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.