Texas Workers Compensation Act

    Title 5 - Texas Labor Code - Chapters 401-506

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TABLE OF CONTENTS

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LABOR CODE

CHAPTER 415. ADMINISTRATIVE VIOLATIONS

SUBCHAPTER A. PROHIBITED ACTS


	§ 415.001. ADMINISTRATIVE VIOLATION BY REPRESENTATIVE OF 
EMPLOYEE OR LEGAL BENEFICIARY.  A representative of an employee or 
legal beneficiary commits an administrative violation if the 
person:
		(1)  fails without good cause to attend a dispute 
resolution proceeding within the division;
		(2)  attends a dispute resolution proceeding within the 
division without complete authority or fails to exercise authority 
to effectuate an agreement or settlement;
		(3)  commits an act of barratry under Section 38.12, 
Penal Code;            
		(4)  withholds from the employee's or legal 
beneficiary's weekly benefits or from advances amounts not 
authorized to be withheld by the division;
		(5)  enters into a settlement or agreement without the 
knowledge, consent, and signature of the employee or legal 
beneficiary;
		(6)  takes a fee or withholds expenses in excess of the 
amounts authorized by the division;
		(7)  refuses or fails to make prompt delivery to the 
employee or legal beneficiary of funds belonging to the employee or 
legal beneficiary as a result of a settlement, agreement, order, or 
award;
		(8)  violates the Texas Disciplinary Rules of 
Professional Conduct of the State Bar of Texas;
		(9)  misrepresents the provisions of this subtitle to 
an employee, an employer, a health care provider, or a legal 
beneficiary;
		(10)  violates a commissioner rule;  or                                       
		(11)  fails to comply with this subtitle.                                     

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.265, eff. Sept. 1, 2005.


	§ 415.002. ADMINISTRATIVE VIOLATION BY INSURANCE 
CARRIER.  (a) An insurance carrier or its representative commits an 
administrative violation if that person:
		(1)  misrepresents a provision of this subtitle to an 
employee, an employer, a health care provider, or a legal 
beneficiary;
		(2)  terminates or reduces benefits without 
substantiating evidence that the action is reasonable and 
authorized by law;
		(3)  instructs an employer not to file a document 
required to be filed with the division;
		(4)  instructs or encourages an employer to violate a 
claimant's right to medical benefits under this subtitle;
		(5)  fails to tender promptly full death benefits if a 
legitimate dispute does not exist as to the liability of the 
insurance carrier;
		(6)  allows an employer, other than a self-insured 
employer, to dictate the methods by which and the terms on which a 
claim is handled and settled;
		(7)  fails to confirm medical benefits coverage to a 
person or facility providing medical treatment to a claimant if a 
legitimate dispute does not exist as to the liability of the 
insurance carrier;
		(8)  fails, without good cause, to attend a dispute 
resolution proceeding within the division;
		(9)  attends a dispute resolution proceeding within the 
division without complete authority or fails to exercise authority 
to effectuate agreement or settlement;
		(10)  adjusts a workers' compensation claim in a manner 
contrary to license requirements for an insurance adjuster, 
including the requirements of Chapter 4101, Insurance Code, or the 
rules of the commissioner of insurance;
		(11)  fails to process claims promptly in a reasonable 
and prudent manner;  
		(12)  fails to initiate or reinstate benefits when due 
if a legitimate dispute does not exist as to the liability of the 
insurance carrier;
		(13)  misrepresents the reason for not paying benefits 
or terminating or reducing the payment of benefits;
		(14)  dates documents to misrepresent the actual date 
of the initiation of benefits;
		(15)  makes a notation on a draft or other instrument 
indicating that the draft or instrument represents a final 
settlement of a claim if the claim is still open and pending before 
the division;
		(16)  fails or refuses to pay benefits from week to week 
as and when due directly to the person entitled to the benefits;
		(17)  fails to pay an order awarding benefits;                                
		(18)  controverts a claim if the evidence clearly 
indicates liability;      
		(19)  unreasonably disputes the reasonableness and 
necessity of health care;
		(20)  violates a commissioner rule;                                           
		(21)  makes a statement denying all future medical care 
for a compensable injury;  or
		(22)  fails to comply with a provision of this 
subtitle.                    
	(b)  An insurance carrier or its representative does not 
commit an administrative violation under Subsection (a)(6) by 
allowing an employer to:
		(1)  freely discuss a claim;                                                  
		(2)  assist in the investigation and evaluation of a 
claim;  or             
		(3)  attend a proceeding of the division and 
participate at the proceeding in accordance with this subtitle.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 1995, 74th Leg., ch. 980, § 1.45, eff. Sept. 1, 1995;  
Acts 2005, 79th Leg., ch. 265, § 3.266, eff. Sept. 1, 2005;  Acts 
2005, 79th Leg., ch. 728, § 11.144, eff. Sept. 1, 2005.


	§ 415.003. ADMINISTRATIVE VIOLATION BY HEALTH CARE 
PROVIDER.  A health care provider commits an administrative 
violation if the person:
		(1)  submits a charge for health care that was not 
furnished;               
		(2)  administers improper, unreasonable, or medically 
unnecessary treatment or services;
		(3)  makes an unnecessary referral;                                           
		(4)  violates the division's fee and treatment 
guidelines;                  
		(5)  violates a commissioner rule;  or                                        
		(6)  fails to comply with a provision of this subtitle.                       

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 1995, 74th Leg., ch. 980, § 1.45, eff. Sept. 1, 1995;  
Acts 2005, 79th Leg., ch. 265, § 3.267, eff. Sept. 1, 2005.


	§ 415.0035. ADDITIONAL VIOLATIONS BY INSURANCE CARRIER OR 
HEALTH CARE PROVIDER.  (a) An insurance carrier or its 
representative commits an administrative violation if that person:
		(1)  fails to submit to the division a settlement or 
agreement of the parties;
		(2)  fails to timely notify the division of the 
termination or reduction of benefits and the reason for that 
action;  or
		(3)  denies preauthorization in a manner that is not in 
accordance with rules adopted by the commissioner under Section 
413.014.
	(b)  A health care provider commits an administrative 
violation if that person:
		(1)  fails or refuses to timely file required reports 
or records;  or       
		(2)  fails to file with the division the annual 
disclosure statement required by Section 413.041.
	(c)  A violation under Subsection (a) is a Class C 
administrative violation. 
	(d)  A violation under Subsection (b) is a Class D 
administrative violation. 
	(e)  An insurance carrier or health care provider commits an 
administrative violation if that person violates this subtitle or a 
rule, order, or decision of the commissioner.
	(f)  A subsequent administrative violation under this 
section, after prior notice to the insurance carrier or health care 
provider of noncompliance, is subject to penalties as provided by 
Section 415.021.  Prior notice under this subsection is not 
required if the violation was of a decision or order of the 
commissioner.

Added by Acts 1995, 74th Leg., ch. 980, § 1.45, eff. Sept. 1, 
1995.  Amended by Acts 2001, 77th Leg., ch. 1456, § 6.06, eff. 
June 17, 2001;  Acts 2005, 79th Leg., ch. 265, § 3.268, eff. 
Sept. 1, 2005.


	§ 415.004. PENALTY SPECIFIED IN OTHER LAW.  If an act that 
is an administrative violation under Section 415.001, 415.002, or 
415.003 is expressly made an administrative violation of a 
particular class or subject to a specified penalty in another 
section of this subtitle, the administrative penalty assessed under 
that section, and not under Section 415.001, 415.002, or 415.003, 
prevails.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.                    


	§ 415.005. OVERCHARGING BY HEALTH CARE PROVIDERS 
PROHIBITED;  ADMINISTRATIVE VIOLATION.  (a) A health care provider 
commits a violation if the person charges an insurance carrier an 
amount greater than that normally charged for similar treatment to 
a payor outside the workers' compensation system, except for 
mandated or negotiated charges.
	(b)  A violation under this section is an administrative 
violation.  A health care provider may be liable for an 
administrative penalty regardless of whether a criminal action is 
initiated under Section 413.043.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.269, eff. Sept. 1, 2005.


	§ 415.006. EMPLOYER CHARGEBACKS PROHIBITED;  
ADMINISTRATIVE VIOLATION.  (a) An employer may not collect from an 
employee, directly or indirectly, a premium or other fee paid by the 
employer to obtain workers' compensation insurance coverage, 
except as provided by Sections 406.123 and 406.144.
	(b)  An employee or legal beneficiary of an employee has a 
right of action to recover damages against an employer who violates 
Subsection (a).
	(c)  A person commits an administrative violation if the 
person violates Subsection (a).

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.270, eff. Sept. 1, 2005.


	§ 415.007. LOANS BY ATTORNEYS PROHIBITED.  (a) An 
attorney who represents a claimant before the division may not lend 
money to the claimant during the pendency of the workers' 
compensation claim.
	(b)  The attorney may assist the claimant in obtaining 
financial assistance from another source if the attorney is not 
personally liable for the credit extended to the claimant.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.271, eff. Sept. 1, 2005.


	§ 415.008. FRAUDULENTLY OBTAINING OR DENYING BENEFITS;  
ADMINISTRATIVE VIOLATION.  (a) A person commits a violation if the 
person, to obtain or deny a payment of a workers' compensation 
benefit or the provision of a benefit for the person or another, 
knowingly or intentionally:
		(1)  makes a false or misleading statement;                                   
		(2)  misrepresents or conceals a material fact;                               
		(3)  fabricates, alters, conceals, or destroys a 
document;  or              
		(4)  conspires to commit an act described by 
Subdivision (1), (2), or (3).  
	(b)  A violation under this section is a Class B 
administrative violation.   
	(c)  A person who has obtained an excess payment in violation 
of this section is liable for full repayment plus interest computed 
at the rate prescribed by Section 401.023.  If the person is an 
employee or person claiming death benefits, the repayment may be 
redeemed from future income or death benefits to which the person is 
otherwise entitled.
	(d)  An employer who has committed an act described by 
Subsection (a) that results in denial of payments is liable for the 
past benefit payments that would otherwise have been payable by the 
insurance carrier during the period of denial, plus interest 
computed at the rate prescribed by Section 401.023.  The insurance 
carrier is not liable for benefit payments during the period of 
denial.
	(e)  If an administrative violation proceeding is pending 
under this section against an employee or person claiming death 
benefits, the division may not take final action on the person's 
benefits.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.272, eff. Sept. 1, 2005.


	§ 415.009. FRIVOLOUS ACTIONS;  ADMINISTRATIVE 
VIOLATION.  (a) A person commits a violation if the person brings, 
prosecutes, or defends an action for benefits under this subtitle 
or requests initiation of an administrative violation proceeding 
that does not have a basis in fact or is not warranted by existing 
law or a good faith argument for the extension, modification, or 
reversal of existing law.
	(b)  A violation under Subsection (a) is a Class B 
administrative violation. 

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.273, eff. Sept. 1, 2005.


	§ 415.010. BREACH OF AGREEMENT;  ADMINISTRATIVE 
VIOLATION.  (a) A party to an agreement approved by the division 
commits a violation if the person breaches a provision of the 
agreement.
	(b)  A violation under Subsection (a) is a Class C 
administrative violation. 

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.274, eff. Sept. 1, 2005.

SUBCHAPTER B. PENALTIES


	§ 415.021. ASSESSMENT OF ADMINISTRATIVE PENALTIES.  (a) 
In addition to any other provisions in this subtitle relating to 
violations, a person commits an administrative violation if the 
person violates, fails to comply with, or refuses to comply with 
this subtitle or a rule, order, or decision of the commissioner.  In 
addition to any sanctions, administrative penalty, or other remedy 
authorized by this subtitle, the commissioner may assess an 
administrative penalty against a person who commits an 
administrative violation.  The administrative penalty shall not 
exceed $25, 000 per day per occurrence.  Each day of noncompliance 
constitutes a separate violation.  The commissioner's authority 
under this chapter is in addition to any other authority to enforce 
a sanction, penalty, fine, forfeiture, denial, suspension, or 
revocation otherwise authorized by law.
	(b)  The commissioner may enter a cease and desist order 
against a person who:
		(1)  commits repeated administrative violations;                              
		(2)  allows, as a business practice, the commission of 
repeated administrative violations;  or
		(3)  violates an order or decision of the commissioner.                       
	(c)  In assessing an administrative penalty:                                   
		(1)  the commissioner shall consider:                                         
			(A)  the seriousness of the violation, including 
the nature, circumstances, consequences, extent, and gravity of the 
prohibited act;
			(B)  the history and extent of previous 
administrative violations;         
			(C)  the demonstrated good faith of the violator, 
including actions taken to rectify the consequences of the 
prohibited act;
			(D)  the penalty necessary to deter future 
violations;  and                
			(E)  other matters that justice may require;  and                            
		(2)  the commissioner shall, to the extent reasonable, 
consider the economic benefit resulting from the prohibited act.
	(d)  A penalty may be assessed only after the person charged 
with an administrative violation has been given an opportunity for 
a hearing under Subchapter C.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2001, 77th Leg., ch. 1456, § 6.07, eff. June 17, 2001;  
Acts 2005, 79th Leg., ch. 265, § 3.275, eff. Sept. 1, 2005.


	§ 415.022. CLASSIFICATION OF ADMINISTRATIVE VIOLATIONS;  
PENALTIES.  Administrative violations are classified as follows:
		(1)  a Class A administrative violation, punishable by 
an administrative penalty not to exceed $10,000;
		(2)  a Class B administrative violation, punishable by 
an administrative penalty not to exceed $5,000;
		(3)  a Class C administrative violation, punishable by 
an administrative penalty not to exceed $1,000;  and
		(4)  a Class D administrative violation, punishable by 
an administrative penalty not to exceed $500.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.                    


	§ 415.023. COMMISSION OF WRONGFUL ACT AS MATTER OF 
PRACTICE;  ADMINISTRATIVE VIOLATION.  (a) A person who commits an 
administrative violation under Section 415.001, 415.002, 415.003, 
or 415.0035 as a matter of practice is subject to an applicable rule 
adopted under Subsection (b) in addition to the penalty assessed 
for the violation.
	(b)  The commissioner may adopt rules providing for:                           
		(1)  a reduction or denial of fees;                                           
		(2)  public or private reprimand by the commissioner;                         
		(3)  suspension from practice before the division;                            
		(4)  restriction, suspension, or revocation of the 
right to receive reimbursement under this subtitle;  or
		(5)  referral and petition to the appropriate licensing 
authority for appropriate disciplinary action, including the 
restriction, suspension, or revocation of the person's license.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2001, 77th Leg., ch. 1456, § 6.08, eff. June 17, 2001;  
Acts 2005, 79th Leg., ch. 265, § 3.276, eff. Sept. 1, 2005.


	§ 415.024. BREACH OF SETTLEMENT AGREEMENT;  
ADMINISTRATIVE VIOLATION.  A material and substantial breach of a 
settlement agreement that establishes a compliance plan is an 
administrative violation.  In determining the amount of the 
penalty, the commissioner shall consider the total volume of claims 
handled by the insurance carrier.

Added by Acts 1997, 75th Leg., ch. 1443, § 9, eff. Sept. 1, 1997.  
Amended by Acts 2005, 79th Leg., ch. 265, § 3.277, eff. Sept. 1, 
2005.


	§ 415.025. REFERENCES TO A CLASS OF VIOLATION OR 
PENALTY.  A reference in this code or other law, or in rules of the 
former Texas Workers' Compensation Commission or the commissioner, 
to a particular class of violation, administrative violation, or 
penalty shall be construed as a reference to an administrative 
penalty.  Except as otherwise provided by this subtitle, an 
administrative penalty may not exceed $25,000 per day per 
occurrence.  Each day of noncompliance constitutes a separate 
violation.

Added by Acts 2005, 79th Leg., ch. 265, § 3.278, eff. Sept. 1, 
2005.     

SUBCHAPTER C. PROCEDURES


	§ 415.031. INITIATION OF ADMINISTRATIVE VIOLATION 
PROCEEDINGS.  Any person may request the initiation of 
administrative violation proceedings by filing a written 
allegation with the division.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.279, eff. Sept. 1, 2005.


	§ 415.032. NOTICE OF POSSIBLE ADMINISTRATIVE VIOLATION;  
RESPONSE.  (a) If investigation by the division indicates that an 
administrative violation has occurred, the division shall notify 
the person alleged to have committed the violation in writing of:
		(1)  the charge;                                                              
		(2)  the proposed penalty;                                                    
		(3)  the right to consent to the charge and the penalty;  
and               
		(4)  the right to request a hearing.                                          
	(b)  Not later than the 20th day after the date on which 
notice is received, the charged party shall:
		(1)  remit the amount of the penalty to the division;  
or                   
		(2)  submit to the division a written request for a 
hearing.                

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.280, eff. Sept. 1, 2005.


	§ 415.033. FAILURE TO RESPOND.  If, without good cause, a 
charged party fails to respond as required under Section 415.032, 
the penalty is due and the division shall initiate enforcement 
proceedings.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 2005, 79th Leg., ch. 265, § 3.281, eff. Sept. 1, 2005.


	§ 415.034. HEARING PROCEDURES.  (a) On the request of the 
charged party or the commissioner, the State Office of 
Administrative Hearings shall set a hearing.  The hearing shall be 
conducted in the manner provided for a contested case under Chapter 
2001, Government Code (the administrative procedure law).
	(b)  At the close of the hearing, the hearing officer 
conducting the hearing shall make findings of fact and conclusions 
of law and shall issue a written decision.  If the hearing officer 
determines that an administrative violation has occurred, the 
hearing officer shall include in the decision the amount of the 
administrative penalty assessed and shall order payment of the 
penalty.
	(c)  The findings of fact, the decision, and the order shall 
be sent immediately to the charged party.

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 1995, 74th Leg., ch. 76, § 5.95(49), eff. Sept. 1, 1995;  
Acts 1995, 74th Leg., ch. 980, § 1.46, eff. Sept. 1, 1995;  Acts 
2005, 79th Leg., ch. 265, § 3.282, eff. Sept. 1, 2005.


	§ 415.035. JUDICIAL REVIEW.  (a) A decision under Section 
415.034 is subject to judicial review in the manner provided for 
judicial review under Chapter 2001, Government Code.
	(b)  If an administrative penalty is assessed, the person 
charged shall:     
		(1)  forward the amount of the penalty to the division 
for deposit in an escrow account;  or
		(2)  post with the division a bond for the amount of the 
penalty, effective until all judicial review of the determination 
is final.
	(c)  Failure to comply with Subsection (b) results in a 
waiver of all legal rights to contest the violation or the amount of 
the penalty.
	(d)  If the court determines that the penalty should not have 
been assessed or reduces the amount of the penalty, the division 
shall:
		(1)  remit the appropriate amount, plus accrued 
interest, if the administrative penalty was paid;  or
		(2)  release the bond.                                                        

Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 1995, 74th Leg., ch. 76, § 5.95(49), eff. Sept. 1, 1995;  
Acts 2005, 79th Leg., ch. 265, § 3.283, eff. Sept. 1, 2005.