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.