each lime iL tailed to comply t an anorder or decision of the commissioner.

7. Indemnity violated TEx. LAB. CODI. ANN. 410.169 each time it failed to comply with adecision or order of the [)ivision.

8. indemnity violated TEx. LAB. COD[ ANN. 408.027(b) each time it failed to timelyprocess and take final action on a properly completed medical bill ithin 45 days ofreceipt of the bill.

9. Indemnity violated TEX. LAB. CoDE A . 408.027(e) each time it failed to sufficientlyexplain the reasons for the reduction or denial of payment for health care services to theinjured employee.

10, Indemnity violated lix, LAB. CODE Ax . 413.011 each time it failed to pay medicalbills according to the Division Medical Fee Guidelines.

11. Indemnity iolated l ix . LAB. CODE Ass. 408.081 each t ime it failed to pay benefitsweekly. as and when the benefits accrued without order from the commissioner.

12. indemnit iolaied TEx. I n . (or xx . 409.021 each time it iiied t timely pay ordispute initial TIBs.

13. Indemnity violated l ix . LAB. CoDE A< . 409.023(a) each time it failed to pay benefitspromptly as and when the benefits accrued.

14. Indemnity violated l ix . L n , COOF ANN. 4i5.002(a)(i9) each time it unreasonablydisputed the reasonableness and necessity of health care.

15. Indemnity violated 28 l ix . ADMIN, CoDE 124.2 each time it failed to submit accurateinitial payment of T113s data by electronic data interchange to the Division.

16. Indemnity violated 28 l i x . ADMIX. CODE 130.107(b) each time it failed to timely paySIBs for subsequent quarters.

17. Indemnity violated 28 l ix. ADMIN. CODE 133.240(e) each time it failed to take finalaction on a properly completed medical bill vithin 45 days of receipt of the bill.

18. Indemnit violated 28 TEx. ADMIX. CODE 133.250 each time it failed to timely respondto a request for reconsideration.

19. Indemnity violated 28 IEX. ADMIN. CODF 134.403(e) each time it failed to pay medicalbills according to the Division Medical Fee Guidelines.


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DWC-41 OO16i)MMIssIO\LRS OREWRIndemnity InsuranceCompany of North America: C IS No. 58286Page lOof 13

20 . Indemnity iolated 28 ILX, ADMIN. CODL 134.600(c)(IXB) each time it failed to pathe reasonable and necessary medical costs relating to treatmentsservices which requirepreauthorization ii the insurance carrier ae preauthorization or voluntary certificationprior to the services being provided.

21. Indemnity violated 28 TEx. ADMIN. (ODE. 134.600(1) each time it failed to pay formedical services that were preauthorized.

22. Indemnity iolated 28 TFx, ADMIN, Coor 1521 each time it failed to timely payattorneys fees ordered by the Division.

Based on the Findings of Fact and Conclusions of Law above, the Commissioner of WorkersCompensation has determined that the appropriate disposition is to order payment of anadministrative penalty and full compliance with the terms of this Order.

IT IS THEREFORE ORDERED thatIndemnity

Insurance Companyof

North Americashallpay, and is hereby directed to pay, on or before thirty (30) days from the date of this Order, an

administrative penalty in the amount of SIXTY EIGHI THOUSAND DOLLARS AND ZEROCENTS ($68,000.00). The payment must be paid by company check, cashiers check, or moneyorder made payable to the State of Texas and transmitted to the Texas Department ofInsurance, Enforcement Division-DWC, Division 3721, MC-9999. P.O. Box 149104, Austin,Texas 78714-9104.


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DWC-11 - 0 0 1 6OMMISIONFRS ORDgRIndemnity Insurance Company of North America: C IS No . 58286Page II of 13

II IS ALSO ORDERED by the Commissioner of Workers Compensation that if hdemnitInsurance Company of North America fails to comply with the terms of this Order thatIndemnity Insurance Cempan of North America will base committed an additionaladministrative violation and its failure to comply with the terms of this Order may subjectIndemnity Insurance Company of North America to furthei penalties as authorized by the fexasLabor Code, which, pursuant to TEx. LAB. CODE ANN. 415.021(a). includes the right to imposean administrative penalty of up to $25,000 pe r day pe r occurrence.

ROORD,ELON /f M I S S k N E R ?J7WORKERS COMPENSATION

FOR THE STAFF :

p CnAttorney, Enforcement

Texas Department of InsuranceDis ision of Workers Compensation


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DWC1 1 OO1 6u \ 1 \ lN !ONLR URIM R

lndemnit Insurance Uompan of North America: CIS No. 58286Page I2of IS

AGREED. ACCEPTED. AND EXECLTED h Indemnity Insurance Compan oF NorthAmerica on this. the / day of J . 2011.

S uznatur

____

(S

_______

Title

Iy ped/Printed Name


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\ i \ i iSSifl \F RS ORjj[R l)4C I I 0 0 1 61ndemnit Insurance Compan of North America: C [S No. 58286

Pac 13 ut 13

SIAlE OF

______

COUNTY OF

BEFORE ME. n o t a ry public in and for the State o f .this day personally appeared . known to me or proven to methrough to be the person hose name is subscribed to theforegoing instrument. nd acknowledged to me that (he/she) executed the same for the purposesand consideration therein expressed, who being by me duly sworn, deposed as follows:

name is I am of suund mind, capable of making thisstatement. and personally acquainted with the facts herein stated.

2. 1 hold the office of O

________

. 1 am an authorized representative ofIndemnity Insurance Company of North America, which holds a Certificate of Authority totransact the business of insurance in the State of Texas. and I am duly authorized by said

company to execute this statement.

3. Indemnity Insurance Company of North America has knowingly and voluntariiy entered into thisConsent Order and agrees with and consents to the issuance and service of the foregoing ConsentOrder by the Commissioner of Workers Compensation in the State of Texas.

q / i 4gia ture

I A L k P W4 ,/

Typed/Printed Name

7Given under my hand and seal of offIce this / day of ( - ,201l.

A /T h

Signature of Notary Public

a- (i

Printed Name of Notar Public

NOTARY PUBLIC IN AND FOR THE STAlL OF

_________

My Commission Expires:

____________

(NOTAR SFAI)

Bianca D . erholiowMy Comrnissor xprer

04/04/201 JNew Laste County Set&

N o ta H

dwc-11-0016 indemnity insurance texas department of workers comp

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