Amend CSHB 1862 by striking all below the enacting clause and
substituting the following:
SECTION 1. Section 1, Article 3.70-3C, Insurance Code, as
added by Chapter 1024, Acts of the 75th Legislature, Regular
Session, 1997, is amended by adding Subdivision (14) to read as
follows:
(14) "Preauthorization" means a reliable
representation by an insurer to a physician or health care provider
that the insurer will pay the physician or health care provider for
proposed medical care or health care services if the physician or
health care provider renders those services to the patient for whom
the services are proposed. The term includes precertification,
certification, re-certification, or any other term that would be a
reliable representation by an insurer to a physician or health care
provider.
SECTION 2. Section 3A, Article 3.70-3C, Insurance Code, as
added by Chapter 1024, Acts of the 75th Legislature, Regular
Session, 1997, is amended to read as follows:
Sec. 3A. PROMPT PAYMENT OF PREFERRED PROVIDERS. (a) In this
section, "clean claim" means a <completed> claim that complies with
Section 3B of this article<, as determined under department rules,
submitted by a preferred provider for medical care or health care
services under a health insurance policy>.
(b) A physician or provider must submit a claim to an
insurer not later than the 95th day after the date the physician or
provider provides the medical care or health care services for
which the claim is made. An insurer shall accept as proof of
timely filing a claim filed in compliance with Subsection (c) of
this section or information from another insurer showing that the
physician or provider submitted the claim to the insurer in
compliance with Subsection (c) of this section. If a physician or
provider fails to submit a claim in compliance with this
subsection, the physician or provider forfeits the right to
payment. The period for submitting a claim under this subsection
may be extended by contract. A physician or provider may not
submit a duplicate claim for payment before the 46th day after the
date the original claim was submitted. The commissioner shall
adopt rules under which an insurer may determine whether a claim is
a duplicate claim <A preferred provider for medical care or health
care services under a health insurance policy may obtain
acknowledgment of receipt of a claim for medical care or health
care services under a health care plan by submitting the claim by
United States mail, return receipt requested. An insurer or the
contracted clearinghouse of an insurer that receives a claim
electronically shall acknowledge receipt of the claim by an
electronic transmission to the preferred provider and is not
required to acknowledge receipt of the claim by the insurer in
writing>.
(c) A physician or provider shall, as appropriate:
(1) mail a claim by United States mail, first class,
or by overnight delivery service, and maintain a log of mailed
claims and include a copy of the log with the relevant mailed
claim;
(2) submit the claim electronically and maintain a log
of electronically submitted claims;
(3) fax the claim and maintain a log of all faxed
claims; or
(4) hand deliver the claim and maintain a log of all
hand-delivered claims.
(d) If a claim for medical care or health care services
under a health care plan is mailed, the claim is presumed to have
been received by the insurer on the third day after the date the
claim is mailed or, if the claim is mailed using overnight service
or return receipt requested, on the date the delivery receipt is
signed. If the claim is submitted electronically, the claim is
presumed to have been received on the date of the electronic
verification of receipt by the insurer or the insurer's
clearinghouse. If the insurer or the insurer's clearinghouse does
not provide a confirmation within 24 hours of submission by the
physician or provider, the physician's or provider's clearinghouse
shall provide the confirmation. If the claim is faxed, the claim
is presumed to have been received on the date of the transmission
acknowledgment. If the claim is hand delivered, the claim is
presumed to have been received on the date the delivery receipt is
signed.
(e) Not later than the 45th day after the date that the
insurer receives a clean claim from a preferred provider, the
insurer shall make a determination of whether the claim is eligible
for payment and:
(1) if the insurer determines the entire claim is
eligible for payment, pay the total amount of the claim in
accordance with the contract between the preferred provider and the
insurer;
(2) if the insurer disputes a portion of the claim,
pay the portion of the claim that is not in dispute and notify the
preferred provider in writing why the remaining portion of the
claim will not be paid; or
(3) if the insurer determines that the claim is not
eligible for payment, notify the preferred provider in writing why
the claim will not be paid.
(f) Not later than the 21st day after the date an insurer
affirmatively adjudicates a pharmacy benefit claim that is
electronically submitted, the insurer shall:
(1) pay the total amount of the claim; or
(2) notify the benefit provider of the reasons for
denying payment of the claim.
(g) An insurer that determines under Subsection (e) of this
section that a claim is eligible for payment and does not pay the
claim on or before the 45th day after the date the insurer receives
a clean claim commits an unfair claim settlement practice in
violation of Article 21.21-2 of this code and is subject to an
administrative penalty under Chapter 84 of this code. The insurer
shall pay the physician or provider making the claim the full
amount of billed charges submitted on the claim and interest on the
billed charges at a rate of 15 percent annually, except that the
insurer is not required to pay a preferred provider an amount of
billed charges that exceeds the amount billable under a fee
schedule provided by the preferred provider to the insurer on or
before the 30th day after the date the physician or provider enters
into a preferred provider contract with the insurer. The preferred
provider may modify the fee schedule if the provider notifies the
insurer of the modification on or before the 90th day before the
date the modification takes effect.
(h) The investigation and determination of eligibility for
payment, including any coordination of other payments does not
extend the period for determining whether a claim is eligible for
payment under Subsection (e) of this section <(d) If a prescription
benefit claim is electronically adjudicated and electronically
paid, and the preferred provider or its designated agent authorizes
treatment, the claim must be paid not later than the 21st day after
the treatment is authorized>.
(i) Except as provided by Subsection (j) of this section, if
<(e) If> the insurer acknowledges coverage of an insured under the
health insurance policy but intends to audit the preferred provider
claim, the insurer shall pay the charges submitted at 85 percent of
the contracted rate on the claim not later than the 45th day after
the date that the insurer receives the claim from the preferred
provider. The insurer must complete <Following completion of> the
audit, and any additional payment due a preferred provider or any
refund due the insurer shall be made not later than the 90th <30th>
day after the <later of the> date the claim is received by the
insurer <that:>
<(1) the preferred provider receives notice of the
audit results; or>
<(2) any appeal rights of the insured are exhausted>.
(j) If an insurer needs additional information from a
treating preferred provider to determine eligibility for payment,
the insurer, not later than the 30th calendar day after the date
the insurer receives a clean claim, shall request in writing that
the preferred provider provide any attachment to the claim the
insurer desires in good faith for clarification of the claim. The
request must describe with specificity the clinical information
requested and relate only to information the insurer can
demonstrate is specific to the claim or the claim's related episode
of care. An insurer that requests an attachment under this
subsection shall determine whether the claim is eligible for
payment on or before the later of the 15th day after the date the
insurer receives the attachment or the latest date for determining
whether the claim is eligible for payment under Subsection (e) of
this section. An insurer may not make more than one request under
this subsection in connection with a claim. Subsections (c) and (d)
of this section apply to a request for and submission of an
attachment under this subsection.
(k) If an insurer requests an attachment or other
information from a person other than the physician or provider who
submitted the claim, the insurer shall provide a copy of the
request to the physician or provider who submitted the claim. The
insurer may not withhold payment pending receipt of an attachment
or information requested under this subsection. If on receiving an
attachment or information requested under this subsection the
insurer determines an error in payment of the claim, the insurer
may recover under Section 3C of this article.
(l) The commissioner shall adopt rules under which an
insurer can easily identify attachments or information submitted by
a physician or provider under Subsection (j) or (k) of this section
<(f) An insurer that violates Subsection (c) or (e) of this
section is liable to a preferred provider for the full amount of
billed charges submitted on the claim or the amount payable under
the contracted penalty rate, less any amount previously paid or any
charge for a service that is not covered by the health insurance
policy>.
(m) The insurer's claims payment processes shall:
(1) use nationally recognized, generally accepted
Correct Procedural Terminology codes, including all relevant
modifiers; and
(2) be consistent with nationally recognized,
generally accepted, clinically appropriate bundling logic and
edits.
(n) <(g)> A preferred provider may recover reasonable
attorney's fees and court costs in an action to recover payment
under this section.
(o) <(h)> In addition to any other penalty or remedy
authorized by this code or another insurance law of this state, an
insurer that violates Subsection (c) or (i) <(e)> of this section
is subject to an administrative penalty under Article 1.10E of this
code. The administrative penalty imposed under that article may
not exceed $1,000 for each day the claim remains unpaid in
violation of Subsection (c) or (i) <(e)> of this section.
(p) <(i)> The insurer shall provide a preferred provider
with copies of all applicable utilization review policies and claim
processing policies or procedures<, including required data
elements and claim formats>.
(q) <(j) An insurer may, by contract with a preferred
provider, add or change the data elements that must be submitted
with the preferred provider claim.>
<(k) Not later than the 60th day before the date of an
addition or change in the data elements that must be submitted with
a claim or any other change in an insurer's claim processing and
payment procedures, the insurer shall provide written notice of the
addition or change to each preferred provider.>
<(l) This section does not apply to a claim made by a
preferred provider who is a member of the legislature.>
<(m)> This section applies to a person with whom an insurer
contracts to process claims or to obtain the services of preferred
providers to provide medical care or health care to insureds under
a health insurance policy.
(r) <(n)> The commissioner of insurance may adopt rules as
necessary to implement this section.
SECTION 3. Article 3.70-3C, Insurance Code, as added by
Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
is amended by adding Sections 3B-3I, 10, 11, and 12 to read as
follows:
Sec. 3B. ELEMENTS OF CLEAN CLAIM. (a) A claim by a
physician or provider, other than an institutional provider, is a
"clean claim" if the claim is submitted using Health Care Financing
Administration Form 1500 or a successor to that form developed by
the National Uniform Billing Committee or its successor and adopted
by the commissioner by rule for the purposes of this subsection
that is submitted to an insurer for payment and that contains the
information required by the commissioner by rule for the purposes
of this subsection entered into the appropriate fields on the form.
(b) A claim by an institutional provider is a "clean claim"
if the claim is submitted using Health Care Financing
Administration Form UB-92 or a successor to that form developed by
the National Uniform Billing Committee or its successor and adopted
by the commissioner by rule for the purposes of this subsection
that is submitted to an insurer for payment and that contains the
information required by the commissioner by rule for the purposes
of this subsection entered into the appropriate fields on the form.
(c) An insurer may require any data element that is required
in an electronic transaction set needed to comply with federal law.
An insurer may not require a physician or provider to provide
information other than information for a data field included on the
form used for a clean claim under Subsection (a) or (b) of this
section, as applicable.
(d) A claim submitted by a physician or provider that
includes additional fields, data elements, attachments, or other
information not required under this section is considered to be a
clean claim for the purposes of this article.
Sec. 3C. OVERPAYMENT. An insurer may recover an overpayment
to a physician or provider if:
(1) not later than the 180th day after the date the
physician or provider receives the payment, the insurer provides
written notice of the overpayment to the physician or provider that
includes the basis and specific reasons for the request for
recovery of funds; and
(2) the physician or provider does not make
arrangements for repayment of the requested funds on or before the
45th day after the date the physician or provider receives the
notice.
Sec. 3D. VERIFICATION OF ELIGIBILITY FOR PAYMENT. (a) On
the request of a physician or provider for verification of the
eligibility for payment of a particular medical care or health care
service the physician or provider proposes to provide to a
particular patient, the insurer shall inform the physician or
provider whether the service, if provided to that patient, is
eligible for payment from the insurer to the physician or provider.
(b) An insurer shall provide verification under this section
between 6 a.m. and 6 p.m. central standard time each day.
(c) Verification under this section shall be made in good
faith and without delay.
Sec. 3E. COORDINATION OF PAYMENT. (a) An insurer may
require a physician or provider to retain in the physician's or
provider's records updated information concerning other health
benefit plan coverage and to provide the information to the
insurer on the applicable form described by Section 3B of this
article. Except as provided in this subsection, an insurer may not
require a physician or provider to investigate coordination of
other health benefit plan coverage.
(b) Coordination of payment under this section does not
extend the period for determining whether a service is eligible for
payment under Section 3A(e) of this article.
(c) A physician or provider who submits a claim for
particular medical care or health care services to more than one
health maintenance organization or insurer shall provide written
notice on the claim submitted to each health maintenance
organization or insurer of the identity of each other health
maintenance organization or insurer with which the same claim is
being filed.
(d) On receipt of notice under Subsection (c) of this
section, an insurer shall coordinate and determine the appropriate
payment for each health maintenance organization or insurer to make
to the physician or provider.
(e) If an insurer is a secondary payor and pays more than
the amount for which the insurer is legally obligated, the insurer
may recover the amount of the overpayment from the health
maintenance organization or insurer that is primarily responsible
for that amount.
(f) If the portion of the claim overpaid by the secondary
insurer was also paid by the primary health maintenance
organization or insurer, the secondary insurer may recover the
amount of overpayment under Section 3C of this article from the
physician or provider who received the payment.
(g) An insurer may share information with another health
maintenance organization or insurer to the extent necessary to
coordinate appropriate payment obligations on a specific claim.
(h) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 3F. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
SERVICES. (a) An insurer that uses a preauthorization process for
medical care and health care services shall provide each
participating physician or health care provider, not later than the
10th working day after the date a request is made, a list of
medical care and health care services that require preauthorization
and information concerning the preauthorization process.
(b) If proposed medical care or health care services require
preauthorization as a condition of the insurer's payment to a
physician or health care provider under a health insurance policy
or a physician or health care provider requests preauthorization of
proposed medical care or health care services, the insurer shall
determine whether the medical care or health care services proposed
to be provided to the insured are medically necessary and
appropriate.
(c) On receipt of a request from a physician or health care
provider for preauthorization, the insurer shall review and issue a
determination indicating whether the proposed services are
preauthorized. If the determination requires a determination of
medical necessity and appropriateness of the proposed medical care
or health care services, the determination must be mailed or
otherwise transmitted not later than the third calendar day after
the date the request is received by the insurer.
(d) If the proposed medical care or health care services
involve inpatient care, the determination issued by the insurer
must be provided within one calendar day of the request by
telephone or electronic transmission to the physician or health
care provider of record and followed by written notice to the
physician or provider on or before the third day after the date of
the request and must specify an approved length of stay for
admission into a health care facility based on the recommendation
of the patient's physician or health care provider and the
insurer's written medically acceptable screening criteria and
review procedures. The criteria and procedures must be established,
periodically evaluated, and updated.
(e) If an insurer has preauthorized medical care or health
care services, the insurer may not deny or reduce payment to the
physician or health care provider for those services unless the
physician or health care provider has materially misrepresented the
proposed medical care or health care services or has substantially
failed to perform the proposed medical care or health care
services.
(f) This section applies to an agent or other person with
whom an insurer contracts to perform, or to whom the insurer
delegates the performance of, preauthorization of proposed medical
or health care services.
Sec. 3G. AVAILABILITY OF CODING GUIDELINES. (a) A preferred
provider contract between an insurer and a physician or provider
must provide that:
(1) the physician or provider may request a
description of the coding guidelines, including any underlying
bundling, recoding, or other payment process and fee schedules
applicable to specific procedures that the physician or provider
will receive under the contract;
(2) the insurer or the insurer's agent will provide
the guidelines not later than the 30th day after the date the
insurer receives the request;
(3) the insurer will provide notice of material
changes to the coding guidelines and fee schedules not later than
the 90th day before the date the changes take effect and will not
make retroactive revisions to the coding guidelines and fee
schedules; and
(4) the contract may be terminated by the physician or
provider on or before the 30th day after the date the physician or
provider receives information requested under this subsection
without penalty or discrimination in participation in other health
care products or plans.
(b) A physician or provider who receives information under
Subsection (a) of this section may use or disclose the information
only for the purpose of practice management, billing activities, or
other business operations. The commissioner may impose and collect
a penalty of $1,000 for each use or disclosure of the information
that violates this subsection.
Sec. 3H. DISPUTE RESOLUTION. (a) An insurer may not require
by contract or otherwise the use of a dispute resolution procedure
or binding arbitration with a physician or health care provider.
This subsection does not prohibit an insurer from offering a
dispute resolution procedure or binding arbitration to resolve a
dispute if the insurer and the physician or provider consent to the
process after the dispute arises. This subsection may not be
construed to conflict with any applicable appeal mechanisms
required by law.
(b) The provisions of this section may not be waived or
nullified by contract.
Sec. 3I. AUTHORITY OF ATTORNEY GENERAL. In addition to any
other remedy available for a violation of this article, the
attorney general may take action and seek remedies available under
Section 15, Article 21.21 of this code, and Sections 17.58, 17.60,
17.61, and 17.62, Business & Commerce Code, for a violation of
Section 3A or 7 of this article.
Sec. 10. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND HEALTH
CARE PROVIDERS. The provisions of this article relating to prompt
payment by an insurer of a physician or health care provider and to
preauthorization of medical care or health care services apply to a
physician or health care provider who:
(1) is not a preferred provider under a preferred
provider benefit plan; and
(2) provides to an insured:
(A) emergency care; or
(B) specialty or other medical care or health
care services at the request of the insurer or a preferred provider
because the services are not reasonably available from a preferred
provider.
Sec. 11. CONFLICT WITH OTHER LAW. To the extent of any
conflict between this article and Article 21.52C of this code, this
article controls.
Sec. 12. APPLICATION OF CERTAIN PROVISIONS UNDER MEDICAID. A
provision of this article may not be interpreted as requiring an
insurer, physician, or health care provider, in providing benefits
or services under the state Medicaid program, to:
(1) use billing forms or codes that are inconsistent
with those required under the state Medicaid program; or
(2) make determinations relating to medical necessity
or appropriateness or eligibility for coverage in a manner
different than that required under the state Medicaid program.
SECTION 4. Section 2, Texas Health Maintenance Organization
Act (Chapter 20A.02, Vernon's Texas Insurance Code), is amended by
adding Subdivision (ff) to read as follows:
(ff) "Preauthorization" means a reliable
representation by a health maintenance organization to a physician
or provider that the health maintenance organization will pay the
physician or provider for proposed medical care or health care
services if the physician or provider renders those services to the
patient for whom the services are proposed. The term includes
precertification, certification, re-certification, or any other
term that would be a reliable representation by a health
maintenance organization to a physician or provider.
SECTION 5. Section 18B, Texas Health Maintenance
Organization Act (Section 20A.18B, Vernon's Texas Insurance Code),
is amended to read as follows:
Sec. 18B. PROMPT PAYMENT OF PHYSICIAN AND PROVIDERS. (a) In
this section, "clean claim" means a <completed> claim that complies
with Section 18D of this Act<, as determined under Texas Department
of Insurance rules, submitted by a physician or provider for
medical care or health care services under a health care plan>.
(b) A physician or provider must submit a claim under this
section to a health maintenance organization not later than the
95th day after the date the physician or provider provides the
medical care or health care services for which the claim is made.
A health maintenance organization shall accept as proof of timely
filing a claim filed in compliance with Subsection (c) of this
section or information from another health maintenance organization
showing that the physician or provider submitted the claim to the
health maintenance organization in compliance with Subsection (c)
of this section. If a physician or provider fails to submit a
claim in compliance with this subsection, the physician or provider
forfeits the right to payment. The period for submitting a claim
under this subsection may be extended by contract. A physician or
provider may not submit a duplicate claim for payment before the
46th day after the date the original claim was submitted. The
commissioner shall adopt rules under which a health maintenance
organization may determine whether a claim is a duplicate claim <A
physician or provider for medical care or health care services
under a health care plan may obtain acknowledgment of receipt of a
claim for medical care or health care services under a health care
plan by submitting the claim by United States mail, return receipt
requested. A health maintenance organization or the contracted
clearinghouse of the health maintenance organization that receives
a claim electronically shall acknowledge receipt of the claim by an
electronic transmission to the physician or provider and is not
required to acknowledge receipt of the claim by the health
maintenance organization in writing>.
(c) A physician or provider shall, as appropriate:
(1) mail a claim by United States mail, first class,
or by overnight delivery service, and maintain a log of mailed
claims and include a copy of the log with the claim;
(2) submit the claim electronically and maintain a log
of electronically submitted claims;
(3) fax the claim and maintain a log of all faxed
claims; or
(4) hand deliver the claim and maintain a log of all
hand-delivered claims.
(d) If a claim for medical care or health care services
under a health care plan is mailed, the claim is presumed to have
been received by the health maintenance organization on the third
day after the date the claim is mailed or, if the claim is mailed
using overnight service or return receipt requested, on the date
the delivery receipt is signed. If the claim is submitted
electronically, the claim is presumed to have been received on the
date of the electronic verification of receipt by the health
maintenance organization or the health maintenance organization's
clearinghouse. If the health maintenance organization or the
health maintenance organization's clearinghouse does not provide a
confirmation within 24 hours of submission by the physician or
provider, the physician's or provider's clearinghouse shall provide
the confirmation. If the claim is faxed, the claim is presumed to
have been received on the date of the transmission acknowledgment.
If the claim is hand delivered, the claim is presumed to have been
received on the date the delivery receipt is signed.
(e) Not later than the 45th day after the date that the
health maintenance organization receives a clean claim from a
physician or provider, the health maintenance organization shall
make a determination of whether the claim is eligible for payment
and:
(1) if the health maintenance organization determines
the entire claim is eligible for payment, pay the total amount of
the claim in accordance with the contract between the physician or
provider and the health maintenance organization;
(2) if the health maintenance organization disputes a
portion of the claim, pay the portion of the claim that is not in
dispute and notify the physician or provider in writing why the
remaining portion of the claim will not be paid; or
(3) if the health maintenance organization determines
that the claim is not eligible for payment, notify the physician or
provider in writing why the claim will not be paid.
(f) Not later than the 21st day after the date a health
maintenance organization or the health maintenance organization's
designated agent affirmatively adjudicates a pharmacy benefit claim
that is electronically submitted, the health maintenance
organization shall:
(1) pay the total amount of the claim; or
(2) notify the benefit provider of the reasons for
denying payment of the claim.
(g) A health maintenance organization that determines under
Subsection (e) of this section that a claim is eligible for payment
and does not pay the claim on or before the 45th day after the date
the health maintenance organization receives a clean claim commits
an unfair claim settlement practice in violation of Article
21.21-2, Insurance Code, and is subject to an administrative
penalty under Chapter 84, Insurance Code. The health maintenance
organization shall pay the physician or provider making the claim
the full amount of billed charges submitted on the claim and
interest on the billed charges at a rate of 15 percent annually,
except that the health maintenance organization is not required to
pay a physician or provider with whom the health maintenance
organization has a contract an amount of billed charges that
exceeds the amount billable under a fee schedule provided by the
physician or provider to the health maintenance organization on or
before the 30th day after the date the physician or provider enters
into the contract with the health maintenance organization. The
physician or provider may modify the fee schedule if the physician
or provider notifies the health maintenance organization of the
modification on or before the 90th day before the date the
modification takes effect.
(h) The investigation and determination of eligibility for
payment, including any coordination of other payments, does not
extend the period for determining whether a claim is eligible for
payment under Subsection (e) of this section <(d) If a
prescription benefit claim is electronically adjudicated and
electronically paid, and the health maintenance organization or its
designated agent authorizes treatment, the claim must be paid not
later than the 21st day after the treatment is authorized>.
(i) Except as provided by Subsection (j) of this section, if
<(e) If> the health maintenance organization acknowledges coverage
of an enrollee under the health care plan but intends to audit the
physician or provider claim, the health maintenance organization
shall pay the charges submitted at 85 percent of the contracted
rate on the claim not later than the 45th day after the date that
the health maintenance organization receives the claim from the
physician or provider. The health maintenance organization shall
complete <Following completion of> the audit, and any additional
payment due a physician or provider or any refund due the health
maintenance organization shall be made not later than the 90th
<30th> day after the <later of the> date the claim is received by
the health maintenance organization <that:>
<(1) the physician or provider receives notice of the
audit results; or>
<(2) any appeal rights of the enrollee are exhausted>.
(j) If a health maintenance organization needs additional
information from a treating physician or provider to determine
eligibility for payment, the health maintenance organization, not
later than the 30th calendar day after the date the health
maintenance organization receives a clean claim, shall request in
writing that the physician or provider provide any attachment to
the claim the health maintenance organization desires in good faith
for clarification of the claim. The request must describe with
specificity the clinical information requested and relate only to
information the health maintenance organization can demonstrate is
specific to the claim or the claim's related episode of care. A
health maintenance organization that requests an attachment under
this subsection shall determine whether the claim is eligible for
payment on or before the later of the 15th day after the date the
health maintenance organization receives the attachment or the
latest date for determining whether the claim is eligible for
payment under Subsection (e) of this section. A health maintenance
organization may not make more than one request under this
subsection in connection with a claim. Subsections (c) and (d) of
this section apply to a request for and submission of an attachment
under this subsection.
(k) If a health maintenance organization requests an
attachment or other information from a person other than the
physician or provider who submitted the claim, the health
maintenance organization shall provide a copy of the request to the
physician or provider who submitted the claim. The health
maintenance organization may not withhold payment pending receipt
of an attachment or information requested under this subsection.
If on receiving an attachment or information requested under this
subsection the health maintenance organization determines an error
in payment of the claim, the health maintenance organization may
recover under Section 18E of this Act.
(l) The commissioner shall adopt rules under which a health
maintenance organization can easily identify attachments or
information submitted by a physician or provider <(f) A health
maintenance organization that violates Subsection (c) or (e) of
this section is liable to a physician or provider for the full
amount of billed charges submitted on the claim or the amount
payable under the contracted penalty rate, less any amount
previously paid or any charge for a service that is not covered by
the health care plan>.
(m) A health maintenance organization's claims payment
processes must:
(1) use nationally recognized, generally accepted
Correct Procedural Terminology codes, including all relevant
modifiers; and
(2) be consistent with nationally recognized,
generally accepted, clinically appropriate bundling logic and
edits.
(n) <(g)> A physician or provider may recover reasonable
attorney's fees and court costs in an action to recover payment
under this section.
(o) <(h)> In addition to any other penalty or remedy
authorized by the Insurance Code or another insurance law of this
state, a health maintenance organization that violates Subsection
(c) or (i) <(e)> of this section is subject to an administrative
penalty under Article 1.10E, Insurance Code. The administrative
penalty imposed under that article may not exceed $1,000 for each
day the claim remains unpaid in violation of Subsection (c) or (i)
<(e)> of this section.
(p) <(i)> The health maintenance organization shall provide
a participating physician or provider with copies of all applicable
utilization review policies and claim processing policies or
procedures<, including required data elements and claim formats>.
(q) <(j) A health maintenance organization may, by contract
with a physician or provider, add or change the data elements that
must be submitted with the physician or provider claim.>
<(k) Not later than the 60th day before the date of an
addition or change in the data elements that must be submitted with
a claim or any other change in a health maintenance organization's
claim processing and payment procedures, the health maintenance
organization shall provide written notice of the addition or change
to each participating physician or provider.>
<(l) This section does not apply to a claim made by a
physician or provider who is a member of the legislature.>
<(m)> This section does not apply to a capitation payment
required to be made to a physician or provider under an agreement
to provide medical care or health care services under a health care
plan.
(r) <(n)> This section applies to a person with whom a
health maintenance organization contracts to process claims or to
obtain the services of physicians and providers to provide health
care services to health care plan enrollees.
(s) <(o)> The commissioner may adopt rules as necessary to
implement this section.
SECTION 6. The Texas Health Maintenance Organization Act
(Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
Sections 18D-18L, 40, and 41 to read as follows:
Sec. 18D. ELEMENTS OF CLEAN CLAIM. (a) A claim by a
physician or provider, other than an institutional provider, is a
"clean claim" if the claim is submitted using Health Care Financing
Administration Form 1500 or a successor to that form developed by
the National Uniform Billing Committee or its successor and adopted
by the commissioner by rule for the purposes of this subsection
that is submitted to a health maintenance organization for payment
and that contains the information required by the commissioner by
rule for the purposes of this subsection entered into the
appropriate fields on the form.
(b) A claim by an institutional provider is a "clean claim"
if the claim is submitted using Health Care Financing
Administration Form UB-92 or a successor to that form developed by
the National Uniform Billing Committee or its successor and adopted
by the commissioner by rule for the purposes of this subsection
that is submitted to a health maintenance organization for payment
and that contains the information required by the commissioner by
rule for the purposes of this subsection entered into the
appropriate fields on the form.
(c) A health maintenance organization may require any data
element that is required in an electronic transaction set needed to
comply with federal law. A health maintenance organization may not
require a physician or provider to provide information other than
information for a data field included on the form used for a clean
claim under Subsection (a) or (b) of this section, as applicable.
(d) A claim submitted by a physician or provider that
includes additional fields, data elements, attachments, or other
information not required under this section is considered to be a
clean claim for the purposes of this section.
Sec. 18E. OVERPAYMENT. A health maintenance organization
may recover an overpayment to a physician or provider if:
(1) not later than the 180th day after the date the
physician or provider receives the payment, the health maintenance
organization provides written notice of the overpayment to the
physician or provider that includes the basis and specific reasons
for the request for recovery of funds; and
(2) the physician or provider does not make
arrangements for repayment of the requested funds on or before the
45th day after the date the physician or provider receives the
notice.
Sec. 18F. VERIFICATION OF ELIGIBILITY FOR PAYMENT. (a) On
the request of a physician or provider for verification of the
payment eligibility of a particular medical care or health care
service the physician or provider proposes to provide to a
particular patient, the health maintenance organization shall
inform the physician or provider whether the service, if provided
to that patient, is eligible for payment from the health
maintenance organization to the physician or provider.
(b) A health maintenance organization shall provide
verification under this section between 6 a.m. and 6 p.m. central
standard time each day.
(c) Verification under this section shall be made in good
faith and without delay.
Sec. 18G. COORDINATION OF PAYMENT BENEFITS. (a) A health
maintenance organization may require a physician or provider to
retain in the physician's or provider's records updated information
concerning other health benefit plan coverage and to provide the
information to the health maintenance organization on the
applicable form described by Section 18D of this Act. Except as
provided by this subsection, a health maintenance organization may
not require a physician or provider to investigate coordination of
other health benefit plan coverage.
(b) Coordination of other payment under this section does
not extend the period for determining whether a service is eligible
for payment under Section 18B(e) of this Act.
(c) A physician or provider who submits a claim for
particular medical care or health care services to more than one
health maintenance organization or insurer shall provide written
notice on the claim submitted to each health maintenance
organization or insurer of the identity of each other health
maintenance organization or insurer with which the same claim is
being filed.
(d) On receipt of notice under Subsection (c) of this
section, a health maintenance organization shall coordinate and
determine the appropriate payment for each health maintenance
organization or insurer to make to the physician or provider.
(e) If a health maintenance organization is a secondary
payor and pays more than the amount for which the health
maintenance organization is legally obligated, the overpayment may
be recovered from the health maintenance organization or insurer
that is primarily responsible for that amount.
(f) If the portion of the claim overpaid by the secondary
health maintenance organization was also paid by the primary health
maintenance organization or insurer, the secondary health
maintenance organization may recover the amount of the overpayment
under Section 18E of this Act from the physician or provider who
received the payment.
(g) A health maintenance organization may share information
with another health maintenance organization or insurer to the
extent necessary to coordinate appropriate payment obligations on a
specific claim.
(h) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 18H. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
SERVICES. (a) A health maintenance organization that uses a
preauthorization process for medical care and health care services
shall provide each participating physician or provider, not later
than the 10th working day after the date a request is made, a list
of the medical care and health care services that do not require
preauthorization and information concerning the preauthorization
process.
(b) If proposed medical care or health care services require
preauthorization by a health maintenance organization as a
condition of the health maintenance organization's payment to a
physician or provider or a physician or provider requests
preauthorization of proposed medical care or health care services,
the health maintenance organization shall determine whether the
medical care or health care services proposed to be provided to the
enrollee are medically necessary and appropriate.
(c) On receipt of a request from a physician or provider for
preauthorization, the health maintenance organization shall review
and issue a determination indicating whether the services are
preauthorized. If the determination requires a determination of
medical necessity and appropriateness of the proposed medical care
or health care services, the determination must be mailed or
otherwise transmitted not later than the third calendar day after
the date the request is received by the insurer.
(d) If the proposed medical care or health care services
involve inpatient care, the determination issued by the health
maintenance organization must be provided within one calendar day
of the request by telephone or electronic transmission to the
physician or provider of record and followed by written notice to
the physician or provider on or before the third day after the date
of the request and must specify an approved length of stay for
admission into a health care facility based on the recommendation
of the patient's physician or provider and the health maintenance
organization's written medically acceptable screening criteria and
review procedures. The criteria and procedures must be established,
periodically evaluated, and updated.
(e) If the health maintenance organization has preauthorized
medical care or health care services, the health maintenance
organization may not deny or reduce payment to the physician or
provider for those services unless the physician or provider has
materially misrepresented the proposed medical care or health care
services or has substantially failed to perform the proposed
medical care or health care services.
(f) This section applies to an agent or other person with
whom a health maintenance organization contracts to perform, or to
whom the health maintenance organization delegates the performance
of, preauthorization of proposed medical care or health care
services.
Sec. 18I. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
PROVIDERS. The provisions of this Act relating to prompt payment by
a health maintenance organization of a physician or provider and to
preauthorization of medical care or health care services apply to a
physician or provider who:
(1) is not included in the health maintenance
organization delivery network; and
(2) provides to an enrollee:
(A) emergency care; or
(B) specialty or other medical care or health
care services at the request of the health maintenance organization
or a physician or provider who is included in the health
maintenance organization delivery network because the services are
not reasonably available within the network.
Sec. 18J. AVAILABILITY OF CODING GUIDELINES. (a) A contract
between a health maintenance organization and a physician or
provider must provide that:
(1) the physician or provider may request a
description of the coding guidelines, including any underlying
bundling, recoding, or other payment process and fee schedules
applicable to specific procedures that the physician or provider
will receive under the contract;
(2) the health maintenance organization will provide
the guidelines not later than the 30th day after the date the
health maintenance organization receives the request;
(3) the health maintenance organization will provide
notice of material changes to the coding guidelines and fee
schedules not later than the 90th day before the date the changes
take effect and will not make retroactive revisions to the coding
guidelines and fee schedules; and
(4) the contract may be terminated by the physician or
provider on or before the 30th day after the date the physician or
provider receives information requested under this subsection
without penalty or discrimination in participation in other health
care products or plans.
(b) A physician or provider who receives information under
Subsection (a) of this section may use or disclose the information
only for the purpose of practice management, billing activities, or
other business operations. The commissioner may impose and collect
a penalty of $1,000 for each use or disclosure of the information
that violates this subsection.
Sec. 18K. DISPUTE RESOLUTION. (a) A health maintenance
organization may not require by contract or otherwise the use of a
dispute resolution procedure or binding arbitration with a
physician or provider. This subsection does not prohibit a health
maintenance organization from offering a dispute resolution
procedure or binding arbitration to resolve a dispute if the health
maintenance organization and the physician or provider consent to
the process after the dispute arises. This subsection may not be
construed to conflict with any applicable appeal mechanisms
required by law.
(b) The provisions of this section may not be waived or
nullified by contract.
Sec. 18L. AUTHORITY OF ATTORNEY GENERAL. In addition to any
other remedy available for a violation of this Act, the attorney
general may take action and seek remedies available under Section
15, Article 21.21, Insurance Code, and Sections 17.58, 17.60,
17.61, and 17.62, Business & Commerce Code, for a violation of
Section 14 or 18B of this Act.
Sec. 40. CONFLICT WITH OTHER LAW. To the extent of any
conflict between this Act and Article 21.52C, Insurance Code, this
Act controls.
Sec. 41. APPLICATION OF CERTAIN PROVISIONS UNDER MEDICAID.
A provision of this Act may not be interpreted as requiring a
health maintenance organization, physician, or provider, in
providing benefits or services under the state Medicaid program,
to:
(1) use billing forms or codes that are inconsistent
with those required under the state Medicaid program; or
(2) make determinations relating to medical necessity
or appropriateness or eligibility for coverage in a manner
different than that required under the state Medicaid program.
SECTION 7. (a) The changes in law made by this Act relating
to payment of a physician or health care provider for medical or
health care services apply only to payment for services provided on
or after the effective date of this Act.
(b) The changes in law made by this Act relating to a
contract between a physician or health care provider and an insurer
or health maintenance organization apply only to a contract entered
into or renewed on or after the effective date of this Act.
SECTION 8. This Act takes effect September 1, 2001.