By Thompson H.B. No. 3603 76R8949 DB-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the control of health insurance fraud; providing civil 1-3 penalties. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 3, Insurance Code, is amended by adding 1-6 Subchapter K to read as follows: 1-7 SUBCHAPTER K. INSURER ANTIFRAUD PROGRAMS 1-8 Art. 3.97-1. DEFINITIONS. In this subchapter: 1-9 (1) "Health care provider" has the meaning assigned by 1-10 Section 35.01, Penal Code. 1-11 (2) "Insurer" means: 1-12 (A) a health insurer, including a life, health, 1-13 and accident insurer, or a health and accident insurer, a health 1-14 maintenance organization, or any other person operating under 1-15 Chapter 3, 10, 20, 20A, 22, or 26 of this code who is authorized to 1-16 issue, issue for delivery, or deliver policies, certificates, or 1-17 contracts of insurance in this state; 1-18 (B) an approved nonprofit health corporation 1-19 that: 1-20 (i) is certified under Section 5.01(a), 1-21 Medical Practice Act (Article 4495b, Vernon's Texas Civil 1-22 Statutes); and 1-23 (ii) holds a certificate of authority 1-24 issued by the commissioner under Article 21.52F of this code; or 2-1 (C) an insurer authorized by the department to 2-2 write workers' compensation insurance in this state. 2-3 Art. 3.97-2. NOTICE OF PENALTY FOR FALSE OR FRAUDULENT 2-4 CLAIMS; DISPLAY ON FORMS. (a) If an insurer provides a form for a 2-5 person to use to make a claim against a policy issued by the 2-6 insurer or to give notice of a person's intent to make a claim 2-7 against a policy issued by the insurer, the insurer shall provide 2-8 on that form, in comparative prominence with the other content on 2-9 the form, a statement as follows: "Any person who knowingly 2-10 presents a false or fraudulent claim for the payment of a loss is 2-11 guilty of a crime and may be subject to fines and confinement in 2-12 state prison." 2-13 (b) The statement required in Subsection (a) of this article 2-14 must be preceded by the words: "For your protection, Texas law 2-15 requires the following to appear on this form." 2-16 Art. 3.97-3. INSURER ANTIFRAUD PLANS. An insurer may adopt 2-17 an antifraud plan under this article. If the insurer adopts an 2-18 antifraud plan, the insurer shall annually file that plan with the 2-19 insurance fraud unit. The plan must include: 2-20 (1) a description of the insurer's procedures for 2-21 detecting and investigating possible fraudulent insurance acts; and 2-22 (2) a description of the insurer's procedures for 2-23 reporting possible fraudulent insurance acts to the insurance fraud 2-24 unit. 2-25 Art. 3.97-4. IMMUNITY FOR INSURER-TO-INSURER INFORMATION 2-26 SHARING. (a) In the course of investigating insurance fraud 2-27 claims, an insurer may share information with other insurers 3-1 concerning: 3-2 (1) whether health care goods or services were 3-3 provided; 3-4 (2) whether health care goods or services were 3-5 medically necessary under professionally accepted standards; 3-6 (3) the nature of the health care goods or services 3-7 provided; 3-8 (4) the date on which health care goods or services 3-9 were provided; 3-10 (5) the medical record of goods or services provided; 3-11 (6) the condition treated or diagnosis made; or 3-12 (7) the identity and applicable license of the 3-13 provider or the recipient of health care goods or services. 3-14 (b) Before providing information as permitted by this 3-15 article to another insurer, an insurer must provide a copy of that 3-16 information to each health care provider that the information 3-17 concerns. 3-18 (c) An insurer may not provide information under this 3-19 article if the information is provided with malice, fraudulent 3-20 intent, or bad faith. 3-21 (d) This article does not affect or modify common law or a 3-22 statutory privilege or immunity. 3-23 SECTION 2. Chapter 6, Title 71, Revised Statutes, is amended 3-24 by adding Article 4512q to read as follows: 3-25 Art. 4512q. UNPROFESSIONAL CONDUCT BY HEALTH CARE PROVIDER 3-26 Sec. 1. DEFINITION. In this article, "health care provider" 3-27 has the meaning assigned by Section 35.01, Penal Code. 4-1 Sec. 2. UNPROFESSIONAL CONDUCT. (a) A health care provider 4-2 violates this article if the health care provider intentionally or 4-3 knowingly presents or causes to be presented to a person a bill for 4-4 medical treatment and knows that the treatment: 4-5 (1) was not provided; or 4-6 (2) was unreasonable or medically or clinically 4-7 unnecessary. 4-8 (b) A violation of this article by a health care provider 4-9 constitutes cause for the revocation or suspension of the 4-10 provider's license, permit, registration, certificate, or other 4-11 authority or other disciplinary action against the health care 4-12 provider. 4-13 Sec. 3. CIVIL PENALTY. (a) A health care provider that 4-14 violates this article is liable to the state for a civil penalty 4-15 not to exceed $2,000 for each violation. 4-16 (b) On request of the Texas Department of Insurance or an 4-17 agency that regulates the health care provider, the attorney 4-18 general shall file suit to collect the penalty in a district court 4-19 in Travis County or in the county in which the violation occurred. 4-20 (c) The attorney general may recover reasonable expenses 4-21 incurred in obtaining a civil penalty under this section, including 4-22 court costs, reasonable attorney's fees, reasonable investigative 4-23 costs, witness fees, and deposition expenses. 4-24 (d) A civil penalty recovered under this section shall be 4-25 deposited in the state treasury to the credit of the general 4-26 revenue fund. 4-27 (e) A health care provider is not liable under this section 5-1 for an isolated billing error. 5-2 SECTION 3. This Act takes effect September 1, 1999. 5-3 SECTION 4. The importance of this legislation and the 5-4 crowded condition of the calendars in both houses create an 5-5 emergency and an imperative public necessity that the 5-6 constitutional rule requiring bills to be read on three several 5-7 days in each house be suspended, and this rule is hereby suspended.