Vista Medical Center Hospital v. Texas Mutual Insurance Company ( 2013 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NOS. 03-11-00641-CV through 03-11-00643-CV
NOS. 03-11-00742-CV through 03-11-00785-CV
Vista Medical Center Hospital, Appellant
v.
Texas Mutual Insurance Company, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT
HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING1
OPINION
In these appeals, we again consider the scope of the exclusive jurisdiction that the
Legislature has vested in the Texas Department of Insurance’s Division of Workers’ Compensation
1
As detailed herein, the underlying causes were filed in multiple Travis County district courts
but were ultimately decided in consolidated proceedings in the 261st judicial district court before
Judge Yelenosky. The trial court cause numbers corresponding to appellate cause numbers 03-11-
00641-CV through 03-11-00643-CV are: D-1-GN-08-002851, D-1-GN-07-004383, D-1-GN-07-
004381, and for 03-11-00742-CV through 03-11-00785-CV: D-1-GN-08-002597, D-1-GN-08-
000107, D-1-GN-08-002877, D-1-GN-08-002700, D-1-GN-08-001604, D-1-GN-08-002878, D-1-
GN-08-001309, D-1-GN-08-002594, D-1-GN-07-003908, D-1-GN-08-001698, D-1-GN-07-004215,
D-1-GN-07-003912, D-1-GN-07-004379, D-1-GN-08-001697, D-1-GN-08-000109, D-1-GN-08-
000108, D-1-GN-08-002850, D-1-GN-07-004137, D-1-GN-08-000111, D-1-GN-08-001603, D-1-
GN-08-001764, D-1-GN-07-004135, D-1-GN-08-000105, D-1-GN-08-002848, D-1-GN-08-002879,
D-1-GN-08-000110, D-1-GN-08-001763, D-1-GN-08-000465, D-1-GN-07-004373, D-1-GN-08-
002595, D-1-GN-08-001517, D-1-GN-07-004380, D-1-GN-08-001765, D-1-GN-08-002699, D-1-
GN-08-001762, D-1-GN-07-004378, D-1-GN-08-000467, D-1-GN-08-002849, D-1-GN-08-002593,
D-1-GN-08-002880, D-1-GN-08-000104, D-1-GN-08-000468, D-1-GN-08-000466, and D-1-GN-
08-002876.
(the Division)2 to initially determine certain disputes under the workers’ compensation act.3 The
appeals emanate from 47 “medical-fee disputes” that each arose when appellee Texas Mutual
Insurance Company paid appellant Vista Medical Center Hospital, L.L.P., less reimbursement than
Vista contended it was owed for providing injured workers “medical benefits” under the act. Such
disputes are within the Division’s exclusive jurisdiction to initially determine,4 and Vista accordingly
initiated proceedings before that agency in an attempt to recover the additional reimbursement it
claimed. The administrative proceedings culminated in final orders compelling Texas Mutual to pay
Vista additional reimbursement on each of its claims. In response to each final administrative order,
Texas Mutual paid the additional reimbursement as the order required, filed a suit for judicial review,
and ultimately obtained a district court judgment reversing the order and remanding Vista’s
reimbursement claims to the Division. But within each judgment, and of central importance in these
appeals, the district court also ordered Vista to pay back the additional reimbursement it had received
from Texas Mutual under the now-invalidated administrative order.
2
The Division has been vested with this jurisdiction and primary responsibility for administering
the workers’ compensation act since September 1, 2005, when it succeeded to the statutory
responsibilities and rules of the former Texas Workers’ Compensation Commission. See Act of
May 29, 2005, 79th Leg., R.S., ch. 265, §§ 8.001(b), .004(a), 2005 Tex. Gen. Laws 607, 608.
Although some of the underlying events date back to the period in which the Commission was still
in operation, we will use “the Division” to refer to both incarnations of the agency for clarity and
because the distinction is immaterial to our analysis.
3
See, e.g., Apollo Enters., Inc. v. ScripNet, Inc., 301 S.W.3d 848, 858–71 (Tex. App.—Austin
2009, no pet.); Texas Mut. Ins. Co. v. Eckerd Corp., 162 S.W.3d 261, 263–67 (Tex. App.—Austin
2005, pet. denied); Howell v. Texas Workers’ Comp. Comm’n, 143 S.W.3d 416, 428–29, 434–38
(Tex. App.—Austin 2004, pet. denied).
4
See Howell, 143 S.W.3d at 434–38.
2
In its principal contention on appeal, Vista asserts that the district court lacked
subject-matter jurisdiction to award this monetary relief unless and until there is a final
administrative determination that Vista is not entitled to the additional reimbursement it seeks. We
agree, and will reverse the district court’s judgments and remand these causes.
BACKGROUND
Statutory context
Because the parties’ contentions on appeal arise from, and center on, the workers’
compensation act’s system of regulating medical reimbursement paid to health-care providers and
resolving disputes about such payments, it is helpful to begin by noting some pertinent features
of that system.
The workers’ compensation act establishes a “comprehensive scheme whereby
employees who are covered by workers’ compensation insurance and incur ‘compensable’ injuries
are provided the exclusive remedy of ‘workers’ compensation benefits,’” including “medical
benefits” (i.e., “all health care reasonably required by the nature of the injury as and when needed”),
to be paid by the insurance carrier that covers each worker. Apollo Enters., Inc. v. ScripNet, Inc.,
301 S.W.3d 848, 852, 860 (Tex. App.—Austin 2009, no pet.); see Tex. Lab. Code §§ 401.011(10),
(31), 406.031, 408.001, 408.021.5 In turn, the act “gives a health care provider who provides
medical benefits . . . the right to reimbursement from the workers’ compensation carrier that covers
the employee.” Apollo, 301 S.W.3d at 860; see Tex. Lab. Code § 408.027(a).
5
In the absence of material intervening substantive changes, we will cite to the current versions
of statutes for convenience.
3
To obtain such reimbursement, the act requires a health-care provider to submit
a claim for payment to the appropriate workers’ compensation insurance carrier not later than
the 95th day after the date on which the health-care services were provided. See Tex. Lab. Code
§ 408.027(a). Applicable Division rules6 further specify that the provider is to bill the carrier
its usual and customary charges for the services. See 28 Tex. Admin. Code § 133.1(a)(3) (2005)
(Tex. Dep’t of Ins., Definitions);7 Texas Workers’ Comp. Comm’n v. Patient Advocates, 136 S.W.3d
643, 656 (Tex. 2004). In response, the act requires the carrier to take one or more of the following
actions (termed “final actions” by the Division’s rules) within 45 days after receipt of the bill:
(1) make a payment on the charges, (2) deny one or more charges because, e.g., the health-care
services are not covered by the workers’ compensation insurance policy, or (3) determine to audit
the “relationship of the health care services provided to the compensable injury, the extent of the
injury, and the medical necessity of the services provided,” in which case it must make partial
payment of the charges pending the outcome of the audit. See Tex. Lab. Code § 408.027(b)–(c);
28 Tex. Admin. Code § 133.304(b) (2005) (Tex. Dep’t Ins., Medical Payments and Denial); see also
28 Tex. Admin. Code § 133.301 (2005) (Tex. Dep’t Ins., Retrospective Review of Medical Bills)
(describing “retrospective review” of medical bills by carriers and noting that it may include
examination for compliance with treatment guidelines established by the Division, duplicate billing,
6
See Tex. Lab. Code § 402.061 (charging the Division with adopting rules as necessary for
implementation and enforcement of the act).
7
Unless otherwise indicated, we cite to the versions of Division rules that were in effect during
the time frame relevant to the underlying medical-fee disputes. Each of the 47 medical-fee disputes
at issue were in the dispute-resolution process between 2002 and 2005, and the relevant rules did not
change materially during that time.
4
billing for treatment or services unrelated to the compensable injury, and provision of unnecessary
or unreasonable services). The Division’s applicable rules further provide that a carrier may
also respond to a provider’s bill by “requesting reimbursement for an overpayment” by the 45-day
“final action” deadline. See 28 Tex. Admin. Code § 133.304(b). When making or denying payment
on a bill, the carrier is required to generate an “explanation of benefits” (EOB) that “provide[s]
sufficient explanation to allow the sender to understand the reason(s) for the insurance carrier’s
actions.” Id. § 133.304(c); see Tex. Lab. Code § 408.027(e).
The act comprehensively regulates the amount of reimbursement that workers’
compensation insurance carriers are to pay health-care providers and delegates expansive rulemaking
powers to the Division for that purpose. These delegations include the power and duty to promulgate
“fee guidelines” that are “fair and reasonable and designed to ensure the quality of medical care and
to achieve effective medical cost control.” See Tex. Lab. Code § 413.011–.012. Once adopted, such
guidelines generally govern the amount of medical reimbursement that a carrier must pay and a
health-care provider can receive for providing particular medical benefits. See id. § 408.027(f) (as
general rule, “[a]ny payment made by an insurance carrier under this section shall be in accordance
with the fee guidelines authorized under” the act); see also 28 Tex. Admin. Code §§ 133.1(8)
(defining “fair and reasonable reimbursement” as the lesser of the provider’s usual and customary
charge and, in the absence of a contract rate, “the maximum allowable reimbursement, when one has
been established in an applicable [Division] fee guideline”), 133.301(a)(1) (noting that retrospective
review may examine provider bill for “compliance with the fee guidelines established by the
[Division]”), 133.304(b)(1) (payment shall “make[] the total reimbursement for th[e] bill a fair and
reasonable reimbursement in accordance with § 133.1(8) of this title”). In fact, the act requires that
5
if the Division “determines that an insurance carrier has paid medical charges that are inconsistent
with the medical policies or fee guidelines,” the Division “shall investigate the potential violation”
and, if it turns out that the carrier reduced a charge that was within the guidelines, direct the carrier to
submit the difference to the provider unless the reduction was authorized by contract. See Tex. Lab.
Code § 413.016(b). Section 413.016 likewise mandates that “[t]he Division shall order a refund
of charges paid to a health care provider in excess of those allowed by the medical policies or
fee guidelines.” Id. § 413.016(a).
In instances where a carrier denies or reduces payment on a provider’s bill, the
workers’ compensation act entitles either the carrier or the provider to obtain administrative “review”
of the claim before the Division, known as “medical dispute resolution.” See id. §§ 408.027(e),
413.031(a)(1); see also 28 Tex. Admin. Code § 133.305 (2005) (Tex. Dep’t Ins., Medical Dispute
Resolution-General).8 Medical dispute resolution is also available to providers who are “ordered
by the [Division] to refund a payment received” and to carriers who have made refund requests
of providers and been refused. See Tex. Lab. Code § 413.031(a)(3); 28 Tex. Admin. Code
§§ 133.304(p), .305. In cases where the dispute is solely “over the amount of payment due for
services determined to be medically necessary and appropriate for treatment of compensable injury”
as opposed to disputes about, e.g., medical necessity, the Division “is to adjudicate the payment
given the relevant statutory provisions and commission rules.” Tex. Lab. Code § 413.031(c); see
28 Tex. Admin. Code §§ 133.305(a)(2), .307(a) (2005) (Tex. Dep’t Ins., Medical Dispute Resolution
8
The Division’s applicable rules require the provider to first submit a request for reconsideration
to the carrier. See 28 Tex. Admin. Code § 133.304(k)–(n) (2005) (Tex. Dep’t Ins., Medical
Payments and Denials).
6
of a Medical Fee Dispute); Apollo, 301 S.W.3d at 861. This category of medical disputes are known
as “medical-fee” disputes. See 28 Tex. Admin. Code §§ 133.305(a)(2), .307(a); Apollo, 301 S.W.3d
at 861. Procedurally, the Division determines medical-fee disputes on papers submitted by each
party; it is not a contested-case proceeding. See Patient Advocates, 136 S.W.3d at 656. In addition
to deciding the amount of reimbursement the carrier is obligated to pay under the act and Division
rules and has either underpaid or overpaid, the Division is to award interest on that amount that
begins accruing on the 60th day after the date the provider submits the bill to the carrier, in the case
of an underpayment, or the 60th day after the date the provider receives notice of the “alleged
overpayment” in the event of an overpayment. See Tex. Lab. Code § 413.019.
Although a carrier or provider may elect to pay in compliance with the Division’s
order in a medical-fee dispute, at relevant times the workers’ compensation act has provided
the aggrieved party a right to a de novo contested-case hearing on the reimbursement or refund
claim, in the manner prescribed under the Administrative Procedure Act (APA),9 before
an administrative law judge (ALJ) of the State Office of Administrative Hearings (SOAH). See
Tex. Lab. Code § 413.031(k).10 Following the contested-case hearing (colloquially termed an
“appeal”), the ALJ renders the final administrative order on the claim. See id. § 402.073(b). A party
9
See Tex. Gov’t Code §§ 2001.051–.014 (rights to and procedures for contested cases); see
generally id. §§ 2001.001–.902 (provisions of APA).
10
Cf. Texas Mut. Ins. Co. v. Vista Cmty. Med. Ctr., LLP, 275 S.W.3d 538, 543–46 & nn. 4 & 5
(Tex. App.—Austin 2008, pet. denied) (Vista I) (explaining that the Legislature repealed the right
to a SOAH hearing in medical-fee disputes during a period between 2005 and 2007, thereby leaving
the Division’s order as the final administrative order subject to judicial review). Each of the
medical-fee disputes at issue here were governed by a version of the act providing the right to the
SOAH contested-case hearing.
7
that has exhausted these administrative remedies and is aggrieved by the final administrative order
may then seek judicial review under the APA substantial-evidence standard in Travis County
District Court. See id. § 413.027(k-1); Tex. Gov’t Code §§ 2001.171, 2001.174–.176.
As with various other disputes that arise under the workers’ compensation act, it is
established that this statutory scheme impliedly delegates to the Division (and, in turn, SOAH)
exclusive jurisdiction to determine the amount of medical reimbursement that is owed by a carrier
to a health-care provider under the act and Division rules, subject to judicial review under the APA
substantial-evidence standard. See Patient Advocates, 136 S.W.3d at 656–57; Apollo, 301 S.W.3d
at 858–71; Texas Mut. Ins. Co. v. Eckerd Corp., 162 S.W.3d 261, 263–67 (Tex. App.—Austin 2005,
pet. denied); Howell v. Texas Workers’ Comp. Comm’n, 143 S.W.3d 416, 434–38
(Tex. App.—Austin 2004, pet. denied).
The stop-loss controversy
The present medical-fee disputes and ensuing litigation originated from a larger
controversy concerning a fee guideline that the Division promulgated in 1997 to govern the amount
of medical reimbursement that workers’ compensation carriers must pay for inpatient hospital
admissions of covered workers. See 22 Tex. Reg. 6305 (1997) (originally codified at 28 Tex.
Admin. Code § 134.401) (hereinafter “Former Rule 134.401” or “1997 hospital fee guideline”).11
The 1997 hospital fee guideline generally prescribes reimbursement according to a standard per-diem
methodology based on specified categories of admissions. See Former Rule 134.401(c)(1)–(2).
11
Former Rule 134.401 was repealed effective March 1, 2008, but remains in effect for hospital
admissions that, like those at issue here, occurred before that effective date. See Tex. Reg. 5319
(July 4, 2008).
8
However, in the event of “an unusually costly or lengthy stay,” the guideline provides an important
exception or alternative to the per-diem rates, known as the “stop-loss exception” or “stop-loss
method.” See Former Rule 134.401(b)(1)(F)–(H), (c)(6). When applicable, the stop-loss exception
requires the carrier to pay the hospital 75% of the hospital’s total “audited” charges (defined as billed
charges that remain after the carrier excludes charges for personal items, services that are not
documented as having been provided, and services determined to be unrelated to the compensable
injury) for the entire hospital stay. See Former Rule 134.401(c)(6). Application of the stop-loss
exception tends to yield hospitals reimbursement for a given hospital admission that is substantially
more generous—indeed, potentially several times larger—than the amounts prescribed under the
standard per-diem methodology.
The 1997 hospital fee guideline states that a hospital’s total audited charges from
an admission must meet a “minimum stop-loss threshold” of $40,000 in order for the stop-loss
exception to apply. See Former Rule 134.401(c)(6)(A). Various operators of hospitals, including
Vista, interpreted the guideline to mean that their charges from an admission need only meet the
$40,000 threshold in order to recover stop-loss reimbursement. In contrast, insurance carriers,
including Texas Mutual, maintained that the guideline required providers not only to meet the
$40,000 threshold, but also to demonstrate, through a case-by-case analysis, that the admission
entailed “unusually costly and unusually extensive” services in order to qualify for stop-loss
reimbursement. This underlying disagreement between hospitals and carriers regarding the
proper construction of the stop-loss exception—what we will term the “threshold-only” versus
9
“threshold-plus” views, respectively12—gave rise to hundreds of medical-fee-dispute-resolution
proceedings before the Division as Vista and other hospitals sought to recover stop-loss
reimbursement essentially whenever total audited charges from an admission exceeded the $40,000
threshold and Texas Mutual and other carriers paid only per-diem rates absent proof of what
they deemed “unusually costly and unusually extensive” services. The Division reached somewhat
divergent results in these proceedings, and the losing party “appealed” many of the orders to SOAH
for contested-case hearings.
In response to a torrent of such filings, SOAH consolidated many of the
proceedings and assigned them to an en banc panel of ALJs to decide several common issues of
construction under the 1997 hospital fee guideline. These issues included the threshold-only versus
threshold-plus controversy regarding the stop-loss exception. In January 2007, the en banc panel
issued a decision that, in relevant part, agreed with the hospitals’ threshold-only view and held
that such providers were required only to show that their total audited expenses from an admission
met the $40,000 threshold in order to receive stop-loss reimbursement. Thereafter, ALJs began
conducting contested-case hearings in the individual medical-fee disputes pending there and
consistently rendered final orders awarding stop-loss reimbursement to providers based solely on
12
This Court has previously described these divergent constructions of the stop-loss exception
in terms of a “one-prong” test (i.e., merely satisfy the $40,000 threshold) versus a “two-prong”
test (satisfy the $40,000 threshold + have “unusually costly and unusually extensive” services). See
Vista I, 275 S.W.3d at 544–45. In this appeal, however, Vista has suggested that the “unusually
costly and unusually extensive” services requirement actually imposes two “prongs” in addition to
the $40,000 threshold “prong” so as to create a “three-pronged” test. To avoid unnecessary comment
regarding the precise requirements for proving “unusually costly and unusually extensive” services,
we have instead opted for the shorthand descriptions above.
10
findings that the total audited charges from the admission exceeded the $40,000 threshold. In many
of these cases, the carrier perfected suits for judicial review from the ALJ’s final order.13
Large numbers of these administrative proceedings and ensuing suits for judicial
review pitted Vista against Texas Mutual. Those parties, along with several intervenors, eventually
presented the threshold-only versus threshold-plus controversy for judicial resolution through
competing declaratory claims under APA section 2001.038.14 Although the hospital’s threshold-only
view prevailed at the trial level, on appeal this Court agreed with the carriers’ threshold-plus view.
We reversed and rendered judgment declaring that hospitals were required to show not only that
charges from an admission met the $40,000 stop-loss threshold, but also that “the admission
involved unusually costly and unusually extensive services to receive reimbursement under the
stop-loss method.” See Texas Mut. Ins. Co. v. Vista Cmty. Med. Ctr., LLP, 275 S.W.3d 538, 548–51
(Tex. App.—Austin 2008, pet. denied) (Vista I). The Texas Supreme Court denied review.
The present litigation
Among the medical-fee disputes emanating from the stop-loss controversy and pitting
Vista against Texas Mutual were the 47 that gave rise to the present appeals. Each arose when Vista
submitted a reimbursement claim to Texas Mutual, the carrier paid only per-diem reimbursement
on the claim (and issued an EOB reflecting that action), and Vista pursued medical-fee-dispute
13
Likewise, in a number of similar medical-fee disputes that were adjudicated by the Division
during the period in which the Legislature had repealed the “appeal” to SOAH, the aggrieved party
perfected a suit for judicial review of the Division’s final order in district court. See Vista I,
275 S.W.3d at 545 n.4.
14
See Tex. Gov’t Code § 2001.038(a)–(d) (providing that validity or applicability of agency rule
may be determined in suit for declaratory judgment).
11
resolution before the Division to recover the full amount of stop-loss reimbursement to which
it claimed entitlement. The Division issued an order in each proceeding—in some cases favoring
Vista, in others Texas Mutual—and the losing party in each proceeding “appealed” the order
to SOAH for a contested-case hearing. The 47 proceedings (like many similar ones) remained
pending at SOAH until after the en banc panel’s decision and the district court’s subsequent
judgment in Vista I favoring the hospitals. Following the district court’s ruling, ALJs began
conducting contested-case hearings in the pending medical-fee disputes. The ALJs disposed of these
proceedings with largely parallel orders holding that “[t]he Stop-Loss Methodology applies to this
case” and ordering Texas Mutual to pay Vista additional reimbursement accordingly, less the
amounts Texas Mutual had already paid under the per diem rates, plus interest on the difference. See
Tex. Lab. Code § 413.019(a) (providing interest on unpaid fees or charges). Underlying the ALJs’
ultimate conclusion that the stop-loss exception applied were a series of legal conclusions that were
incorporated from the SOAH en banc panel’s decision. These included a conclusion adopting the
threshold-only view of the stop-loss exception: “A hospital . . . establishes eligibility for applying
the Stop-Loss Methodology . . . when total eligible charges exceed the Stop-Loss Threshold of
$40,000 [and] [t]here is no additional requirement for a hospital to separately establish that any or
all of the services were unusually costly or unusually extensive.” The ALJ further made underlying
fact findings regarding the amount of Vista’s total audited charges from the admission, which in each
instance exceeded the $40,000 stop-loss threshold. Consistent with its legal conclusions adopting
the threshold-only view, the ALJ did not make findings as to whether the charges stemmed from
“unusually costly and unusually extensive” services, see State Banking Bd. v. Valley Nat’l Bank,
604 S.W.2d 415, 419 (Tex. Civ. App.—Austin 1980, writ ref’d n.r.e.) (holding that APA does not
12
require findings on matter on which agency did not rely in support of its ultimate determinations),
but instead found that the amount of Vista’s charges alone “allows [Vista] to obtain reimbursement
under the Division’s Stop-Loss Methodology.”
In response to each of the 47 final administrative orders, Texas Mutual
paid the additional reimbursement as ordered and timely perfected a suit for judicial review.
See Tex. Lab. Code § 413.031(k-1); Tex. Gov’t Code § 2001.176(a)–(b); see also id.
§ 2001.176(b)(3) (providing that “the filing of the petition [for judicial review] vacates a state agency
decision for which trial de novo is the manner of review authorized by law but does not affect the
enforcement of an agency decision for which another manner of review is authorized”). When
making each payment, Texas Mutual also issued a new EOB in which it emphasized its position,
consistent with its threshold-plus view of the stop-loss exception, that it did not properly owe
the payment to Vista and that it was “reserv[ing] all rights afforded it by law to recover
this overpayment with interest.” It subsequently sent Vista “negative” EOBs purporting to request
“refunds” “for payments in excess of fee guidelines,” further specifying that “the admission did not
require unusually costly or unusually extensive services.” Vista refused to return the payments.
Texas Mutual did not attempt to seek remedies before the Division in response to Vista’s refusal.
Texas Mutual’s judicial-review claims were similarly founded on its threshold-plus
view of the stop-loss exception. The carrier asserted that the ALJs’ reliance on the threshold-only
view in awarding Vista stop-loss reimbursement necessitated reversal of the orders and remand of
Vista’s claims to the Division for redetermination under a proper, threshold-plus, construction of the
13
exception. See Tex. Gov’t Code § 2001.174(2).15 Texas Mutual’s position was eventually validated
when, during the pendency of its suits, this Court decided Vista I, holding that the stop-loss
exception required proof of both expenses exceeding the $40,000 threshold and “unusually costly
and unusually extensive” services. See Vista I, 275 S.W.3d at 548–51.
Thereafter, Vista acknowledged that the administrative orders awarding it stop-loss
reimbursement could not survive judicial review to the extent they rested solely on the legal
conclusion that the stop-loss exception applied to all claims meeting the $40,000 threshold and
did not additionally require proof of “unusually costly and unusually extensive” services. See id.
at 550–51. However, Vista urged that the administrative records in 20 of the 47 cases established
an alternative legal basis for applying the stop-loss exception there. Specifically, Vista maintained
that Texas Mutual had waived its right to contest whether the hospital services at issue in
those proceedings were “unusually costly and unusually extensive,” which in Vista’s view had the
effect of conceding that the stop-loss exception applied by virtue of the ALJ’s findings that
the charges at issue met the $40,000 threshold. Based on that premise, Vista filed in each of
these 20 cases a motion for summary judgment seeking to affirm the administrative order. Both
15
Specifically, Texas Mutual sought reversal of each administrative order under the APA on the
grounds that its substantial rights had been prejudiced by findings, conclusions, and decisions that
were based upon an error of law (the ALJ relied on the threshold-only view of the stop-loss
exception), made upon unlawful procedure (the ALJ did not require Vista to prove that its services
were “unusually costly and unusually extensive”), not supported by substantial evidence (there was
no evidence that Vista’s services in the admission were “unusually costly and unusually extensive”),
and arbitrary or capricious (the ALJ awarded Vista reimbursement under the stop-loss exception
without considering relevant factors, whether Vista’s services were “unusually costly and unusually
extensive”). See Tex. Gov’t Code § 2001.174(2)(C)–(F).
14
Texas Mutual and the Division, which was also a defendant, filed responses in opposition to Vista’s
summary-judgment motions.
However, as Texas Mutual observed in its briefing below, “the real fight” in the
district court “[was] about refunds”—specifically whether Texas Mutual (1) could immediately
recover in the district court’s judgment the additional reimbursement it had paid Vista under the
now-invalidated administrative orders, in essence returning the parties to their status quo before
Vista had sought medical-fee-dispute resolution on its claims for stop-loss reimbursement, or
(2) could recover the “overpayments” only if and after administrative proceedings on remand yielded
a final determination that Vista was not entitled to the disputed funds under a correct, threshold-plus
application of the stop-loss exception. In seeking an immediate “refund” of the disputed funds in
the judgment, Texas Mutual relied on two basic theories of recovery. First, in addition to seeking
reversal and remand of each administrative order under the APA, Texas Mutual contended that the
APA empowered the district court also to “order [Vista] to refund to Texas Mutual” the additional
reimbursement amount “Texas Mutual paid to [Vista] pursuant to the invalid SOAH order,
plus interest.” Alternatively, Texas Mutual asserted a claim for “refund” or recoupment of the
additional reimbursement under an equitable money-had-and-received theory. In the further
alternative, Texas Mutual sought declaratory judgments that the Division (or SOAH, in an “appeal”
from the Division) had the authority and duty under Labor Code section 413.016(a) to order Vista
to “refund” all funds paid by Texas Mutual pursuant to the invalidated administrative orders and that
if the Division’s rules precluded such relief, they were invalid and unconstitutional.16 Moreover, in
16
See Tex. Gov’t Code § 2001.038 (providing that validity or applicability of a rule may be
determined in suit for declaratory judgment); Tex. Civ. Prac. & Rem. Code §§ 37.001–.011
15
a final alternative, Texas Mutual sought a declaratory judgment that, if it “is unable to collect from
Vista the overpayment made to Vista, whether because there is no legal mechanism for doing so or
Vista is insolvent,” it is entitled to collect the “overpayment,” plus interest, from the subsequent
injury fund.17
Texas Mutual filed in each case a brief on the merits of its APA judicial-review
claims in which it emphasized its request for monetary relief under that statute. It combined
with that brief a motion for summary judgment on its equitable money-had-and-received claim.
Texas Mutual insisted that this “refund relief” was urgently necessary to protect the carrier’s interests
in the disputed funds during the interim before a final administrative determination of Vista’s claims
for stop-loss reimbursement. Texas Mutual emphasized filings by Vista’s parent company, Dynacq
Healthcare, Inc., before the U.S. Securities and Exchange Commission indicating that Dynacq was
in the process of selling the Vista hospitals due to continued operating losses, that Dynacq classified
the hospitals as “discontinued operation[s],” and that the company’s continuing operations
and business plans were focused exclusively on investments in China. Texas Mutual urged the
district court that if it “does not order refunds now, in its judgments,” there would be a substantial
risk that any payments it made to Vista in excess of the amounts it properly owed “may become
uncollectible, as Vista’s parent company moves all operations and assets to China.”
(provisions of the Uniform Declaratory Judgments Act) (UDJA). Texas Mutual also sought
attorney’s fees as the UDJA authorizes. See Tex. Civ. Prac. & Rem. Code § 37.009.
17
The subsequent injury fund is a dedicated account in the general revenue fund used only for
purposes specified by statute, including reimbursement to an insurance carrier for overpayment or
benefits made under an interlocutory order of the Division. See Tex. Lab. Code § 403.006.
16
Vista filed responses in opposition to Texas Mutual’s summary-judgment motions
in which it objected to an affidavit the carrier had presented. But Vista’s primary resistance to
Texas Mutual’s monetary claims came in the form of a plea to the jurisdiction it interposed in each
case. Vista asserted that the district court lacked subject-matter jurisdiction over the claims because
the Legislature had vested exclusive jurisdiction in the Division (and, in turn, SOAH) to determine
carriers’ entitlement to “refunds” of “overpayments” of medical reimbursement, subject to judicial
review, and the relief Texas Mutual sought fell squarely within the scope of this delegation. In
essence, Vista urged that Texas Mutual’s monetary claims presented a type of medical-fee dispute.
In response to Vista’s jurisdictional challenges, Texas Mutual acknowledged that the
“ultimate” question of whether Vista was entitled to reimbursement under the stop-loss exception
was within the Division’s exclusive jurisdiction to determine on remand and that the agency “could
order such refunds” at the conclusion of that process. Nonetheless, Texas Mutual insisted that its
“refund” claims presented a conceptually distinct issue that lay beyond the Division’s exclusive
jurisdiction over medical-fee disputes—whether it or Vista should be entitled to hold the disputed
stop-loss reimbursement amounts at the present time, pending determination of Vista’s “ultimate”
entitlement to stop-loss reimbursement. The Division echoed Texas Mutual in drawing “a sharp
distinction ‘between’ a ‘medical fee dispute’ (which includes a determination of the ultimate amount
due in the context of a refund demand) and a dispute as to the court’s authority to award equitable
recovery to [Texas Mutual] at this stage of the contested claims process.” It posited that “if the
court’s exercise of its powers in equity does not involve a determination that there has been an
‘overpayment’ or determining [] the payment ultimately due for hospital services, then adjudication
17
of [Texas Mutual’s] pending refund claims do not seem to compromise the Division’s original
jurisdiction to adjudicate medical fee disputes.”
The 47 suits proceeded to a consolidated hearing on Texas Mutual’s APA claims,
the parties’ summary-judgment motions, and Vista’s pleas to the jurisdiction. Thereafter, the
district court rendered the following judgments:
• In each of the 20 cases in which Vista had filed a motion for summary judgment seeking
affirmance of the final administrative order, the district court denied the motion.
• In each of the 47 cases, the district court
• rendered judgment reversing and remanding the administrative order to the Division
for further proceedings consistent with Vista I;
• denied Vista’s plea to the jurisdiction;
• overruled Vista’s evidentiary objection, granted Texas Mutual’s summary-judgment
motion on its money-had-and-received claim, and rendered judgment awarding the
carrier the additional reimbursement it had paid Vista under the now-invalidated
administrative order, plus interest. The district court emphasized that “[t]his
monetary award is without prejudice to the exclusive jurisdiction of [the Division]
to determine on remand in proceedings consistent with [Vista I] the hospital fee
dispute . . . and to order additional payments that may be due, if any, in accordance
with the Texas Labor Code and applicable medical fee guidelines”;
• in light of these holdings, dismissed “the other actions pled by Plaintiff Texas
Mutual” without prejudice; and
• ordered that “[a]ll claims for relief not expressly addressed above are DENIED.”
Vista paid the disputed funds into the court’s registry and perfected appeals to this
Court from each of the 47 judgments. On Vista’s motion, we consolidated the appeals for purposes
of briefing and argument.
18
ANALYSIS
Vista brings four issues on appeal. Its first, second, and fourth issues seek relief
from the district court’s judgment awarding Texas Mutual monetary relief under an equitable
money-had-and-received theory. In its first issue, Vista urges that the district court erred in
denying its pleas to the jurisdiction as to Texas Mutual’s money-had-and-received claims. In its
second issue, Vista argues that the district court abused its discretion in granting Texas Mutual’s
summary-judgment motions because it was an abuse of discretion to award relief under a
money-had-and-received theory under the circumstances presented here. In its fourth issue, Vista
complains that the district court abused its discretion in overruling its objection to Texas Mutual’s
summary-judgment evidence. In its remaining issue, its third, Vista asserts that the district court
erred in denying its motions for summary judgment in the 20 cases in which it filed one.
In addition to responding to Vista’s issues, Texas Mutual brings a cross-point
urging that the district court possessed subject-matter jurisdiction to award the monetary relief
under the APA, as the carrier had argued below, and that the judgment awards can be affirmed
on that alternative theory. Vista disputes that Texas Mutual’s cross-point sufficed to preserve this
contention for appeal and suggests that the APA claims for monetary relief would fall within the
Division’s exclusive jurisdiction in any event.
The Division, as appellee, has also filed a brief joining with Texas Mutual in
opposition to Vista’s third issue addressing Vista’s cross-motions for summary judgment. The
Division takes no position with respect to Vista’s remaining issues in the view that these concern
equitable monetary claims that fall outside the Division’s exclusive jurisdiction. But in the event
this Court determines that the district court could not properly grant such relief without reaching
19
Vista’s ultimate entitlement to stop-loss reimbursement, the Division conditionally asserts that the
courts would lack jurisdiction to adjudicate those issues until administrative remedies are exhausted.
Vista’s motions for summary judgment
Because Vista’s third issue seeks summary judgments affirming some of the
administrative orders, it logically precedes Vista’s other appellate issues in the 20 cases to which it
applies. Accordingly, we will address it first. We review the district court’s summary- judgment
rulings de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident
Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). Summary judgment is proper
when there are no disputed issues of material fact and the movant is entitled to judgment as a matter
of law. Tex. R. Civ. P. 166a(c). Where, as here, both parties move for summary judgment and the
district court grants one motion and denies the other, we review the summary-judgment evidence
presented by both sides, determine all questions presented, and render the judgment that the
district court should have rendered. Patient Advocates, 136 S.W.3d at 648. We must affirm the
summary judgment if any of the grounds asserted in the motion are meritorious. Id.
In each of its motions for summary judgment, Vista asserted that the administrative
order being challenged by Texas Mutual must be affirmed as a matter of law, notwithstanding the
ALJ’s reliance on the erroneous threshold-only view of the stop-loss exception, because substantial
evidence in the administrative record (itself a question of law18) supports a theory that, in Vista’s
view, effectively rendered the ALJ’s error harmless or immaterial. Specifically, Vista urged that
18
See Texas Dep’t of Pub. Safety v. Alford, 209 S.W.3d 101, 103 (Tex. 2006) (noting that
whether there is substantial evidence to support an administrative decision is a question of law).
20
there was substantial evidence that Texas Mutual administratively waived its right to contest whether
the hospital services were “unusually costly and unusually extensive.” Vista has reasoned that this
asserted waiver by Texas Mutual amounted to a concession that the hospital services were
“unusually costly and unusually extensive,” making the ALJ’s unchallenged findings that the
expenses met the $40,000 stop-loss threshold singularly sufficient to support the order even under
a correct interpretation of the stop-loss exception.
In urging that the district court could disregard the ALJ’s erroneous legal conclusions
and findings predicated on the threshold-only view of the stop-loss exception, Vista invokes the
longstanding principle—one that predates APA substantial-evidence review on the administrative
record—that a reviewing court generally must affirm an administrative order “if it is correct on any
theory of law applicable to the case,” regardless of whether the agency purported to rely on that legal
theory or even relied on an erroneous one. See Gulf Land Co. v. Atlantic Ref. Co., 131 S.W.2d 73,
77 (Tex. 1939). However, as Vista acknowledges, this principle does not permit a reviewing court
to affirm an administrative order on a factual theory on which the agency did not rely. See id. at
77–78; Public Util. Comm’n v. Southwestern Bell Tel. Co., 960 S.W.2d 116, 121 n.7
(Tex. App.—Austin 1997, no pet.). And this limitation gives rise to a threshold difficulty with
Vista’s third issue: each administrative order is devoid of any fact findings or legal conclusions
indicating that the ALJ relied on any factual theory of waiver, nor does any order contain the
underlying findings that would be necessary to support such a theory under a substantial-evidence
analysis.
The closest Vista can come to such support is to refer us to the following legal
conclusion contained in each administrative order:
21
Pursuant to 28 TAC § 133.307(j)(2), any defense or reason for a denial of a claim not
asserted by a carrier before a request for medical dispute resolution may not be
considered at the hearing before SOAH, whether or not it arises out of an audit.
The cited rule, section 133.307(j)(2) of Texas Administrative Code title 28, limits the “defenses” or
“denial reasons” that a carrier may raise in a medical-fee-dispute-resolution proceeding before the
Division solely to those the carrier “presented to the requestor prior to the date the request for
medical dispute resolution was filed with the [D]ivision and the other party.” See 28 Tex. Admin.
Code § 133.307(j)(2). Consequently, Vista is correct to suggest that rule 133.307(j)(2) is a rule
that could conceivably give rise to a waiver of rights by a workers’ compensation insurance carrier in
a medical-fee-dispute-resolution proceeding before the Division. Furthermore, as Vista emphasizes,
Texas Mutual did not challenge this legal conclusion in its judicial-review claim. But this
legal conclusion, as Texas Mutual urges, does no more than state an abstract legal proposition
relating to waiver—and there are no further findings or conclusions in the order purporting to apply
rule 133.307(j)(2) to specific facts and actually find a waiver, nor any findings of the underlying facts
(e.g., the defenses of denial reasons Texas Mutual did or did not raise, and when) that would be
required to support such a finding or conclusion. See Texas Health Facilities Comm’n v. Charter
Med.-Dallas, Inc., 665 S.W.2d 446, 453 (Tex. 1984) (explaining that substantial-evidence review
entails consideration of (1) whether agency made findings of underlying facts that logically support
the ultimate facts and legal conclusions that are the ultimate basis for the order and, in turn,
(2) whether the findings of underlying fact are reasonably supported by evidence).19 Nor was the
19
We also observe that the legal conclusion Vista cites is among the several that were
incorporated into each order essentially verbatim from the SOAH en banc panel’s order. Further,
the legal conclusion Vista cites is immediately preceded by another conclusion from the en banc
22
district court allowed to infer or presume those facts. See Morgan Drive Away, Inc. v. Railroad
Comm’n, 498 S.W.2d 147, 152 (Tex. 1973) (“We may consider only what was written by the
[agency] in its order, and we must measure its statutory sufficiency by what it says,” and “findings
of basic [underlying] facts cannot be presumed from findings of a conclusional nature.”).
There is, in short, no indication in the respective administrative orders that the ALJ
relied on any finding or conclusion that Texas Mutual had waived rights in regard to reimbursement
payments, and the district court was not permitted to supply that rationale to support each order. See
Gulf Land, 131 S.W.2d at 77–78; see also Yeary v. Board of Nurse Exam’rs, 855 S.W.2d 236,
240–41(Tex. App.—Austin 1993, no writ) (“In our review, we are limited to the factual grounds the
[agency] actually gave as the basis for its conclusion of law, although we may affirm the order on
a legal ground not mentioned by the [agency] in its final order,” and “[a]s to the factual grounds
stated by the [agency] as the basis for its conclusion of law, . . . we must judge the validity of
the [agency’s] order ‘by what it says.’”) (citing Gulf Land, 131 S.W.2d at 84; Morgan, 498 S.W.2d
at 152). And even if the legal conclusion Vista cites could be construed as an ultimate finding or
conclusion adopting Vista’s waiver theory, substantial evidence to support that finding would still
be lacking because there are none of the underlying fact findings that would be necessary to
panel order stating that carriers’ audit rights are not limited by the stop-loss exception’s application.
Read in context, the thrust of these two conclusions is to emphasize that while carriers may audit
reimbursement claims that are subject to the stop-loss exception, any grounds for denying payment
that are ultimately uncovered through the audit (a process that may delay a carrier’s disposition of
a reimbursement claim beyond the normal 45-day deadline for acting on a reimbursement claim, see
Tex. Lab. Code § 408.027(a), (b)), nonetheless must be raised in accordance with rule 133.307(j)(2)
in order to preserve them for purposes of medical dispute resolution. Vista has not suggested that
the underlying medical-fee disputes have anything in particular to do with audits. This tends to
further confirm that the ALJ’s legal conclusion regarding rule 133.307(j)(2) does not reflect or
support Vista’s waiver theory as a basis for affirming the administrative order.
23
demonstrate a reasonable basis for that ultimate finding or conclusion. See Charter Med.-Dallas,
665 S.W.2d at 453.
Vista insists, however, that the absence of underlying fact findings supporting
its waiver theory is immaterial because the administrative record establishes the necessary facts as
a matter of law. See Gulf Land, 131 S.W.2d at 77–78 (stating that reviewing court could affirm
administrative order based on alternative factual theory not addressed by the agency if the theory
was established by conclusive evidence). Specifically, Vista argues that the EOB forms that
Texas Mutual generated when initially processing the 20 reimbursement claims at issue failed to
comply with the following Division rule applicable at the time:
At the time an insurance carrier makes payment or denies payment on a medical bill,
the insurance carrier shall send, in the form and manner prescribed by the [Division],
the explanation of benefits to the appropriate parties. The explanation of benefits
[EOB] shall include the correct payment exception codes required by the [Division’s]
instructions, and shall provide sufficient explanation to allow the sender to
understand the reason(s) for the insurance carrier’s actions. A generic statement that
simply states a conclusion such as “not sufficiently documented” or other similar
phrases with no further description of the reason for the reduction or denial does not
satisfy the requirements of this section.
Former Rule 133.304(c). As Vista urges, the EOBs at issue are contained in the administrative
record from each respective proceeding and their contents are uncontroverted. Vista reasons that the
face of each EOB demonstrates that, as a matter of law, Texas Mutual failed to provide “sufficient
explanation to allow [Vista] to understand the reason(s) for the insurance carrier’s actions,” as
Former Rule 133.304(c) requires, with respect to Texas Mutual’s contention that the hospital
services at issue were not “unusually costly and unusually extensive.” Leaving aside whether such
24
a determination could in itself supply the necessary factual underpinnings for Vista’s waiver theory,20
Vista fails to demonstrate that Texas Mutual’s EOBs violated Former Rule 133.304(c).
Each EOB was printed on a Division-approved form and listed itemized charges that
Vista had billed Texas Mutual in connection with a hospital admission. Beside each itemized charge
was indicated Texas Mutual’s payment on the charge, which in each instance was either zero or
an amount reduced below the amount charged. Accompanying each charge and payment reference
was indicated “exception code F.” Vista’s summary-judgment evidence established that the Division
had adopted 22 “exception codes” and directed that exception code F—which the Division titled or
described as “Fee guideline MAR [Maximum Allowable Reimbursement] reduction”—was to be
used “when the [carrier] is reducing payment from the billed amount in accordance with the
appropriate [Division] fee guideline’s MAR . . . [and] NOT to be used for reductions based on lack
of documentation or for charges for which [the Division] has not established an MAR.” A complete
listing or glossary of the 22 exception codes and their brief descriptions was also incorporated into
the EOB form. Consequently, a reader of the form can discern that Texas Mutual’s references
to exception code F meant “Fee guideline MAR.” Alongside each reference to exception code F in
the itemized charges in the EOB was printed a “rationale” of “01,” which was identified elsewhere
in the document as: “01 THE CHARGE FOR THE PROCEDURE EXCEEDS THE AMOUNT
INDICATED IN THE FEE SCHEDULE.”
20
We note, for example, that Vista relies on asserted violations of Former Rule 133.304(c) to
show waiver under a different rule, rule 133.307(j)(2), yet the administrative orders contain no
findings or conclusions explaining why or how the latter would follow from the former.
25
Although Vista does not appear to quarrel with whether “F” was the appropriate
exception code for Texas Mutual to use under the circumstances here, see Former Rule 133.304(c),
it urges that Texas Mutual’s references to “Fee guideline MAR reduction” and “THE CHARGE
FOR THE PROCEDURE EXCEEDS THE AMOUNT INDICATED IN THE FEE SCHEDULE”
amounted only to the sort of “generic statement[s] that simply state a conclusion” that Former
Rule 133.304(c) prohibits, and did not satisfy the rule’s requirement of a “sufficient explanation to
allow the sender to understand the reason(s) for the insurance carrier’s actions.” See id. Vista also
contrasts these references with more specific explanations that Texas Mutual included in the
“negative” EOBs it generated in connection with its refund requests,21 suggesting this is tantamount
to an admission by Texas Mutual that its earlier EOBs were deficient. However, the Division has
adopted a construction of Former Rule 133.304(c)’s requirements that is less exacting than the
standard Vista advocates, and we conclude that we should defer to it.
The Division refers us to several of its medical-fee dispute decisions involving
stop-loss issues—some of which have involved Vista—that have addressed whether EOBs materially
identical to Texas Mutual’s here satisfy Former Rule 133.304(c)’s requirement. In these decisions,
the Division uniformly held that EOBs citing explanation code “F” (“Fee Guideline MAR
reduction”) coupled with a reference to “fee schedules” or similar shorthand “support an explanation
for the reduction of reimbursement” from the stop-loss amount to the per diem rates and
21
In the negative EOBs, as previously noted, Texas Mutual elaborated that it was requesting a
“refund . . . for payments in excess of fee guidelines because the admission did not require unusually
extensive and costly services.”
26
“provide sufficient explanation to allow the provider to understand the reason(s) for the insurance
carrier’s action(s).”22
The Division has requested that we take judicial notice of these administrative
decisions. Vista has not objected. We will do so. See Office of Pub. Util. Counsel v. Public Util.
Comm’n, 878 S.W.2d 598, 600 (Tex. 1994) (holding that court of appeals must take judicial notice
of agency’s published order if asked to do so) (citing Tex. R. Civ. Evid. 201(b)(2)); Hendee
v. Dewhurst, 228 S.W.3d 354, 377 n.30 (Tex. App.—Austin 2007, pet. denied) (likening agency
decisions to court decisions with regard to judicial notice). The Division has likewise urged us to
give deference to its rule construction reflected in these decisions. Vista has not disputed that these
decisions authoritatively represent the Division’s construction of Former Rule 133.304(c) and are
the sort of agency pronouncements regarding the construction of statutes and rules to which courts
could potentially give deference. Cf. Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747 (Tex. 2006)
(discussing analogous principles of judicial deference to agency statutory construction that apply
to “formal opinions adopted after formal proceedings”). And assuming an authoritative agency
interpretation like this, “[i]f there is vagueness, ambiguity, or room for policy interpretation in [the]
statute or regulation,” we normally defer to the agency’s interpretation if it is “reasonable” and
22
See Texas Dep’t of Ins., Div. of Workers’ Comp., Vista Hosp. of Dallas v. Texas Mut. Ins. Co.,
M4-08-1759-01 (Sept. 17, 2012); Texas Dep’t of Ins., Div. of Workers’ Comp., Vista Med. Ctr.
Hosp. v. Lumbermens Mut. Cas. Co., M4-03-8005-01 (Aug. 23, 2012); Texas Dep’t of Ins., Div. of
Workers’ Comp., Vista Med. Ctr. Hosp. v. State Office of Risk Mgmt., M4-05-4763-01 (Aug. 14,
2012); Texas Dep’t of Ins., Div. of Workers’ Comp., Vista Med. Ctr. Hosp. v. Commerce & Indus.
Ins., M4-06-6004-01 (Aug. [sic] 2012); Texas Dep’t of Ins., Div. of Workers’ Comp., Vista Hosp.
of Dallas v. Zurich Am. Ins. Co., M4-09-3488-01 (June 22, 2012); Texas Dep’t of Ins., Div. of
Workers’ Comp., Vista Med. Ctr. Hosp. v. Facility Ins. Corp., M4-06-6080-01 (June 6, 2012).
27
not “plainly erroneous or inconsistent with the language of the statute, regulation, or rule.” See
TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 438 (Tex. 2011).
We conclude that former Rule 133.304(c) is sufficiently vague, ambiguous, and open
to policy interpretation with respect to the precise parameters of a “sufficient explanation to allow
the sender to understand the reason(s) for the insurance carrier’s actions,” as distinguished from
a “generic statement,” that we should defer to the Division’s construction of these terms if it
is reasonable and not plainly erroneous or inconsistent with the rule’s text. See id. We further
conclude that the Division’s construction is reasonable, not plainly erroneous, and not inconsistent
with the rule’s text, but is instead within the range of reasonable constructions permitted by that
language. See id. Accordingly, we give deference to the Division’s construction. See id.
Texas Mutual’s EOBs plainly pass muster under the Division’s construction of
Former Rule 133.304(c). Again, Texas Mutual’s EOBs are materially identical to those addressed
in the administrative decisions to which the Division refers us. Consequently, the Texas Mutual
EOBs that Vista cites as conclusive proof of its waiver theory instead only further demonstrate
the absence of substantial evidence to support it. See Tex. Gov’t Code § 2001.174(2); Charter
Med.-Dallas, 665 S.W.2d at 453.
Absent administrative findings, conclusions, and substantial evidence to support
Vista’s waiver theory, the district court did not err in denying Vista’s motions for summary
judgment. We overrule Vista’s third issue.
Vista’s challenges to monetary relief
Having overruled Vista’s sole issue that would support affirming any of the
administrative orders, we now turn to Vista’s issues challenging the monetary relief the district court
28
awarded upon reversing those orders. Vista’s principal contention, advanced chiefly within its first
issue, is that the district court lacked subject-matter jurisdiction to award the monetary relief because
it amounted to the sort of “refund” of an “overpayment” of medical reimbursement to which the
Division (and, in turn, SOAH) have been vested with exclusive jurisdiction to determine entitlement,
subject to judicial review. Because Vista’s arguments and Texas Mutual’s responses are grounded
in the principles that govern analysis of administrative-agency jurisdiction, and that of the Division
in particular, it is helpful to first summarize those principles before turning to the parties’ specific
assertions regarding them.
Our “analytical starting point” with such issues is Article V, section 8 of the
Texas Constitution, which provides that a district court’s jurisdiction “consists of exclusive,
appellate, and original jurisdiction of all actions, proceedings, and remedies, except in cases where
exclusive, appellate, or original jurisdiction may be conferred by this Constitution or other law on
some other court, tribunal, or administrative body.” Tex. Const. art. V, § 8; see Apollo, 301 S.W.3d
at 859. The Legislature has generally conferred on district courts “the jurisdiction provided by
Article V, Section 8, of the Texas Constitution” and jurisdiction to “hear and determine any cause
that is cognizable by courts of law or equity and . . . grant any relief that could be granted by either
courts of law or equity.” Tex. Gov’t Code §§ 24.007–.008. Consequently, “[c]ourts of general
jurisdiction presumably have subject matter jurisdiction unless a contrary showing is made.” Subaru
of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 220 (Tex. 2002); see Apollo,
301 S.W.3d at 859.
In contrast, “there is no presumption that administrative agencies are authorized to
resolve disputes. Rather, they may exercise only those powers the law, in clear and express statutory
29
language, confers upon them.” Subaru, 84 S.W.3d at 220. “Courts will not imply additional
authority to agencies, nor may agencies create for themselves any excess powers.” Id. The courts
are not divested by an agency of the subject-matter jurisdiction they would otherwise possess to
adjudicate a cause except if and to the extent the Legislature has granted the agency exclusive
jurisdiction, or the sole power to make an initial determination of a claim or issue. See id. at 221;
Apollo, 301 S.W.3d at 859. Whether the Legislature has done so is determined by examination and
construction of the relevant statutory scheme, and is thus a question of law that we review de novo.
See Thomas v. Long, 207 S.W.3d 334, 340 (Tex. 2006) (citing Subaru, 84 S.W.3d at 221); Apollo,
301 S.W.3d at 859.23 We look to whether the Legislature has enacted express statutory language
indicating that the agency has exclusive jurisdiction, or if not, whether a “pervasive regulatory
scheme” nonetheless reflects legislative intent that an agency have the sole power to make the initial
determination in the dispute. See Thomas, 207 S.W.3d at 340 (citing Subaru, 84 S.W.3d at 223);
Apollo, 301 S.W.3d at 859. Moreover, “because ‘abrogating common-law claims is disfavored’ in
light of open courts implications, we are not to construe a statute creating an administrative
remedy to deprive a person of an established common-law remedy unless the statute ‘clearly or
plainly’ reflects the [L]egislature’s intent to supplant the common-law remedy with the statutory
23
Our primary objective in statutory construction is to give effect to the Legislature’s intent.
State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). We seek that intent “first and foremost” in the
statutory text. Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83, 85 (Tex. 2006). “Where text is clear,
text is determinative of that intent.” Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437
(Tex. 2009) (op. on reh’g) (citing Shumake, 199 S.W.3d at 284; Alex Sheshunoff Mgmt. Servs.
v. Johnson, 209 S.W.3d 644, 651–52 (Tex. 2006)). We give such statutes their plain meaning
without resort to rules of construction or extrinsic aids. Texas Lottery Comm’n v. First State Bank
of DeQueen, 325 S.W.3d 628, 635, 637 (Tex. 2010).
30
one.” Apollo, 301 S.W.3d at 859–60 (quoting Cash Am. Int’l, Inc. v. Bennett, 35 S.W.3d 12, 15–17
(Tex. 2000)).
As previously noted, and as all parties acknowledge, the Legislature has impliedly
delegated exclusive jurisdiction to the Division (and, in turn, SOAH) to determine, subject to judicial
review, medical-fee disputes—i.e., “disputes over the amount of payment due for services
determined to be medically necessary and appropriate for treatment of a compensable injury” that
must be paid by workers’ compensation insurance carriers to reimburse health-care providers for
“medical benefits” provided to injured workers. See Tex. Lab. Code §§ 408.027, 413.031(a), (c);
Apollo, 301 S.W.3d at 858–71; Eckerd, 162 S.W.3d at 263–67; Howell, 143 S.W.3d at 435–36. This
jurisdiction has been held to be implicated by any claim, even if couched in common-law or
equitable theories of recovery, through which a health-care provider seeks relief predicated on an
asserted entitlement to medical reimbursement under the workers’ compensation act and Division
rules. See Howell, 143 S.W.3d at 438. In essence, this holding is an application of the rationale
underlying the Texas Supreme Court’s Fodge decision, which held that common-law claims by
injured workers that would have the effect of establishing a right to workers’ compensation benefits
implicate the Division’s exclusive jurisdiction to award such benefits, and thus cannot be litigated
unless and until those administrative remedies are first exhausted. See American Motorists Ins. Co.
v. Fodge, 63 S.W.3d 801, 803 (Tex. 2001).
In Apollo, we held that this jurisdiction was similarly implicated by tort claims
asserted against a benefits management company (an entity that assists carriers in processing and
paying reimbursement claims) by an assignee of a health-care provider’s reimbursement rights, to
the extent the claims required determination of the amount of reimbursement that was properly owed
31
by the carrier to the provider under the act and Division rules. See Apollo, 301 S.W.3d at 862–71.
And in Eckerd, we held that the Division’s exclusive jurisdiction over medical-fee disputes was
likewise implicated by a workers’ compensation carrier’s claims seeking to recover “overpayments”
of reimbursement to a provider beyond the amounts the carrier is obligated to pay under the workers’
compensation act and rules. See Eckerd, 162 S.W.3d at 263–67. The specific claims we addressed
in Eckerd, it so happens, were asserted by Texas Mutual, and sought to recover alleged past
“overpayments” under legal theories that included money had and received, one of the same theories
of recovery on which Texas Mutual relies here. See id.
In concluding that the Legislature intended for the Division’s medical-fee
dispute-resolution processes to serve as the sole means of obtaining the determination—necessary
for recovery in each of these cases—as to the proper amount of reimbursement the carrier owed the
provider under the act and Division rules, we cited three basic features of the workers’ compensation
act. First, we emphasized that a health-care provider’s entitlement to any particular amount of
reimbursement payment and a carrier’s corresponding obligation to pay that amount derive from the
workers’ compensation act rather than the common law. See Apollo, 301 S.W.3d at 866–67; Eckerd,
162 S.W.3d at 266; cf. Cash Am., 35 S.W.3d at 15–17. Second, we noted the “pervasive” and
“comprehensive” nature of the workers’ compensation act’s regulatory scheme, and its governance
of medical reimbursement in particular. See Apollo, 301 S.W.3d at 860; Eckerd, 162 S.W.3d
at 264–66; Howell, 143 S.W.3d at 435–38. Third, we emphasized that the Legislature has provided
specific adjudicatory mechanisms and remedies by which the Division could determine and enforce
the respective rights of providers and carriers regarding medical reimbursement. See Apollo,
301 S.W.3d at 860–61; Eckerd, 162 S.W.3d at 265, 266 n.12; Howell, 143 S.W.3d at 435–38. In
32
Eckerd, for example, we observed that the act and Division rules provided mechanisms for resolving
disputes between providers and carriers regarding the proper amount of reimbursement due,
162 S.W.3d at 265 & n.9, empowered the Division to grant administrative remedies that we deemed
equivalent to the common-law remedies Texas Mutual was pursuing—including ordering “refunds”
under Labor Code section 413.016 and awarding interest on them, see id. at 266 n.12 (citing
Tex. Lab. Code §§ 413.016, .019)—and likewise authorized the Division to impose administrative
sanctions that included reducing fees or revoking or suspending a provider’s right to receive them,
see id. (citing Tex. Lab. Code § 415.023(b)(1), (4)). The Legislature’s provision of such procedures
and remedies in the context of the act’s “comprehensive” regulatory scheme, we reasoned, evidenced
intent that they serve as the sole means of initially determining and enforcing the statutory rights and
duties at issue, to the exclusion of the jurisdiction the courts would otherwise possess. See Apollo,
301 S.W.3d at 860–63.
On the other hand, we have also recognized that not every claim related to medical
reimbursement presents a medical-fee dispute and falls within the Division’s exclusive jurisdiction.
As we explained in Apollo, “[w]hat matters” with regard to the Division’s exclusive jurisdiction over
medical-fee disputes “is whether the claims are based on the alleged failure of carriers to pay . . . in
compliance with the statutes and rules governing . . . fee reimbursement,” whether by underpayment
or overpayment, such that adjudication would require determination of the specific amount due under
those standards and thereby infringe the Division’s sole power to initially determine those issues.
See id. at 865; cf. Fodge, 63 S.W.3d at 803. Although we concluded that two of the claims at issue
in Apollo were predicated on alleged entitlements to particular amounts of reimbursement due from
a carrier, thereby presenting medical-fee disputes, we held that two other claims did not because they
33
presumed the carrier had paid the correct amount of reimbursement due under the act and rules and
complained only that the defendant had acted wrongfully in depriving the plaintiff the opportunity
to establish an entitlement to greater reimbursement. See Apollo, 301 S.W.3d at 867–69. A parallel
distinction is recognized in the progeny of Fodge, which have distinguished between claims by
injured workers that would have the effect of establishing a right to workers’ compensation benefits,
thereby infringing the Division’s exclusive jurisdiction to award such benefits, and claims that did
not seek such benefits or presumed the absence of workers’ compensation coverage, which have
been held to be beyond the Division’s jurisdiction to decide.24
In Apollo, we further held that those two claims did not present a medical-fee dispute
or otherwise fall within the Division’s exclusive jurisdiction merely because the plaintiff sought
damages predicated on the reimbursement amounts that a carrier hypothetically would have been
required to pay it absent the defendant’s conduct, observing “[t]hat is not the same issue that is
presented in a medical-fee dispute.” See id. at 870. We additionally observed that the Legislature
had not provided any procedural mechanisms through which the Division could adjudicate this
24
Cf. In re Texas Mut. Ins. Co., 157 S.W.3d 75, 81 (Tex. App.—Austin 2004, orig. proceeding)
(breach-of-contract claim against carrier for damages allegedly caused by denial of benefits
“presuppose[d] the existence of a workers’ compensation policy and quite plainly seeks benefits due
under that policy,” thereby implicating the Division’s exclusive jurisdiction) with id. at 81–82
(contrasting claim for damages based on negligence in causing gap in coverage, which did not seek
benefits or damages based on arising from wrongful deprivation of benefits the carrier owed)
and Texas Mut. Ins. Co. v. Texas Dep’t of Ins., Div. of Workers’ Comp., 214 S.W.3d 613, 619
(Tex. App.—Austin 2006, no pet.) (holding that negligence claim requiring determination of
effective date of employers’ liability policy did not implicate Division’s exclusive jurisdiction, even
while policy was contained in same form as workers’ compensation policy and shared a common
effective date, because the plaintiffs were not asserting a claim to workers’ compensation benefits
or based on their deprivation; “[t]he foundation of our analysis in Texas Mutual and the supreme
court’s analysis in Fodge was a pending claim whose resolution required a determination of a
claimant’s entitlement to workers’ compensation benefits”).
34
“what-might-have-been inquiry” or decide the various subsidiary issues that might bear upon it. Id.
Apollo thus reminds us of a more basic prerequisite for exclusive agency jurisdiction to make the
initial determination regarding a claim or issue: the Legislature must have provided the agency a
procedural mechanism for making that determination in the first place. See id. (citing Butnaru
v. Ford Motor Co., 84 S.W.3d 198, 207–08 (Tex. 2002); Texas Mut. Ins. Co. v. Texas Dep’t of Ins.,
Div of Workers’ Comp., 214 S.W.3d 613, 619 (Tex. App.—Austin 2006, no pet.). More generally,
the scope of the administrative remedy (if any) as it compares to a common-law or equitable one is
one indicator of whether the Legislature intended to supplant the latter with the former. See Eckerd,
162 S.W.3d at 266 n.12 (reasoning that “[t]he ability of the [Division] to fully compensate
the injured party, to sanction parties that violate the Act, and to establish and enforce the Act’s
provisions further demonstrates the [L]egislature’s intent to grant the [Division] exclusive
jurisdiction over these claims,” and contrasting these remedies with the like-kind-replacement
remedy at issue in Cash America).
The parties’ competing contentions regarding the district court’s jurisdiction here
distill down essentially to whether Texas Mutual’s claims for monetary relief are materially identical
to its claims in Eckerd, as Vista suggests, or are more closely akin to the two claims in Apollo that
were held not to present medical-fee disputes, as Texas Mutual insists. In support of its view, Vista
urges that Texas Mutual’s monetary claims fall squarely within the scope of act provisions and
Division rules that authorize carriers to obtain “refunds” of reimbursement paid in excess of amounts
properly owed under the act and Division rules. Vista emphasizes Labor Code section 413.016(a),
which mandates that the Division “shall order a refund of charges paid to a health care provider in
excess of those allowed by the medical policies or fee guidelines.” See Tex. Lab. Code § 413.016(a);
35
Eckerd, 162 S.W.3d at 266 n.12. Whether a carrier is entitled to a refund under section 413.016(a),
as Vista observes, presents a medical-fee dispute, as it turns on whether the carrier has paid “charges
. . . in excess of those allowed by the medical policies or fee guidelines.” Consequently, as
Vista suggests, section 413.016(a) contemplates that a carrier can (or must) obtain the refund
remedy through the Division’s medical-fee-dispute-resolution process. In fact, Vista emphasizes,
the Division’s rules prescribe procedures for adjudicating carrier “refund” claims and explicitly
include such disputes in its definition of “medical-fee dispute.” See 28 Tex. Admin. Code
§§ 133.304(a), (o), (p) (carrier may “request[] reimbursement for an overpayment” in response to
a provider’s bill and seek medical-dispute resolution if the provider does not timely pay the
amount of refund requested); .305(a)(2) (defining “medical-fee disputes” to include a “refund
request dispute”—“a carrier dispute of a health care provider reduction or denial of the carrier
request for refund of payment for health care previously paid by the carrier”). Assuming the
medical-dispute-resolution process yields a final determination that the amount of charges “allowed
by the medical policies or fee guidelines” is less than the amount the carrier paid, section 413.016(a)
requires that the Division “shall order a refund” of those excessive payments. See Tex. Lab. Code
§ 413.016(a).25
25
Vista additionally asserts that Texas Mutual’s monetary claims fall within another provision
of the workers’ compensation act, Labor Code section 408.0271, which states that “[i]f the
health care services provided to an injured employee are determined to be inappropriate,” the carrier
“shall . . . demand a refund by the health care provider of the portion of the payment on the
claim that was received by the health care provider for the inappropriate services.” See Tex. Lab.
Code § 408.0271(a). Although Texas Mutual originally cited section 408.0271 as authority for its
“negative” EOBs and refund requests, it has subsequently contended that the provision is not
applicable to the entitlement it claims here. Conversely, Vista has previously asserted that
section 408.0271 was inapplicable to Texas Mutual’s claims, but suggests otherwise now. We agree
36
Drawing on our reasoning in Eckerd, Apollo, and Howell, Vista adds that the
Legislature’s provision of these administrative remedies, viewed in the context of the workers’
compensation act’s “pervasive regulatory scheme,” reflects its intent that the remedies serve as the
sole means by which Texas Mutual can recover any excess payment of medical reimbursement it
made to Vista. See Apollo, 301 S.W.3d at 860; Eckerd, 162 S.W.3d at 264–66; Howell, 143 S.W.3d
at 435–38. In other words, according to Vista, Texas Mutual can obtain recovery or “refunds” of
additional reimbursement it paid under the now-invalidated administrative orders only if it litigates,
and ultimately defeats, Vista’s claim for stop-loss reimbursement—now remanded to the Division,
and yet to be resolved—through the Division’s medical-dispute-resolution process. This statutory
scheme, Vista insists, divests the district court of any subject-matter jurisdiction to award
Texas Mutual the monetary relief challenged here.
with Texas Mutual’s current position that the “refund” claim contemplated by section 408.0271 is
not directly relevant here.
The refund claim provided by section 408.0271 arises “[i]f the health care services provided
to an injured employee are determined to be inappropriate.” See id. The meaning of “inappropriate”
health-care services or charges under section 408.0271 is informed by the section that immediately
precedes it, 408.027, which authorizes carriers to respond to medical-reimbursement claims by
auditing the “relationship of the health care services provided to the compensable injury, the extent
of the injury, and the medical necessity of the services provided.” See id. § 408.027(b). However,
if a carrier exercises its audit rights, section 408.027 requires it to make partial payment of a defined
percentage of the charges pending the audit’s outcome. See id. In the event “the health care services
provided are determined to be appropriate” by the audit, the carrier must then pay the remaining
portion due. See id. § 408.027(c). Read in this context, section 408.0271’s “refund” claim appears
to be addressed to the converse situation—the audit determines that some portion of the charges that
the carrier previously was required to pay turn out not to have been “appropriate,” in terms of
compensability, extent-of-injury, or medical necessity—in which case the carrier is authorized to
recover the partial payment it had previously made. See id. § 408.027(b), (c). The present medical-
fee disputes do not involve the circumstances to which section 408.0271 is addressed.
37
In response, Texas Mutual acknowledges that Labor Code section 413.016(a) and the
Division rules provide a “refund” remedy to carriers who pay providers medical reimbursement “in
excess of those allowed by the medical policies or fee guidelines.” It likewise admits that its claims
here can be said to seek a type of “refund” of reimbursement it contends it does not properly owe
Vista under the 1997 hospital fee guidelines—indeed, it has used the term “refund” throughout this
litigation to describe the relief it seeks. Also, as previously noted, Texas Mutual seemed to accept
below that the Division “could order such refunds,” at least after the administrative proceedings on
remand had yielded a final determination that Vista was not entitled to stop-loss reimbursement. On
appeal, however, Texas Mutual questions whether the “refund” remedy under section 413.016(a)
encompasses claims arising, as do its claims here, from the payment of additional reimbursement
in compliance with an administrative order in a medical-fee dispute that is later reversed. According
to Texas Mutual, section 413.016(a) contemplates only carrier “refund” claims that arise from
overpayments of reimbursement occurring during a carrier’s initial processing of a provider’s
reimbursement claim. Relatedly, Texas Mutual disputes whether the workers’ compensation act or
Division rules provide any procedural mechanism through which carriers in Texas Mutual’s
situation, as opposed to carriers who have made overpayments during initial claims processing, can
invoke the Division’s medical-fee-dispute-resolution process to obtain the necessary determinations
for refund relief under section 413.016(a). In support, Texas Mutual cites Division rules imposing
a deadline of 45 days after date of service for a carrier to request a “refund” or take other “final
action” on a bill, see 28 Tex. Admin. Code § 133.304, and a deadline of one year from the date of
the services at issue for a carrier to request medical-dispute resolution in a refund-request dispute,
see id. § 133.307(d)(2).
38
But even assuming that the “refund” remedy contemplated by section 413.016(a)
would otherwise permit it to recoup the additional reimbursement payments upon a final
determination, through the Division’s medical-fee-dispute-resolution process, that Vista is not
entitled to stop-loss reimbursement, Texas Mutual insists that the mere existence of this remedy does
not in itself suffice to establish legislative intent to supplant the district court’s jurisdiction to
grant the monetary relief it awarded here. Why this is so, Texas Mutual reasons, begins with a
conceptual distinction between an “ultimate” determination of Vista’s entitlement to stop-loss
reimbursement, which is the focus of the Division’s medical-fee-dispute-resolution processes and
the section 413.016(a) “refund” remedy, and what the carrier views as the focus of the theory of
recovery on which the judgment awards were based—money had and received.
An action for money had and received is equitable in nature and belongs conceptually
to the doctrine of unjust enrichment. See Best Buy Co. v. Barrera, 248 S.W.3d 160, 162 (Tex. 2007)
(per curiam); Edwards v. Mid-Continent Office Dist., L.P., 252 S.W.3d 833, 837 (Tex. App.—Dallas
2008, pet. denied) (quoting Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.—El Paso
1997, no writ)). The doctrine of unjust enrichment characterizes the result of a failure to make
restitution under circumstances that give rise to an implied or quasi-contractual obligation to return
those benefits. See Edwards, 252 S.W.3d at 837 (citing Amoco, 946 S.W.2d at 164). An action for
restitution via money had and received is said to lie whenever the defendant holds money that “in
equity and good conscience” “belongs” to the plaintiff “under the particular circumstances of each
case.” Best Buy, 248 S.W.3d at 162; Staats v. Miller, 243 S.W.2d 686, 687 (Tex. 1951); see also
id. (also describing the standard as “to which party does the money, in equity, justice, and law,
belong”). The action is not premised on wrongdoing, but rather “aims at the abstract justice of the
39
case, and looks solely to the inquiry whether the defendant holds money, which . . . belongs to the
plaintiff.” Staats, 243 S.W.2d at 687–88 (quoting United States v. Jefferson Elec. Mfg. Co., 291 U.S.
386, 403 (1934)). It has also been said that “a cause of action for money had and received is ‘less
restricted and fettered by technical rules and formalities than any other form of action.’” Id. at 687
(quoting Jefferson, 291 U.S. at 402–03).
In support of summary judgment on its money-had-and-received claims,
Texas Mutual has asserted that the disputed funds “belong” to it in “equity and good conscience”
because the 1997 hospital fee guideline presumes per-diem reimbursement and that, as of the time
of the district court judgments below, Vista has no valid order entitling it to the higher stop-loss
payments. In essence, Texas Mutual has argued that unless and until Vista can show itself entitled
to stop-loss reimbursement on remand, the equities weigh in favor of returning the disputed
additional reimbursement to the carrier, thereby returning it to the same economic position in which
it would have been had the funds never been awarded or paid to Vista in the first place. Relatedly,
Texas Mutual has relied on longstanding precedent holding that these equitable principles generally
require that a party who had received payment under a judgment that is subsequently reversed
must make restitution to the party who paid the judgment. See Miga v. Jensen, 299 S.W.3d 98, 101
(Tex. 2009) (citing Bank of U.S. v. Bank of Wash., 31 U.S. 17 (1832); Cleveland v. Tufts, 7 S.W. 72,
74 (Tex. 1888)).
Whether it is entitled to recover the disputed funds in “equity and good conscience,”
in Texas Mutual’s view, does not require a determination of Vista’s entitlement to stop-loss
reimbursement, the sine qua non of medical-fee disputes. See Apollo, 301 S.W.3d at 865.
Texas Mutual similarly distinguishes its money-had-and-received theory on the basis that it goes
40
only to whether it or Vista should be entitled to hold the disputed funds now, in the interim pending
the “ultimate” determination of Vista’s entitlement to stop-loss reimbursement, and does not
implicate the Division’s exclusive jurisdiction to initially determine that ultimate issue. Further,
because its money-had-and-received claims are rooted in equitable and common-law principles
rather than the workers’ compensation act, Texas Mutual reasons, we should not construe
the workers’ compensation act to deprive them of this remedy absent “clear expression” of
such legislative intent. See Cash America, 35 S.W.3d at 16. That required “clear expression”
of legislative intent is lacking, Texas Mutual suggests, because the workers’ compensation act does
not address or purport to supplant judicial power to award interim relief like the district court
fashioned here, if indeed the act addresses “refunds” or other relief for carriers in Texas Mutual’s
situation at all.
The substance of the parties’ contentions join issue with respect to two basic sets
of considerations in our analysis of the Division’s jurisdiction. The first is whether the workers’
compensation act provides any administrative remedy through which an insurance carrier in
Texas Mutual’s position, one that has paid additional reimbursement to comply with an
administrative order in a medical-fee dispute that is ultimately reversed on judicial review,
can potentially recoup those funds. See Apollo, 301 S.W.3d at 870. Vista urges that the “refund”
remedy of section 413.016(a) is such a remedy, while Texas Mutual disputes whether that
remedy would lie where, as here, the allegedly excessive reimbursement payment stems
from an administrative order in a medical-fee dispute that is ultimately reversed. Assuming Vista
is correct that section 413.016(a) would provide Texas Mutual a remedy through which it could
recover the disputed funds (assuming the carrier ultimately prevails, through the Division’s
41
medical-fee-dispute-resolution process, on Vista’s ultimate or underlying claim for stop-loss
reimbursement on remand), the next question is whether the Legislature intended that remedy to
serve as the sole and exclusive means for Texas Mutual to recover the additional reimbursement,
to the extent of divesting the district courts of any jurisdiction they might otherwise possess
to award the monetary relief at issue here. We conclude that both questions must be answered in
the affirmative.
Turning first to whether the section 413.016(a) refund remedy would lie for a carrier
in Texas Mutual’s situation, we find it significant that the Legislature did not place any limitations
or qualifications on the circumstance under which a carrier would come to pay “charges . . . to a
health care provider in excess of those allowed by the medical policies or fee guidelines,” so
as to require the Division to order a “refund.” See Tex. Lab. Code § 413.016(a). The text of
section 413.016(a) does not, in other words, draw the distinction Texas Mutual advocates between
excessive reimbursement occurring due to a subsequently reversed administrative order in a
medical-fee dispute, as here; or because of allegedly improper billing practices, the situation in
Eckerd; or because of accidents or errors in processing claims, as Texas Mutual suggests; or
any other reason. And the absence of any such distinction in the statute is especially telling in the
context of other statutory provisions that contemplate that section 413.016(a) “refunds” will arise
from circumstances like those here.
The Legislature has crafted a medical-fee-dispute-resolution regime under which
(1) the Division initially determines the amount of reimbursement owed by a carrier to a provider;
(2) a party aggrieved by the Division’s decision (which can include a carrier or provider) may
“appeal” to a SOAH contested-case hearing under the APA, see id. § 413.031(k); (3) the ALJ renders
42
the final administrative order, see id. § 402.073(b), subject to judicial review, see id. § 413.027(k-1);
but (4) the administrative order remains effective unless and until the court reverses the order and
remands the proceedings required by the APA, see Tex. Gov’t Code §§ 2001.174(2), .176(b)(3).
Collectively, this regime anticipates that (1) a carrier can be compelled to pay reimbursement to a
provider under an administrative order that is later reversed and that (2) further administrative
proceedings on remand may determine that the carrier does not owe the additional reimbursement
after all, (3) requiring that the Division “shall order a refund of charges paid to a health care
provider in excess of those allowed by the medical policies or fee guidelines.” See Tex. Lab. Code
§ 413.016(a).26 We must presume that the Legislature crafted this statutory scheme deliberately and
with awareness of these consequences. See Texas Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 452
(Tex. 2012) (presuming that “the Legislature deliberately and purposefully selects words and phrases
it enacts, as well as deliberately and purposefully omits words and phrases it does not enact”) (citing
Texas Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010)); City of
DeSoto v. White, 288 S.W.3d 389, 395 (Tex. 2009) (noting that Legislature is aware of consequences
of its enactments). Moreover, in the context of the workers’ compensation act, this is not only a
presumption but an established fact: as we have frequently observed, the act creates a “pervasive”
and “comprehensive” regulatory scheme in which the Legislature has carefully balanced the interests
of injured workers, employers, insurance carriers, and other system participants to achieve a viable
compensation system. See, e.g., Apollo, 301 S.W.3d at 860; Mid-Century Ins. Co. v. Texas Workers’
26
This analysis might be different if, as Texas Mutual urges in its cross-point, the APA
authorized the district court to award it recoupment of the disputed funds incident to its reversals of
the administrative orders. But we reject that contention below.
43
Comp. Comm’n, 187 S.W.3d 754, 758 (Tex. App.—Austin 2006, no pet.); Eckerd, 162 S.W.3d
at 264–66; Howell, 143 S.W.3d at 435–38. We must conclude that the Legislature intended
section 413.016(a) to serve as a remedy for carriers in Texas Mutual’s situation.
While Texas Mutual suggests otherwise, this statutory regime anticipates and
provides a procedural mechanism for determining whether “charges [were] paid to a health care
provider in excess of those allowed by the medical policies or fee guidelines,” as a predicate to
refund relief under section 413.016(a). Namely, upon reversal of the administrative orders, the APA
required the district court to remand Vista’s claims for stop-loss reimbursement for redetermination,
through the medical-fee-dispute-resolution process before the Division (and possibly SOAH, and
then judicial review in district court), under a correct, threshold-plus construction of the stop-loss
exception. See Tex. Gov’t Code §§ 2001.174(2). If these proceedings yield a final determination
that Vista is entitled to stop-loss reimbursement, Texas Mutual would have no right to those funds.
If, on the other hand, the proceedings yield a final determination that Vista is not entitled to stop-loss
reimbursement, section 413.016(a) would require the disputed funds to be refunded to Texas Mutual.
See Tex. Lab. Code § 413.016(a). Texas Mutual insists, however, that the most likely outcome on
remand if it is not awarded the disputed funds immediately is that Vista will simply dismiss or fail
to prosecute its pending reimbursement claims because it already possesses the funds and stands
only to lose or keep them in any further administrative proceedings. Were Vista to do so, it would
amount to an abandonment or concession of any claim to stop-loss reimbursement, leaving the
standard per-diem rates as the governing standard, and again requiring the Division to order Vista
to refund any reimbursement that Texas Mutual paid beyond those amounts. See id.
44
Assuming the existence of this refund remedy under section 413.016(a),
Texas Mutual seems to acknowledge that if it were to pursue “refunds” or recovery of the
additional reimbursement it paid Vista predicated on a determination that Vista did not satisfy
the requirements of the stop-loss exception, those claims would be medical-fee disputes within
the Division’s exclusive jurisdiction. See Eckerd, 162 S.W.3d at 263–67. In insisting that its
money-had-and-received claims do not implicate the Division’s exclusive jurisdiction, Texas Mutual
ultimately relies on asserted conceptual distinctions between the timing of the relief sought (interim
immediate relief versus relief whenever Vista’s claims to stop-loss reimbursement are finally
determined) and the legal theories presented (who in “equity and good conscience” should be
deemed to “own” the funds now versus whether Vista qualifies for stop-loss reimbursement under
a correct application of the stop-loss exception).27 We conclude that these conceptual distinctions
were of no moment to the Legislature when enacting the workers’ compensation act, and that it
instead intended the medical-fee-dispute-resolution process to supplant judicial jurisdiction to award
relief like the district court provided here. We reach this conclusion for three basic reasons.
First, although Texas Mutual strives to portray its money-had-and-received claims
as being rooted solely in equity or the common law, the claims instead seek redress for alleged
27
As previously noted, the Division has joined with Texas Mutual in distinguishing between
medical-fee disputes and “interim” equitable relief between parties to such disputes, although
the agency has not briefed the issue extensively. In contrast to the Division’s litigation position
regarding the sufficiency of Texas Mutual’s EOBs, which rested upon the agency’s authoritative
constructions of statutes and rules in past medical-fee-dispute decisions, the Division does not assert
that we should give any heightened deference to its litigation position regarding jurisdiction. Cf.
Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747 (Tex. 2006) (distinguishing between “formal
opinions adopted after formal proceedings” and “opinions in documents like the . . . amicus brief
here”). Neither does Texas Mutual.
45
injury that derives from the workers’ compensation act—medical reimbursement Texas Mutual paid
to Vista in excess of the amounts to which the carrier claims the provider is properly
entitled under the act and Division rules. While Texas Mutual attempts to distinguish between an
“ultimate” determination of Vista’s entitlement to stop-loss reimbursement versus a determination
of whether Vista should get to keep the stop-loss reimbursement it was paid under the
now-invalidated administrative orders in the meantime, in either case Texas Mutual seeks relief
based on contentions that Vista has not shown itself entitled under the workers’ compensation act
and rules to a particular amount of medical reimbursement—a claim that, as we observed in Eckerd,
is “‘common law’ in name only.” Eckerd, 162 S.W.3d at 266. Texas Mutual’s asserted distinctions
between the claims, in other words, boil down ultimately to mere differences in their temporal
focus—one asks whether Vista has failed to establish an entitlement to stop-loss reimbursement
upon final adjudication of that issue, the other asks whether Vista has established such an entitlement
yet. In both, the nature of the claimed injury is identical, deriving from rights and duties rooted
solely in the workers’ compensation act’s provisions governing medical reimbursement and not the
common law. See Apollo, 301 S.W.3d at 867 (“As we explained in Eckerd, the right to recover any
particular amount of reimbursement from a workers’ compensation insurance carrier for [health care]
services provided . . . to an injured worker is entirely a function of the workers’ compensation act
and Division rules.”). This is the sort of injury at issue in cases like Eckerd and Howell rather than
in Cash America.
The second reason, to which we have already alluded, is that the Legislature intended
the workers’ compensation act to serve as a “pervasive” and “comprehensive” scheme governing
the provision of benefits to injured workers, including the manner in which health-care providers
46
are compensated for providing services within that system. See, e.g., Apollo, 301 S.W.3d at 860;
Eckerd, 162 S.W.3d at 264–66; Howell, 143 S.W.3d at 435–38. Each feature of that scheme
reflects painstaking Legislative economic and policy judgments as to the appropriate means of
balancing the often-competing interests of participants to achieve a viable compensation system
within constitutional limitations. See, e.g., Mid-Century, 187 S.W.3d at 758. In the context of this
comprehensive statutory framework, it seems doubtful that the Legislature intended to leave the
courts free to fashion “interim” monetary relief between parties to pending medical-fee disputes, so
long as the relief purported to avoid the “ultimate” question of the proper amount of reimbursement
that is owed.
This observation brings us to the third reason why we conclude the Legislature
intended the section 413.016(a) refund remedy to supplant such “interim” relief, which is closely
related to the second: Texas Mutual’s view would invite disruptions to the workers’ compensation
act’s careful balancing of interests that the Legislature could not possibly have intended. See Great-
West Life & Annuity Ins. Co. v. Texas Attorney Gen. Child Support Div., 331 S.W.3d 884, 899
(Tex. App.—Austin 2011, pet. denied); see also Tex. Gov’t Code § 311.023(5) (permitting
consideration of consequences of a particular statutory construction). Texas Mutual’s view would
imply that there is no impediment, as far as the act is concerned, to a court ordering a workers’
compensation insurance carrier to make advance payment of the entirety of a provider’s bill because
this is merely “interim” relief that does not address the provider’s “ultimate” entitlement to payment
under the act and Division rules. Even if the carrier might “ultimately” prevail in the underlying
medical-fee dispute and recover the funds, the compulsory interim payments, as Texas Mutual’s own
arguments tacitly recognize, would nonetheless risk substantial disruptions of the economic
47
relationship of the parties and the viability of the workers’ compensation regime. Cf. Cities of
Corpus Christi v. Public Util. Comm’n, 188 S.W.3d 681, 690–91 (Tex. App.—Austin 2005,
pet. denied) (making an analogous observation regarding interim awards of “stranded costs”).
Indeed, if courts were left free to fashion interim relief based on such malleable and idiosyncratic
guideposts as “equity and good conscience,” there would soon be little left of the Legislature’s
careful balancing of interests. Rather than leaving such a gap or hole in the act’s “comprehensive”
and “pervasive” regulatory scheme, we conclude that the Legislature instead addressed the issue with
the section 413.016(a) refund remedy and other features of the medical-fee-dispute-resolution
process. Cf. Ruttiger, 381 S.W.3d at 443 (relying on its notion that “‘it is conceptually untenable
that the Legislature would have enacted two alternative statutory remedies, one that enacts a
structured scheme . . . and carefully constructs rights, remedies, and procedures . . . and one that
would significantly undermine that scheme’” to hold that workers’ compensation claimants may not
assert claims under the Insurance Code) (quoting City of Waco v. Lopez, 259 S.W.3d 147, 155–56
(Tex. 2008)).
We hold that Texas Mutual’s sole remedy for recovering medical reimbursement
it paid to Vista under the administrative orders reversed by the district court is to pursue refunds
under Labor Code section 413.016(a) in the further medical-fee-dispute-resolution proceedings
on Vista’s claims to stop-loss reimbursement. Because this determination is vested solely in the
Division (and, in turn, SOAH), subject only to judicial review under the APA, the district court
lacked subject-matter jurisdiction to award those funds to Texas Mutual in the judgments.
Accordingly, we sustain Vista’s first issue, reverse the judgment awards of monetary relief, and
render judgment dismissing Texas Mutual’s money-had-and-received claims for want of jurisdiction.
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Our disposition of Vista’s first issue makes it unnecessary for us to reach its second
and fourth issues, which present other challenges to the district court’s judgment awarding monetary
relief on Texas Mutual’s money-had-and-received claims. See Tex. R. App. P. 47.1.28 This leaves
only Texas Mutual’s cross-point, in which it argues that the district court possessed subject-matter
jurisdiction to award the disputed funds under the APA as relief incidental to reversal of the
administrative orders and remanding of Vista’s stop-loss claims for further proceedings. The
APA provisions governing substantial-evidence review do not explicitly mention monetary
relief—they state only that a reviewing court, upon finding legal error that prejudiced a petitioner’s
“substantial rights,” “shall reverse or remand the case for further proceedings.” See Tex. Gov’t
28
However, we emphasize that we are expressing no opinion as to whether, apart from the
jurisdictional defects we have identified, the district court had discretion under the circumstances
here to award the relief under a money-had-and-received theory. Within its second issue, Vista
asserts that Texas Mutual’s money-had-and-received claims inherently presented issues within the
Division’s exclusive jurisdiction over medical-fee disputes, such that the district court’s purported
avoidance of those issues when granting summary judgment amounted to an abuse of discretion
under the equitable principles that govern such claims. Vista emphasizes the Texas Supreme Court’s
recent recognition that defendants in money-had-and-received claims are entitled to “present any
facts and raise any defenses that would deny the claimant’s right or show that the claimant should
not recover,” including particular circumstances showing that “in equity and good conscience”
the disputed funds should belong to the defendant rather than the claimant. Best Buy Co.
v. Barrera, 248 S.W.3d 160, 162 (Tex. 2007) (per curiam); Stonebridge Life Ins. Co. v. Pitts,
236 S.W.3d 201, 205–06 (Tex. 2007). Such “facts” and “defenses,” Vista suggests, would
necessarily include whether Vista was entitled to stop-loss reimbursement under a proper threshold-
plus view of the exception—i.e., that the original administrative order compelling payment in each
case, while founded on reversible error, ultimately reached the right result. Relatedly, Vista asserts
that Texas cases awarding equitable restitution of debts previously paid under subsequently reversed
judgments have uniformly turned on appellate judgments that not only reverse the lower-court
judgments imposing the debt, but render judgment definitively negating the debt’s existence—not
situations where, as here, the existence of the potential judgment debt remains an unresolved issue
on remand. From either perspective, Vista urges, the issue of its ultimate entitlement to stop-loss
reimbursement is inseparable from the “equity and good conscience” inquiry, properly applied. This
is a close question, but one that we need not reach here.
49
Code § 2001.174(2). Nor does Texas Mutual refer us to any case in which a court has awarded
monetary relief incident to reversing and remanding an administrative order. However, it relies on
Southwestern Bell Telephone Co. v. Public Utility Commission, 615 S.W.2d 947 (Tex. App.—Austin
1981), aff’d, 622 S.W.2d 82 (Tex. 1981), in which we held that “meaningful and effective” judicial
review in a utility rate case allowed error correction on remand made effective back to the date of
the agency’s original order. See id. at 955–56. Emphasizing Southwestern Bell’s notion that the
APA is intended to provide “effective” relief via judicial review, Texas Mutual extrapolates that it
authorized the district court to award it recoupment of the disputed funds to ensure that its remand
of Vista’s stop-loss reimbursement would be fully “effective” and Vista would not simply move its
assets to China and potentially make the funds uncollectible.
In response, Vista asserts that Texas Mutual is seeking relief more favorable than
that afforded it in the judgment and, consequently, was required to perfect its own appeal in order
to raise its complaint. See Tex. R. App. P. 25.1(c) (“A party who seeks to alter the trial court’s
judgment . . . must file a notice of appeal). Because Texas Mutual did not file a notice of appeal,
Vista insists, we lack jurisdiction to consider the complaint. See id.; Texas Bd. of Chiropractic
Exam’rs v. Texas Med. Ass’n, 375 S.W.3d 464, 491–92 (Tex. App.—Austin 2012, pet. filed)
(holding that appellate court lacked jurisdiction to consider appellee’s cross-point seeking to alter
trial court’s judgment because appellee had failed to file separate notice of appeal). Alternatively,
Vista insists that the APA does not authorize the monetary relief and that, in any event, the
claims would implicate the Division’s exclusive jurisdiction in the same manner that the
money-had-and-received claims did.
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Assuming without deciding that Texas Mutual preserved this complaint for appellate
review, we would hold that, in the absence of further support in the APA’s text or Texas Supreme
Court precedent telling us otherwise, the APA does not authorize the monetary relief Texas Mutual
seeks. We overrule Texas Mutual’s cross-point.
CONCLUSION
In light of our disposition of the parties’ issues, we affirm the district court’s
judgments reversing the administrative orders and remanding Vista’s claims for stop-loss
reimbursement to the Division for further proceedings. We reverse the district court’s judgments
awarding Texas Mutual monetary relief and render judgments dismissing those claims for want of
jurisdiction. However, because Texas Mutual has asserted alternative constitutional and statutory
claims that may not be directly impacted by these holdings, we remand these causes to the
district court for further proceedings consistent with this opinion. We express no opinion as to the
district court’s jurisdiction to award relief based on Texas Mutual’s surviving claims or theories.
__________________________________________
Bob Pemberton, Justice
Before Justices Puryear, Pemberton, and Rose
Affirmed in part; Reversed and Rendered in part; Reversed and Remanded in part
Filed: June 6, 2013
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