AUSTIN, Texas, Nov. 14 /PRNewswire/ -- Texas Mutual Insurance Company won
a substantial victory Nov. 13 in a Texas appeals court case challenging an
abusive pattern of questionable hospital bills for injured workers covered by
workers' compensation insurance.
The Austin Court of Appeals overturned a Travis County District Court
ruling about the interpretation of a Texas Division of Workers' Compensation
guideline dealing with hospital fees.
"This Court of Appeals ruling puts a stop to questionable billing
practices of certain hospitals in Texas that inflate costs in the workers'
compensation system and ultimately drive up premiums for Texas employers,"
Russell Oliver, president of Texas Mutual Insurance, said.
The guideline allowed an exception to the general rule that hospitals be
paid on a per diem basis for treatment of injuries involving workers'
compensation claims. The so-called "stop-loss exception," dating back to 1997,
dictated that hospital bills exceeding $40,000 in instances when services were
deemed "unusually extensive" and "unusually costly" would be reimbursed at 75
percent of the billed charges.
Vista Medical Center Hospital in Pasadena, Texas, and CHRISTUS Health Gulf
Coast of Houston, Texas -- including CHRISTUS St. Catherine Hospital in Katy,
Texas, and CHRISTUS St. John Hospital in Nassau Bay, Texas -- had argued in
court that they did not need to demonstrate anything more than that a bill
exceeded the $40,000 threshold. The Travis County District Court agreed with
On Nov. 13, however, a three-judge panel of the Austin Court of Appeals
unanimously overruled the lower court. The court stated that the hospitals
did, in fact, need to show that a hospital stay is "unusually extensive" and
"unusually costly" before they can receive a 75 percent reimbursement.
In its opinion, the Court of Appeals noted that the lower court's
interpretation of this matter led to "the absurd and unreasonable result" that
reimbursement under the stop-loss exception had replaced the per diem
Texas Mutual successfully argued that a system that put no restraints on
hospital charges and allowed hospitals to receive 75 percent any time they
chose to charge workers' compensation insurers $40,000 or more would not be
adhering to medical cost controls mandated by Texas lawmakers in 1989. Texas
Mutual's co-appellants in this case were Liberty Mutual Insurance Company,
Zenith Insurance Company and Zurich American Insurance Company.
About Texas Mutual Insurance Company
Austin-based Texas Mutual Insurance Company is the state's leading
provider of workers' compensation insurance, with approximately 25 percent of
the market. Since 1991, the company has provided a stable, competitively
priced source of workers' comp insurance for all Texas employers. Preventing
workplace accidents and minimizing their consequences is a major part of Texas
For more information, visit http://www.texasmutual.com.
Elizabeth Christian & Associates Public Relations
SOURCE Texas Mutual Insurance Company