TEXAS UPDATE

Texas Update has returned from the holidays and a Rose Bowl victory and is ready to get back to the ol’ pen and pad. Likewise, the Texas Legislature has returned to Austin and is ready to tax and spend. We suggest you lock up the spousal unit and kids and secure your worldly goods. This won’t be pretty. Never is.
CHAMBERLAIN MCHANEY LAWYER SCORES MAJOR VICTORY: In a case notable for the complexity of its issues and novelty of its procedures, Tim Poteet of our firm successfully represented Hartford Insurance Company in a commercial breach of contract suit against the University of Houston before the State Office of Administrative Hearings. The suit arose from a controversy over liability for a $250,000.00 deductible in connection with an Owner Controlled Insurance Program (or wrap-up policy) under which the first named insured (owner University of Houston) sued another named insured (the general contractor) for damages resulting from defects in an athletic facility. The suit proceeded under an administrative protocol dictated by the recently enacted Contract Claims Act, which governs claims against state entities that otherwise would be barred by sovereign immunity. In a 41 page decision and order, the court addressed numerous jurisdictional and affirmative defenses raised by the University of Houston, and found that our client, Hartford, was entitled to recover the maximum amount of its claim.
LEGISLATURE MAY OVERHAUL WORKERS COMPENSATION SYSTEM: A proposed overhaul of the state’s workers’ compensation system would create regulated networks of doctors to treat injured workers and revamp the structure of the state agency that oversees the system. The Texas system has come under attack from many fronts. Organized labor says too many workers are denied adequate compensation and too often must fight insurance companies to pay claims. Employers say too many doctors and chiropractors are more focused on maximizing profits than helping workers get back to work quickly. Many doctors have stopped taking workers’ compensation patients, citing the hassle of justifying their treatment and trying to get paid.
Richard Levy, legal director for the Texas AFL-CIO, said the labor group plans to study the bill to see whether it places too much control of the provider networks in the hands of insurance companies and whether it emphasizes cost-cutting over the quality of care. But under the new system, with insurance companies and networks agreeing beforehand on fees, treatment procedures and the like, “the carrier won’t play the day-to-day role of micromanager,” said one of the bill’s sponsors. Texas AFL-CIO President Emmett Sheppard isn’t so sure that the bill is a panacea. “The devil is in the details,” Sheppard said. “We are examining the bill with an eye toward whether the medical networks the bill would set up provide a broad-enough choice of quality medical care providers.”
Highlights of the bill:
• Replace the Texas Workers’ Compensation Commission with a more traditional state department with a single commissioner in charge.
• Use networks of doctors to provide care. Employers, doctors or HMOs could create the networks, which would contract with employers or insurers to provide care. The state Department of Insurance would regulate the networks and periodically review the quality of care they provide.
• Increase benefits for injured workers, which now are capped at $539 a week, and reduce the waiting period from four weeks to two.