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623 S.W.3d 336
Tex.
2021
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Background

  • Patients Medical Center (provider) performed preauthorized surgery and billed $94,640.48; Facility Insurance Corporation (carrier) paid $2,354.75 and denied further reimbursement.
  • Patients requested Medical Fee Dispute Resolution (MFDR) from the Texas Department of Insurance, Division of Workers’ Compensation; the Division awarded Patients $22,850.53 total, ordering an additional $20,495.78 to be paid.
  • Facility requested a contested‑case hearing at the State Office of Administrative Hearings (SOAH) to appeal the Division’s MFDR decision.
  • At SOAH, the Administrative Law Judge (ALJ) ruled that Facility (the party seeking review) bore the burden of proof, rejected Facility’s defenses (timeliness/complete bill and scope of preauthorization), and ordered payment of the additional amount plus interest.
  • The trial court affirmed; the court of appeals reversed, holding the burden of proof remained with the provider and remanding for further proceedings.
  • The Texas Supreme Court granted review solely on the burden‑of‑proof allocation and reversed the court of appeals, holding the ALJ acted properly.

Issues

Issue Patients' Argument Facility's Argument Held
Who bears the burden of proof at a SOAH contested‑case hearing following Division MFDR? Burden rests on the party seeking relief at SOAH; here Facility sought review, so Facility bears it. Burden should remain on the provider because the provider initiated MFDR to obtain payment. Burden is on the party seeking review at SOAH (the party who requested the contested‑case hearing); ALJ correctly placed it on Facility.
Does assigning the burden to the reviewer render SOAH review meaningless or force the reviewer to "prove a negative"? ALJ conducted independent review of evidence, not deferential reliance on the Division decision; review remains meaningful. Requiring Facility to disprove entitlement makes the contest illusory and improperly shifts proof. Court rejects Facility's contention; ALJ considered evidence de novo and did not merely adopt the Division’s findings.
Are judicial‑review authorities that place burdens on appellants controlling for SOAH contested‑case procedure? Those statutes/cases govern judicial review (court phase), not administrative contested‑case hearings, so they are inapposite. Cites statutes/cases on judicial review to argue burden should favor provider at SOAH as well. Court holds those authorities govern judicial review only and do not control administrative SOAH burden allocation.

Key Cases Cited

  • TGS‑NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432 (Tex. 2011) (principles for construing administrative rules like statutes)
  • Zanchi v. Lane, 408 S.W.3d 373 (Tex. 2013) (agency intent is reflected in plain language of rules)
  • Tex. Workers’ Comp. Comm’n v. Patient Advocates of Tex., 136 S.W.3d 643 (Tex. 2004) (Division — not carrier — makes fee determinations subject to review)
  • Rodriguez v. Serv. Lloyds Ins. Co., 997 S.W.2d 248 (Tex. 1999) (Texas Register statements reflect agency intent)
  • In re Lazy W Dist. No. 1, 493 S.W.3d 538 (Tex. 2016) (distinguishing administrative proceedings from later judicial proceedings)
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Case Details

Case Name: Patients Medical Center v. Facility Insurance Corporation
Court Name: Texas Supreme Court
Date Published: Jan 29, 2021
Citations: 623 S.W.3d 336; 19-0533
Docket Number: 19-0533
Court Abbreviation: Tex.
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    Patients Medical Center v. Facility Insurance Corporation, 623 S.W.3d 336