Crain v. Hartford Ins. Co.
| Decision Date | 18 November 2010 |
| Docket Number | NO. 03-09-00140-CV,03-09-00140-CV |
| Parties | John Crain, Appellant v. Hartford Insurance Company and Texas Department of Insurance Division of Workers' Compensation, Appellees |
| Court | Texas Court of Appeals |
NO. CV-05952, HONORABLE DANIEL H. MILLS, JUDGE PRESIDING
Appellee Hartford Insurance Company filed suit against Appellant John Crain for judicial review of a decision of the Division of Workers' Compensation of the Texas Department of Insurance that Hartford was liable for Crain's spinal surgery.1 Hartford filed a motion for summary judgment asserting that it was not liable for the spinal surgery because Crain had waived his right to seek administrative review of Hartford's decision to deny preauthorization for the surgery. Crain then filed counterclaims for declaratoryjudgment. The trial court granted Hartford'smotion and, at a later hearing, dismissed Crain's counterclaims for lack of subject-matter jurisdiction. Because we hold that Crain failed to timely file his request for administrative review of Hartford's preauthorization denial and because the trial court lacked subject-matter jurisdiction over Crain's claims for declaratory judgment, we will affirm the trial court's judgment.
BACKGROUND
Crain suffered a compensable injury to his back while at work on January 8, 2003. Hartford was the workers' compensation insurance carrier for Crain's employer. Dr. Lloyd Youngblood, Crain's neurosurgeon, sought preauthorization from Hartford on October 3, 2003 to perform spinal surgery as treatment for Crain's compensable injury.2 Hartford asked an orthopedic surgeon to review Dr. Youngblood's preauthorization request. When Hartford's doctor determined that the requested spinal surgery was not medically necessary, Hartford denied Dr. Youngblood's request for preauthorization on October 9, 2003.
On October 31, 2003, Dr. Youngblood submitted another request for preauthorization of the spinal surgery for Crain. The diagnosis and surgical procedure requested by Dr. Youngblood in this request were identical to the diagnosis and surgical request in the previously denied October 3, 2003 request. Hartford asked a different surgeon to review this request, and he likewise determined that the spinal surgery was not medically necessary, so Hartford again deniedpreauthorization on November 11, 2003. Hartford's surgeon notified Dr. Youngblood directly of the denial and, according to Hartford's surgeon's notes, Dr. Youngblood expressed an intent to try a different medical procedure on Crain.
On January 2, 2004, Dr. Youngblood submitted a third request for preauthorization of the spinal surgery for Crain. The diagnosis and requested surgery in this request were again identical to the diagnosis and surgery in the previous two requests. Hartford asked the same surgeon to review this request. He again determined that the requested spinal surgery was not medically necessary and notified Dr. Youngblood's office directly of his decision. Hartford also sent a letter denying this preauthorization request.
Almost five months later, on May 21, 2004, Dr. Youngblood submitted a fourth request for preauthorization. The diagnosis and requested spinal surgery were identical to those described in the previous three requests. Hartford notified Dr. Youngblood's office that it would not review this request because Crain had failed to timely request reconsideration of Hartford's previous denial as required by the Division's rules.
Finally, on June 11, 2004, Dr. Youngblood submitted a fifth request for preauthorization. Again, the diagnosis and surgical procedure in this request were identical to Dr. Youngblood's previous four requests for preauthorization. Hartford called Dr. Youngblood's office on June 11, 2004 to inform him that Hartford would not process this request because it was untimely.
Administrative Review of Preauthorization Request
On June 28, 2004, Grain filed a request for a medical dispute resolution ("MDR") with the Division, seeking an independent review organization ("IRO") review of Hartford's denial of preauthorization for Grain's spinal surgery. See 28 Tex. Admin. Code § 134.600 (2003) (Tex. Workers' Compensation Gomm'n, Pre-authorization), amended by 29 Tex. Reg. 2349 (2004), amended by 31 Tex. Reg. 3566 (2006) (hereinafter "Former 28 Tex. Admin Code § 134.600"). Hartford argued to the Division that it should deny Grain's request for MDR because it was filed more than forty-five days after Hartford had denied reconsideration of Grain's preauthorization request. See 28 Tex. Admin. Gode § 133.308(e) (2004) (), amended by 29 Tex. Reg. 8562 (2004), replaced by 31 Tex. Reg. 30314 (2006) (hereinafter "Former 28 Tex. Admin. Gode § 133.308"). The Division granted Grain's MDR request and referred the dispute to an IRO. The IRO reviewed Grain's file, determined that the spinal surgery was medically necessary, and approved Grain's request for preauthorization.
After the IRO's decision, Hartford filed a request for a contested case hearing with the Division. See id. § 133.308(v). After a full hearing on the merits, the hearing officer for the contested case hearing held that Grain had not waived his right to MDR and that a preponderance of the evidence supported the IRO reviewer's determination that the requested spinal surgery was medically necessary. Hartford appealed the hearing officer's decision to the Division's appeals panel. The appeals panel did not issue its own decision, but instead allowed the hearing officer's decision to become the final decision of the appeals panel by operation of law. See Tex. Lab. Gode Ann. § 410.204(c) (West 2006). Because the affirmed hearing officer's decision was binding on theparties during the pendency of any appeal, see Tex. Lab. Code Ann. § 410.205 (West 2006), Crain received and Hartford paid for the disputed spinal surgery.
District Court Proceedings
Hartford filed this case seeking judicial review of the appeals panel decision. See Tex. Lab. Code Ann. § 410.251-.258 (West Supp. 2010).3 Hartford seeks judgment here that it is not liable for the costs of Crain's spinal surgery, but Hartford's objective is reimbursement for the costs of Crain's surgery from the Subsequent Injury Fund ("SIF"). The SIF is a dedicated account in the general revenue fund used only for purposes specified by statute, including reimbursement to an insurance carrier for overpayment of benefits made under an interlocutory order of the Division. Tex. Lab. Code Ann. § 403.006 (West Supp. 2010); 28 Tex. Admin. Code § 116.11(a) (West 2010) (). Because Hartford can seek reimbursement from the SIF if it is determined that Hartford it is not liable for the costs of Crain's surgery, Crain is not liable for any payments Hartford made on his behalf prior to the appeals panel's decision being overturned. See Tex. Lab. Code Ann. § 410.209 (West 2006); see also Wolford v. American Home Assurance Co., 263 S.W.3d 12, 17 (Tex. App.—Houston [1st Dist.] 2006, no pet.).
Hartford moved for summary judgment on its assertion that Grain had waived his right to administrative review by failing to timely file his request for MDR. Grain responded by asserting that Hartford's evidence raised material issues of fact regarding waiver. He also filed counterclaims for declaratory judgment regarding Hartford's claims and the interpretation and application of the Texas Workers' Compensation Act ("TWCA"), see Tex. Lab. Gode Ann. §§ 401.001-506.002 (West 2006 and West Supp. 2010). The trial court granted Hartford's motion for summary judgment, reversed the Division's decision, and ordered that Hartford was not liable for the cost of Grain's surgery.
Shortly after the trial court granted summary judgment, Hartford filed a plea to the jurisdiction on Grain's claims for declaratory judgment. In response, Grain amended his counterclaims for declaratory judgment by adding the Division as a third-party defendant. The Division filed its own plea to the jurisdiction and answer. The trial court granted Hartford's plea to the jurisdiction and dismissed Grain's counterclaims for declaratory judgment for lack of subject-matter jurisdiction, thus rendering its earlier partial summary judgment final.
DISCUSSION
In four issues on appeal, Grain contends that the trial court erred by granting Hartford's motion for summary judgment and by dismissing his claims for declaratory judgment.
Summary Judgment
Grain asserts that summary judgment was improper because (1) Hartford's evidence raised factual disputes regarding Grain's alleged waiver, (2) the summary judgment limited orterminated, in violation of the TWCA, Crain's right to lifetime medical care under the TWCA, and (3) a health care provider's actions may not waive an injured worker's rights to lifetime medical care under the TWCA.
Because the issues here ultimately involve matters regarding compensability and medical benefits, judicial review of the Division's decision is under a modified de novo standard. See Tex. Lab. Code Ann. § 410.301 (West 2006); see also Morales v. Liberty Mut. Ins. Co., 241 S.W.3d 514, 519 (Tex. 2007). Under modified de novo review, all issues regarding compensability must be tried by the jury or the trial court, Texas Workers' Compensation Commission v. Garcia, 893 S.W.2d 504, 528 (Tex. 1995), but the "trial is limited to the issues decided by the appeals panel and on which judicial review is sought" and the pleadings must specifically set forth the determinations of the appeals panel for which review is sought, Tex. Lab. Code Ann. § 410.302(b) (West 2006). In the present case, Hartford sought review of the appeals panel's determination that a preponderance of the evidence supported the IRO's determination that Crain's spinal...
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