Vista Medical Center Hospital v. Texas Mutual Insurance Company

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

ON MOTION FOR REHEARING

NOS. 03-11-00641-CV through 03-11-00643-CV

NOS. 03-11-00742-CV through 03-11-00785-CV

Vista Medical Center Hospital, Appellant

v.

Texas Mutual Insurance Company, Appellee

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT

HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING1

OPINION

We withdraw our opinion and judgments dated June 6, 2013, and substitute the

following in their place. We overrule the motion for rehearing filed by appellee Texas Mutual

Insurance Company.

1

As detailed herein, the underlying causes were filed in multiple Travis County district courts

but were ultimately decided in consolidated proceedings in the 261st judicial district court before

Judge Yelenosky. The trial court cause numbers corresponding to appellate cause numbers 03-11-

00641-CV through 03-11-00643-CV are: D-1-GN-08-002851, D-1-GN-07-004383, D-1-GN-07-

004381, and for 03-11-00742-CV through 03-11-00785-CV: D-1-GN-08-002597, D-1-GN-08-

000107, D-1-GN-08-002877, D-1-GN-08-002700, D-1-GN-08-001604, D-1-GN-08-002878, D-1-

GN-08-001309, D-1-GN-08-002594, D-1-GN-07-003908, D-1-GN-08-001698, D-1-GN-07-004215,

D-1-GN-07-003912, D-1-GN-07-004379, D-1-GN-08-001697, D-1-GN-08-000109, D-1-GN-08-

000108, D-1-GN-08-002850, D-1-GN-07-004137, D-1-GN-08-000111, D-1-GN-08-001603, D-1-

GN-08-001764, D-1-GN-07-004135, D-1-GN-08-000105, D-1-GN-08-002848, D-1-GN-08-002879,

D-1-GN-08-000110, D-1-GN-08-001763, D-1-GN-08-000465, D-1-GN-07-004373, D-1-GN-08-

002595, D-1-GN-08-001517, D-1-GN-07-004380, D-1-GN-08-001765, D-1-GN-08-002699, D-1-

GN-08-001762, D-1-GN-07-004378, D-1-GN-08-000467, D-1-GN-08-002849, D-1-GN-08-002593,

D-1-GN-08-002880, D-1-GN-08-000104, D-1-GN-08-000468, D-1-GN-08-000466, and D-1-GN-

08-002876.

In these appeals, we again consider the scope of the exclusive jurisdiction that the

Legislature has vested in the Texas Department of Insurance’s Division of Workers’ Compensation

(the Division)2 to initially determine certain disputes under the workers’ compensation act.3 The

appeals emanate from 47 “medical-fee disputes” that each arose when Texas Mutual, a workers’

compensation insurance carrier, paid appellant Vista Medical Center Hospital, L.L.P., less

reimbursement than Vista contended it was owed for providing injured workers “medical benefits”

under the act. Such disputes are within the Division’s exclusive jurisdiction to initially determine,4

and Vista accordingly initiated proceedings before that agency in an attempt to recover the additional

reimbursement it claimed. The administrative proceedings culminated in final orders compelling

Texas Mutual to pay Vista additional reimbursement on each of its claims. In response to each final

administrative order, Texas Mutual paid the additional reimbursement as the order required, filed

a suit for judicial review, and ultimately obtained a district court judgment reversing the order and

remanding Vista’s reimbursement claims to the Division. But within each judgment, and of central

2

The Division has been vested with this jurisdiction and primary responsibility for administering

the workers’ compensation act since September 1, 2005, when it succeeded to the statutory

responsibilities and rules of the former Texas Workers’ Compensation Commission. See Act of

May 29, 2005, 79th Leg., R.S., ch. 265, §§ 8.001(b), .004(a), 2005 Tex. Gen. Laws 607, 608.

Although some of the underlying events date back to the period in which the Commission was still

in operation, we will use “the Division” to refer to both incarnations of the agency for clarity and

because the distinction is immaterial to our analysis.

3

See, e.g., Apollo Enters., Inc. v. ScripNet, Inc., 301 S.W.3d 848, 858–71 (Tex. App.—Austin

2009, no pet.); Texas Mut. Ins. Co. v. Eckerd Corp., 162 S.W.3d 261, 263–67 (Tex. App.—Austin

2005, pet. denied); Howell v. Texas Workers’ Comp. Comm’n, 143 S.W.3d 416, 428–29, 434–38

(Tex. App.—Austin 2004, pet. denied).

4

See Howell, 143 S.W.3d at 434–38.

2

importance in these appeals, the district court also ordered Vista to pay back the additional

reimbursement it had received from Texas Mutual under the now-invalidated administrative order.

In its principal contention on appeal, Vista asserts that the district court lacked

subject-matter jurisdiction to award this monetary relief unless and until there is a final

administrative determination that Vista is not entitled to the additional reimbursement it seeks. We

agree, and will reverse the district court’s judgments and remand these causes.

BACKGROUND

Statutory context

Because the parties’ contentions on appeal arise from, and center on, the workers’

compensation act’s system of regulating medical reimbursement paid to health care providers and

resolving disputes about such payments, it is helpful to begin by noting some pertinent features

of that system.

The workers’ compensation act establishes a “comprehensive scheme whereby

employees who are covered by workers’ compensation insurance and incur ‘compensable’ injuries

are provided the exclusive remedy of ‘workers’ compensation benefits,’” including “medical

benefits” (i.e., “all health care reasonably required by the nature of the injury as and when needed”),

to be paid by the insurance carrier that covers each worker. Apollo Enters., Inc. v. ScripNet, Inc.,

301 S.W.3d 848, 852, 860 (Tex. App.—Austin 2009, no pet.); see Tex. Lab. Code §§ 401.011(10),

(31), 406.031, 408.001, 408.021.5 In turn, the act “gives a health care provider who provides

5

In the absence of material intervening substantive changes, we will cite to the current versions

of statutes for convenience.

3

medical benefits . . . the right to reimbursement from the workers’ compensation carrier that covers

the employee.” Apollo, 301 S.W.3d at 860; see Tex. Lab. Code § 408.027(a).

To obtain such reimbursement, the act requires a health care provider to submit

a claim for payment to the appropriate workers’ compensation insurance carrier not later than

the 95th day after the date on which the health care services were provided. See Tex. Lab. Code

§ 408.027(a). Applicable Division rules6 further specify that the provider is to bill the carrier

its usual and customary charges for the services. See 28 Tex. Admin. Code § 133.1(a)(3) (2005)

(Tex. Dep’t of Ins., Definitions);7 Texas Workers’ Comp. Comm’n v. Patient Advocates, 136 S.W.3d

643, 656 (Tex. 2004). In response, the act requires the carrier to take one or more of the following

actions (termed “final actions” by the Division’s rules) within 45 days after receipt of the bill:

(1) make a payment on the charges, (2) deny one or more charges because, e.g., the health care

services are not covered by the workers’ compensation insurance policy, or (3) determine to audit

the “relationship of the health care services provided to the compensable injury, the extent of the

injury, and the medical necessity of the services provided,” in which case it must make partial

payment of the charges pending the outcome of the audit. See Tex. Lab. Code § 408.027(b)–(c);

28 Tex. Admin. Code § 133.304(b) (Medical Payments and Denial); see also 28 Tex. Admin. Code

§ 133.301 (Retrospective Review of Medical Bills) (describing “retrospective review” of

6

See Tex. Lab. Code § 402.061 (charging the Division with adopting rules as necessary for

implementation and enforcement of the act).

7

Unless otherwise indicated, we cite to the versions of Division rules that were in effect during

the time frame relevant to the underlying medical-fee disputes. Each of the 47 medical-fee

disputes at issue here were in the dispute-resolution process between 2002 and 2005, and the

relevant rules did not change materially during that time. Further, all citations to Title 28 of the

Texas Administrative Code are to rules promulgated by the Texas Department of Insurance.

4

medical bills by carriers and noting that it may include examination for compliance with treatment

guidelines established by the Division, duplicate billing, billing for treatment or services unrelated

to the compensable injury, and provision of unnecessary or unreasonable services). The Division’s

applicable rules further provide that a carrier may also respond to a provider’s bill by “requesting

reimbursement for an overpayment” by the 45-day “final action” deadline. See 28 Tex. Admin. Code

§ 133.304(b). When making or denying payment on a bill, the carrier is required to generate an

“explanation of benefits” (EOB) that “provide[s] sufficient explanation to allow the sender to

understand the reason(s) for the insurance carrier’s actions.” Id. § 133.304(c); see Tex. Lab. Code

§ 408.027(e).

The act comprehensively regulates the amount of reimbursement that workers’

compensation insurance carriers are to pay health care providers and delegates expansive rulemaking

powers to the Division for that purpose. These delegations include the power and duty to promulgate

“fee guidelines” that are “fair and reasonable and designed to ensure the quality of medical care and

to achieve effective medical cost control.” See Tex. Lab. Code § 413.011–.012. Once adopted, such

guidelines generally govern the amount of medical reimbursement that a carrier must pay and a

health care provider can receive for providing particular medical benefits. See id. § 408.027(f) (as

general rule, “[a]ny payment made by an insurance carrier under this section shall be in accordance

with the fee guidelines authorized under” the act); see also 28 Tex. Admin. Code §§ 133.1(8)

(defining “fair and reasonable reimbursement” as the lesser of the provider’s usual and customary

charge and, in the absence of a contract rate, “the maximum allowable reimbursement, when one has

been established in an applicable [Division] fee guideline”), 133.301(a)(1) (noting that retrospective

review may examine provider bill for “compliance with the fee guidelines established by the

5

[Division]”), 133.304(b)(1) (payment shall “make[] the total reimbursement for th[e] bill a fair and

reasonable reimbursement in accordance with § 133.1(8) of this title”). In fact, the act requires that

if the Division “determines that an insurance carrier has paid medical charges that are inconsistent

with the medical policies or fee guidelines,” the Division “shall investigate the potential violation”

and, if it turns out that the carrier reduced a charge that was within the guidelines, direct the carrier to

submit the difference to the provider unless the reduction was authorized by contract. See Tex. Lab.

Code § 413.016(b). Section 413.016 likewise mandates that “[t]he Division shall order a refund

of charges paid to a health care provider in excess of those allowed by the medical policies or

fee guidelines.” Id. § 413.016(a).

In instances where a carrier denies or reduces payment on a provider’s bill, the

workers’ compensation act entitles either the carrier or the provider to obtain administrative “review”

of the claim before the Division, known as “medical dispute resolution.” See id. §§ 408.027(e),

413.031(a)(1); see also 28 Tex. Admin. Code § 133.305 (Medical Dispute Resolution-General).8

Medical dispute resolution is also available to providers who are “ordered by the [Division] to refund

a payment received” and to carriers who have made refund requests of providers and been refused.

See Tex. Lab. Code § 413.031(a)(3); 28 Tex. Admin. Code §§ 133.304(p), .305. In cases where the

dispute is solely “over the amount of payment due for services determined to be medically necessary

and appropriate for treatment of compensable injury” as opposed to disputes about, e.g., medical

necessity, the Division “is to adjudicate the payment given the relevant statutory provisions and

commission rules.” Tex. Lab. Code § 413.031(c); see 28 Tex. Admin. Code §§ 133.305(a)(2),

8

The Division’s applicable rules require the provider to first submit a request for reconsideration

to the carrier. See 28 Tex. Admin. Code § 133.304(k)–(n) (Medical Payments and Denials).

6

.307(a) (Medical Dispute Resolution of a Medical Fee Dispute); Apollo, 301 S.W.3d at 861. This

category of medical disputes is known as “medical fee” disputes. See 28 Tex. Admin. Code

§§ 133.305(a)(2), .307(a); Apollo, 301 S.W.3d at 861. Procedurally, the Division determines

medical-fee disputes on papers submitted by each party; it is not a contested-case proceeding. See

Patient Advocates, 136 S.W.3d at 656. In addition to deciding the amount of reimbursement the

carrier is obligated to pay under the act and Division rules and has either underpaid or overpaid,

the Division is to award interest on that amount that begins accruing on the 60th day after the date

the provider submits the bill to the carrier, in the case of an underpayment, or the 60th day after the

date the provider receives notice of the “alleged overpayment” in the event of an overpayment. See

Tex. Lab. Code § 413.019.

Although a carrier or provider may elect to pay in compliance with the Division’s

order in a medical-fee dispute, at relevant times the workers’ compensation act has provided

the aggrieved party a right to a de novo contested-case hearing on the reimbursement or

refund claim, in the manner prescribed under the Administrative Procedure Act (APA),9 before

an administrative law judge (ALJ) of the State Office of Administrative Hearings (SOAH). See

Tex. Lab. Code § 413.031(k).10 Following the contested-case hearing (colloquially termed an

9

See Tex. Gov’t Code §§ 2001.051–.014 (rights to and procedures for contested cases); see

generally id. §§ 2001.001–.902 (provisions of APA).

10

Cf. Texas Mut. Ins. Co. v. Vista Cmty. Med. Ctr., LLP, 275 S.W.3d 538, 543–46 & nn. 4 & 5

(Tex. App.—Austin 2008, pet. denied) (Vista I) (explaining that the Legislature repealed the right

to a SOAH hearing in medical-fee disputes during a period between 2005 and 2007, thereby leaving

the Division’s order as the final administrative order subject to judicial review). Each of the

medical-fee disputes at issue here were governed by a version of the act providing the right to the

SOAH contested-case hearing.

7

“appeal”), the ALJ renders the final administrative order on the claim. See id. § 402.073(b). A party

that has exhausted these administrative remedies and is aggrieved by the final administrative order

may then seek judicial review under the APA substantial-evidence standard in Travis County District

Court. See id. § 413.027(k-1); Tex. Gov’t Code §§ 2001.171, 2001.174–.176.

As with various other disputes that arise under the workers’ compensation act, it is

established that this statutory scheme impliedly delegates to the Division (and, in turn, SOAH)

exclusive jurisdiction to determine the amount of medical reimbursement that is owed by a

carrier to a health care provider under the act and Division rules, subject to judicial review under

the APA substantial-evidence standard. See Patient Advocates, 136 S.W.3d at 656–57; Apollo,

301 S.W.3d at 858–71; Texas Mut. Ins. Co. v. Eckerd Corp., 162 S.W.3d 261, 263–67

(Tex. App.—Austin 2005, pet. denied); Howell v. Texas Workers’ Comp. Comm’n, 143 S.W.3d 416,

434–38 (Tex. App.—Austin 2004, pet. denied).

The stop-loss controversy

The present medical-fee disputes and ensuing litigation originated from a larger

controversy concerning a fee guideline that the Division promulgated in 1997 to govern the amount

of medical reimbursement that workers’ compensation carriers must pay for inpatient hospital

admissions of covered workers. See 22 Tex. Reg. 6305 (1997) (originally codified at 28 Tex.

Admin. Code § 134.401) (hereinafter “Former Rule 134.401” or “1997 hospital fee guideline”).11

The 1997 hospital fee guideline generally prescribes reimbursement according to a standard per-diem

11

Former Rule 134.401 was repealed effective March 1, 2008, but remains in effect for hospital

admissions that, like those at issue here, occurred before that effective date. See 33 Tex. Reg. 5319

(July 4, 2008).

8

methodology based on specified categories of admissions. See Former Rule 134.401(c)(1)–(2).

However, in the event of “an unusually costly or lengthy stay,” the guideline provides an important

exception or alternative to the per diem rates, known as the “stop-loss exception” or “stop-loss

method.” See Former Rule 134.401(b)(1)(F)–(H), (c)(6). When applicable, the stop-loss exception

requires the carrier to pay the hospital 75% of the hospital’s total “audited” charges (defined as billed

charges that remain after the carrier excludes charges for personal items, services that are not

documented as having been provided, and services determined to be unrelated to the compensable

injury) for the entire hospital stay. See Former Rule 134.401(c)(6). Application of the stop-loss

exception tends to yield hospitals reimbursement for a given hospital admission that is substantially

more generous—indeed, potentially several times larger—than the amounts prescribed under the

standard per diem methodology.

The 1997 hospital fee guideline states that a hospital’s total audited charges from

an admission must meet a “minimum stop-loss threshold” of $40,000 in order for the stop-loss

exception to apply. See Former Rule 134.401(c)(6)(A). Various operators of hospitals, including

Vista, interpreted the guideline to mean that their charges from an admission need only meet

the $40,000 threshold in order to recover stop-loss reimbursement. In contrast, insurance carriers,

including Texas Mutual, maintained that the guideline required providers not only to meet the

$40,000 threshold, but also to demonstrate, through a case-by-case analysis, that the admission

entailed “unusually costly and unusually extensive” services in order to qualify for stop-loss

reimbursement. This underlying disagreement between hospitals and carriers regarding the

proper construction of the stop-loss exception—what we will term the “threshold-only” versus

9

“threshold-plus” views, respectively12—gave rise to hundreds of medical-fee dispute-resolution

proceedings before the Division as Vista and other hospitals sought to recover stop-loss

reimbursement essentially whenever total audited charges from an admission exceeded the $40,000

threshold and Texas Mutual and other carriers paid only per-diem rates absent proof of what

they deemed “unusually costly and unusually extensive” services. The Division reached somewhat

divergent results in these proceedings, and the losing party “appealed” many of the orders to SOAH

for contested-case hearings.

In response to a torrent of such filings, SOAH consolidated many of the

proceedings and assigned them to an en banc panel of ALJs to decide several common issues of

construction under the 1997 hospital fee guideline. These issues included the threshold-only versus

threshold-plus controversy regarding the stop-loss exception. In January 2007, the en banc panel

issued a decision that, in relevant part, agreed with the hospitals’ threshold-only view and held

that such providers were required only to show that their total audited expenses from an admission

met the $40,000 threshold in order to receive stop-loss reimbursement. Thereafter, ALJs began

conducting contested-case hearings in the individual medical-fee disputes pending there and

consistently rendered final orders awarding stop-loss reimbursement to providers based solely on

12

This Court has previously described these divergent constructions of the stop-loss exception

in terms of a “one-prong” test (i.e., merely satisfy the $40,000 threshold) versus a “two-prong”

test (satisfy the $40,000 threshold + have “unusually costly and unusually extensive” services). See

Vista I, 275 S.W.3d at 544–45. In this appeal, however, Vista has suggested that the “unusually

costly and unusually extensive” services requirement actually imposes two “prongs” in addition to

the $40,000 threshold “prong” so as to create a “three-pronged” test. To avoid unnecessary comment

regarding the precise requirements for proving “unusually costly and unusually extensive” services,

we have instead opted for the shorthand descriptions above.

10

findings that the total audited charges from the admission exceeded the $40,000 threshold. In many

of these cases, the carrier perfected suits for judicial review from the ALJ’s final order.13

Large numbers of these administrative proceedings and ensuing suits for judicial

review pitted Vista against Texas Mutual. Those parties, along with several intervenors, eventually

presented the threshold-only versus threshold-plus controversy for judicial resolution through

competing declaratory claims under APA section 2001.038.14 Although the hospital’s threshold-only

view prevailed at the trial level, on appeal this Court agreed with the carriers’ threshold-plus view.

We reversed and rendered judgment declaring that hospitals were required to show not only that

charges from an admission met the $40,000 stop-loss threshold, but also that “the admission

involved unusually costly and unusually extensive services to receive reimbursement under the

stop-loss method.” See Texas Mut. Ins. Co. v. Vista Cmty. Med. Ctr., LLP, 275 S.W.3d 538, 548–51

(Tex. App.—Austin 2008, pet. denied) (Vista I). The Texas Supreme Court denied review.

The present litigation

Among the medical-fee disputes emanating from the stop-loss controversy and pitting

Vista against Texas Mutual were the 47 that gave rise to the present appeals. Each arose when Vista

submitted a reimbursement claim to Texas Mutual, the carrier paid only per diem reimbursement on

the claim (and issued an EOB reflecting that action), and Vista pursued medical-fee dispute

13

Likewise, in a number of similar medical-fee disputes that were adjudicated by the Division

during the period in which the Legislature had repealed the “appeal” to SOAH, the aggrieved party

perfected a suit for judicial review of the Division’s final order in district court. See Vista I,

275 S.W.3d at 545 n.4.

14

See Tex. Gov’t Code § 2001.038(a)–(d) (providing that validity or applicability of agency rule

may be determined in suit for declaratory judgment).

11

resolution before the Division to recover the full amount of stop-loss reimbursement to which

it claimed entitlement. The Division issued an order in each proceeding—in some cases favoring

Vista, in others Texas Mutual—and the losing party in each proceeding “appealed” the order

to SOAH for a contested-case hearing. The 47 proceedings (like many similar ones) remained

pending at SOAH until after the en banc panel’s decision and the district court’s subsequent

judgment in Vista I favoring the hospitals. Following the district court’s ruling, ALJs began

conducting contested-case hearings in the pending medical-fee disputes. The ALJs disposed of these

proceedings with largely parallel orders holding that “[t]he Stop-Loss Methodology applies to this

case” and ordering Texas Mutual to pay Vista additional reimbursement accordingly, less the

amounts Texas Mutual had already paid under the per diem rates, plus interest on the difference. See

Tex. Lab. Code § 413.019(a) (providing interest on unpaid fees or charges). Underlying the ALJs’

ultimate conclusion that the stop-loss exception applied were a series of legal conclusions that were

incorporated from the SOAH en banc panel’s decision. These included a conclusion adopting the

threshold-only view of the stop-loss exception: “A hospital . . . establishes eligibility for applying

the Stop-Loss Methodology . . . when total eligible charges exceed the Stop-Loss Threshold of

$40,000 [and] [t]here is no additional requirement for a hospital to separately establish that any or

all of the services were unusually costly or unusually extensive.” The ALJ further made underlying

fact findings regarding the amount of Vista’s total audited charges from the admission, which in each

instance exceeded the $40,000 stop-loss threshold. Consistent with its legal conclusions adopting

the threshold-only view, the ALJ did not make findings as to whether the charges stemmed from

“unusually costly and unusually extensive” services, see State Banking Bd. v. Valley Nat’l Bank,

604 S.W.2d 415, 419 (Tex. Civ. App.—Austin 1980, writ ref’d n.r.e.) (holding that APA does not

12

require findings on matter on which agency did not rely in support of its ultimate determinations),

but instead found that the amount of Vista’s charges alone “allows [Vista] to obtain reimbursement

under the Division’s Stop-Loss Methodology.”

In response to each of the 47 final administrative orders, Texas Mutual

paid the additional reimbursement as ordered and timely perfected a suit for judicial review.

See Tex. Lab. Code § 413.031(k-1); Tex. Gov’t Code § 2001.176(a)–(b); see also id.

§ 2001.176(b)(3) (providing that “the filing of the petition [for judicial review] vacates a state agency

decision for which trial de novo is the manner of review authorized by law but does not affect

the enforcement of an agency decision for which another manner of review is authorized”). When

making each payment, Texas Mutual also issued a new EOB in which it emphasized its position,

consistent with its threshold-plus view of the stop-loss exception, that it did not properly owe

the payment to Vista and that it was “reserv[ing] all rights afforded it by law to recover

this overpayment with interest.” It subsequently sent Vista “negative” EOBs purporting to request

“refunds” “for payments in excess of fee guidelines,” further specifying that “the admission did not

require unusually costly or unusually extensive services.” Vista refused to return the payments.

Texas Mutual’s judicial-review claims were similarly founded on its threshold-plus

view of the stop-loss exception. The carrier asserted that the ALJs’ reliance on the threshold-only

view in awarding Vista stop-loss reimbursement necessitated reversal of the orders and remand of

Vista’s claims to the Division for redetermination under a proper, threshold-plus, construction of the

exception. See Tex. Gov’t Code § 2001.174(2).15 Texas Mutual’s position was eventually validated

15

Specifically, Texas Mutual sought reversal of each administrative order under the APA on the

grounds that its substantial rights had been prejudiced by findings, conclusions, and decisions that

13

when, during the pendency of its suits, this Court decided Vista I, holding that the stop-loss

exception required proof of both expenses exceeding the $40,000 threshold and “unusually costly

and unusually extensive” services. See Vista I, 275 S.W.3d at 548–51.

Thereafter, Vista acknowledged that the administrative orders awarding it stop-loss

reimbursement could not survive judicial review to the extent they rested solely on the legal

conclusion that the stop-loss exception applied to all claims meeting the $40,000 threshold and

did not additionally require proof of “unusually costly and unusually extensive” services. See id.

at 550–51. However, Vista urged that the administrative records in 20 of the 47 cases established

an alternative legal basis for applying the stop-loss exception there. Specifically, Vista maintained

that Texas Mutual had waived its right to contest whether the hospital services at issue in

those proceedings were “unusually costly and unusually extensive,” which in Vista’s view had the

effect of conceding that the stop-loss exception applied by virtue of the ALJ’s findings that

the charges at issue met the $40,000 threshold. Based on that premise, Vista filed in each of

these 20 cases a motion for summary judgment seeking to affirm the administrative order. Both

Texas Mutual and the Division, which was also a defendant, filed responses in opposition to Vista’s

summary-judgment motions.

were based upon an error of law (the ALJ relied on the threshold-only view of the stop-loss

exception), made upon unlawful procedure (the ALJ did not require Vista to prove that its services

were “unusually costly and unusually extensive”), not supported by substantial evidence (there was

no evidence that Vista’s services in the admission were “unusually costly and unusually extensive”),

and arbitrary or capricious (the ALJ awarded Vista reimbursement under the stop-loss exception

without considering relevant factors, whether Vista’s services were “unusually costly and unusually

extensive”). See Tex. Gov’t Code § 2001.174(2)(C)–(F).

14

However, as Texas Mutual observed in its briefing below, “the real fight” in the

district court “[was] about refunds”—specifically whether (1) as Texas Mutual urged, it could

immediately recover in the district court’s judgment the additional reimbursement it had paid Vista

under the now-invalidated administrative orders, in essence returning the parties to their status quo

before Vista had sought medical-fee dispute resolution on its claims for stop-loss reimbursement,

or (2) as Vista maintained, the carrier could recover the “overpayments” only if and after

administrative proceedings on remand yielded a final determination that Vista was not entitled to

the disputed funds under a correct, threshold-plus application of the stop-loss exception. In seeking

an immediate “refund” of the disputed funds in the judgment, Texas Mutual relied on two basic

theories of recovery. First, Texas Mutual contended that the APA’s remedy of “reversing” the

final administrative orders entailed or required, under these circumstances, that the district court

“order [Vista] to refund to Texas Mutual” the additional reimbursement amount “Texas Mutual

paid to [Vista] pursuant to the invalid SOAH order, plus interest.” Alternatively, Texas Mutual

asserted a claim for “refund” or recoupment of the additional reimbursement under an equitable

money-had-and-received theory. In the further alternative, Texas Mutual sought declaratory

judgments that the Division (or SOAH, in an “appeal” from the Division) had the authority and duty

under Labor Code section 413.016(a) to order Vista to “refund” all funds paid by Texas Mutual

pursuant to the invalidated administrative orders and that if the Division’s rules precluded such

relief, they were invalid and unconstitutional.16 Moreover, in a final alternative, Texas Mutual

16

See Tex. Gov’t Code § 2001.038 (providing that validity or applicability of a rule may be

determined in suit for declaratory judgment); Tex. Civ. Prac. & Rem. Code §§ 37.001–.011

(provisions of the Uniform Declaratory Judgments Act) (UDJA). Texas Mutual also sought

attorney’s fees as the UDJA authorizes. See Tex. Civ. Prac. & Rem. Code § 37.009.

15

sought a declaratory judgment that, if it “is unable to collect from Vista the overpayment made to

Vista, whether because there is no legal mechanism for doing so or Vista is insolvent,” it is entitled

to collect the “overpayment,” plus interest, from the subsequent injury fund.17

Texas Mutual filed in each case a brief on the merits of its APA judicial-review

claims in which it emphasized the monetary component of the relief it sought under that statute. It

combined with that brief a motion for summary judgment on its equitable money-had-and-received

claim. Texas Mutual insisted that this “refund relief” was urgently necessary to protect the carrier’s

interests in the disputed funds during the interim before a final administrative determination of

Vista’s claims for stop-loss reimbursement. Texas Mutual emphasized filings by Vista’s parent

company, Dynacq Healthcare, Inc., before the U.S. Securities and Exchange Commission indicating

that Dynacq was in the process of selling the Vista hospitals due to continued operating losses, that

Dynacq classified the hospitals as “discontinued operation[s],” and that the company’s continuing

operations and business plans were focused exclusively on investments in China. Texas Mutual

urged the district court that if it “does not order refunds now, in its judgments,” there would be a

substantial risk that any payments it made to Vista in excess of the amounts it properly owed “may

become uncollectible, as Vista’s parent company moves all operations and assets to China.”

Vista filed responses in opposition to Texas Mutual’s summary-judgment motions

in which it objected to an affidavit the carrier had presented. But Vista’s primary resistance to

Texas Mutual’s monetary claims came in the form of a plea to the jurisdiction it interposed in each

17

The subsequent injury fund is a dedicated account in the general revenue fund used only for

purposes specified by statute, including reimbursement to an insurance carrier for overpayment or

benefits made under an interlocutory order of the Division. See Tex. Lab. Code § 403.006.

16

case. Vista asserted that the district court lacked subject-matter jurisdiction over the claims because

the Legislature had vested exclusive jurisdiction in the Division (and, in turn, SOAH) to determine

carriers’ entitlement to “refunds” of “overpayments” of medical reimbursement, subject to judicial

review, and the relief Texas Mutual sought fell squarely within the scope of this delegation. In

essence, Vista urged that Texas Mutual’s monetary claims presented a type of medical-fee dispute.

In response to Vista’s jurisdictional challenges, Texas Mutual acknowledged that the

“ultimate” question of whether Vista was entitled to reimbursement under the stop-loss exception

was within the Division’s exclusive jurisdiction to determine on remand and that, through this

process, the agency “could order such refunds.” Nonetheless, Texas Mutual insisted that its “refund”

claims presented a conceptually distinct issue that lay beyond the Division’s exclusive jurisdiction

over medical-fee disputes—whether it or Vista should be entitled to hold the disputed stop-loss

reimbursement amounts at the present time, pending determination of Vista’s “ultimate” entitlement

to stop-loss reimbursement. The Division echoed Texas Mutual in drawing “a sharp distinction

‘between’ a ‘medical fee dispute’ (which includes a determination of the ultimate amount due in

the context of a refund demand) and a dispute as to the court’s authority to award equitable recovery

to [Texas Mutual] at this stage of the contested claims process.” It posited that “if the court’s

exercise of its powers in equity does not involve a determination that there has been an

‘overpayment’ or determining [] the payment ultimately due for hospital services, then adjudication

of [Texas Mutual’s] pending refund claims do not seem to compromise the Division’s original

jurisdiction to adjudicate medical fee disputes.”

17

The 47 suits proceeded to a consolidated hearing on Texas Mutual’s APA claims,

the parties’ summary-judgment motions, and Vista’s pleas to the jurisdiction. Thereafter, the

district court rendered the following judgments:

• In each of the 20 cases in which Vista had filed a motion for summary judgment seeking

affirmance of the final administrative order, the district court denied the motion.

• In each of the 47 cases, the district court

• rendered judgment reversing and remanding the administrative order to the Division

for further proceedings consistent with Vista I;

• denied Vista’s plea to the jurisdiction;

• overruled Vista’s evidentiary objection, granted Texas Mutual’s summary-judgment

motion on its money-had-and-received claim, and rendered judgment awarding the

carrier the additional reimbursement it had paid Vista under the now-invalidated

administrative order, plus interest. The district court emphasized that “[t]his

monetary award is without prejudice to the exclusive jurisdiction of [the Division]

to determine on remand in proceedings consistent with [Vista I] the hospital fee

dispute . . . and to order additional payments that may be due, if any, in accordance

with the Texas Labor Code and applicable medical fee guidelines”;

• in light of these holdings, dismissed “the other actions pled by Plaintiff Texas

Mutual” without prejudice; and

• ordered that “[a]ll claims for relief not expressly addressed above are DENIED.”

Vista paid the disputed funds into the court’s registry and perfected appeals to this

Court from each of the 47 judgments. On Vista’s motion, we consolidated the appeals for purposes

of briefing and argument.

18

ANALYSIS

Vista brings four issues on appeal. Its first, second, and fourth issues seek relief

from the district court’s judgment awarding Texas Mutual monetary relief under an equitable

money-had-and-received theory. In its first issue, Vista urges that the district court erred in

denying its pleas to the jurisdiction as to Texas Mutual’s money-had-and-received claims. In its

second issue, Vista argues that the district court abused its discretion in granting Texas Mutual’s

summary-judgment motions because it was an abuse of discretion to award relief under a

money-had-and-received theory under the circumstances presented here. In its fourth issue, Vista

complains that the district court abused its discretion in overruling its objection to Texas Mutual’s

summary-judgment evidence. In its remaining issue, its third, Vista asserts that the district court

erred in denying its motions for summary judgment in the 20 cases in which it filed one.

In addition to responding to Vista’s issues, Texas Mutual brings a cross-point

urging that the district court possessed subject-matter jurisdiction to award the monetary relief

under the APA, as the carrier had argued below, and that the judgment awards can be affirmed

on that alternative theory. Vista disputes that Texas Mutual’s cross-point sufficed to preserve this

contention for appeal and suggests that the APA claims for monetary relief would fall within the

Division’s exclusive jurisdiction in any event.

The Division, as appellee, has also filed a brief joining with Texas Mutual in

opposition to Vista’s third issue addressing Vista’s cross-motions for summary judgment. In its

brief, the Division takes no position with respect to Vista’s remaining issues in the view that

these concern equitable monetary claims that fall outside the Division’s exclusive jurisdiction. But

in the event this Court determines that the district court could not properly grant such relief

19

without reaching Vista’s ultimate entitlement to stop-loss reimbursement, the Division conditionally

asserts that the courts would lack jurisdiction to adjudicate those issues until administrative remedies

are exhausted.

Vista’s motions for summary judgment

Because Vista’s third issue seeks summary judgments affirming some of the

administrative orders, it logically precedes Vista’s other appellate issues in the 20 cases to which it

applies. Accordingly, we will address it first. We review the district court’s summary-judgment

rulings de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident

Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). Summary judgment is proper

when there are no disputed issues of material fact and the movant is entitled to judgment as a matter

of law. Tex. R. Civ. P. 166a(c). Where, as here, both parties move for summary judgment and the

district court grants one motion and denies the other, we review the summary-judgment evidence

presented by both sides, determine all questions presented, and render the judgment that the

district court should have rendered. Patient Advocates, 136 S.W.3d at 648. We must affirm the

summary judgment if any of the grounds asserted in the motion are meritorious. Id.

In each of its motions for summary judgment, Vista asserted that the administrative

order being challenged by Texas Mutual must be affirmed as a matter of law, notwithstanding the

ALJ’s reliance on the erroneous threshold-only view of the stop-loss exception, because substantial

evidence in the administrative record (itself a question of law18) supports a theory that, in Vista’s

18

See Texas Dep’t of Pub. Safety v. Alford, 209 S.W.3d 101, 103 (Tex. 2006) (noting that

whether there is substantial evidence to support an administrative decision is a question of law).

20

view, effectively rendered the ALJ’s error harmless or immaterial. Specifically, Vista urged that

there was substantial evidence that Texas Mutual administratively waived its right to contest whether

the hospital services were “unusually costly and unusually extensive.” Vista has reasoned that this

asserted waiver by Texas Mutual amounted to a concession that the hospital services were

“unusually costly and unusually extensive,” making the ALJ’s unchallenged findings that the

expenses met the $40,000 stop-loss threshold singularly sufficient to support the order even under

a correct interpretation of the stop-loss exception.

In urging that the district court could disregard the ALJ’s erroneous legal conclusions

and findings predicated on the threshold-only view of the stop-loss exception, Vista invokes the

longstanding principle—one that predates APA substantial-evidence review on the administrative

record—that a reviewing court generally must affirm an administrative order “if it is correct on any

theory of law applicable to the case,” regardless of whether the agency purported to rely on that

legal theory or even relied on an erroneous one. See Gulf Land Co. v. Atlantic Ref. Co., 131 S.W.2d

73, 77 (Tex. 1939). However, as Vista acknowledges, this principle does not permit a reviewing

court to affirm an administrative order on a factual theory on which the agency did not rely. See id.

at 77–78; Public Util. Comm’n v. Southwestern Bell Tel. Co., 960 S.W.2d 116, 121 n.7

(Tex. App.—Austin 1997, no pet.). And this limitation gives rise to a threshold difficulty with

Vista’s third issue: each administrative order is devoid of any fact findings or legal conclusions

indicating that the ALJ relied on any factual theory of waiver, nor does any order contain the

underlying findings that would be necessary to support such a theory under a substantial-evidence

analysis.

21

The closest Vista can come to such support is to refer us to the following legal

conclusion contained in each administrative order:

Pursuant to 28 TAC § 133.307(j)(2), any defense or reason for a denial of a claim not

asserted by a carrier before a request for medical dispute resolution may not be

considered at the hearing before SOAH, whether or not it arises out of an audit.

The cited rule, section 133.307(j)(2) of Texas Administrative Code title 28, limits the “defenses” or

“denial reasons” that a carrier may raise in a medical-fee dispute-resolution proceeding before the

Division solely to those the carrier “presented to the requestor prior to the date the request for

medical dispute resolution was filed with the [D]ivision and the other party.” See 28 Tex. Admin.

Code § 133.307(j)(2). Consequently, Vista is correct to suggest that rule 133.307(j)(2) is a rule

that could conceivably give rise to a waiver of rights by a workers’ compensation insurance carrier in

a medical-fee-dispute-resolution proceeding before the Division. Furthermore, as Vista emphasizes,

Texas Mutual did not challenge this legal conclusion in its judicial-review claim. But this

legal conclusion, as Texas Mutual urges, does no more than state an abstract legal proposition

relating to waiver—and there are no further findings or conclusions in the order purporting to apply

rule 133.307(j)(2) to specific facts and actually find a waiver, nor any findings of the underlying facts

(e.g., the defenses of denial reasons Texas Mutual did or did not raise, and when) that would be

required to support such a finding or conclusion. See Texas Health Facilities Comm’n v. Charter

Med.-Dallas, Inc., 665 S.W.2d 446, 453 (Tex. 1984) (explaining that substantial-evidence review

entails consideration of (1) whether agency made findings of underlying facts that logically support

the ultimate facts and legal conclusions that are the ultimate basis for the order and, in turn,

22

(2) whether the findings of underlying fact are reasonably supported by evidence).19 Nor was the

district court allowed to infer or presume those facts. See Morgan Drive Away, Inc. v. Railroad

Comm’n, 498 S.W.2d 147, 152 (Tex. 1973) (“We may consider only what was written by the

[agency] in its order, and we must measure its statutory sufficiency by what it says,” and “findings

of basic [underlying] facts cannot be presumed from findings of a conclusional nature.”).

There is, in short, no indication in the respective administrative orders that the ALJ

relied on any finding or conclusion that Texas Mutual had waived rights in regard to reimbursement

payments, and the district court was not permitted to supply that rationale to support each order. See

Gulf Land, 131 S.W.2d at 77–78; see also Yeary v. Board of Nurse Exam’rs, 855 S.W.2d 236,

240–41(Tex. App.—Austin 1993, no writ) (“In our review, we are limited to the factual grounds the

[agency] actually gave as the basis for its conclusion of law, although we may affirm the order on

a legal ground not mentioned by the [agency] in its final order,” and “[a]s to the factual grounds

stated by the [agency] as the basis for its conclusion of law, . . . we must judge the validity of

the [agency’s] order ‘by what it says.’”) (citing Gulf Land, 131 S.W.2d at 84; Morgan, 498 S.W.2d

19

We also observe that the legal conclusion Vista cites is among the several that were

incorporated into each order essentially verbatim from the SOAH en banc panel’s order. Further,

the legal conclusion Vista cites is immediately preceded by another conclusion from the en banc

panel order stating that carriers’ audit rights are not limited by the stop-loss exception’s application.

Read in context, the thrust of these two conclusions is to emphasize that while carriers may audit

reimbursement claims that are subject to the stop-loss exception, any grounds for denying payment

that are ultimately uncovered through the audit (a process that may delay a carrier’s disposition of

a reimbursement claim beyond the normal 45-day deadline for acting on a reimbursement claim, see

Tex. Lab. Code § 408.027(a), (b)), nonetheless must be raised in accordance with rule 133.307(j)(2)

in order to preserve them for purposes of medical dispute resolution. Vista has not suggested that

the underlying medical-fee disputes have anything in particular to do with audits. This tends to

further confirm that the ALJ’s legal conclusion regarding rule 133.307(j)(2) does not reflect or

support Vista’s waiver theory as a basis for affirming the administrative order.

23

at 152). And even if the legal conclusion Vista cites could be construed as an ultimate finding or

conclusion adopting Vista’s waiver theory, substantial evidence to support that finding would still

be lacking because there are none of the underlying fact findings that would be necessary to

demonstrate a reasonable basis for that ultimate finding or conclusion. See Charter Med.-Dallas,

665 S.W.2d at 453.

Vista insists, however, that the absence of underlying fact findings supporting

its waiver theory is immaterial because the administrative record establishes the necessary facts as

a matter of law. See Gulf Land, 131 S.W.2d at 77–78 (stating that reviewing court could affirm

administrative order based on alternative factual theory not addressed by the agency if the theory

was established by conclusive evidence). Specifically, Vista argues that the EOB forms that

Texas Mutual generated when initially processing the 20 reimbursement claims at issue failed to

comply with the following Division rule applicable at the time:

At the time an insurance carrier makes payment or denies payment on a medical bill,

the insurance carrier shall send, in the form and manner prescribed by the [Division],

the explanation of benefits to the appropriate parties. The explanation of benefits

[EOB] shall include the correct payment exception codes required by the [Division’s]

instructions, and shall provide sufficient explanation to allow the sender to

understand the reason(s) for the insurance carrier’s actions. A generic statement that

simply states a conclusion such as “not sufficiently documented” or other similar

phrases with no further description of the reason for the reduction or denial does not

satisfy the requirements of this section.

Former Rule 133.304(c). As Vista urges, the EOBs at issue are contained in the administrative

record from each respective proceeding and their contents are uncontroverted. Vista reasons that the

face of each EOB demonstrates that, as a matter of law, Texas Mutual failed to provide “sufficient

explanation to allow [Vista] to understand the reason(s) for the insurance carrier’s actions,” as

24

Former Rule 133.304(c) requires, with respect to Texas Mutual’s contention that the hospital

services at issue were not “unusually costly and unusually extensive.” Leaving aside whether such

a determination could in itself supply the necessary factual underpinnings for Vista’s waiver theory,20

Vista fails to demonstrate that Texas Mutual’s EOBs violated Former Rule 133.304(c).

Each EOB was printed on a Division-approved form and listed itemized charges that

Vista had billed Texas Mutual in connection with a hospital admission. Beside each itemized charge

was indicated Texas Mutual’s payment on the charge, which in each instance was either zero or

an amount reduced below the amount charged. Accompanying each charge and payment reference

was indicated “exception code F.” Vista’s summary-judgment evidence established that the Division

had adopted 22 “exception codes” and directed that exception code F—which the Division titled or

described as “Fee guideline MAR [Maximum Allowable Reimbursement] reduction”—was to be

used “when the [carrier] is reducing payment from the billed amount in accordance with the

appropriate [Division] fee guideline’s MAR . . . [and] NOT to be used for reductions based on lack

of documentation or for charges for which [the Division] has not established an MAR.” A complete

listing or glossary of the 22 exception codes and their brief descriptions was also incorporated into

the EOB form. Consequently, a reader of the form can discern that Texas Mutual’s references

to exception code F meant “Fee guideline MAR.” Alongside each reference to exception code F in

the itemized charges in the EOB was printed a “rationale” of “01,” which was identified elsewhere

20

We note, for example, that Vista relies on asserted violations of Former Rule 133.304(c) to

show waiver under a different rule, rule 133.307(j)(2), yet the administrative orders contain no

findings or conclusions explaining why or how the latter would follow from the former.

25

in the document as: “01 THE CHARGE FOR THE PROCEDURE EXCEEDS THE AMOUNT

INDICATED IN THE FEE SCHEDULE.”

Although Vista does not appear to quarrel with whether “F” was the appropriate

exception code for Texas Mutual to use under the circumstances here, see Former Rule 133.304(c),

it urges that Texas Mutual’s references to “Fee guideline MAR reduction” and “THE CHARGE

FOR THE PROCEDURE EXCEEDS THE AMOUNT INDICATED IN THE FEE SCHEDULE”

amounted only to the sort of “generic statement[s] that simply state a conclusion” that Former

Rule 133.304(c) prohibits, and did not satisfy the rule’s requirement of a “sufficient explanation to

allow the sender to understand the reason(s) for the insurance carrier’s actions.” See id. Vista also

contrasts these references with more specific explanations that Texas Mutual included in the

“negative” EOBs it generated in connection with its refund requests,21 suggesting this is tantamount

to an admission by Texas Mutual that its earlier EOBs were deficient. However, the Division has

adopted a construction of Former Rule 133.304(c)’s requirements that is less exacting than the

standard Vista advocates, and we conclude that we should defer to it.

The Division refers us to several of its medical-fee dispute decisions involving

stop-loss issues—some of which have involved Vista—that have addressed whether EOBs materially

identical to Texas Mutual’s here satisfy Former Rule 133.304(c)’s requirement. In these decisions,

the Division uniformly held that EOBs citing explanation code “F” (“Fee Guideline MAR

reduction”) coupled with a reference to “fee schedules” or similar shorthand “support an explanation

21

In the negative EOBs, as previously noted, Texas Mutual elaborated that it was requesting a

“refund . . . for payments in excess of fee guidelines because the admission did not require unusually

extensive and costly services.”

26

for the reduction of reimbursement” from the stop-loss amount to the per diem rates and

“provide sufficient explanation to allow the provider to understand the reason(s) for the insurance

carrier’s action(s).”22

The Division has requested that we take judicial notice of these administrative

decisions. Vista has not objected. We will do so. See Office of Pub. Util. Counsel v. Public Util.

Comm’n, 878 S.W.2d 598, 600 (Tex. 1994) (holding that court of appeals must take judicial notice

of agency’s published order if asked to do so) (citing Tex. R. Civ. Evid. 201(b)(2)); Hendee

v. Dewhurst, 228 S.W.3d 354, 377 n.30 (Tex. App.—Austin 2007, pet. denied) (likening agency

decisions to court decisions with regard to judicial notice). The Division has likewise urged us to

give deference to its rule construction reflected in these decisions. Vista has not disputed that these

decisions authoritatively represent the Division’s construction of Former Rule 133.304(c) and are

the sort of agency pronouncements regarding the construction of statutes and rules to which courts

could potentially give deference. Cf. Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747 (Tex. 2006)

(discussing analogous principles of judicial deference to agency statutory construction that apply

to “formal opinions adopted after formal proceedings”). And assuming an authoritative agency

interpretation like this, “[i]f there is vagueness, ambiguity, or room for policy interpretation in [the]

statute or regulation,” we normally defer to the agency’s interpretation if it is “reasonable” and

22

See Texas Dep’t of Ins., Div. of Workers’ Comp., Vista Hosp. of Dallas v. Texas Mut. Ins. Co.,

M4-08-1759-01 (Sep. 17, 2012); Texas Dep’t of Ins., Div. of Workers’ Comp., Vista Med. Ctr.

Hosp. v. Lumbermens Mut. Cas. Co., M4-03-8005-01 (Aug. 23, 2012); Texas Dep’t of Ins., Div. of

Workers’ Comp., Vista Med. Ctr. Hosp. v. State Office of Risk Mgmt., M4-05-4763-01 (Aug. 14,

2012); Texas Dep’t of Ins., Div. of Workers’ Comp., Vista Med. Ctr. Hosp. v. Commerce & Indus.

Ins., M4-06-6004-01 (Aug. [sic] 2012); Texas Dep’t of Ins., Div. of Workers’ Comp., Vista Hosp.

of Dallas v. Zurich Am. Ins. Co., M4-09-3488-01 (June 22, 2012); Texas Dep’t of Ins., Div. of

Workers’ Comp., Vista Med. Ctr. Hosp. v. Facility Ins. Corp., M4-06-6080-01 (June 6, 2012).

27

not “plainly erroneous or inconsistent with the language of the statute, regulation, or rule.” See

TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 438 (Tex. 2011).

We conclude that former Rule 133.304(c) is sufficiently vague, ambiguous, and

open to policy interpretation with respect to the precise parameters of a “sufficient explanation to

allow the sender to understand the reason(s) for the insurance carrier’s actions,” as distinguished

from a “generic statement,” that we should defer to the Division’s construction of these terms if

it is reasonable and not plainly erroneous or inconsistent with the rule’s text. See id. We further

conclude that the Division’s construction is reasonable, not plainly erroneous, and not inconsistent

with the rule’s text, but is instead within the range of reasonable constructions permitted by that

language. See id. Accordingly, we give deference to the Division’s construction. See id.

Texas Mutual’s EOBs plainly pass muster under the Division’s construction of

Former Rule 133.304(c). Again, Texas Mutual’s EOBs are materially identical to those addressed

in the administrative decisions to which the Division refers us. Consequently, the Texas Mutual

EOBs that Vista cites as conclusive proof of its waiver theory instead only further demonstrate

the absence of substantial evidence to support it. See Tex. Gov’t Code § 2001.174(2); Charter

Med.-Dallas, 665 S.W.2d at 453.

Absent administrative findings, conclusions, and substantial evidence to support

Vista’s waiver theory, the district court did not err in denying Vista’s motions for summary

judgment. We overrule Vista’s third issue.

Vista’s challenges to monetary relief

Having overruled Vista’s sole issue that would support affirming any of the

administrative orders, we now turn to Vista’s issues challenging the monetary relief the district court

28

awarded upon reversing those orders. Vista’s principal contention, advanced chiefly within its first

issue, is that the district court lacked subject-matter jurisdiction to award the monetary relief because

it amounted to the sort of “refund” of an “overpayment” of medical reimbursement to which the

Division (and, in turn, SOAH) have been vested with exclusive jurisdiction to determine entitlement,

subject to judicial review. Because Vista’s arguments and Texas Mutual’s responses are grounded

in the principles that govern analysis of administrative-agency jurisdiction, and that of the Division

in particular, it is helpful to first summarize those principles before turning to the parties’ specific

assertions regarding them.

Our “analytical starting point” with such issues is Article V, section 8 of the

Texas Constitution, which provides that a district court’s jurisdiction “consists of exclusive,

appellate, and original jurisdiction of all actions, proceedings, and remedies, except in cases where

exclusive, appellate, or original jurisdiction may be conferred by this Constitution or other law on

some other court, tribunal, or administrative body.” Tex. Const. art. V, § 8; see Apollo, 301 S.W.3d

at 859. The Legislature has generally conferred on district courts “the jurisdiction provided by

Article V, Section 8, of the Texas Constitution” and jurisdiction to “hear and determine any cause

that is cognizable by courts of law or equity and . . . grant any relief that could be granted by either

courts of law or equity.” Tex. Gov’t Code §§ 24.007–.008. Consequently, “[c]ourts of general

jurisdiction presumably have subject matter jurisdiction unless a contrary showing is made.” Subaru

of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 220 (Tex. 2002); see Apollo,

301 S.W.3d at 859.

In contrast, “there is no presumption that administrative agencies are authorized

to resolve disputes. Rather, they may exercise only those powers the law, in clear and express

29

statutory language, confers upon them.” Subaru, 84 S.W.3d at 220. “Courts will not imply

additional authority to agencies, nor may agencies create for themselves any excess powers.” Id.

The courts are not divested by an agency of the subject-matter jurisdiction they would otherwise

possess to adjudicate a cause except if and to the extent the Legislature has granted the agency

exclusive jurisdiction, or the sole power to make an initial determination of a claim or issue. See id.

at 221; Apollo, 301 S.W.3d at 859. Whether the Legislature has done so is determined by

examination and construction of the relevant statutory scheme, and is thus a question of law that we

review de novo. See Thomas v. Long, 207 S.W.3d 334, 340 (Tex. 2006) (citing Subaru, 84 S.W.3d

at 221); Apollo, 301 S.W.3d at 859.23 We look to whether the Legislature has enacted express

statutory language indicating that the agency has exclusive jurisdiction or, if not, whether a

“pervasive regulatory scheme” nonetheless reflects legislative intent that an agency have the

sole power to make the initial determination in the dispute. See Thomas, 207 S.W.3d at 340 (citing

Subaru, 84 S.W.3d at 223); Apollo, 301 S.W.3d at 859. Moreover, “because ‘abrogating

common-law claims is disfavored’ in light of open courts implications, we are not to construe a

statute creating an administrative remedy to deprive a person of an established common-law remedy

unless the statute ‘clearly or plainly’ reflects the [L]egislature’s intent to supplant the common-law

23

Our primary objective in statutory construction is to give effect to the Legislature’s intent.

State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). We seek that intent “first and foremost” in the

statutory text. Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83, 85 (Tex. 2006). “Where text is clear,

text is determinative of that intent.” Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437

(Tex. 2009) (op. on reh’g) (citing Shumake, 199 S.W.3d at 284; Alex Sheshunoff Mgmt. Servs.

v. Johnson, 209 S.W.3d 644, 651–52 (Tex. 2006)). We give such statutes their plain meaning

without resort to rules of construction or extrinsic aids. Texas Lottery Comm’n v. First State Bank

of DeQueen, 325 S.W.3d 628, 635, 637 (Tex. 2010).

30

remedy with the statutory one.” Apollo, 301 S.W.3d at 859–60 (quoting Cash Am. Int’l, Inc.

v. Bennett, 35 S.W.3d 12, 15–17 (Tex. 2000)).

As previously noted, and as all parties acknowledge, the Legislature has impliedly

delegated exclusive jurisdiction to the Division (and, in turn, SOAH) to determine, subject to judicial

review, medical-fee disputes—i.e., “disputes over the amount of payment due for services

determined to be medically necessary and appropriate for treatment of a compensable injury” that

must be paid by workers’ compensation insurance carriers to reimburse health care providers for

“medical benefits” provided to injured workers. See Tex. Lab. Code §§ 408.027, 413.031(a), (c);

Apollo, 301 S.W.3d at 858–71; Eckerd, 162 S.W.3d at 263–67; Howell, 143 S.W.3d at 435–36. This

jurisdiction has been held to be implicated by any claim, even if couched in common-law or

equitable theories of recovery, through which a health-care provider seeks relief predicated on an

asserted entitlement to medical reimbursement under the workers’ compensation act and Division

rules. See Howell, 143 S.W.3d at 438. In essence, this holding is an application of the rationale

underlying the Texas Supreme Court’s Fodge decision, which held that common-law claims by

injured workers that would have the effect of establishing a right to workers’ compensation benefits

implicate the Division’s exclusive jurisdiction to award such benefits, and thus cannot be litigated

unless and until those administrative remedies are first exhausted. See American Motorists Ins. Co.

v. Fodge, 63 S.W.3d 801, 803 (Tex. 2001).

In Apollo, we held that this jurisdiction was similarly implicated by tort claims

asserted against a benefits management company (an entity that assists carriers in processing and

paying reimbursement claims) by an assignee of a health-care provider’s reimbursement rights, to

the extent the claims required determination of the amount of reimbursement that was properly owed

31

by the carrier to the provider under the act and Division rules. See Apollo, 301 S.W.3d at 862–71.

And in Eckerd, we held that the Division’s exclusive jurisdiction over medical-fee disputes was

likewise implicated by a workers’ compensation carrier’s claims seeking to recover “overpayments”

of reimbursement to a provider beyond the amounts the carrier is obligated to pay under the workers’

compensation act and rules. See Eckerd, 162 S.W.3d at 263–67. The specific claims we addressed

in Eckerd, it so happens, were asserted by Texas Mutual, and sought to recover alleged past

“overpayments” under legal theories that included money had and received, one of the same theories

of recovery on which Texas Mutual relies here. See id.

In concluding that the Legislature intended for the Division’s medical-fee

dispute-resolution processes to serve as the sole means of obtaining the determination—necessary

for recovery in each of these cases—as to the proper amount of reimbursement the carrier owed the

provider under the act and Division rules, we cited three basic features of the workers’ compensation

act. First, we emphasized that a health care provider’s entitlement to any particular amount of

reimbursement payment and a carrier’s corresponding obligation to pay that amount derive from the

workers’ compensation act rather than the common law. See Apollo, 301 S.W.3d at 866–67; Eckerd,

162 S.W.3d at 266; cf. Cash Am., 35 S.W.3d at 15–17. Second, we noted the “pervasive” and

“comprehensive” nature of the workers’ compensation act’s regulatory scheme, and its governance

of medical reimbursement in particular. See Apollo, 301 S.W.3d at 860; Eckerd, 162 S.W.3d

at 264–66; Howell, 143 S.W.3d at 435–38. Third, we emphasized that the Legislature has provided

specific adjudicatory mechanisms and remedies by which the Division could determine and

enforce the respective rights of providers and carriers regarding medical reimbursement. See Apollo,

301 S.W.3d at 860–61; Eckerd, 162 S.W.3d at 265, 266 n.12; Howell, 143 S.W.3d at 435–38. In

32

Eckerd, for example, we observed that the act and Division rules provided mechanisms for resolving

disputes between providers and carriers regarding the proper amount of reimbursement due,

162 S.W.3d at 265 & n.9, empowered the Division to grant administrative remedies that we deemed

equivalent to the common-law remedies Texas Mutual was pursuing—including ordering “refunds”

under Labor Code section 413.016 and awarding interest on them, see id. at 266 n.12 (citing

Tex. Lab. Code §§ 413.016, .019)—and likewise authorized the Division to impose administrative

sanctions that included reducing fees or revoking or suspending a provider’s right to receive them,

see id. (citing Tex. Lab. Code § 415.023(b)(1), (4)). The Legislature’s provision of such procedures

and remedies in the context of the act’s “comprehensive” regulatory scheme, we reasoned, evidenced

intent that they serve as the sole means of initially determining and enforcing the statutory rights and

duties at issue, to the exclusion of the jurisdiction the courts would otherwise possess. See Apollo,

301 S.W.3d at 860–63.

On the other hand, we have also recognized that not every claim related to medical

reimbursement presents a medical-fee dispute and falls within the Division’s exclusive jurisdiction.

As we explained in Apollo, “[w]hat matters” with regard to the Division’s exclusive jurisdiction over

medical-fee disputes “is whether the claims are based on the alleged failure of carriers to pay . . . in

compliance with the statutes and rules governing . . . fee reimbursement,” whether by underpayment

or overpayment, such that adjudication would require determination of the specific amount due under

those standards and thereby infringe the Division’s sole power to initially determine those issues.

See id. at 865; cf. Fodge, 63 S.W.3d at 803. Although we concluded that two of the claims at issue

in Apollo were predicated on alleged entitlements to particular amounts of reimbursement due from

a carrier, thereby presenting medical-fee disputes, we held that two other claims did not because they

33

presumed the carrier had paid the correct amount of reimbursement due under the act and rules and

complained only that the defendant had acted wrongfully in depriving the plaintiff the opportunity

to establish an entitlement to greater reimbursement. See Apollo, 301 S.W.3d at 867–69. A parallel

distinction is recognized in the progeny of Fodge, which have distinguished between claims by

injured workers that would have the effect of establishing a right to workers’ compensation benefits,

thereby infringing the Division’s exclusive jurisdiction to award such benefits, and claims that did

not seek such benefits or presumed the absence of workers’ compensation coverage, which have

been held to be beyond the Division’s jurisdiction to decide.24

In Apollo, we further held that those two claims did not present a medical-fee dispute

or otherwise fall within the Division’s exclusive jurisdiction merely because the plaintiff sought

damages predicated on the reimbursement amounts that a carrier hypothetically would have been

required to pay it absent the defendant’s conduct, observing “[t]hat is not the same issue that is

presented in a medical-fee dispute.” See id. at 870. We additionally observed that the Legislature

had not provided any procedural mechanisms through which the Division could adjudicate this

24

Cf. In re Texas Mut. Ins. Co., 157 S.W.3d 75, 81 (Tex. App.—Austin 2004, orig. proceeding)

(breach-of-contract claim against carrier for damages allegedly caused by denial of benefits

“presuppose[d] the existence of a workers’ compensation policy and quite plainly seeks benefits due

under that policy,” thereby implicating the Division’s exclusive jurisdiction) with id. at 81–82

(contrasting claim for damages based on negligence in causing gap in coverage, which did not seek

benefits or damages based on arising from wrongful deprivation of benefits the carrier owed)

and Texas Mut. Ins. Co. v. Texas Dep’t of Ins., Div. of Workers’ Comp., 214 S.W.3d 613, 619

(Tex. App.—Austin 2006, no pet.) (holding that negligence claim requiring determination of

effective date of employers’ liability policy did not implicate Division’s exclusive jurisdiction, even

while policy was contained in same form as workers’ compensation policy and shared a common

effective date, because the plaintiffs were not asserting a claim to workers’ compensation benefits

or based on their deprivation; “[t]he foundation of our analysis in Texas Mutual and the supreme

court’s analysis in Fodge was a pending claim whose resolution required a determination of a

claimant’s entitlement to workers’ compensation benefits”).

34

“what-might-have-been inquiry” or decide the various subsidiary issues that might bear upon it. Id.

Apollo thus reminds us of a more basic prerequisite for exclusive agency jurisdiction to make the

initial determination regarding a claim or issue: the Legislature must have provided the agency a

procedural mechanism for making that determination in the first place. See id. (citing Butnaru

v. Ford Motor Co., 84 S.W.3d 198, 207–08 (Tex. 2002)); Texas Mut. Ins. Co. v. Texas Dep’t of Ins.,

Div of Workers’ Comp., 214 S.W.3d 613, 619 (Tex. App.—Austin 2006, no pet.). More generally,

the scope of the administrative remedy (if any) as it compares to a common-law or equitable one is

one indicator of whether the Legislature intended to supplant the latter with the former. See Eckerd,

162 S.W.3d at 266 n.12 (reasoning that “[t]he ability of the [Division] to fully compensate

the injured party, to sanction parties that violate the Act, and to establish and enforce the Act’s

provisions further demonstrates the [L]egislature’s intent to grant the [Division] exclusive

jurisdiction over these claims,” and contrasting these remedies with the like-kind-replacement

remedy at issue in Cash America).

The parties’ competing contentions regarding the district court’s jurisdiction here

distill down essentially to whether Texas Mutual’s claims for monetary relief are materially identical

to its claims in Eckerd, as Vista suggests, or are more closely akin to the two claims in Apollo that

were held not to present medical-fee disputes, as Texas Mutual insists. In support of its view, Vista

urges that Texas Mutual’s monetary claims fall squarely within the scope of act provisions and

Division rules that authorize carriers to obtain “refunds” of reimbursement paid in excess of amounts

properly owed under the act and Division rules. Vista emphasizes Labor Code section 413.016(a),

which mandates that the Division “shall order a refund of charges paid to a health care provider in

excess of those allowed by the medical policies or fee guidelines.” See Tex. Lab. Code § 413.016(a);

35

Eckerd, 162 S.W.3d at 266 n.12. Whether a carrier is entitled to a refund under section 413.016(a),

as Vista observes, presents a medical-fee dispute, as it turns on whether the carrier has paid

“charges . . . in excess of those allowed by the medical policies or fee guidelines.” Consequently,

Vista suggests, section 413.016(a) contemplates that a carrier can (or must) obtain the refund

remedy through the Division’s medical-fee-dispute-resolution process. In fact, Vista emphasizes,

the Division’s rules prescribe procedures for adjudicating carrier “refund” claims and explicitly

include such disputes in its definition of “medical fee dispute.” See 28 Tex. Admin. Code

§§ 133.304(a), (o), (p) (carrier may “request[] reimbursement for an overpayment” in response to

a provider’s bill and seek medical dispute resolution if the provider does not timely pay the

amount of refund requested); .305(a)(2) (defining “medical fee disputes” to include a “refund

request dispute”—“a carrier dispute of a health care provider reduction or denial of the carrier

request for refund of payment for health care previously paid by the carrier”). Assuming the

medical-dispute-resolution process yields a final determination that the amount of charges “allowed

by the medical policies or fee guidelines” is less than the amount the carrier paid, section 413.016(a)

requires that the Division “shall order a refund” of those excessive payments. See Tex. Lab. Code

§ 413.016(a).25

25

Vista additionally asserts that Texas Mutual’s monetary claims fall within another provision

of the workers’ compensation act, Labor Code section 408.0271, which states that “[i]f the

health care services provided to an injured employee are determined to be inappropriate,” the carrier

“shall . . . demand a refund by the health care provider of the portion of the payment on the

claim that was received by the health care provider for the inappropriate services.” See Tex. Lab.

Code § 408.0271(a). Although Texas Mutual originally cited section 408.0271 as authority for its

“negative” EOBs and refund requests, it has subsequently contended that the provision is not

applicable to the entitlement it claims here. Conversely, Vista has previously asserted that

section 408.0271 was inapplicable to Texas Mutual’s claims, but suggests otherwise now. We agree

36

Drawing on our reasoning in Eckerd, Apollo, and Howell, Vista adds that the

Legislature’s provision of these administrative remedies, viewed in the context of the workers’

compensation act’s “pervasive regulatory scheme,” reflects its intent that the remedies serve as the

sole means by which Texas Mutual can recover any excess payment of medical reimbursement it

made to Vista. See Apollo, 301 S.W.3d at 860; Eckerd, 162 S.W.3d at 264–66; Howell, 143 S.W.3d

at 435–38. In other words, according to Vista, Texas Mutual can obtain recovery or “refunds” of

additional reimbursement it paid under the now-invalidated administrative orders only if it litigates,

and ultimately defeats, Vista’s claim for stop-loss reimbursement—now remanded to the Division,

and yet to be resolved—through the Division’s medical dispute-resolution process. This statutory

scheme, Vista insists, divests the district court of any subject-matter jurisdiction to award

Texas Mutual the monetary relief challenged here.

with Texas Mutual’s current position that the “refund” claim contemplated by section 408.0271 is

not directly relevant here.

The refund claim provided by section 408.0271 arises “[i]f the health care services provided

to an injured employee are determined to be inappropriate.” See id. The meaning of “inappropriate”

health care services or charges under section 408.0271 is informed by the section that immediately

precedes it, 408.027, which authorizes carriers to respond to medical-reimbursement claims by

auditing the “relationship of the health care services provided to the compensable injury, the extent

of the injury, and the medical necessity of the services provided.” See id. § 408.027(b). However,

if a carrier exercises its audit rights, section 408.027 requires it to make partial payment of a defined

percentage of the charges pending the audit’s outcome. See id. In the event “the health care services

provided are determined to be appropriate” by the audit, the carrier must then pay the remaining

portion due. See id. § 408.027(c). Read in this context, section 408.0271’s “refund” claim appears

to be addressed to the converse situation—the audit determines that some portion of the charges that

the carrier previously was required to pay turn out not to have been “appropriate,” in terms of

compensability, extent-of-injury, or medical necessity—in which case the carrier is authorized to

recover the partial payment it had previously made. See id. § 408.027(b), (c). The present medical-

fee disputes do not involve the circumstances to which section 408.0271 is addressed.

37

In response, Texas Mutual acknowledges that its claims here can be said to seek a

type of “refund” of reimbursement it contends it does not properly owe Vista under the 1997 hospital

fee guidelines—indeed, it has used the term “refund” throughout this litigation to describe the

relief it seeks—and that the Division is empowered to provide such “refunds” under Labor Code

section 413.016(a). But Texas Mutual questions whether the Division’s rules governing medical-fee

disputes contemplate “refund” claims arising, as do its claims here, from the payment of additional

reimbursement in compliance with an administrative order in a medical-fee dispute that is later

reversed, as opposed to “refund” claims that arise from overpayments of reimbursement occurring

during a carrier’s initial processing of a provider’s reimbursement claim. In support, Texas Mutual

cites Division rules imposing a deadline of 45 days after date of service for a carrier to request a

“refund” or take other “final action” on a bill, see 28 Tex. Admin. Code § 133.304, and a deadline

of one year from the date of the services at issue for a carrier to request medical dispute resolution

in a refund-request dispute, see id. § 133.307(d)(2).

More broadly, Texas Mutual insists that the mere existence of an administrative

“refund” remedy does not in itself suffice to establish legislative intent to supplant the district court’s

jurisdiction to grant the monetary relief it awarded here. Why this is so, Texas Mutual reasons,

begins with a conceptual distinction between an “ultimate” determination of Vista’s entitlement to

stop-loss reimbursement, which is the focus of the Division’s medical-fee dispute-resolution

processes, and what the carrier views as the focus of the theory of recovery on which the judgment

awards were based—money had and received.

An action for money had and received is equitable in nature and belongs conceptually

to the doctrine of unjust enrichment. See Best Buy Co. v. Barrera, 248 S.W.3d 160, 162 (Tex. 2007)

38

(per curiam); Edwards v. Mid-Continent Office Dist., L.P., 252 S.W.3d 833, 837 (Tex. App.—Dallas

2008, pet. denied) (quoting Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.—El Paso

1997, no writ)). The doctrine of unjust enrichment characterizes the result of a failure to make

restitution under circumstances that give rise to an implied or quasi-contractual obligation to return

those benefits. See Edwards, 252 S.W.3d at 837 (citing Amoco, 946 S.W.2d at 164). An action for

restitution via money had and received is said to lie whenever the defendant holds money that

“in equity and good conscience” “belongs” to the plaintiff “under the particular circumstances

of each case.” Best Buy, 248 S.W.3d at 162; Staats v. Miller, 243 S.W.2d 686, 687 (Tex. 1951);

see also id. (also describing the standard as “to which party does the money, in equity, justice, and

law, belong”). The action is not premised on wrongdoing, but rather “aims at the abstract justice of

the case, and looks solely to the inquiry whether the defendant holds money, which . . . belongs to the

plaintiff.” Staats, 243 S.W.2d at 687–88 (quoting United States v. Jefferson Elec. Mfg. Co., 291 U.S.

386, 403 (1934)). It has also been said that “a cause of action for money had and received is ‘less

restricted and fettered by technical rules and formalities than any other form of action.’” Id. at 687

(quoting Jefferson, 291 U.S. at 402–03).

In support of summary judgment on its money-had-and-received claims,

Texas Mutual has asserted that the disputed funds “belong” to it in “equity and good conscience”

because the 1997 hospital fee guideline presumes per diem reimbursement and that, as of the time

of the district court judgments below, Vista has no valid order entitling it to the higher stop-loss

payments. In essence, Texas Mutual has argued that unless and until Vista can show itself entitled

to stop-loss reimbursement on remand, the equities weigh in favor of returning the disputed

additional reimbursement to the carrier, thereby returning it to the same economic position in which

39

it would have been had the funds never been awarded or paid to Vista in the first place. Relatedly,

Texas Mutual has relied on longstanding precedent holding that these equitable principles generally

require that a party who had received payment under a judgment that is subsequently reversed

must make restitution to the party who paid the judgment. See Miga v. Jensen, 299 S.W.3d 98, 101

(Tex. 2009) (citing Bank of U.S. v. Bank of Wash., 31 U.S. 17 (1832); Cleveland v. Tufts, 7 S.W. 72,

74 (Tex. 1888)).

Whether it is entitled to recover the disputed funds in “equity and good conscience,”

in Texas Mutual’s view, does not require a determination of Vista’s entitlement to stop-loss

reimbursement, the sine qua non of medical-fee disputes. See Apollo, 301 S.W.3d at 865.

Texas Mutual similarly distinguishes its money-had-and-received theory on the basis that it goes

only to whether it or Vista should be entitled to hold the disputed funds now, in the interim pending

the “ultimate” determination of Vista’s entitlement to stop-loss reimbursement, and does not

implicate the Division’s exclusive jurisdiction to initially determine that ultimate issue. Further,

because its money-had-and-received claims are rooted in equitable and common-law principles

rather than the workers’ compensation act, Texas Mutual reasons, we should not construe

the workers’ compensation act to deprive them of this remedy absent “clear expression” of

such legislative intent. See Cash America, 35 S.W.3d at 16. That required “clear expression”

of legislative intent is lacking, Texas Mutual suggests, because the workers’ compensation act does

not address or purport to supplant judicial power to award interim relief like the district court

fashioned here, if indeed the act addresses “refunds” or other relief for carriers in Texas Mutual’s

situation at all.

40

To resolve the jurisdictional issue, we consider first whether the workers’

compensation act provides any administrative remedy through which an insurance carrier in

Texas Mutual’s position, one that has paid additional reimbursement to comply with an

administrative order in a medical-fee dispute that is ultimately reversed on judicial review,

can potentially recoup those funds. See Apollo, 301 S.W.3d at 870. Assuming that it does, the next

question is whether the Legislature intended that remedy to serve as the sole and exclusive means for

Texas Mutual to recover the additional reimbursement, to the extent of divesting the district courts

of any jurisdiction they might otherwise possess to award the monetary relief at issue here. We

conclude that both questions must be answered in the affirmative.

The parties concur that section 413.016(a) would provide a remedy through which

a carrier in Texas Mutual’s situation could seek refunds of alleged overpayments, and we agree. We

find it significant that the Legislature did not place any limitations or qualifications on the

circumstance under which a carrier would come to pay “charges . . . to a health care provider in

excess of those allowed by the medical policies or fee guidelines,” so as to require the Division to

order a “refund.” See Tex. Lab. Code § 413.016(a). The text of section 413.016(a) does not, in other

words, draw a distinction between excessive reimbursement occurring due to a subsequently reversed

administrative order in a medical-fee dispute, as here; or because of allegedly improper billing

practices, the situation in Eckerd; or because of accidents or errors in processing claims; or any other

reason. And the absence of any such distinction in the statute is especially telling in the context of

other statutory provisions that contemplate that section 413.016(a) “refunds” will arise from

circumstances like those here.

41

The Legislature has crafted a medical-fee dispute-resolution regime under which

(1) the Division initially determines the amount of reimbursement owed by a carrier to a provider;

(2) a party aggrieved by the Division’s decision (which can include a carrier or provider) may

“appeal” to a SOAH contested-case hearing under the APA, see id. § 413.031(k); (3) the ALJ renders

the final administrative order, see id. § 402.073(b), subject to judicial review, see id. § 413.027(k-1);

but (4) the administrative order remains effective unless and until the court reverses the order and

remands the proceedings required by the APA, see Tex. Gov’t Code §§ 2001.174(2), .176(b)(3).

Collectively, this regime anticipates that (1) a carrier can be compelled to pay reimbursement to a

provider under an administrative order that is later reversed and that (2) further administrative

proceedings on remand may determine that the carrier does not owe the additional reimbursement

after all, (3) requiring that the Division “shall order a refund of charges paid to a health care

provider in excess of those allowed by the medical policies or fee guidelines.” See Tex. Lab. Code

§ 413.016(a).26 We must presume that the Legislature crafted this statutory scheme deliberately and

with awareness of these consequences. See Texas Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 452

(Tex. 2012) (presuming that “the Legislature deliberately and purposefully selects words and phrases

it enacts, as well as deliberately and purposefully omits words and phrases it does not enact”) (citing

Texas Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010)); City of

DeSoto v. White, 288 S.W.3d 389, 395 (Tex. 2009) (noting that Legislature is aware of consequences

of its enactments). Moreover, in the context of the workers’ compensation act, this is not only a

26

This analysis might be different if, as Texas Mutual urges in its cross-point, the APA

authorized the district court to award it recoupment of the disputed funds incident to its reversals of

the administrative orders. But we reject that contention below.

42

presumption but an established fact: as we have frequently observed, the act creates a “pervasive”

and “comprehensive” regulatory scheme in which the Legislature has carefully balanced the interests

of injured workers, employers, insurance carriers, and other system participants to achieve a viable

compensation system. See, e.g., Apollo, 301 S.W.3d at 860; Mid-Century Ins. Co. v. Texas Workers’

Comp. Comm’n, 187 S.W.3d 754, 758 (Tex. App.—Austin 2006, no pet.); Eckerd, 162 S.W.3d

at 264–66; Howell, 143 S.W.3d at 435–38. We must conclude that the Legislature intended

section 413.016(a) to serve as a remedy for carriers in Texas Mutual’s situation.

This statutory regime anticipates and provides a procedural mechanism for

determining whether “charges [were] paid to a health care provider in excess of those allowed by the

medical policies or fee guidelines,” as a predicate to refund relief under section 413.016(a). Namely,

upon reversal of the administrative orders, the APA required the district court to remand Vista’s

claims for stop-loss reimbursement for redetermination, through the medical-fee dispute-resolution

process before the Division (and possibly SOAH, and then judicial review in district court), under a

correct, threshold-plus construction of the stop-loss exception. See Tex. Gov’t Code § 2001.174(2).

If these proceedings yield a final determination that Vista is entitled to stop-loss reimbursement,

Texas Mutual would have no right to those funds. If, on the other hand, the proceedings yield a final

determination that Vista is not entitled to stop-loss reimbursement, section 413.016(a) would require

the disputed funds to be refunded to Texas Mutual. See Tex. Lab. Code § 413.016(a). Texas Mutual

insists, however, that the most likely outcome on remand if it is not awarded the disputed funds

immediately is that Vista will simply dismiss or fail to prosecute its pending reimbursement

claims because it already possesses the funds and stands only to lose or keep them in any further

administrative proceedings. Were Vista to do so, it would amount to an abandonment or concession

43

of any claim to stop-loss reimbursement, leaving the standard per diem rates as the governing

standard, and again requiring the Division to order Vista to refund any reimbursement that

Texas Mutual paid beyond those amounts. See id.

Assuming the existence of this refund remedy under section 413.016(a),

Texas Mutual seems to acknowledge that if it were to pursue “refunds” or recovery of the

additional reimbursement it paid Vista predicated on a determination that Vista did not satisfy

the requirements of the stop-loss exception, those claims would be medical-fee disputes within

the Division’s exclusive jurisdiction. See Eckerd, 162 S.W.3d at 263–67.27 In insisting that its

money-had-and-received claims do not implicate the Division’s exclusive jurisdiction, Texas Mutual

ultimately relies on asserted conceptual distinctions between the timing of the relief sought (interim

immediate judicial relief versus relief whenever Vista’s claims to stop-loss reimbursement are finally

determined) and the legal theories presented (who in “equity and good conscience” should be

deemed to “own” the funds now versus whether Vista qualifies for stop-loss reimbursement under

a correct application of the stop-loss exception).28 We conclude that these conceptual distinctions

27

On rehearing, Texas Mutual also suggests that section 413.016(a), in conjunction with other

provisions of the workers’ compensation act, contemplate that the Division could provide some

form of interim relief prior to the ultimate conclusion of the medical-fee-dispute-resolution process

on remand. Whether the Division possesses such authority is not before us in this appeal, as

all parties seem to agree, and we express no opinion in that regard. However, Texas Mutual’s

assertion that the Division possesses such authority would tend to confirm not only the existence of

an administrative remedy for carriers in Texas Mutual’s situation, but also the comprehensiveness

of it.

28

As previously noted, the Division has joined with Texas Mutual in distinguishing between

medical-fee disputes and “interim” equitable relief between parties to such disputes, although

the agency has not briefed the issue extensively. In contrast to the Division’s litigation position

regarding the sufficiency of Texas Mutual’s EOBs, which rested upon the agency’s authoritative

constructions of statutes and rules in past medical-fee-dispute decisions, the Division does not

44

were of no moment to the Legislature when enacting the workers’ compensation act, and that it

instead intended the medical-fee dispute-resolution process to supplant judicial jurisdiction to award

relief like the district court provided here. We reach this conclusion for three basic reasons.

First, although Texas Mutual strives to portray its money-had-and-received claims

as being rooted solely in equity or the common law, the claims instead seek redress for alleged

injury that derives from the workers’ compensation act—medical reimbursement Texas Mutual

paid to Vista in excess of the amounts to which the carrier claims the provider is properly

entitled under the act and Division rules. While Texas Mutual attempts to distinguish between an

“ultimate” determination of Vista’s entitlement to stop-loss reimbursement versus a determination

of whether Vista should get to keep the stop-loss reimbursement it was paid under the

now-invalidated administrative orders in the meantime, in either case Texas Mutual seeks relief

based on contentions that Vista has not shown itself entitled under the workers’ compensation act

and rules to a particular amount of medical reimbursement—a claim that, as we observed in Eckerd,

is “‘common law’ in name only.” Eckerd, 162 S.W.3d at 266. Texas Mutual’s asserted distinctions

between the claims, in other words, boil down ultimately to mere differences in their temporal

focus—one asks whether Vista has failed to establish an entitlement to stop-loss reimbursement

upon final adjudication of that issue, the other asks whether Vista has established such an entitlement

yet. In both, the nature of the claimed injury is identical, deriving from rights and duties rooted

solely in the workers’ compensation act’s provisions governing medical reimbursement and not the

assert that we should give any heightened deference to its litigation position regarding jurisdiction.

Cf. Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747 (Tex. 2006) (distinguishing between “formal

opinions adopted after formal proceedings” and “opinions in documents like the . . . amicus brief

here”). Neither does Texas Mutual.

45

common law. See Apollo, 301 S.W.3d at 867 (“As we explained in Eckerd, the right to recover any

particular amount of reimbursement from a workers’ compensation insurance carrier for [health care]

services provided . . . to an injured worker is entirely a function of the workers’ compensation act

and Division rules.”). This is the sort of injury at issue in cases like Eckerd and Howell rather than

in Cash America.

The second reason, to which we have already alluded, is that the Legislature intended

the workers’ compensation act to serve as a “pervasive” and “comprehensive” scheme governing

the provision of benefits to injured workers, including the manner in which health care providers

are compensated for providing services within that system. See, e.g., id. at 860; Eckerd, 162 S.W.3d

at 264–66; Howell, 143 S.W.3d at 435–38. Each feature of that scheme reflects painstaking

Legislative economic and policy judgments as to the appropriate means of balancing the

often-competing interests of participants to achieve a viable compensation system within

constitutional limitations. See, e.g., Mid-Century, 187 S.W.3d at 758. In the context of this

comprehensive statutory framework, it seems doubtful that the Legislature intended to leave the

courts free to fashion “interim” monetary relief between parties to pending medical-fee disputes, so

long as the relief purported to avoid the “ultimate” question of the proper amount of reimbursement

that is owed.29

This observation brings us to the third reason why we conclude the Legislature

intended the section 413.016(a) refund remedy to supplant such “interim” judicial relief, which

29

And the existence of Division authority to fashion interim administrative relief, as Texas

Mutual advocates, would only further confirm that the Legislature has intended that this agency, not

the courts, perform the sensitive balancing of economic and policy interests that such relief would

implicate.

46

is closely related to the second: Texas Mutual’s view would invite disruptions to the workers’

compensation act’s careful balancing of interests that the Legislature could not possibly have

intended. See Great-West Life & Annuity Ins. Co. v. Texas Attorney Gen. Child Support Div.,

331 S.W.3d 884, 899 (Tex. App.—Austin 2011, pet. denied); see also Tex. Gov’t Code § 311.023(5)

(permitting consideration of consequences of a particular statutory construction). Texas Mutual’s

view would imply that there is no impediment, as far as the act is concerned, to a court ordering a

workers’ compensation insurance carrier to make advance payment of the entirety of a provider’s

bill because this is merely “interim” judicial relief that does not address the provider’s “ultimate”

entitlement to payment under the act and Division rules. Even if the carrier might “ultimately”

prevail in the underlying medical-fee dispute and recover the funds, compulsory interim payment

ordered by a court, as Texas Mutual’s own arguments tacitly recognize, would nonetheless risk

substantial disruptions of the economic relationship of the parties and the viability of the workers’

compensation regime. Cf. Cities of Corpus Christi v. Public Util. Comm’n, 188 S.W.3d 681, 690–91

(Tex. App.—Austin 2005, pet. denied) (making an analogous observation regarding interim awards

of “stranded costs”). Indeed, if courts were left free to fashion interim relief based on such malleable

and idiosyncratic guideposts as “equity and good conscience,” there would soon be little left of

the Legislature’s careful balancing of interests. Rather than leaving such a gap or hole in the act’s

“comprehensive” and “pervasive” regulatory scheme, we conclude that the Legislature instead

addressed the issue with the section 413.016(a) refund remedy and other features of the medical-fee

dispute-resolution process. Cf. Ruttiger, 381 S.W.3d at 443 (relying on its notion that “‘it

is conceptually untenable that the Legislature would have enacted two alternative statutory

remedies, one that enacts a structured scheme . . . and carefully constructs rights, remedies, and

47

procedures . . . and one that would significantly undermine that scheme’” to hold that workers’

compensation claimants may not assert claims under the Insurance Code) (quoting City of Waco

v. Lopez, 259 S.W.3d 147, 155–56 (Tex. 2008)).

We hold that Texas Mutual’s sole remedy for recovering medical reimbursement

it paid to Vista under the administrative orders reversed by the district court lies in the Division

(and, in turn, SOAH), subject only to judicial review under the APA, and that the district court

lacked subject-matter jurisdiction to award those funds to Texas Mutual in the judgments.

Accordingly, we sustain Vista’s first issue, reverse the judgment awards of monetary relief, and

render judgment dismissing Texas Mutual’s money-had-and-received claims for want of jurisdiction.

Our disposition of Vista’s first issue makes it unnecessary for us to reach its

second and fourth issues, which present other challenges to the district court’s judgment awarding

monetary relief on Texas Mutual’s money-had-and-received claims. See Tex. R. App. P. 47.1.30

30

However, we emphasize that we are expressing no opinion as to whether, apart from the

jurisdictional defects we have identified, the district court had discretion under the circumstances

here to award the relief under a money-had-and-received theory. Within its second issue, Vista

asserts that Texas Mutual’s money-had-and-received claims inherently presented issues within the

Division’s exclusive jurisdiction over medical-fee disputes, such that the district court’s purported

avoidance of those issues when granting summary judgment amounted to an abuse of discretion

under the equitable principles that govern such claims. Vista emphasizes the Texas Supreme Court’s

recent recognition that defendants in money-had-and-received claims are entitled to “present any

facts and raise any defenses that would deny the claimant’s right or show that the claimant should

not recover,” including particular circumstances showing that “in equity and good conscience”

the disputed funds should belong to the defendant rather than the claimant. Best Buy Co. v. Barrera,

248 S.W.3d 160, 162 (Tex. 2007) (per curiam); Stonebridge Life Ins. Co. v. Pitts, 236 S.W.3d 201,

205–06 (Tex. 2007). Such “facts” and “defenses,” Vista suggests, would necessarily include

whether Vista was entitled to stop-loss reimbursement under a proper threshold-plus view of the

exception—i.e., that the original administrative order compelling payment in each case, while

founded on reversible error, ultimately reached the right result. Relatedly, Vista asserts that Texas

cases awarding equitable restitution of debts previously paid under subsequently reversed judgments

have uniformly turned on appellate judgments that not only reverse the lower-court judgments

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This leaves only Texas Mutual’s cross-point, in which it argues that the district court possessed

subject-matter jurisdiction to award the disputed funds under the APA because such relief

was inherent in the “reversal” of the administrative orders under the statute. The APA provisions

governing substantial-evidence review do not explicitly mention monetary relief—they state only

that a reviewing court, upon finding legal error that prejudiced a petitioner’s “substantial rights,”

“shall reverse or remand the case for further proceedings.” See Tex. Gov’t Code § 2001.174(2). Nor

does Texas Mutual refer us to any case in which a court has awarded monetary relief incident to

reversing and remanding an administrative order. However, it relies on Southwestern Bell Telephone

Co. v. Public Utility Commission, 615 S.W.2d 947 (Tex. App.—Austin 1981), aff’d, 622 S.W.2d 82

(Tex. 1981), in which we held that “meaningful and effective” judicial review in a utility rate case

allowed error correction on remand made effective back to the date of the agency’s original order.

See id. at 955–56. Emphasizing Southwestern Bell’s notion that the APA is intended to provide

“effective” relief via judicial review, Texas Mutual extrapolates that it authorized the district court

to award it recoupment of the disputed funds to ensure that its remand of Vista’s stop-loss

reimbursement would be fully “effective” and Vista would not simply move its assets to China and

potentially make the funds uncollectible.

In response, Vista asserts that Texas Mutual is seeking relief more favorable than

that afforded it in the judgment and, consequently, was required to perfect its own appeal in order

imposing the debt, but render judgment definitively negating the debt’s existence—not situations

where, as here, the existence of the potential judgment debt remains an unresolved issue on remand.

From either perspective, Vista urges, the issue of its ultimate entitlement to stop-loss reimbursement

is inseparable from the “equity and good conscience” inquiry, properly applied. This is a close

question, but one that we need not reach here.

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to raise its complaint. See Tex. R. App. P. 25.1(c) (“A party who seeks to alter the trial court’s

judgment . . . must file a notice of appeal.”). Because Texas Mutual did not file a notice of appeal,

Vista insists, we lack jurisdiction to consider the complaint. See id.; Texas Bd. of Chiropractic

Exam’rs v. Texas Med. Ass’n, 375 S.W.3d 464, 491–92 (Tex. App.—Austin 2012, pet. denied)

(holding that appellate court lacked jurisdiction to consider appellee’s cross-point seeking to alter

trial court’s judgment because appellee had failed to file separate notice of appeal). Alternatively,

Vista insists that the APA does not authorize the monetary relief and that, in any event, the

claims would implicate the Division’s exclusive jurisdiction in the same manner that the

money-had-and-received claims did.

Assuming without deciding that Texas Mutual preserved this complaint for appellate

review, we would hold that, in the absence of further support in the APA’s text or Texas Supreme

Court precedent telling us otherwise, the APA does not authorize the monetary relief Texas Mutual

seeks. We overrule Texas Mutual’s cross-point.

CONCLUSION

In light of our disposition of the parties’ issues, we affirm the district court’s

judgments reversing the administrative orders and remanding Vista’s claims for stop-loss

reimbursement to the Division for further proceedings. We reverse the district court’s judgments

awarding Texas Mutual monetary relief and render judgments dismissing those claims for want of

jurisdiction. However, because Texas Mutual has asserted alternative constitutional and statutory

claims that may not be directly impacted by these holdings, we remand these causes to the

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district court for further proceedings consistent with this opinion. We express no opinion as to the

district court’s jurisdiction to award relief based on Texas Mutual’s surviving claims or theories.

__________________________________________

Bob Pemberton, Justice

Before Justices Puryear, Pemberton, and Rose

Affirmed in part; Reversed and Rendered in part; Reversed and Remanded in part on Motion

for Rehearing

Filed: September 27, 2013

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