Texas Seeks Input on Designated Doctor Audits

Texas is seeking input for the Division of Workers’ Compensation Designated Doctor Plan-Based Audit.
The Texas Department of Insurance will use audits to evaluate the medical necessity and reasonableness of referrals or additional testing ordered by designated doctors, as well as how referral information is incorporated into their narrative reports.
The audit sets the scope, methodology, selection standards, and program area duties laid out in the Medical Quality Review Process.
The medical advisor approved the designated doctor audit category as part of the Calendar Year 2025 Medical Quality Review Annual Audit Plan.
Texas Labor Code requires the Division of Workers’ Compensation (DWC) to review the quality of health care provided in the workers’ compensation system and take appropriate action as needed. In addition to reviewing health care providers that deliver services, DWC is also required to review actions of peer review doctors, designated doctors, utilization review agents, and independent review organizations.
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The Centers for Medicare & Medicaid Services (CMS) will begin auditing workers’ compensation, general liability, and no-fault claims payers for noncompliance with Section 111 Medicare Reporting requirements, as of Oct. 11.
Specifically, the auditing will cause CMS to enforce civil money penalties (CMPs) against Responsible Reporting Entities (RREs) that fail to timely report Medicare beneficiary claims and settlements via Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 as outlined within the Final Rule.
CMS’ website suggests that even though CMS may begin to issue civil money penalties as early as October 11, 2025, the first round of civil money penalties may not actually be issued until January 2026.
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NCCI’s Court Case Insights dashboard notes that the Iowa Supreme Court earlier this month, in Den Hartog Industries v. Dungan, considered the determination of workers compensation benefits when an employee suffers nonscheduled permanent partial disabilities and then voluntarily leaves the employment to work at a different job with higher wages.
The group’s dashboard is currently tracking 309 cases nationwide.
The Iowa case is centered on an employee who sustained a compensable nonscheduled back injury but continued working for the same employer with restrictions.
Less than a year later, they voluntarily left that employment and began working a different job for higher pay.
During the benefit hearing, the administrative law judge applied Iowa statute 85.34 and awarded benefits in accordance with the industrial disability method—which considers the loss of earning capacity and does not consider the employee’s functional impairment rating. The Iowa Court of Appeals affirmed.
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