Insurer Group Files Lawsuit Against Texas Workers’ Compensation Commission

The Insurance Council of Texas reported it filed a lawsuit against the Texas Workers’ Compensation Commission challenging the agency’s proposed assessment of costly administrative penalties. ICT questions why TWCC has singled out insurers with such stiff penalties, most of which are not in keeping with the severity of the alleged infractions.

Steve Nichols, manager of ICT’s Workers Compensation Services, says it would be easy to conclude that TWCC has a double standard when it comes to dealing with insurance companies. “We’re simply asking TWCC to treat insurers just like they do others involved in the workers’ compensation system in Texas,” said Nichols. “A good first start would be to play by the rules.”

TWCC has levied penalties exceeding $6.6 million in the past seven months against insurers. Many of the alleged violations have come from TWCC audits conducted on the submission of medical payment data. TWCC regulates insurers, health care providers, attorneys and employers who participate in workers’ compensation in Texas.

Robert Shipe, TWCC’s Executive Director, recently testified before the Business and Industry Committee of the Texas House of Representatives and reported that 98 percent of all fines levied by his agency have been against insurers. The agency is expected to levy several more millions of dollars of penalties during the remaining five months of the agency’s fiscal year that ends Aug. 31.

“The Texas Labor Code requires TWCC to establish, by rule, standards for reporting and billing governing both form and content of what must be reported,” Nichols said. “However, the rules adopted by TWCC do not comply with provisions of the Labor Code.”

The lawsuit was filed on April 7 in the 250th District Court in Travis County. ICT is seeking a declaratory judgment that the actions taken by the proposed sanctions against carriers are not authorized by statute because TWCC did not follow rulemaking procedures.