                             ATTORNEY GENERAL OF TEXAS
                                           GREG        ABBOTT




                                             December 10, 2010



Mr. Rod Bordelon                                         Opinion No. GA-0828
Commissioner of Workers' Compensation
Texas Department of Insurance                            Re: Whether a workers' compensation carrier
7551 Metro Center Drive, Suite 100                       may pay for a prescription drug at a rate lower
Austin, Texas 78744-1609                                 than the fee rate allowed under the guidelines of
                                                         the Division of Workers' Compensation of the
                                                         Department of Insurance (RQ-0890-GA)

Dear Commissioner Bordelon:

        You ask two questions about the fee rates that workers' compensation insurance carriers must
pay to reimburse health care providers for prescription drugs and other remedies delivered to injured
workers under Texas workers' compensation laws.' First, you ask whether insurers may contract
with providers after January 1, 2011, to pay for prescriptions at rates lower than the rates that might
be allowed under the fee guidelines established by the Texas Department of Insurance, Division of
Workers' Compensation (the "Division"). Request Letter at I. If the answer to that question is
"yes," you want to know whether insurers may contract with informal or voluntary networks to
obtain such contracts. Id.

I.      Whether Insurers May Pay Rates Lower than the Guidelines Allow

         In presenting your first question, you discuss whether sections 408.027 ,408.028, and413.0 11
of the Labor Code prohibit insurers from contracting for a reimbursement rate that is lower than the
rates that the guidelines allow. Id. at 1-3. We begin our answer by noting that none of those statutes
refers to a minimum fee rate at which insurers may reimburse providers for prescriptions. See
generally TEX. LAB. CODE ANN. §§ 408.027 (West Supp. 2010), 408.028 (West 2006), 413.011
(West Supp. 2010). This suggests that the statutes you discuss do not establish a minimum rate. See
State v. Shumake, 199 S.W.3d 279,284 (Tex. 2006) (holding that courts determine the Legislature's
intent from the plain meaning of the words it chose); see also Cameron v. Terrel & Garrett, Inc., 618
S.W.2d 535, 540 (Tex. 1981) (holding that courts must presume that every word excluded from a
statute was excluded for a purpose). The lack of a reference to a minimum rate contrasts with the
express grant of permission in section 413.011 to insurers to contract "for fees that exceed the fees
adopted by the division under this section." TEX. LAB. CODE ANN. § 413.011(d-4) (West Supp.



        lRequest Letter at 1 (available at http://www.texasattorneygeneral.gov).
Mr. Rod Bordelon - Page 2                             (GA-0828)



20 I 0) (effective January I, 20 II). This is further indication that the statutes you discuss do not
establish a minimum rate. See Mid-Century Ins. Co. o/Tex. v. Kidd, 997 S.W.2d 265, 273-74 (Tex.
1999) (explaining that a law's express inclusion of a thing generally excludes a thing not expressly
included). We have not found any statute that mentions a minimum rate for prescriptions under the
Texas workers' compensation system, nor did any of the many briefs we received in this matter
purport to identify such a law. Because we are unaware of a statute that identifies a minimum
allowable rate, we must interpret the guidelines in order to determine whether there is a minimum
allowable rate.

       The guidelines refer to a maximum allowable rate, but they do not refer to a minimum
allowable rate. 28 TEx. ADMIN. CODE § 134.503(a) (2010) (Tex. Dep't ofIns., Reimbursement
Methodology).2 This suggests that the guidelines do not provide a minimum allowable rate. See
Kidd, 997 S. W .2d at 273-74 (noting thatthe express inclusion of something excludes something not
expressly included); see also Rodriguez v. Servo Lloyd's Ins. Co., 997 S. W.2d 248, 254 (Tex. 1999)
(providing that courts interpret administrative rules as they interpret statutes). Therefore, we
conclude that there is not a minimum allowable rate under the guidelines.

II.      Whether Insnrers May Contract for Discounted Rates

         You also ask "whether insurance carriers may contract with informal or voluntary networks"
to obtain a' contractual agreement with health care providers to pay for prescriptions at rates lower
than the rates allowed under the guidelines after January 1,2011. Request Letter at 1. Because there
could not be a rate lower than the rates the guidelines allow, we will discuss the more basic question
of whether insurance carriers may enter into contracts with informal or voluntary networks to obtain
contracts with health care providers to pay for prescriptions at negotiated rates. Under Insurance
Code chapter 1305, every informal or voluntary network must be certified as a workers'
compensation health care network ("WCHCN") by January I, 2011. TEX. LAB. CODE ANN. §
413.0115(b) (West Supp. 2010). Chapter 1305 provides that "prescription medication or services,
as defined by section 401.0 II (19)(E), Labor Code, may not be delivered through" a WCHCN. TEx.
INS. CODE ANN. § 1305.101(c) (West 2009). Section 40 1.0 11 (19)(E) ofthe Labor Code provides
that a "prescription drug, medicine, or other remedy" is a form of "[hJealth care," the definition of
which includes "all reasonable and necessary medical aid, medical examinations, medical treatments,
medical diagnoses, medical evaluation, and medical services." TEx. LAB. CODE ANN. §
413.011(19)(E) (West Supp. 2010). Thus, "prescription medication or services" under chapter
1305.101 are medications or services that provide medical aid to injured workers.

         Neither the Labor Code nor Insurance Code defines the adjective "medical," but both codes
use it to define other terms in a way that indicates it describes a physical treatment or condition. See
id. § 401.011(31) (defming the term "medical benefit" as payment for health care intended to treat
an injury or disease); TEx.lNs. CODE ANN. § 1305.004(13) (West Supp. 2010) (defining the term
"medical emergency" as the sudden onset of a condition manifested by severe pain or serious bodily


         2See E-mail from Dirk Johnson, the Division's General Counsel, to Jason Boatright, Assistant Attorney General
(Sept. 16,2010) (indicating that the guidelines are section 134.503) (on file with the Opinion Committee).
Mr. Rod Bordelon - Page 3                             (GA-0828)




dysfunction). Because entering into a contract would not physically treat an injured worker, entering
into a contract could not be a prescription medication or service. See TEx. INs. CODE ANN. §
1305.101(c) (West 2009) (prohibiting a WCHCN from providing a prescription medication or
service). Therefore, although a WCHCN must not provide prescription medication or services, an
insurance carrier may enter into a contract with a WCHCN to obtain a contract with a health care
provider to pay for prescriptions at a negotiated rate after January I, 2011. 3




         3We express no opinion on whether any particular contract between a WCHCN and an insurer would be legally
pennissible. Tex. Att'y Gen. Op. No. GA-0302 (2005) (stating that this office does not review or construe contracts).
Mr. Rod Bordelon - Page 4                    (GA-0828)



                                           ,
                                       SUMMARY

                       Sections 408.027, 408.028, and 413.011 of the Texas Labor
               Code do not establish a minimum allowable rate at which workers'
               compensation insurance carriers may pay for a prescription drug,
               medicine, or other remedy. A workers' compensation insurance
               carrier may contract with a workers' compensation health care
               network to obtain a contract with a health care provider to pay for a
               prescription drug, medicine, or other remedy at negotiated rates that
               are permitted by law.




DANIEL T. HODGE
First Assistant Attorney General

DAVID 1,. SCHENCK
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Jason Boatright
Assistant Attorney General, Opinion Committee
