Division Announces Insurance Carrier PBO Results

The Texas Department of Insurance, Division of Workers’ Compensation has released the 2020 Insurance Carrier Performance Based Oversight assessment. This PBO cycle, DWC reviewed 120 insurance carriers with the following results: 44 had scores placing them in the high performer tier, 76 were in the average performer tier, and four had a score placing them in the poor performer tier.

For this year’s PBO review, the Division implemented a new methodology which placed greater emphasis on the timely initial payment of temporary income benefits than in past PBO cycles. This assessment also took place while changes to carrier business operations occurred in response to COVID-19. These two factors resulted in lower scores than in past years.

The PBO data time frame for the 2020 assessment ran from January 1, 2020 through June 30, 2020. The data sources used to assess performance of the above measures came from the claim and medical data submitted electronically via EDI to the Division.

The weighted measures that were assessed this cycle were:

1. 1. 1. Timely payment of initial Temporary Income Benefits by the insurance carrier – 50% weight (up from 40%)
      2. Timely processing of initial medical bills by the insurance carrier – 30% weight
      3. Timely processing of request for reconsideration medical bills by the insurance carrier – 10% weight
      4. Timely submission of Initial Payment data via Electronic Data Interchange (EDI) – 5% weight (down from 10%)
      5. Timely submission of Medical Bill Processing data via EDI – 5% weight (down from 10%)

The Purpose and Process of PBO

PBO is a statutorily mandated evaluation of insurance carrier performance in the Texas workers’ compensation system. It is required to take place every two years. A similar review process takes place biennially for health care providers who practice in the system.

PBO assessments are conducted by underwriting company, not by group or by TPA. Carriers and TPAs should review their internal procedures with an emphasis on compliance with the five measures set out above.

The Division utilizes the PBO process to allocate its limited audit and enforcement resources. Carriers placed in the low tier are very likely to be audited in 2021. Carriers placed in the high tier have a good chance of avoiding a 2021 audit. Mid-tier carriers may or may not be audited this year.

2020 Final Scores

The final scores identify the overall performance standard for the assessed entity. The performance standards are:

High Tier: 95 or greater

Average Tier: 80.00 through 94.99

Poor Tier: 79.99 or less

The 2020 PBO assessment results and a list of the insurance carriers that were reviewed are posted on the Division website. If an insurance carrier is not listed, they were not assessed in 2020; however, no insurance carrier in the Texas workers’ compensation system is exempt from compliance with the Texas Labor Code and DWC rules. DWC will assess health care providers in a separate PBO review in 2021.

If you have questions about the PBO process, please feel free to contact James Sheffield, Steve Tipton or Bobby Stokes in our office.