76R11423 DLF-D By Janek, Christian, Naishtat H.B. No. 610 Substitute the following for H.B. No. 610: By Lewis of Tarrant C.S.H.B. No. 610 A BILL TO BE ENTITLED 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 that 1-18 receives a claim electronically and that confirms receipt of the 1-19 claim electronically is not required to acknowledge receipt of the 1-20 claim in writing. 1-21 (c) Not later than the 60th day after the date that the 1-22 health maintenance organization receives a clean claim from a 1-23 physician or provider, the health maintenance organization shall: 1-24 (1) pay the total amount of the claim in accordance 2-1 with the contract between the physician or provider and the health 2-2 maintenance organization; 2-3 (2) pay the portion of the claim that is not in 2-4 dispute and notify the physician or provider in writing why the 2-5 remaining portion of the claim will not be paid; or 2-6 (3) notify the physician or provider in writing why 2-7 the claim will not be paid. 2-8 (d) If the health maintenance organization acknowledges 2-9 coverage of an enrollee under the health care plan but intends to 2-10 audit the physician or provider claim, the health maintenance 2-11 organization shall pay at least 85 percent of the charges submitted 2-12 at the contracted rate on the claim not later than the 60th day 2-13 after the date that the health maintenance organization receives 2-14 the clean claim from the physician or provider. Following 2-15 completion of the audit, any additional payment due a physician or 2-16 provider or any refund due the health maintenance organization 2-17 shall be made not later than the 30th day after the later of the 2-18 date that: 2-19 (1) the physician or provider receives notice of the 2-20 audit results; or 2-21 (2) any appeal rights of the enrollee are exhausted. 2-22 (e) A health maintenance organization that violates 2-23 Subsection (c) or (d) of this section is liable to a physician or 2-24 provider for the full amount of charges submitted on the claim at 2-25 the contracted rate, plus any penalties imposed under the contract, 2-26 less any amount previously paid or any charge for a service that is 2-27 not covered by the health care plan. 3-1 (f) A physician or provider may recover reasonable 3-2 attorney's fees in an action to recover payment under this section. 3-3 (g) In addition to any other penalty or remedy authorized by 3-4 the Insurance Code or another insurance law of this state, a health 3-5 maintenance organization that violates Subsection (c) or (d) of 3-6 this section is subject to an administrative penalty under Article 3-7 1.10E, Insurance Code. The administrative penalty imposed under 3-8 that article may not exceed $1,000 for each day the claim remains 3-9 unpaid in violation of Subsection (c) or (d) of this section. 3-10 (h) The health maintenance organization shall provide a 3-11 participating physician or provider with copies of all applicable 3-12 utilization review policies and claim processing policies or 3-13 procedures, including required data elements and claim formats. 3-14 (i) A health maintenance organization may, by contract with 3-15 a physician or provider, add or change the data elements that must 3-16 be submitted with the physician or provider claim. 3-17 (j) Not later than the 60th day before the date of an 3-18 addition or change in the data elements that must be submitted with 3-19 a claim or any other change in a health maintenance organization's 3-20 claim processing and payment procedures, the health maintenance 3-21 organization shall provide written notice of the addition or change 3-22 to each participating physician or provider. 3-23 (k) This section does not apply to a claim made by an 3-24 anesthesiologist. 3-25 (l) This section does not apply to a capitation payment 3-26 required to be made to a physician or provider under an agreement 3-27 to provide medical care or health care services under a health care 4-1 plan. 4-2 (m) This section applies to a person with whom a health 4-3 maintenance organization contracts to obtain the services of 4-4 physicians and providers to provide health care services to health 4-5 care plan enrollees. 4-6 (n) The commissioner may adopt rules as necessary to 4-7 implement this section. 4-8 SECTION 2. Article 3.70-3C, Insurance Code, as added by 4-9 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, 4-10 is amended by adding Section 3A to read as follows: 4-11 Sec. 3A. PROMPT PAYMENT OF PREFERRED PROVIDERS. (a) In 4-12 this section, "clean claim" means a completed claim, as determined 4-13 under department rules, submitted by a preferred provider for 4-14 medical care or health care services under a health insurance 4-15 policy. 4-16 (b) A preferred provider for medical care or health care 4-17 services under a health insurance policy may obtain acknowledgment 4-18 of receipt of a claim for medical care or health care services 4-19 under a health care plan by submitting the claim by United States 4-20 mail, return receipt requested. An insurer that receives a claim 4-21 electronically and that confirms receipt of the claim 4-22 electronically is not required to acknowledge receipt of the claim 4-23 in writing. 4-24 (c) Not later than the 60th day after the date that the 4-25 insurer receives a clean claim from a preferred provider, the 4-26 insurer shall: 4-27 (1) pay the total amount of the claim in accordance 5-1 with the contract between the preferred provider and the insurer; 5-2 (2) pay the portion of the claim that is not in 5-3 dispute and notify the preferred provider in writing why the 5-4 remaining portion of the claim will not be paid; or 5-5 (3) notify the preferred provider in writing why the 5-6 claim will not be paid. 5-7 (d) If the insurer acknowledges coverage of an insured under 5-8 the health insurance policy but intends to audit the preferred 5-9 provider claim, the insurer shall pay at least 85 percent of the 5-10 charges submitted at the contracted rate on the claim not later 5-11 than the 60th day after the date that the insurer receives the 5-12 clean claim from the preferred provider. Following completion of 5-13 the audit, any additional payment due a preferred provider or any 5-14 refund due the insurer shall be made not later than the 30th day 5-15 after the later of the date that: 5-16 (1) the preferred provider receives notice of the 5-17 audit results; or 5-18 (2) any appeal rights of the insured are exhausted. 5-19 (e) An insurer that violates Subsection (c) or (d) of this 5-20 section is liable to a preferred provider for the full amount of 5-21 charges submitted on the claim at the contracted rate, plus any 5-22 penalties imposed under the contract, less any amount previously 5-23 paid or any charge for a service that is not covered by the health 5-24 insurance policy. 5-25 (f) A preferred provider may recover reasonable attorney's 5-26 fees in an action to recover payment under this section. 5-27 (g) In addition to any other penalty or remedy authorized by 6-1 this code or another insurance law of this state, an insurer that 6-2 violates Subsection (c) or (d) of this section is subject to an 6-3 administrative penalty under Article 1.10E of this code. The 6-4 administrative penalty imposed under that article may not exceed 6-5 $1,000 for each day the claim remains unpaid in violation of 6-6 Subsection (c) or (d) of this section. 6-7 (h) The insurer shall provide a preferred provider with 6-8 copies of all applicable utilization review policies and claim 6-9 processing policies or procedures, including required data elements 6-10 and claim formats. 6-11 (i) An insurer may, by contract with a preferred provider, 6-12 add or change the data elements that must be submitted with the 6-13 preferred provider claim. 6-14 (j) Not later than the 60th day before the date of an 6-15 addition or change in the data elements that must be submitted with 6-16 a claim or any other change in an insurer's claim processing and 6-17 payment procedures, the insurer shall provide written notice of the 6-18 addition or change to each preferred provider. 6-19 (k) This section does not apply to a claim made by an 6-20 anesthesiologist. 6-21 (l) This section applies to a person with whom an insurer 6-22 contracts to obtain the services of preferred providers to provide 6-23 medical care or health care to insureds under a health insurance 6-24 policy. 6-25 (m) The commissioner of insurance may adopt rules as 6-26 necessary to implement this section. 6-27 SECTION 3. Section 5(c), Article 21.55, Insurance Code, is 7-1 amended to read as follows: 7-2 (c) This article does not apply to Chapter 20A of this code 7-3 except as provided in Section 9 of that chapter. This article does 7-4 not apply to a claim governed by Section 3A, Article 3.70-3C, of 7-5 this code. 7-6 SECTION 4. This Act takes effect September 1, 1999. 7-7 SECTION 5. The importance of this legislation and the 7-8 crowded condition of the calendars in both houses create an 7-9 emergency and an imperative public necessity that the 7-10 constitutional rule requiring bills to be read on three several 7-11 days in each house be suspended, and this rule is hereby suspended.