By: Madla S.B. No. 781
99S0578/1
A BILL TO BE ENTITLED
AN ACT
1-1 relating to contracts between health care providers and health care
1-2 plans.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 3, Article 3.70-3C, Insurance Code, as
1-5 added by Chapter 1024, Acts of the 75th Legislature, Regular
1-6 Session, 1997, is amended by adding Subsections (n) through (z) to
1-7 read as follows:
1-8 (n) A preferred provider contract must include a complete
1-9 fee schedule, all applicable treatment codes, and a complete
1-10 explanation of the method of determining payment to the preferred
1-11 provider.
1-12 (o) A preferred provider contract must include a provision
1-13 prohibiting the insurer from changing the fee schedule for a
1-14 preferred provider except upon 90 days prior written notice to the
1-15 preferred provider by certified mail. In such event, the preferred
1-16 provider contract must include a provision that allows the
1-17 preferred provider to terminate the preferred provider contract
1-18 prior to the implementation of the revised fee schedule without
1-19 penalty.
1-20 (p) Except as authorized by Subsection (o) of this section,
1-21 a preferred provider contract must include a provision prohibiting
1-22 unilateral amendments to the contract.
1-23 (q) A preferred provider contract must include a provision
1-24 prohibiting the insurer from assigning the contract to another
2-1 entity and thereby causing the preferred provider to become a
2-2 preferred or participating provider in another health care plan
2-3 without the preferred provider's prior consent.
2-4 (r) A preferred provider contract must include a provision
2-5 giving the preferred provider not less than 90 days after the date
2-6 of service to submit a claim for payment.
2-7 (s) A preferred provider contract must include a provision
2-8 requiring the insurer to pay a properly submitted and complete
2-9 claim to the preferred provider within 45 days. In the event the
2-10 insurer fails to pay a claim as required by this subsection, the
2-11 preferred provider contract must include a provision that requires
2-12 the insurer to forfeit any applicable fee discount and to instead
2-13 pay the preferred provider's usual and customary fee for such
2-14 service.
2-15 (t) The preferred provider contract must include a provision
2-16 clearly enumerating all information that must be included on a
2-17 claim form to be submitted by a preferred provider to render that
2-18 claim full and complete for payment purposes.
2-19 (u) The preferred provider contract must include a provision
2-20 that once eligibility and benefits have been properly verified by
2-21 the preferred provider, the insurer may not deny a claim for
2-22 payment on the ground that the insured is no longer eligible for
2-23 coverage or that the benefits have changed.
2-24 (v) A preferred provider contract shall include a provision
2-25 defining "medical necessity" as "the standard for health care
2-26 services as determined by physicians and practitioners in
3-1 accordance with the prevailing practices and standards of the
3-2 medical profession and the community." A preferred provider
3-3 contract shall include a provision that a preferred provider may
3-4 appeal an adverse decision regarding "medical necessity" to a panel
3-5 of preferred providers of the same specialty.
3-6 (w) A preferred provider contract must include a provision
3-7 clearly explaining the insurer's policy regarding global periods
3-8 and payment methods for multiple surgical procedures that are
3-9 performed during the same operation.
3-10 (x) A preferred provider contract must include a provision
3-11 prohibiting the insurer from denying or interfering with the
3-12 preferred provider's right to render medical services and furnish
3-13 durable medical equipment such as x-rays, orthotics, fungal
3-14 cultures, casts, postoperative shoes, crutches, and walkers, to
3-15 patients in an office setting as is customary for preferred
3-16 providers of the same medical specialty.
3-17 (y) A preferred provider contract must include a provision
3-18 which provides for the automatic annual renewal of the contract
3-19 except upon 90 days prior written notice of termination to the
3-20 other party which must state the cause for the termination.
3-21 (z) A preferred provider contract must include a provision
3-22 that all unresolved disputes between the insurer and a preferred
3-23 provider shall be resolved by binding arbitration upon the request
3-24 of either party.
3-25 SECTION 2. Section 18A, Texas Health Maintenance
3-26 Organization Act (Article 20A.18A, Vernon's Texas Insurance Code),
4-1 as added by Chapter 1026, Acts of the 75th Legislature, Regular
4-2 Session, 1997, is amended by adding Subsections (j) through (v) to
4-3 read as follows:
4-4 (j) A contract between a health maintenance organization and
4-5 a physician or provider must include a complete fee schedule, all
4-6 applicable treatment codes, and a complete explanation of the
4-7 method of determining payment to the physician or provider.
4-8 (k) A contract between a health maintenance organization and
4-9 a physician or provider must include a provision prohibiting the
4-10 health maintenance organization from changing the fee schedule for
4-11 a physician or provider except upon 90 days prior written notice to
4-12 the physician or provider by certified mail. In such event, the
4-13 contract must include a provision that allows the physician or
4-14 provider to terminate the contract prior to the implementation of
4-15 the revised fee schedule without penalty.
4-16 (l) Except as authorized by Subsection (k) of this section,
4-17 a contract between a health maintenance organization and a
4-18 physician or provider must include a provision prohibiting
4-19 unilateral amendments to the contract.
4-20 (m) A contract between a health maintenance organization and
4-21 a physician or provider must include a provision prohibiting the
4-22 health maintenance organization from assigning the contract to
4-23 another entity and thereby causing the physician or provider to
4-24 become a preferred or participating physician or provider in
4-25 another health care plan without the physician's or provider's
4-26 prior consent.
5-1 (n) A contract between a health maintenance organization and
5-2 a physician or provider must include a provision giving the
5-3 physician or provider not less than 90 days after the date of
5-4 service to submit a claim for payment.
5-5 (o) A contract between a health maintenance organization and
5-6 a physician or provider must include a provision requiring the
5-7 health maintenance organization to pay a properly submitted and
5-8 complete claim to the physician or provider within 45 days. In the
5-9 event the health maintenance organization fails to pay a claim as
5-10 required by this subsection, the physician or provider contract
5-11 must include a provision that requires the health maintenance
5-12 organization to forfeit any applicable fee discount and to instead
5-13 pay the physician's or provider's usual and customary fee for such
5-14 service.
5-15 (p) The contract between a health maintenance organization
5-16 and a physician or provider must include a provision clearly
5-17 enumerating all information that must be included on a claim form
5-18 to be submitted by a physician or provider to render that claim
5-19 full and complete for payment purposes.
5-20 (q) The contract between a health maintenance organization
5-21 and a physician or provider must include a provision that once
5-22 eligibility and benefits have been properly verified by the
5-23 physician or provider, the health maintenance organization may not
5-24 deny a claim for payment on the ground that an enrollee is no
5-25 longer eligible for coverage or that the benefits have changed.
5-26 (r) A contract between a health maintenance organization and
6-1 a physician or provider shall include a provision defining "medical
6-2 necessity" as "the standard for health care services as determined
6-3 by physicians and providers in accordance with the prevailing
6-4 practices and standards of the medical profession and the
6-5 community." A contract between a health maintenance organization
6-6 and a physician or provider shall include a provision that a
6-7 physician or provider may appeal an adverse decision regarding
6-8 "medical necessity" to a panel of physicians or providers of the
6-9 same specialty.
6-10 (s) A contract between a health maintenance organization and
6-11 a physician or provider must include a provision clearly explaining
6-12 the health maintenance organization's policy regarding global
6-13 periods and payment methods for multiple surgical procedures that
6-14 are performed during the same operation.
6-15 (t) A contract between a health maintenance organization and
6-16 a physician or provider must include a provision prohibiting the
6-17 health maintenance organization from denying or interfering with
6-18 the physician's or provider's right to render medical services and
6-19 furnish durable medical equipment such as x-rays, orthotics, fungal
6-20 cultures, casts, postoperative shoes, crutches, and walkers, to
6-21 patients in an office setting as is customary for physicians or
6-22 providers of the same medical specialty.
6-23 (u) A contract between a health maintenance organization and
6-24 a physician or provider must include a provision which provides for
6-25 the automatic annual renewal of the contract except upon 90 days
6-26 prior written notice of termination to the other party which must
7-1 state the cause for the termination.
7-2 (v) A contract between a health maintenance organization and
7-3 a physician or provider must include a provision that all
7-4 unresolved disputes between the health maintenance organization and
7-5 a physician or provider shall be resolved by binding arbitration
7-6 upon the request of either party.
7-7 SECTION 3. The importance of this legislation and the
7-8 crowded condition of the calendars in both houses create an
7-9 emergency and an imperative public necessity that the
7-10 constitutional rule requiring bills to be read on three several
7-11 days in each house be suspended, and this rule is hereby suspended,
7-12 and that this Act take effect and be in force from and after its
7-13 passage, and it is so enacted.