1-1 By: Janek, et al. (Senate Sponsor - Carona) H.B. No. 610 1-2 (In the Senate - Received from the House May 6, 1999; 1-3 May 7, 1999, read first time and referred to Committee on Economic 1-4 Development; May 14, 1999, reported adversely, with favorable 1-5 Committee Substitute by the following vote: Yeas 7, Nays 0; 1-6 May 14, 1999, sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 610 By: Carona 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to health care providers under certain health benefit 1-11 plans. 1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-13 SECTION 1. The Texas Health Maintenance Organization Act 1-14 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding 1-15 Section 18B to read as follows: 1-16 Sec. 18B. PROMPT PAYMENT OF PHYSICIAN AND PROVIDERS. (a) 1-17 In this section, "clean claim" means a completed claim, as 1-18 determined under Texas Department of Insurance rules, submitted by 1-19 a physician or provider for medical care or health care services 1-20 under a health care plan. 1-21 (b) A physician or provider for medical care or health care 1-22 services under a health care plan may obtain acknowledgment of 1-23 receipt of a claim for medical care or health care services under a 1-24 health care plan by submitting the claim by United States mail, 1-25 return receipt requested. A health maintenance organization or the 1-26 contracted clearinghouse of the health maintenance organization 1-27 that receives a claim electronically shall acknowledge receipt of 1-28 the claim by an electronic transmission to the physician or 1-29 provider and is not required to acknowledge receipt of the claim by 1-30 the health maintenance organization in writing. 1-31 (c) Not later than the 45th day after the date that the 1-32 health maintenance organization receives a clean claim from a 1-33 physician or provider, the health maintenance organization shall: 1-34 (1) pay the total amount of the claim in accordance 1-35 with the contract between the physician or provider and the health 1-36 maintenance organization; 1-37 (2) pay the portion of the claim that is not in 1-38 dispute and notify the physician or provider in writing why the 1-39 remaining portion of the claim will not be paid; or 1-40 (3) notify the physician or provider in writing why 1-41 the claim will not be paid. 1-42 (d) If the health maintenance organization acknowledges 1-43 coverage of an enrollee under the health care plan but intends to 1-44 audit the physician or provider claim, the health maintenance 1-45 organization shall pay the charges submitted at 85 percent of the 1-46 contracted rate on the claim not later than the 45th day after the 1-47 date that the health maintenance organization receives the claim 1-48 from the physician or provider. Following completion of the audit, 1-49 any additional payment due a physician or provider or any refund 1-50 due the health maintenance organization shall be made not later 1-51 than the 30th day after the later of the date that: 1-52 (1) the physician or provider receives notice of the 1-53 audit results; or 1-54 (2) any appeal rights of the enrollee are exhausted. 1-55 (e) A health maintenance organization that violates 1-56 Subsection (c) or (d) of this section is liable to a physician or 1-57 provider for the full amount of billed charges submitted on the 1-58 claim or the amount payable under the contracted penalty rate, less 1-59 any amount previously paid or any charge for a service that is not 1-60 covered by the health care plan. 1-61 (f) A physician or provider may recover reasonable 1-62 attorney's fees in an action to recover payment under this section. 1-63 (g) In addition to any other penalty or remedy authorized by 1-64 the Insurance Code or another insurance law of this state, a health 2-1 maintenance organization that violates Subsection (c) or (d) of 2-2 this section is subject to an administrative penalty under Article 2-3 1.10E, Insurance Code. The administrative penalty imposed under 2-4 that article may not exceed $1,000 for each day the claim remains 2-5 unpaid in violation of Subsection (c) or (d) of this section. 2-6 (h) The health maintenance organization shall provide a 2-7 participating physician or provider with copies of all applicable 2-8 utilization review policies and claim processing policies or 2-9 procedures, including required data elements and claim formats. 2-10 (i) A health maintenance organization may, by contract with 2-11 a physician or provider, add or change the data elements that must 2-12 be submitted with the physician or provider claim. 2-13 (j) Not later than the 60th day before the date of an 2-14 addition or change in the data elements that must be submitted with 2-15 a claim or any other change in a health maintenance organization's 2-16 claim processing and payment procedures, the health maintenance 2-17 organization shall provide written notice of the addition or change 2-18 to each participating physician or provider. 2-19 (k) This section does not apply to a claim made by a 2-20 physician or provider who is a member of the legislature. 2-21 (l) This section does not apply to a capitation payment 2-22 required to be made to a physician or provider under an agreement 2-23 to provide medical care or health care services under a health care 2-24 plan. 2-25 (m) This section applies to a person with whom a health 2-26 maintenance organization contracts to process claims or to obtain 2-27 the services of physicians and providers to provide health care 2-28 services to health care plan enrollees. 2-29 (n) The commissioner may adopt rules as necessary to 2-30 implement this section. 2-31 SECTION 2. Article 3.70-3C, Insurance Code, as added by 2-32 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, 2-33 is amended by adding Section 3A to read as follows: 2-34 Sec. 3A. PROMPT PAYMENT OF PREFERRED PROVIDERS. (a) In 2-35 this section, "clean claim" means a completed claim, as determined 2-36 under department rules, submitted by a preferred provider for 2-37 medical care or health care services under a health insurance 2-38 policy. 2-39 (b) A preferred provider for medical care or health care 2-40 services under a health insurance policy may obtain acknowledgment 2-41 of receipt of a claim for medical care or health care services 2-42 under a health care plan by submitting the claim by United States 2-43 mail, return receipt requested. An insurer or the contracted 2-44 clearinghouse of an insurer that receives a claim electronically 2-45 shall acknowledge receipt of the claim by an electronic 2-46 transmission to the preferred provider and is not required to 2-47 acknowledge receipt of the claim by the insurer in writing. 2-48 (c) Not later than the 45th day after the date that the 2-49 insurer receives a clean claim from a preferred provider, the 2-50 insurer shall: 2-51 (1) pay the total amount of the claim in accordance 2-52 with the contract between the preferred provider and the insurer; 2-53 (2) pay the portion of the claim that is not in 2-54 dispute and notify the preferred provider in writing why the 2-55 remaining portion of the claim will not be paid; or 2-56 (3) notify the preferred provider in writing why the 2-57 claim will not be paid. 2-58 (d) If the insurer acknowledges coverage of an insured under 2-59 the health insurance policy but intends to audit the preferred 2-60 provider claim, the insurer shall pay the charges submitted at 85 2-61 percent of the contracted rate on the claim not later than the 45th 2-62 day after the date that the insurer receives the claim from the 2-63 preferred provider. Following completion of the audit, any 2-64 additional payment due a preferred provider or any refund due the 2-65 insurer shall be made not later than the 30th day after the later 2-66 of the date that: 2-67 (1) the preferred provider receives notice of the 2-68 audit results; or 2-69 (2) any appeal rights of the insured are exhausted. 3-1 (e) An insurer that violates Subsection (c) or (d) of this 3-2 section is liable to a preferred provider for the full amount of 3-3 billed charges submitted on the claim or the amount payable under 3-4 the contracted penalty rate, less any amount previously paid or any 3-5 charge for a service that is not covered by the health insurance 3-6 policy. 3-7 (f) A preferred provider may recover reasonable attorney's 3-8 fees in an action to recover payment under this section. 3-9 (g) In addition to any other penalty or remedy authorized by 3-10 this code or another insurance law of this state, an insurer that 3-11 violates Subsection (c) or (d) of this section is subject to an 3-12 administrative penalty under Article 1.10E of this code. The 3-13 administrative penalty imposed under that article may not exceed 3-14 $1,000 for each day the claim remains unpaid in violation of 3-15 Subsection (c) or (d) of this section. 3-16 (h) The insurer shall provide a preferred provider with 3-17 copies of all applicable utilization review policies and claim 3-18 processing policies or procedures, including required data elements 3-19 and claim formats. 3-20 (i) An insurer may, by contract with a preferred provider, 3-21 add or change the data elements that must be submitted with the 3-22 preferred provider claim. 3-23 (j) 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 an insurer's claim processing and 3-26 payment procedures, the insurer shall provide written notice of the 3-27 addition or change to each preferred provider. 3-28 (k) This section does not apply to a claim made by a 3-29 preferred provider who is a member of the legislature. 3-30 (l) This section applies to a person with whom an insurer 3-31 contracts to process claims or to obtain the services of preferred 3-32 providers to provide medical care or health care to insureds under 3-33 a health insurance policy. 3-34 (m) The commissioner of insurance may adopt rules as 3-35 necessary to implement this section. 3-36 SECTION 3. Section 5(c), Article 21.55, Insurance Code, is 3-37 amended to read as follows: 3-38 (c) This article does not apply to Chapter 20A of this code 3-39 except as provided in Section 9 of that chapter. This article does 3-40 not apply to a claim governed by Section 3A, Article 3.70-3C, of 3-41 this code. 3-42 SECTION 4. (a) The lieutenant governor and the speaker of 3-43 the house of representatives shall appoint a joint committee of the 3-44 legislature to study, evaluate, and make recommendations concerning 3-45 the adequacy of: 3-46 (1) state laws governing the payment and settlement by 3-47 health maintenance organizations and insurers of health care 3-48 provider claims, including the processes and practices established 3-49 by the health maintenance organizations and insurers for the 3-50 payments and settlements; and 3-51 (2) the enforcement of the laws described by 3-52 Subdivision (1) of this subsection, including the processes and 3-53 practices established in connection with the enforcement of those 3-54 laws. 3-55 (b) Not later than December 31, 2000, the interim committee 3-56 established under this section shall report the results of its 3-57 study and evaluation, together with any recommendations adopted by 3-58 the committee, to the lieutenant governor and speaker of the house 3-59 of representatives. 3-60 SECTION 5. This Act takes effect September 1, 1999. 3-61 SECTION 6. The importance of this legislation and the 3-62 crowded condition of the calendars in both houses create an 3-63 emergency and an imperative public necessity that the 3-64 constitutional rule requiring bills to be read on three several 3-65 days in each house be suspended, and this rule is hereby suspended. 3-66 * * * * *