1-1 AN ACT
1-2 relating to health care providers under certain health benefit
1-3 plans.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. The Texas Health Maintenance Organization Act
1-6 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
1-7 Section 18B to read as follows:
1-8 Sec. 18B. PROMPT PAYMENT OF PHYSICIAN AND PROVIDERS. (a)
1-9 In this section, "clean claim" means a completed claim, as
1-10 determined under Texas Department of Insurance rules, submitted by
1-11 a physician or provider for medical care or health care services
1-12 under a health care plan.
1-13 (b) A physician or provider for medical care or health care
1-14 services under a health care plan may obtain acknowledgment of
1-15 receipt of a claim for medical care or health care services under a
1-16 health care plan by submitting the claim by United States mail,
1-17 return receipt requested. A health maintenance organization or the
1-18 contracted clearinghouse of the health maintenance organization
1-19 that receives a claim electronically shall acknowledge receipt of
1-20 the claim by an electronic transmission to the physician or
1-21 provider and is not required to acknowledge receipt of the claim by
1-22 the health maintenance organization in writing.
1-23 (c) Not later than the 45th day after the date that the
1-24 health maintenance organization receives a clean claim from a
2-1 physician or provider, the health maintenance organization shall:
2-2 (1) pay the total amount of the claim in accordance
2-3 with the contract between the physician or provider and the health
2-4 maintenance organization;
2-5 (2) pay the portion of the claim that is not in
2-6 dispute and notify the physician or provider in writing why the
2-7 remaining portion of the claim will not be paid; or
2-8 (3) notify the physician or provider in writing why
2-9 the claim will not be paid.
2-10 (d) If a prescription benefit claim is electronically
2-11 adjudicated and electronically paid, and the health maintenance
2-12 organization or its designated agent authorizes treatment, the
2-13 claim must be paid not later than the 21st day after the treatment
2-14 is authorized.
2-15 (e) If the health maintenance organization acknowledges
2-16 coverage of an enrollee under the health care plan but intends to
2-17 audit the physician or provider claim, the health maintenance
2-18 organization shall pay the charges submitted at 85 percent of the
2-19 contracted rate on the claim not later than the 45th day after the
2-20 date that the health maintenance organization receives the claim
2-21 from the physician or provider. Following completion of the audit,
2-22 any additional payment due a physician or provider or any refund
2-23 due the health maintenance organization shall be made not later
2-24 than the 30th day after the later of the date that:
2-25 (1) the physician or provider receives notice of the
2-26 audit results; or
2-27 (2) any appeal rights of the enrollee are exhausted.
3-1 (f) A health maintenance organization that violates
3-2 Subsection (c) or (e) of this section is liable to a physician or
3-3 provider for the full amount of billed charges submitted on the
3-4 claim or the amount payable under the contracted penalty rate, less
3-5 any amount previously paid or any charge for a service that is not
3-6 covered by the health care plan.
3-7 (g) A physician or provider may recover reasonable
3-8 attorney's fees in an action to recover payment under this section.
3-9 (h) In addition to any other penalty or remedy authorized by
3-10 the Insurance Code or another insurance law of this state, a health
3-11 maintenance organization that violates Subsection (c) or (e) of
3-12 this section is subject to an administrative penalty under Article
3-13 1.10E, Insurance Code. The administrative penalty imposed under
3-14 that article may not exceed $1,000 for each day the claim remains
3-15 unpaid in violation of Subsection (c) or (e) of this section.
3-16 (i) The health maintenance organization shall provide a
3-17 participating physician or provider with copies of all applicable
3-18 utilization review policies and claim processing policies or
3-19 procedures, including required data elements and claim formats.
3-20 (j) A health maintenance organization may, by contract with
3-21 a physician or provider, add or change the data elements that must
3-22 be submitted with the physician or provider claim.
3-23 (k) Not later than the 60th day before the date of an
3-24 addition or change in the data elements that must be submitted with
3-25 a claim or any other change in a health maintenance organization's
3-26 claim processing and payment procedures, the health maintenance
3-27 organization shall provide written notice of the addition or change
4-1 to each participating physician or provider.
4-2 (l) This section does not apply to a claim made by a
4-3 physician or provider who is a member of the legislature.
4-4 (m) This section does not apply to a capitation payment
4-5 required to be made to a physician or provider under an agreement
4-6 to provide medical care or health care services under a health care
4-7 plan.
4-8 (n) This section applies to a person with whom a health
4-9 maintenance organization contracts to process claims or to obtain
4-10 the services of physicians and providers to provide health care
4-11 services to health care plan enrollees.
4-12 (o) The commissioner may adopt rules as necessary to
4-13 implement this section.
4-14 SECTION 2. Article 3.70-3C, Insurance Code, as added by
4-15 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
4-16 is amended by adding Section 3A to read as follows:
4-17 Sec. 3A. PROMPT PAYMENT OF PREFERRED PROVIDERS. (a) In
4-18 this section, "clean claim" means a completed claim, as determined
4-19 under department rules, submitted by a preferred provider for
4-20 medical care or health care services under a health insurance
4-21 policy.
4-22 (b) A preferred provider for medical care or health care
4-23 services under a health insurance policy may obtain acknowledgment
4-24 of receipt of a claim for medical care or health care services
4-25 under a health care plan by submitting the claim by United States
4-26 mail, return receipt requested. An insurer or the contracted
4-27 clearinghouse of an insurer that receives a claim electronically
5-1 shall acknowledge receipt of the claim by an electronic
5-2 transmission to the preferred provider and is not required to
5-3 acknowledge receipt of the claim by the insurer in writing.
5-4 (c) Not later than the 45th day after the date that the
5-5 insurer receives a clean claim from a preferred provider, the
5-6 insurer shall:
5-7 (1) pay the total amount of the claim in accordance
5-8 with the contract between the preferred provider and the insurer;
5-9 (2) pay the portion of the claim that is not in
5-10 dispute and notify the preferred provider in writing why the
5-11 remaining portion of the claim will not be paid; or
5-12 (3) notify the preferred provider in writing why the
5-13 claim will not be paid.
5-14 (d) If a prescription benefit claim is electronically
5-15 adjudicated and electronically paid, and the preferred provider or
5-16 its designated agent authorizes treatment, the claim must be paid
5-17 not later than the 21st day after the treatment is authorized.
5-18 (e) If the insurer acknowledges coverage of an insured under
5-19 the health insurance policy but intends to audit the preferred
5-20 provider claim, the insurer shall pay the charges submitted at 85
5-21 percent of the contracted rate on the claim not later than the 45th
5-22 day after the date that the insurer receives the claim from the
5-23 preferred provider. Following completion of the audit, any
5-24 additional payment due a preferred provider or any refund due the
5-25 insurer shall be made not later than the 30th day after the later
5-26 of the date that:
5-27 (1) the preferred provider receives notice of the
6-1 audit results; or
6-2 (2) any appeal rights of the insured are exhausted.
6-3 (f) An insurer that violates Subsection (c) or (e) of this
6-4 section is liable to a preferred provider for the full amount of
6-5 billed charges submitted on the claim or the amount payable under
6-6 the contracted penalty rate, less any amount previously paid or any
6-7 charge for a service that is not covered by the health insurance
6-8 policy.
6-9 (g) A preferred provider may recover reasonable attorney's
6-10 fees in an action to recover payment under this section.
6-11 (h) In addition to any other penalty or remedy authorized by
6-12 this code or another insurance law of this state, an insurer that
6-13 violates Subsection (c) or (e) of this section is subject to an
6-14 administrative penalty under Article 1.10E of this code. The
6-15 administrative penalty imposed under that article may not exceed
6-16 $1,000 for each day the claim remains unpaid in violation of
6-17 Subsection (c) or (e) of this section.
6-18 (i) The insurer shall provide a preferred provider with
6-19 copies of all applicable utilization review policies and claim
6-20 processing policies or procedures, including required data elements
6-21 and claim formats.
6-22 (j) An insurer may, by contract with a preferred provider,
6-23 add or change the data elements that must be submitted with the
6-24 preferred provider claim.
6-25 (k) Not later than the 60th day before the date of an
6-26 addition or change in the data elements that must be submitted with
6-27 a claim or any other change in an insurer's claim processing and
7-1 payment procedures, the insurer shall provide written notice of the
7-2 addition or change to each preferred provider.
7-3 (l) This section does not apply to a claim made by a
7-4 preferred provider who is a member of the legislature.
7-5 (m) This section applies to a person with whom an insurer
7-6 contracts to process claims or to obtain the services of preferred
7-7 providers to provide medical care or health care to insureds under
7-8 a health insurance policy.
7-9 (n) The commissioner of insurance may adopt rules as
7-10 necessary to implement this section.
7-11 SECTION 3. Section 5(c), Article 21.55, Insurance Code, is
7-12 amended to read as follows:
7-13 (c) This article does not apply to Chapter 20A of this code
7-14 except as provided in Section 9 of that chapter. This article does
7-15 not apply to a claim governed by Section 3A, Article 3.70-3C, of
7-16 this code.
7-17 SECTION 4. This Act takes effect September 1, 1999.
7-18 SECTION 5. The importance of this legislation and the
7-19 crowded condition of the calendars in both houses create an
7-20 emergency and an imperative public necessity that the
7-21 constitutional rule requiring bills to be read on three several
7-22 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 610 was passed by the House on May 5,
1999, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 610 on May 20, 1999, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 610 on May 28, 1999, by a
non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 610 was passed by the Senate, with
amendments, on May 18, 1999, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 610 on May 29, 1999, by
a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor