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DWC-11-0016 Indemnity Insurance Texas Department of Workers Comp

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

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OFFKL4L ORDER of the COMMISSIONER OF WORKERS’ COMPENSATION of the STATE OF TEXAS AUSTIN, TEXAS
Date:
Subject Considered: iNDEMNiTY INSURANCE COMPANY OF NORTH AMERICA 436 Walnut Street Philadelphia, Pennsylvania 19105 CONSENT ORDER DISCIPLiNARY ACTION TDI ENFORCEMENT FILE NO. 58286 General remarks and official action taken:
On this date came on for consideration Lw the Commissioner of Workers Compensation. the matter of whether disciplinary action should be taken against Indemnity Insurance Company of North America (1ndemnity’). The Texas Department of Insurance, Division of Workers’ Compensation Staff (“Division Staff’) alleges that Indemnity violated the Texas Labor Code and that such conduct constitutes grounds for imposition of sanctions pursuant to TEx. LAB. CoDE ANN. ch. 415.
Division Staff and Indemnity announce that they have compromised and settled all claims and agree to the entry of this Consent Order. The parties request that the Commissioner of Workers’ Compensation informally dispose of this case pursuant to TEx. Gov’i CODE ANN. § 2001.056, TEx. LAB. CODE ANx. § 401.02 1 and 402.00 128(b)(7). and 28 Tix. ADMIx. CoDE § 180.26(h).
indemnitY insurance Company of North America: Cl S No. 58286
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MMION ER’S ORI)ER
JURISDICTION
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[‘he Commissioner of Workers’ Compensation has jurisdiction over this matter pursuant to TEX. LAB. CODE A. § 402.001. 402.00111. 402.00114, 402.001 16. 402.00128. 408.027. 408.081. 408.l01.408.144.408.145.409.021.409.023.410.169.413.0T1. 413.015. 415.002. 415.021. and 28 TEx. ADMIN. CODE § 124.2. 124.7. 129.3, 130.107. 133.240, 133.250. 134.202. 134.403. 134,600. and 152.1: and TEN, Gov’T Coiw ANN, § 2001,051—2001,178.
WAIVER Indemnit acknowledges the existence of certain rights provided by the Texas Labor Code and other applicable law, including the right to receive a written notice of possible administrative violations as provided for by TEN. LAB. CODE ANN. § 415.032. the right to request a hearing as provided for by TEx. LAB. CoDE AN’N. § 415,034. and the right to judicial review of the decision as provided for by TEx. LAB. CODE ANN. § 415.035. Indemnity Insurance Company of North America waives all of these rights, as well as any other procedural rights that might otherwise apply, in consideration of the entry of this Consent Order. FINDINGS OF FACT The Commissioner of Workers’ Compensation makes the following findings of fact:
System Participant I. Indemnity is a foreign property and casualty insurance company currently holding a certificate of authority issued by the Texas Department of Insurance on January 1. 1901, to transact the business of insurance pursuant to TEx. INS. CODE A. § $01.05 1801.053. and is licensed to write multiple lines of insurance, including workers’ compensalion,ernployers liability. Indemnity was assessed as an “average tier” performer in the 2007 and 2009 Performance Based Oversight (PBO’ assessments. Failure to Timely Pay Attorney’s Fees Ordered by the Division
2.
3.
Indemnity failed to timely comply with a Division order to pay attorney’s fees (Injured Employee: W.IL; Carrier Number: C7MECO 142076: Claim Number: xxxx2O66: CIS No. 898551). a. On or about January 23, 2006. Indemnity received an order, numbered 3, for attorney’s fees in the amount of$1,219.00.
The order was to he paid at 25% of the inj.ured employee’s indemnity henelits.
c.
On March 13. 2006. Indemnity issued a check to the injured employee for indemnity benefits.
OMMISSiONFR ORDER
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d.
Therefore. indemnity \\as required to make a pa\ment of attorne’s fees on the same date. 1ndemni1 R%ued a check u the allorne\ 1.381 da late on December 22. 2009. Attorney fee order numbers 5. 6. and 7 ere also paid late. Failure to Pay for Preauthorized Medical Services
C
f.
4.
indemnit failed to pay for preauthorized medical services (Injured Employee: 1.W.: Carrier Number: 1606094X1 Claim Number: xxxx8l 54; CIS No. 912072).
a.
On or about March 1, 2010, a medical bill was submitted to atd received by Indemnity for date of service February 23, 201 0. In response, on March 23, 2010, Indemnity denied payment for the services stating “1 97-Precertification/authorization/notification absent.”
This vas not a sufficient reason for the denial because services were preauthorized on January 21. 2010.
b. c. d. 5.
After re-review. Indemnity issued payment on April 28, 2010 in the amount of $111.66.
Indemnity failed to pay (hr preauthorized medical services (Injured Employee: T.V.: Carrier Number: 1 606094X 1: Claim Number: xxxx8 154: CIS No. 909579). a. On or about I-ebruarv I. 2010. a medical bill as submitted to and received by Indemnity for date of service January 27. 2010. In response. on February 1 9. 2010, indemnity denied pay merit for the services stating 1 97-Precertification/authorization/noti fication absent.”
I his was not a sufficient reason for the denial because ser ices were preauthorized on January 21. 2010. After re-review, Indemnity issued payment on March 26. 2010 in the amount of $73.64.
h.
c.
d. 6.
Indemnity failed to pay for preauthorized medical services (Injured Employee: R.C.. Carrier Number: 1414649X1: Claim Number: xxxx63l6: (IS No. 919956).
a.
On or about January 4. 2010. a medical bill vas submitted to and received by Indemnity for dates of service December 16. 2009 through December 23. 2009.
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b.
In response, On January 29, 2010, Indemnity denied payment fir the services stating “39-Services denied at the time authorization/pre-certification was requested”
This was not a sufficient reason for the denial because services were preauthoriLed on November 23. 2009. After re-review, Indemnity issued payment on July 21. 2010 in the amount of S891 MO.
c. d. 7.
indemnity failed to pay lbr preauthorized medical services (Injured Employee: C.D.; Carrier Number: C135C717199X: Claim Number: xxxx6O65: C1S No. 926902).
a.
On or about June 1, 2010, medical bills were submitted to and received by Indemnity for dates of service April 26, 2010 through May 7, 2010. In response. on June 16, 2010, Indemnity denied payment for the services stating “Adjuster disputes charges as medically necessity and reasonable 100%.” This was not a sufficient reason for the denial because services were preauthorized on April 23. 2010 After re-review, Indemnity issued payment on September 28, 2010 in the amount of $7.500.00.
Failure to Timely Pay Temporary Income Benefits (TIBs)
h. c. d.
8.
Indemnity failed to timely pay or dispute initial TIBs (Injured Employee: G,R.; Carrier Number: 949013680; Claim Number: xxxx3748; CIS No. 902590). a. h. On or about August 3, 2009, Indemnity received a first Notice of Injury for the injured employee. The first day of disahi1it as September 25. 2009, and the eighth day of disability accrued on October 2. 2009. Therefore. the due date to initiate TIBs was no later than October 9, 2009. Indemnity issued payment in the amount of $2.68 125 on November 12, 2009. or 34 days late. In addition, lndemnity failed to timely issue 1 lBs for the benefit periods of September 25, 2009 through October 1, 2009, October 9, 2009 through October 15, 2009, October 16, 2009 through October 22, 2009, October 23. 2009 through October 29, 2009. and October 30. 2009 through November 5. 2009.
c. d.
e.
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Failure to Timely Pay Supplemental Income Benefits (SIBs) 9. Indemnity failed to timely pay SIBs (Injured Employee: J.S.; Carrier Number: YLLC5 1254: Claim Number: xxxxi343; CIS No. 920571). a. b. c. Indemnity received the DWC Forrn-52 forthe third quarter on January25. 2010. Payment was due by the later of the I 0° day after Indemnity received the DWC Form-52, or the seventh day of the quarter, or February 8, 2010. Indemnity issued pa ment for the first month of the third quarter of S1Bs on February 22, 2010. or 14 days late.
10.
Indemnity failed to timely pay SJBs (Injured Employee: J.S.; Carrier Number: YLLC5 1254; Claim Number: xxxx 1343; CIS No. 906105). a. Indemnity received the Application fhr Supplemental Income Benefits (DWC Form-52) for the fourth quarter on May 20, 2010. Payment for the second month of tile fourth quarter was due by the 37 day of the quarter. or June 9.2010. Indemnity issued payment for the second month of the fourth quarter of SIRs on June 24, 2010, or 15 days late. In addition, Indemnity failed to timely issue payment for the third month of the fourth quarter of SIBs. Failure to Timely Process Medical Bills
b. c. d.
11.
Indemnity failed to timely process and take final action on a properly completed medical bill (Injured Employee: E.H.; Carrier Number: C498C 1587289; Claim Number: xxxx8864; CJS No. 916766), a. On or about January 16. 2010, Indemnity received a properly completed medical bill from the health care provider in the amount of $2,238.00 for medical services provided to the injured employee on January 5. 2010.
Indemnity was required to take action regarding payment or denial on the medical th bill no later than the 45 day after receipt of the bill, or March 2, 2010.
b.
C.
Indemnity took action 106 days late on June 16. 2010. the amount of $640.60.
hen it issued payment in
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12.
Indemnity Failed to timely process and take final action on a properly completed medical bill (Erured Emploee: L.S.: Carrier Number: 002850001292WC01: Claim Number: xxxxl 154: CIS No. 926943). a. On or about June 24. 2010. Indemnity received a properly completed medical bill from the health care proider in the amount of $640.25 for medical serices provided to the injured employee on June 21. 2010. Indemnity was required to take action regarding payment or denial on the medical 45tH day after receipt of the bill, or August 9. 2010. bill no later than the Indemnity took action 46 days late on September 24, 2010, when it issued payment in the amount of $621.08.
b.
c.
Failure to Provide Sufficient Explanation for Reduction or Denial of Medical Services
13.
Indemnity failed to provide sufficient explanation for reduction or denial of medical services (Injured Employee: G.B.: Carrier Number: 003658000279WC01: Claim Number: xxxxOl34: CIS No. 917926). a. On or about November 24. 2009, indemnity received a properly completed medical bill from the health care provider for date of service October 29. 2009. On or about December 7. 2009, indemnity denied payment stating that the claim lacks information which is needed for adjudication.” I his was not a sufficient reason for the action because necessary’ documentation was provided by the health care provider with the medical bill. After additional review, Indemnity issued payment on July 6. 2010 in the amount of $644.16. Failure to Timely Respond to a Request for Reconsideration
h.
c.
d.
14.
Indemnity failed to timely respond to a request for reconsideration (Injured Employee: E.A.: Carrier Number: 6450190318; Claim Number: xxxx3O6O: CIS No. 913227). a. On or about March 18, 2010. Indemnity received a complete request for reconsideration of a medical bill from the health care provider for dates of service June 15, 2009 through June 26, 2009. indemnit as required to take action regarding payment or denial of the reconsideration request no later than April 8, 2010.
c
indemnity took action 1 3 1 day late on ugust 1 7. 2010. explanation of benefits to the health care provider.
hen it k%Oed an
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d.
In addition. Indemnity fiuiled to tinieiv take action on the request for reconsideration for dates of service June 22. 2009. June 23. 2009. June 25. 2009. and June 26. 2009,
15,
Indemnity failed to timely respond to a request for reconsideration (injured Employee: A.A.; Carrier Number: A86703415800010167; Claim Number: xxxx5 153; CIS No. 914149). a. On or about November 5. 2009, Indemnity received a complete request for reconsideration of a medical bill from the health care provider for dates of service August 4, 2009 and August 5. 2009. Indemnity was required to take action regarding payment or denial of the reconsideration request no later than November 30, 2009. Indemnity took action 21 8 days late on July 6, 2010, when it issued a payment to the health care provider.
b. c.
Failure to Pay Medical Bills in Accordance with Division Medical Fee Guidelines 16. indemnity failed to pay a medical bill in accordance with Division Medical Fee Guidelines (Injured Employee: M.A.: Carrier Number: 00288500043 IWCO1: Claim Number: xxxx7296: CIS No. 905714). a. On December 9, 2009, the health care provider provided medical services to the injured employee. indemnity received a complete medical bill for said date of service for HCPCS codes 99456 (W5) (WP). 99456 (W8), and 99080 (73). On February 4. 2010, Indemnity issued an inaccurate payment of $715.00 according to the Division Medical Fee Guidelines in effect at the time the services were provided. After rereview, indemnity issued an additional payment of $300.00 on March 3, 2010.
b. c.
d. 17.
Indemnity failed to pay a medical bill in accordance with Division Medical Fee Guidelines (Injured Employee: L.L: Carrier N umber: 478CBA8L 1795; Claim Number: xxxx8483; CIS No. 908298). a. On .1anuar 11. 2010. the health care proider proided medical ser ices to the injured employee. Indemnity received a complete medical bill for said date of service for HCPCS codes 99456W5-WP. 99456-W8, and 9908043.
h.
COMMISSIONEWS ORDER indemnity Insurance Company of North America; CTS No. 58286
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c.
On February 27, 2010, Indemnity issued an inaccurate payment of $850.00 for HCPCS codes 99456-W5-WP and 99456-W8 according to the Division Medical Fee Guidelines in effect at the time the services were provided.
d.
After rereview, Indemnity issued an additional payment of $600.00 on March 20, 2010.
Failure to Submit Accurate Initial Payment of TIBs Data by Electronic Data Interchange
18.
Indemnity inaccurately reported initial payment of TIBs data to the Division (Injured Employee J.S., Carrier Number: 186048474001, Claim Number: xxxx24l7; CIS No. 923922). a.
h.
The actual initial benefit payment date was December 21, 2009.
Indemnity incorrectly reported the initial benefit payment date as December 30, 2009. CONCLUSIONS OF LAW
Based upon the firegoing findings of fact, the Commissioner of Workers’ Compensation makes the following conclusions of law:
I.
The Commissioner of Workers’ Compensation has jurisdiction over this matter pursuant to TEx. LAB. CODE ANN. § 402.001, 402.00111, 402.00114, 402.00116, 402.00128, 408.027. 408.081, 408.101, 408.144, 408.145, 409.021, 409.023, 410.169, 413.011, 413.015. 415.002. 415.021, and 28 TEx. ADMIi’i. CODE § 124.2, 124.7, 129.3. 130.107, 133.240, 133.250, 134.202, 134.403, 134.600, and 152.1; and TEx. Gov’T CoDE ANN. § 2001.051—2001.178.
2.
The Commissioner of Workers’ Compensation has authority to informally dispose of this matter as set forth herein under TEx. Gov”r CoDE ANN. § 2001.056, TEx, LAB. CODE ANN. § 401.021 and 402.00 128(b)(7), and 28 TEx. ADMIN. CoDE § 180.26(h).
Indemnity has knowingly and voluntarily waived all procedural rights to which they may have been entitled regarding the entry of this Order, including, but not limited to, written notice of possible administrative violations, a hearing, and judicial review.
in aceordan.ee with TEx. LAB, CODE AN1.r, § 415 02 I, the Com.missioner oi Workers’ Compensation may assess an administrative penalty against a person who commits an administrative violation.
3.
4.
5.
In accordance with TEx. LAB, CoDE ANN, § 415.021, in addition to any other provisions in this subtitle relating to violations a person commits an administratie violation if the
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415.021 each lime tailed to comply an an
person violates, fails to comply sith. or refuses to comply tsith this subtitle or a rule, order. or decision of the commissioner.
6.
indemnhly ioiated T- v. Lxii. (DE order or decision of the commissioner. Indemnity violated TEx. LAB. CODI. ANN. decision or order of the [)ivision.
iL
t
7.
§ 410.169 each time it failed to comply with a
8.
indemnity violated TEx. LAB. COD[ ANN. § 408.027(b) each time it failed to timely process and take final action on a properly completed medical bill ithin 45 days of receipt of the bill. Indemnity violated TEX. LAB. CoDE A. § 408.027(e) each time it failed to sufficiently explain the reasons for the reduction or denial of payment for health care services to the injured employee.
Indemnity violated lix, LAB. CODE Ax. § 413.011 each time it failed to pay medical bills according to the Division Medical Fee Guidelines.
9.
10,
11.
Indemnity ‘ iolated lix. LAB. CODE As’s. § 408.081 each time it failed to pay benefits weekly. as and when the benefits accrued without order from the commissioner. indemnit iolaied TEx. I n. (or xx. dispute initial TIBs.
12.
§ 409.021
each time it iiied t timely pay or
13.
Indemnity violated lix. LAB. CoDE A<. § 409.023(a) each time promptly as and when the benefits accrued.
it
failed to pay benefits
14.
Indemnity violated lix. Ln, COOF ANN. § 4i5.002(a)(i9) each time it unreasonably disputed the reasonableness and necessity of health care. Indemnity’ violated 28 lix. ADMIN, CoDE § 124.2 each time it failed to submit accurate initial payment of T113s data by electronic data interchange to the Division. Indemnity violated 28 lix. ADMIX. CODE SIBs for subsequent quarters.
15.
16.
§ 130.107(b) each time it failed to timely pay
17.
Indemnity violated 28 lix. ADMIN. CODE § 133.240(e) each time it failed to take final action on a properly completed medical bill vithin 45 days of receipt of the bill. Indemnit violated 28 TEx. ADMIX. CODE to a request for reconsideration.
18.
§ 133.250 each time it failed to timely respond
19.
Indemnity violated 28 IEX. ADMIN. CODF § 134.403(e) each time it failed to pay medical bills according to the Division Medical Fee Guidelines.
i)MMIssIO\LR’S OREWR
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20.
Indemnity iolated 28 ILX, ADMIN. CODL 134.600(c)(IXB) each time it failed to pa the reasonable and necessary medical costs relating to treatments’services which require preauthorization ii the insurance carrier ae preauthorization or voluntary certification prior to the services being provided.
21.
Indemnity violated 28 TEx. ADMIN. (ODE. § 134.600(1) each time it failed to pay for medical services that were preauthorized.
Indemnity ‘iolated 28 TFx, ADMIN, Coor attorney’s fees ordered by the Division.
22.
§
1521 each time it failed to timely pay
Based on the Findings of Fact and Conclusions of Law above, the Commissioner of Workers’ Compensation has determined that the appropriate disposition is to order payment of an administrative penalty and full compliance with the terms of this Order. IT IS THEREFORE ORDERED that Indemnity Insurance Company of North America shall pay, and is hereby directed to pay, on or before thirty (30) days from the date of this Order, an administrative penalty in the amount of SIXTY EIGH’I’ THOUSAND DOLLARS AND ZERO CENTS ($68,000.00). The payment must be paid by company check, cashier’s check, or money order made payable to the “State of Texas” and transmitted to the Texas Department of Insurance, Enforcement Division-DWC, Division 3721, MC-9999. P.O. Box 149104, Austin, Texas 78714-9104.
OMMISIONFRS ORDgR Indemnity Insurance Company of North America: C IS No. 58286 Page II of 13
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II IS ALSO ORDERED by the Commissioner of Workers Compensation that if hdemnit Insurance Company of North America fails to comply with the terms of this Order that Indemnity Insurance Cempan of North America will base committed an additional administrative violation and its failure to comply with the terms of this Order may subject Indemnity Insurance Company of North America to furthei penalties as authorized by the fexas Labor Code, which, pursuant to TEx. LAB. CODE ANN. § 415.021(a). includes the right to impose an administrative penalty of up to $25,000 per day per occurrence.
ROORD,ELON fMISSkNER ?J7’WORKERS COMPENSATION
/
FOR THE STAFF:
Cn Attorney, Enforcement Texas Department of Insurance Dis ision of Workers’ Compensation p
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Insurance Compan’ oF North
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AGREED. ACCEPTED. AND EXECLTED h’ Indemnity 2011. America on this. the / day of J
S uznatur
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Title
Iy ped/Printed Name
________ __________________ ___________
_________
\i\iiSSifl\F RS ORjj[R 1ndemnit Insurance Compan of North America: C [S No. 58286 Pac 13 ut 13
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SIAlE OF COUNTY OF
§ § §
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notary public in and for the State of BEFORE ME. known to me or proven to me this day personally appeared to be the person hose name is subscribed to the through foregoing instrument. nd acknowledged to me that (he/she) executed the same for the purposes and consideration therein expressed, who being by me duly sworn, deposed as follows: I am of suund mind, capable of making this name is statement. and personally acquainted with the facts herein stated. 2. O 1 am an authorized representative of 1 hold the office of Indemnity Insurance Company of North America, which holds a Certificate of Authority to transact the business of insurance in the State of Texas. and I am duly authorized by said company to execute this statement.
.
3.
Indemnity Insurance Company of North America has knowingly and voluntariiy entered into this Consent Order and agrees with and consents to the issuance and service of the foregoing Consent Order by the Commissioner of Workers’ Compensation in the State of Texas.”
‘q /i4
giature
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PW4,/
Typed/Printed Name
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Given under my hand and seal of offIce this
A
day of (
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,201l.
/Th
Signature of Notary Public
aPrinted Name of Notar Public
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NOTARY PUBLIC IN AND FOR THE STAlL OF My Commission Expires: Bianca D erholiow My Comrnissor xprer 04/04/201 J New Laste County Set& Nota H
.
(NOTAR SFAI)

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