Law:Title 5. Workers' Compensation. Subtitle A. Texas Workers Compensation Act from Chapter 415. Administrative Violations (Texas)

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Subtitle A. Texas Workers' Compensation Act

Contents

Chapter 415. Administrative Violations

Subchapter A. Prohibited Acts

Section 415.001.  Administrative Violation By Representative Of Employee Or Legal Beneficiary.

A representative of an employee or legal beneficiary commits an administrative violation if the person:

(1)  fails without good cause to attend a dispute resolution proceeding within the division;

(2)  attends a dispute resolution proceeding within the division without complete authority or fails to exercise authority to effectuate an agreement or settlement;

(3)  commits an act of barratry under Section 38.12, Penal Code;

(4)  withholds from the employee's or legal beneficiary's weekly benefits or from advances amounts not authorized to be withheld by the division;

(5)  enters into a settlement or agreement without the knowledge, consent, and signature of the employee or legal beneficiary;

(6)  takes a fee or withholds expenses in excess of the amounts authorized by the division;

(7)  refuses or fails to make prompt delivery to the employee or legal beneficiary of funds belonging to the employee or legal beneficiary as a result of a settlement, agreement, order, or award;

(8)  violates the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas;

(9)  misrepresents the provisions of this subtitle to an employee, an employer, a health care provider, or a legal beneficiary;

(10)   violates a commissioner rule; or

(11)  fails to comply with this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.265, eff. September 1, 2005.



Section 415.002.  Administrative Violation By Insurance Carrier.

(a) An insurance carrier or its representative commits an administrative violation if that person:

(1)  misrepresents a provision of this subtitle to an employee, an employer, a health care provider, or a legal beneficiary;

(2)  terminates or reduces benefits without substantiating evidence that the action is reasonable and authorized by law;

(3)  instructs an employer not to file a document required to be filed with the division;

(4)  instructs or encourages an employer to violate a claimant's right to medical benefits under this subtitle;

(5)  fails to tender promptly full death benefits if a legitimate dispute does not exist as to the liability of the insurance carrier;

(6)  allows an employer, other than a self-insured employer, to dictate the methods by which and the terms on which a claim is handled and settled;

(7)  fails to confirm medical benefits coverage to a person or facility providing medical treatment to a claimant if a legitimate dispute does not exist as to the liability of the insurance carrier;

(8)  fails, without good cause, to attend a dispute resolution proceeding within the division;

(9)  attends a dispute resolution proceeding within the division without complete authority or fails to exercise authority to effectuate agreement or settlement;

(10)  adjusts a workers' compensation claim in a manner contrary to license requirements for an insurance adjuster, including the requirements of Chapter 4101, Insurance Code, or the rules of the commissioner of insurance;

(11)  fails to process claims promptly in a reasonable and prudent manner;

(12)  fails to initiate or reinstate benefits when due if a legitimate dispute does not exist as to the liability of the insurance carrier;

(13)  misrepresents the reason for not paying benefits or terminating or reducing the payment of benefits;

(14)  dates documents to misrepresent the actual date of the initiation of benefits;

(15)  makes a notation on a draft or other instrument indicating that the draft or instrument represents a final settlement of a claim if the claim is still open and pending before the division;

(16)  fails or refuses to pay benefits from week to week as and when due directly to the person entitled to the benefits;

(17)  fails to pay an order awarding benefits;

(18)  controverts a claim if the evidence clearly indicates liability;

(19)  unreasonably disputes the reasonableness and necessity of health care;

(20)  violates a commissioner rule;

(21)  makes a statement denying all future medical care for a compensable injury; or

(22)  fails to comply with a provision of this subtitle.

(b)  An insurance carrier or its representative does not commit an administrative violation under Subsection (a)(6) by allowing an employer to:

(1)  freely discuss a claim;

(2)  assist in the investigation and evaluation of a claim; or

(3)  attend a proceeding of the division and participate at the proceeding in accordance with this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 980, Sec. 1.45, eff. Sept. 1, 1995.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.266, eff. September 1, 2005.



Section 415.003.  Administrative Violation By Health Care Provider.

A health care provider commits an administrative violation if the person:

(1)  submits a charge for health care that was not furnished;

(2)  administers improper, unreasonable, or medically unnecessary treatment or services;

(3)  makes an unnecessary referral;

(4)  violates the division's fee and treatment guidelines;

(5)  violates a commissioner rule; or

(6)  fails to comply with a provision of this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 980, Sec. 1.45, eff. Sept. 1, 1995.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.267, eff. September 1, 2005.



Section  415.0035.  Additional Violations By Insurance Carrier Or Health Care Provider.

(a) An insurance carrier or its representative commits an administrative violation if that person:

(1)  fails to submit to the division a settlement or agreement of the parties;

(2)  fails to timely notify the division of the termination or reduction of benefits and the reason for that action; or

(3)  denies preauthorization in a manner that is not in accordance with rules adopted by the commissioner under Section 413.014.

(b)  A health care provider commits an administrative violation if that person:

(1)  fails or refuses to timely file required reports or records; or

(2)  fails to file with the division the annual disclosure statement required by Section 413.041.

(c)  A violation under Subsection (a) is a Class C administrative violation.

(d)  A violation under Subsection (b) is a Class D administrative violation.

(e)  An insurance carrier or health care provider commits an administrative violation if that person violates this subtitle or a rule, order, or decision of the commissioner.

(f)  A subsequent administrative violation under this section, after prior notice to the insurance carrier or health care provider of noncompliance, is subject to penalties as provided by Section 415.021.  Prior notice under this subsection is not required if the violation was of a decision or order of the commissioner.

Added by Acts 1995, 74th Leg., ch. 980, Sec. 1.45, eff. Sept. 1, 1995. Amended by Acts 2001, 77th Leg., ch. 1456, Sec. 6.06, eff. June 17, 2001.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.268, eff. September 1, 2005.



Section 415.0036.  Administrative Violation By Person Performing Certain Claim Services.

(a) This section applies to an insurance adjuster, case manager, or other person who has authority under this title to request the performance of a service affecting the delivery of benefits to an injured employee or who actually performs such a service, including peer reviews, performance of required medical examinations, or case management.

(b)  A person described by Subsection (a) commits an administrative violation if the person offers to pay, pays, solicits, or receives an improper inducement relating to the delivery of benefits to an injured employee or improperly attempts to influence the delivery of benefits to an injured employee, including through the making of improper threats. This section applies to each person described by Subsection (a) who is a participant in the workers' compensation system of this state and to an agent of such a person.

(c)  A violation under this section is a Class A administrative violation.

Added by Acts 2007, 80th Leg., R.S., Ch. 198, Sec. 1, eff. September 1, 2007.



Section  415.004.  Penalty Specified In Other Law. If An Act That Is

an administrative violation under Section 415.001, 415.002, or 415.003 is expressly made an administrative violation of a particular class or subject to a specified penalty in another section of this subtitle, the administrative penalty assessed under that section, and not under Section 415.001, 415.002, or 415.003, prevails.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.



Section  415.005.  Overcharging By Health Care Providers Prohibited; Administrative Violation.

(a) A health care provider commits a violation if the person charges an insurance carrier an amount greater than that normally charged for similar treatment to a payor outside the workers' compensation system, except for mandated or negotiated charges.

(b)  A violation under this section is an administrative violation.  A health care provider may be liable for an administrative penalty regardless of whether a criminal action is initiated under Section 413.043.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.269, eff. September 1, 2005.



Section  415.006.  Employer Chargebacks Prohibited; Administrative Violation. (a)

An employer may not collect from an employee, directly or indirectly, a premium or other fee paid by the employer to obtain workers' compensation insurance coverage, except as provided by Sections 406.123 and 406.144.

(b)  An employee or legal beneficiary of an employee has a right of action to recover damages against an employer who violates Subsection (a).

(c)  A person commits an administrative violation if the person violates Subsection (a).

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.270, eff. September 1, 2005.



Section  415.007.  Loans By Attorneys Prohibited.

(a) An attorney who represents a claimant before the division may not lend money to the claimant during the pendency of the workers' compensation claim.

(b)  The attorney may assist the claimant in obtaining financial assistance from another source if the attorney is not personally liable for the credit extended to the claimant.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.271, eff. September 1, 2005.



Section  415.008.  Fraudulently Obtaining Or Denying Benefits; Administrative Violation.

(a) A person commits a violation if the person, to obtain or deny a payment of a workers' compensation benefit or the provision of a benefit for the person or another, knowingly or intentionally:

(1)  makes a false or misleading statement;

(2)  misrepresents or conceals a material fact;

(3)  fabricates, alters, conceals, or destroys a document; or

(4)  conspires to commit an act described by Subdivision (1), (2), or (3).

(b)  A violation under this section is a Class B administrative violation.

(c)  A person who has obtained an excess payment in violation of this section is liable for full repayment plus interest computed at the rate prescribed by Section 401.023. If the person is an employee or person claiming death benefits, the repayment may be redeemed from future income or death benefits to which the person is otherwise entitled.

(d)  An employer who has committed an act described by Subsection (a) that results in denial of payments is liable for the past benefit payments that would otherwise have been payable by the insurance carrier during the period of denial, plus interest computed at the rate prescribed by Section 401.023. The insurance carrier is not liable for benefit payments during the period of denial.

(e)  If an administrative violation proceeding is pending under this section against an employee or person claiming death benefits, the division may not take final action on the person's benefits.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.272, eff. September 1, 2005.



Section  415.009.  Frivolous Actions; Administrative Violation.

(a) A person commits a violation if the person brings, prosecutes, or defends an action for benefits under this subtitle or requests initiation of an administrative violation proceeding that does not have a basis in fact or is not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law.

(b)  A violation under Subsection (a) is a Class B administrative violation.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.273, eff. September 1, 2005.



Section  415.010.  Breach Of Agreement; Administrative Violation.

(a) A party to an agreement approved by the division commits a violation if the person breaches a provision of the agreement.

(b)  A violation under Subsection (a) is a Class C administrative violation.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.274, eff. September 1, 2005.



Subchapter B. Penalties

Section 415.021.  Assessment Of Administrative Penalties.

(a) In addition to any other provisions in this subtitle relating to violations, a person commits an administrative violation if the person violates, fails to comply with, or refuses to comply with this subtitle or a rule, order, or decision of the commissioner.  In addition to any sanctions, administrative penalty, or other remedy authorized by this subtitle, the commissioner may assess an administrative penalty against a person who commits an administrative violation.  The administrative penalty shall not exceed $25,000 per day per occurrence.  Each day of noncompliance constitutes a separate violation.  The commissioner's authority under this chapter is in addition to any other authority to enforce a sanction, penalty, fine, forfeiture, denial, suspension, or revocation otherwise authorized by law.

(b)  The commissioner may enter a cease and desist order against a person who:

(1)  commits repeated administrative violations;

(2)  allows, as a business practice, the commission of repeated administrative violations; or

(3)  violates an order or decision of the commissioner.

(c)  In assessing an administrative penalty:

(1)  the commissioner shall consider:

(A)  the seriousness of the violation, including the nature, circumstances, consequences, extent, and gravity of the prohibited act;

(B)  the history and extent of previous administrative violations;

(C)  the demonstrated good faith of the violator, including actions taken to rectify the consequences of the prohibited act;

(D)  the penalty necessary to deter future violations; and

(E)  other matters that justice may require; and

(2)  the commissioner shall, to the extent reasonable, consider the economic benefit resulting from the prohibited act.

(d)  A penalty may be assessed only after the person charged with an administrative violation has been given an opportunity for a hearing under Subchapter C.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 2001, 77th Leg., ch. 1456, Sec. 6.07, eff. June 17, 2001.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.275, eff. September 1, 2005.



Section  415.022.  Classification Of Administrative Violations; Penalties.

Administrative violations are classified as follows:

(1)  a Class A administrative violation, punishable by an administrative penalty not to exceed $10,000;

(2)  a Class B administrative violation, punishable by an administrative penalty not to exceed $5,000;

(3)  a Class C administrative violation, punishable by an administrative penalty not to exceed $1,000; and

(4)  a Class D administrative violation, punishable by an administrative penalty not to exceed $500.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.



Section  415.023.  Commission Of Wrongful Act As Matter Of Practice; Administrative Violation. (a) A Person Who

commits an administrative violation under Section 415.001, 415.002, 415.003, or 415.0035 as a matter of practice is subject to an applicable rule adopted under Subsection (b) in addition to the penalty assessed for the violation.

(b)  The commissioner may adopt rules providing for:

(1)  a reduction or denial of fees;

(2)  public or private reprimand by the commissioner;

(3)  suspension from practice before the division;

(4)  restriction, suspension, or revocation of the right to receive reimbursement under this subtitle; or

(5)  referral and petition to the appropriate licensing authority for appropriate disciplinary action, including the restriction, suspension, or revocation of the person's license.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 2001, 77th Leg., ch. 1456, Sec. 6.08, eff. June 17, 2001.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.276, eff. September 1, 2005.



Section 415.024.  Breach Of Settlement Agreement; Administrative Violation.

A material and substantial breach of a settlement agreement that establishes a compliance plan is an administrative violation.  In determining the amount of the penalty, the commissioner shall consider the total volume of claims handled by the insurance carrier.

Added by Acts 1997, 75th Leg., ch. 1443, Sec. 9, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.277, eff. September 1, 2005.



Section 415.025.  References To A Class Of Violation Or Penalty.

A reference in this code or other law, or in rules of the former Texas Workers' Compensation Commission or the commissioner, to a particular class of violation, administrative violation, or penalty shall be construed as a reference to an administrative penalty.  Except as otherwise provided by this subtitle, an administrative penalty may not exceed $25,000 per day per occurrence.  Each day of noncompliance constitutes a separate violation.

Added by Acts 2005, 79th Leg., Ch. 265, Sec. 3.278, eff. September 1, 2005.



Subchapter C. Procedures

Section 415.031.  Initiation Of Administrative Violation Proceedings.

Any person may request the initiation of administrative violation proceedings by filing a written allegation with the division.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.279, eff. September 1, 2005.



Section 415.032.  Notice Of Possible Administrative Violation; Response.

(a) If investigation by the division indicates that an administrative violation has occurred, the division shall notify the person alleged to have committed the violation in writing of:

(1)  the charge;

(2)  the proposed penalty;

(3)  the right to consent to the charge and the penalty; and

(4)  the right to request a hearing.

(b)  Not later than the 20th day after the date on which notice is received, the charged party shall:

(1)  remit the amount of the penalty to the division; or

(2)  submit to the division a written request for a hearing.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.280, eff. September 1, 2005.



Section 415.033.  Failure To Respond.

If, without good cause, a charged party fails to respond as required under Section 415.032, the penalty is due and the division shall initiate enforcement proceedings.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.281, eff. September 1, 2005.



Section  415.034.  Hearing Procedures.

(a) On the request of the charged party or the commissioner, the State Office of Administrative Hearings shall set a hearing.  The hearing shall be conducted in the manner provided for a contested case under Chapter 2001, Government Code (the administrative procedure law).

(b)  At the close of the hearing, the hearing officer conducting the hearing shall make findings of fact and conclusions of law and shall issue a written decision. If the hearing officer determines that an administrative violation has occurred, the hearing officer shall include in the decision the amount of the administrative penalty assessed and shall order payment of the penalty.

(c)  The findings of fact, the decision, and the order shall be sent immediately to the charged party.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49), eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 980, Sec. 1.46, eff. Sept. 1, 1995.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.282, eff. September 1, 2005.



Section  415.035.  Judicial Review.

(a) A decision under Section 415.034 is subject to judicial review in the manner provided for judicial review under Chapter 2001, Government Code.

(b)  If an administrative penalty is assessed, the person charged shall:

(1)  forward the amount of the penalty to the division for deposit in an escrow account; or

(2)  post with the division a bond for the amount of the penalty, effective until all judicial review of the determination is final.

(c)  Failure to comply with Subsection (b) results in a waiver of all legal rights to contest the violation or the amount of the penalty.

(d)  If the court determines that the penalty should not have been assessed or reduces the amount of the penalty, the division shall:

(1)  remit the appropriate amount, plus accrued interest, if the administrative penalty was paid; or

(2)  release the bond.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49), eff. Sept. 1, 1995.

Amended by:

Acts 2005, 79th Leg., Ch. 265, Sec. 3.283, eff. September 1, 2005.


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