By Bailey H.B. No. 2883
76R6582 AJA-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to contracts between certain health care providers and
1-3 certain health benefit plans.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 3, Article 3.70-3C, Insurance Code, as
1-6 added by Chapter 1024, Acts of the 75th Legislature, Regular
1-7 Session, 1997, is amended by adding Subsection (n) to read as
1-8 follows:
1-9 (n) A preferred provider contract must:
1-10 (1) include a complete fee schedule, all applicable
1-11 treatment codes, and a complete explanation of the method for
1-12 determining payment of a preferred provider;
1-13 (2) prohibit the insurer from changing the fee
1-14 schedule for a preferred provider without giving the preferred
1-15 provider 90 days' prior written notice by certified mail and allow
1-16 the preferred provider to terminate the contract before the
1-17 implementation of the revised fee schedule without penalty;
1-18 (3) except as authorized by Subdivision (2) of this
1-19 subsection, prohibit unilateral amendments to the contract;
1-20 (4) prohibit the insurer from assigning the contract
1-21 to another entity and causing the provider to become a provider in
1-22 another health care plan without the provider's prior consent;
1-23 (5) give the preferred provider at least 90 days after
1-24 the date of service to submit a claim for payment;
2-1 (6) require the insurer to pay a properly submitted
2-2 and complete claim for payment by a preferred provider not later
2-3 than the 45th day after the date the claim is submitted and, if the
2-4 insurer fails to pay a claim as required under this subdivision,
2-5 require the insurer to forfeit any applicable fee discount and to
2-6 instead pay the preferred provider's usual and customary fee for
2-7 the service for which the claim was made;
2-8 (7) clearly describe all information that must be
2-9 included on a claim form submitted by a preferred provider to
2-10 render the claim full and complete for payment purposes;
2-11 (8) provide that once eligibility and benefits have
2-12 been properly verified by the preferred provider, the insurer may
2-13 not deny a claim for payment on the ground that the insured is no
2-14 longer eligible for coverage or that the benefits have changed;
2-15 (9) define "medical necessity" as "the standard for
2-16 health care services as determined by physicians and practitioners
2-17 in accordance with the prevailing practices and standards of the
2-18 medical profession and the community" and allow a preferred
2-19 provider to appeal an adverse decision regarding medical necessity
2-20 to a panel of preferred providers of the same specialty;
2-21 (10) clearly explain the insurer's policy regarding
2-22 global periods and payment methods for multiple surgical procedures
2-23 that are performed during the same operation;
2-24 (11) prohibit the insurer from denying or interfering
2-25 with the preferred provider's right to render medical services and
2-26 furnish durable medical equipment to patients in the office setting
2-27 as is customary for providers of the same medical specialty;
3-1 (12) provide for the automatic annual renewal of the
3-2 contract unless a party to the contract gives 90 days' prior
3-3 written notice of termination to the other party stating the reason
3-4 for the termination; and
3-5 (13) provide for all unresolved disputes between the
3-6 insurer and a preferred provider to be resolved through binding
3-7 arbitration on the request of either party.
3-8 SECTION 2. Section 18A, Texas Health Maintenance
3-9 Organization Act (Article 20A.18A, Vernon's Texas Insurance Code),
3-10 as added by Chapter 1026, Acts of the 75th Legislature, Regular
3-11 Session, 1997, is amended by adding Subsection (j) to read as
3-12 follows:
3-13 (j) A contract between a health maintenance organization and
3-14 a physician or provider must:
3-15 (1) include a complete fee schedule, all applicable
3-16 treatment codes, and a complete explanation of the method for
3-17 determining payment of a physician or provider;
3-18 (2) prohibit the health maintenance organization from
3-19 changing the fee schedule for a physician or provider without
3-20 giving the physician or provider 90 days' prior written notice by
3-21 certified mail and allow the physician or provider to terminate the
3-22 contract before the implementation of the revised fee schedule
3-23 without penalty;
3-24 (3) except as authorized by Subdivision (2) of this
3-25 subsection, prohibit unilateral amendments to the contract;
3-26 (4) prohibit the health maintenance organization from
3-27 assigning the contract to another entity and causing the physician
4-1 or provider to become a physician or provider in another health
4-2 care plan without the physician's or provider's prior consent;
4-3 (5) give the physician or provider at least 90 days
4-4 after the date of service to submit a claim for payment;
4-5 (6) require the health maintenance organization to pay
4-6 a properly submitted and complete claim for payment by a physician
4-7 or provider not later than the 45th day after the date the claim is
4-8 submitted and, if the health maintenance organization fails to pay
4-9 a claim as required under this subdivision, require the health
4-10 maintenance organization to forfeit any applicable fee discount and
4-11 to instead pay the physician's or provider's usual and customary
4-12 fee for the service for which the claim was made;
4-13 (7) clearly describe all information that must be
4-14 included on a claim form submitted by a physician or provider to
4-15 render the claim full and complete for payment purposes;
4-16 (8) provide that once eligibility and benefits have
4-17 been properly verified by the physician or provider, the health
4-18 maintenance organization may not deny a claim for payment on the
4-19 ground that the enrollee is no longer eligible for coverage or that
4-20 the benefits have changed;
4-21 (9) define "medical necessity" as "the standard for
4-22 health care services as determined by physicians and providers in
4-23 accordance with the prevailing practices and standards of the
4-24 medical profession and the community" and allow a physician or
4-25 provider to appeal an adverse decision regarding medical necessity
4-26 to a panel of physicians or providers of the same specialty;
4-27 (10) clearly explain the health maintenance
5-1 organization's policy regarding global periods and payment methods
5-2 for multiple surgical procedures that are performed during the same
5-3 operation;
5-4 (11) prohibit the health maintenance organization from
5-5 denying or interfering with the physician's or provider's right to
5-6 render medical services and furnish durable medical equipment to
5-7 patients in the office setting as is customary for physicians or
5-8 providers of the same medical specialty;
5-9 (12) provide for the automatic annual renewal of the
5-10 contract unless a party to the contract gives 90 days' prior
5-11 written notice of termination to the other party stating the reason
5-12 for the termination; and
5-13 (13) provide for all unresolved disputes between the
5-14 health maintenance organization and a physician or provider to be
5-15 resolved through binding arbitration on the request of either
5-16 party.
5-17 SECTION 3. This Act takes effect September 1, 1999, and
5-18 applies only to a preferred provider contract or a contract between
5-19 a health maintenance organization and a physician or provider
5-20 entered into on or after that date.
5-21 SECTION 4. The importance of this legislation and the
5-22 crowded condition of the calendars in both houses create an
5-23 emergency and an imperative public necessity that the
5-24 constitutional rule requiring bills to be read on three several
5-25 days in each house be suspended, and this rule is hereby suspended.