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Holmes v. Zurich American Insurance Co.

Court of Appeals of Texas, Fifth District, Dallas

January 22, 2014

AARON S. HOLMES, DALLAS SPINE CARE P.A., DR. ERNEST A. AQUI, M.D., AND PINE CREEK MEDICAL CENTER, Appellants
v.
ZURICH AMERICAN INSURANCE COMPANY AND GALLAGHER BASSETT SERVICES, INC., Appellees

Petition for review filed by, 04/28/2014

Page 767

On Appeal from the 192nd Judicial District Court, Dallas County, Texas. Trial Court Cause No. 10-06438.

for appellants: Deanne C. Ayers, Ayers & Ayers, Colleyville, TX; Julie B. Tebbets, Colleyville, TX; Mark Anthony Cevallos, Odessa, TX.

for appellees: Kevin B. Miller, Law Offices Of Miller & Bicklein, Odessa, TX.

Before Justices Lang-Miers, Fillmore, and Brown[1]. Opinion by Justice Brown.

OPINION

Page 768

ADA BROWN, JUSTICE.

In this workers' compensation case, appellants Aaron S. Holmes, Dallas Spine Care P.A., Dr. Ernest A. Aqui, M.D., and Pine Creek Medical Center appeal the trial court's summary judgment in favor of appellees Zurich American Insurance Company and Gallagher Bassett Services, Inc. This case arises out of Zurich's denial of payment for Holmes's spinal surgery. Because we conclude appellants failed to exhaust their administrative remedies under the Texas Workers' Compensation Act, we affirm the trial court's judgment.

In February 2007, Holmes injured his back while working as a tire-lube technician. Zurich, the workers' compensation insurance carrier for Holmes's employer, accepted that Holmes suffered a low back sprain/strain, but disputed any other injuries. In February 2008, Holmes and Zurich participated in a benefit review conference to resolve the dispute over the extent of Holmes's injury but were unable to reach an agreement. Thereafter, a benefit contested case hearing was held to determine if the compensable injury included a 2mm disc protrusion at L5-S1, L4-L5 bilateral radiculopathy, and L5-S1 left radiculopathy. In an order issued May 8, 2008, the hearing officer for the Division of Workers' Compensation (DWC) concluded that the compensable injury included a 2mm disc protrusion at L5-S1, but did not include L4-L5 bilateral radiculopathy or L5-S1 left radiculopathy.

As required by the Texas Workers' Compensation Act (the Act), Holmes sought pre-authorization for spinal surgery, which was initially denied. Holmes then sought medical dispute resolution with the DWC. On September 26, 2008, an Independent Review Organization (IRO) overturned the denial of preauthorization, finding that the requested procedure was medically necessary.[2] On October 30, 2008, Holmes underwent spinal surgery.

Page 769

Dr. Robert Henderson with appellant Dallas Spine Care, P.A. performed the surgery at Pine Creek Medical Center, another appellant. Appellant Dr. Aqui was the anesthesiologist. When it was billed for the surgery, Zurich refused to pay on the grounds that the surgery exceeded the scope of the compensable injury. Zurich's position is that, in addition to repairing the compensable disc protrusion, the spinal surgery also repaired other non-compensable injuries.

Appellants sued Zurich and Gallagher Bassett, a third-party administrator of claims for Zurich, asserting causes of action for statutory and common-law bad faith, fraud, and enforcement of a final order of the DWC. Zurich and Gallagher Bassett filed separate motions for summary judgment. Zurich moved for summary judgment on six grounds, one of which was that appellants failed to exhaust their administrative remedies regarding payment of the surgical bills. Gallagher Bassett moved for summary judgment on the sole ground that it ...


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