By Janek H.B. No. 610
76R2700 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to prompt payment of amounts owed to health care providers
1-3 under certain health benefit 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.
1-9 (a) Not later than the second day after the date that a health
1-10 maintenance organization receives an invoice from a physician or
1-11 provider for medical care or health care services under a health
1-12 care plan, the health maintenance organization shall acknowledge
1-13 receipt of the invoice in writing.
1-14 (b) Not later than the 15th day after the date that the
1-15 health maintenance organization receives an invoice from a
1-16 physician or provider, the health maintenance organization shall
1-17 request from the physician or provider any information, statement,
1-18 or form that the health maintenance organization reasonably
1-19 believes will be required to permit payment of the invoice. The
1-20 health maintenance organization may request additional information
1-21 at a later time if necessary to process the invoice.
1-22 (c) Not later than the 60th day after the date that the
1-23 health maintenance organization receives an invoice from a
1-24 physician or provider, the health maintenance organization shall:
2-1 (1) pay the total amount of the invoice;
2-2 (2) pay a portion of the invoice and notify the
2-3 physician or provider in writing why the remaining portion of the
2-4 invoice will not be paid; or
2-5 (3) notify the physician or provider in writing why
2-6 the invoice will not be paid.
2-7 (d) A health maintenance organization that violates
2-8 Subsection (c) of this section is liable to a physician or
2-9 provider, in addition to the amount owed by the health maintenance
2-10 organization for the care or services provided, for interest on
2-11 that amount. Interest under this subsection accrues at the rate of
2-12 10 percent a year beginning on the date that the health maintenance
2-13 organization receives an invoice from a physician or provider and
2-14 ending on the date the invoice is paid.
2-15 (e) A physician or provider may recover reasonable
2-16 attorney's fees in an action to recover payment of an invoice
2-17 subject to this section or to recover interest under Subsection (d)
2-18 of this section.
2-19 (f) In addition to any other penalty or remedy authorized by
2-20 the Insurance Code or another insurance law of this state, a health
2-21 maintenance organization that violates Subsection (c) of this
2-22 section is subject to an administrative penalty under Article
2-23 1.10E, Insurance Code. The administrative penalty imposed under
2-24 that article may not exceed $1,000 for each day the invoice remains
2-25 unpaid in violation of Subsection (c) of this section.
2-26 (g) This section does not apply to a capitation payment
2-27 required to be made to a physician or provider under an agreement
3-1 to provide medical care or health care services under a health care
3-2 plan.
3-3 SECTION 2. Article 3.70-3C, Insurance Code, as added by
3-4 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
3-5 is amended by adding Section 3A to read as follows:
3-6 Sec. 3A. PROMPT PAYMENT OF PREFERRED PROVIDERS. (a) Not
3-7 later than the second day after the date that an insurer receives
3-8 an invoice from a preferred provider for medical care or health
3-9 care provided to an insured covered by a health insurance policy,
3-10 the insurer shall acknowledge receipt of the invoice in writing.
3-11 (b) Not later than the 15th day after the date that the
3-12 insurer receives an invoice from a preferred provider, the insurer
3-13 shall request from the preferred provider any information,
3-14 statement, or form that the insurer reasonably believes will be
3-15 required to permit payment of the invoice. The insurer may request
3-16 additional information at a later time if necessary to process the
3-17 invoice.
3-18 (c) Not later than the 60th day after the date that the
3-19 insurer receives an invoice from a preferred provider, the insurer
3-20 shall:
3-21 (1) pay the total amount of the invoice;
3-22 (2) pay a portion of the invoice and notify the
3-23 preferred provider in writing why the remaining portion of the
3-24 invoice will not be paid; or
3-25 (3) notify the preferred provider in writing why the
3-26 invoice will not be paid.
3-27 (d) An insurer who violates Subsection (c) of this section
4-1 is liable to a preferred provider, in addition to the amount owed
4-2 by the insurer for the care provided, for interest on that amount.
4-3 Interest under this section accrues at the rate of 10 percent a
4-4 year beginning on the date that the insurer receives an invoice
4-5 from a preferred provider and ending on the date the invoice is
4-6 paid.
4-7 (e) A preferred provider may recover reasonable attorney's
4-8 fees in an action to recover payment of an invoice subject to this
4-9 section or to recover interest under Subsection (d) of this
4-10 section.
4-11 (f) In addition to any other penalty or remedy authorized by
4-12 this code or another insurance law of this state, an insurer that
4-13 violates Subsection (c) of this section is subject to an
4-14 administrative penalty under Article 1.10E of this code. The
4-15 administrative penalty imposed under that article may not exceed
4-16 $1,000 for each day the invoice remains unpaid in violation of
4-17 Subsection (c) of this section.
4-18 SECTION 3. Section 5(c), Article 21.55, Insurance Code, is
4-19 amended to read as follows:
4-20 (c) This article does not apply to Chapter 20A of this code
4-21 except as provided in Section 9 of that chapter. This article does
4-22 not apply to an invoice governed by Section 3A, Article 3.70-3C, of
4-23 this code.
4-24 SECTION 4. This Act takes effect September 1, 1999.
4-25 SECTION 5. The importance of this legislation and the
4-26 crowded condition of the calendars in both houses create an
4-27 emergency and an imperative public necessity that the
5-1 constitutional rule requiring bills to be read on three several
5-2 days in each house be suspended, and this rule is hereby suspended.