Brooke Army Medical Center in San Antonio is known for its acclaimed trauma and burn-care units. It is the military’s only Level I trauma center, and one of only a few trauma centers in southwest Texas.

The hospital treats soldiers and civilians alike, including hundreds of injured workers each year.

In recent years, Brooke also has become known for balance-billing injured workers, sometimes for several thousand dollars, and for turning the unpaid bills over to the U.S. Treasury for collection.

State law prohibits most medical providers from balance-billing injured workers. But that law holds no sway over federal installations.

Now, the Texas Division of Workers' Compensation is asking for legislation to address the problem. In its Biennial Report to the Texas Legislature, released this month, the division recommends that lawmakers adopt a new definition of “federal military treatment facility,” which could clarify that the hospital is exempt from the state's fee schedule.  

The division’s director of external relations, Jeff Nelson, this week declined to say specifically how the proposed legislation should be worded. But claimants’ attorneys and others have said the best way to correct the problem is to simply require Texas insurers to pay the full amount of the Army’s bill for the hospital stay.

Insurers are hoping for other options.

“I assume the Legislature could require that, but that’s not a solution we would like to see,” said Mary Nichols, vice president and general counsel for Texas Mutual Insurance Co., the largest workers’ compensation carrier in the state.

The practice of balance billing by military hospitals has become more common in the last few years, after a 2014 Department of Defense audit that flagged Brooke for a poor record of collecting on delinquent accounts, the report said. At the time, the medical center had more than 15,000 medical accounts that were more than 180 days past due, totaling $73 million, the DOD report shows.

Since then, Brooke’s billing department has been busy.

DWC data show that between Jan. 1, 2015, and July 31, 2018, some 666 injured workers received care at Brooke Army Medical Center, often referred to by its initials, BAMC. Those hospital visits were billed at $25.3 million, of which $13.3 million was paid by insurance carriers.

The $12 million balance comes to an average of $18,000 per worker treated at the hospital, the DWC report indicates.

“It’s not clear whether BAMC intends to pursue all of these additional charges, but DWC has seen an uptick in complaints from injured employees who have received balance bills from BAMC or had their debt turned over to the federal Treasury,” the Biennial Report reads.

San Antonio claimants’ attorney George Escobedo said Brooke billed one of his clients for a $65,000 balance this year, and the Treasury Department announced that it planned to take it out of the man’s Social Security disability checks. Texas Mutual has been responsive, though, and last month agreed to pay up to $57,000 of the balance, he said.

“It took awhile, but it looks like this issue is getting cleared up,” Escobedo said.

Nonetheless, injured workers, already dealing with recovery and the loss of a full paycheck, should not be subjected to balance billing, he said.

“Legislation should be created requiring carriers to pay these balances,” Escobedo said. “It’s not fair to the injured workers.”

Division officials said they have communicated with the Army and insurers several times about the problem, but have yet to work out a permanent solution.

“DWC has met with BAMC officials several times over the past year to gather information from them,” the Biennial Report said. “BAMC has made it clear to DWC that they will not participate in DWC’s medical dispute resolution process to dispute reductions or denials in medical bills by insurance carriers.”

Essentially, the Army has said Brooke hospital is a federal facility, not subject to state regulations. It’s similar to the argument that air ambulance companies have relied on successfully in their own balance billing disputes.

State and federal courts across the country have ruled repeatedly that air ambulance companies that fly across state lines are governed by the federal Airline Deregulation Act, and their prices can’t be constrained by state workers’ comp fee schedules.

"As a federal entity, BAMC follows federal laws governing bills for medical care provided in military hospitals," reads a statement from medical center spokesman Robert Whetstone. "BAMC has no authority to waive or reduce valid claims billed at the federal rate in order to accept a state-established rate."  

The pre-eminence of federal law leaves Texas with few options on balance billing except to create rules that affect only state-regulated entities — in this case, insurance carriers.

“We’re trying to get rid of some of the stated reasons that insurers are using to deny payment on these bills,” the DWC’s Nelson said.

The Biennial Report, required by law to update the Legislature on the compensation system, notes that the DWC can’t fix the system on its own.

“DWC currently has the statutory authority to adopt rules that would alleviate some of the medical bill denials and reductions by insurance carriers,” the report reads. “However, there are certain statutory medical billing and utilization review defenses that insurance carriers could assert when processing medical bills from federal military treatment facilities that DWC cannot waive through rulemaking.”

Brooke Army officials said they were working with the DWC to draft proposed legislation that would exempt BAMC from workers' comp fee schedules.

The DWC's Biennial Report also noted another “emerging issue” that may require legislation, but it made no recommendation.

The report noted that DWC has fielded many complaints that cancer claims by firefighters have been denied all too often, despite the 2005 law that presumes a firefighter or emergency medical technician’s disease is work-related.

Data from the division show that from 2012 through October of this year, 146 of 168 cancer claims were denied by insurance carriers. Only 30 of those denials were appealed by claimants, though.

In most of the denials, "the insurance carrier asserted that the statutory presumption did not apply, either because of the type of claimed cancer or because of other issues like the injured employee’s prior tobacco use, duration of employment as a firefighter, and whether or not the duties performed by the injured employee qualify for the statutory presumption,” the report said.

The wording of the presumption law has been called confusing, and claimants’ attorneys have demanded changes. The law states that the disease must be “a type of cancer that may be caused by exposure to heat, smoke … radiation.” But the law also says that the illness must be caused by “a known or suspected carcinogen as determined by the International Agency for Research on Cancer (IARC).”

Some self-insured municipalities, which employ the firefighters, have argued that the IARC reports support only three types of cancer as firefighting-related: prostate, testicular and non-Hodgkin’s lymphoma, the DWC said.

The DWC’s Nelson said the division is not recommending specific revisions to the law.

“We’re here as a resource,” he said. “The report speaks for itself.”