HBA-DMH H.B. 1862 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1862 By: Eiland Insurance 8/8/2001 Enrolled BACKGROUND AND PURPOSE Currently, when a physician sends a claim to a health maintenance organization or a preferred provider organization (health care plan provider) for payment the health care plan provider may assert that the claim was not received. The statutory limit of 45 days does not begin until the health care plan provider receives the claim; therefore, the health care plan provider may delay payment. House Bill 1862 establishes a standardized clean claim form for health care plan providers and sets forth provisions for the receipt of a claim by a health care plan provider. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 2 (Section 3A, Article 3.70-3C, Insurance Code), SECTION 3 (Section 3B, Article 3.70-3C, Insurance Code), SECTION 5 (Section 18B, Article 20A, Insurance Code), SECTION 6 (Section 18D, Article 20A, Insurance Code), and SECTION 7 (Section 2, Article 21.52K, Insurance Code) of this bill. ANALYSIS House Bill 1862 amends the Insurance Code to authorize an HMO or PPO to require any data element on a clean claim that is required in an electronic transaction set needed to comply with federal law. The bill prohibits an HMO or PPO from requiring a physician, provider, or preferred provider (provider) to provide information other than information for a data field included on the clean claim form. A claim submitted by a provider that includes additional fields, data elements, attachments, or other information not required is considered to be a clean claim for the purposes of this article (Sec. 3B, Art. 3.70-3C and Sec. 18D, Art. 20A). The bill provides that a provider must submit a claim to an HMO or PPO not later than the 95th day after the date the provider provides the medical care or health care services for which the claim is made. The bill provides appropriate methods of submitting a claim for prompt payment. The bill requires an HMO or PPO to accept as proof of timely filing, a claim filed in compliance with this bill or information from another HMO or PPO showing that the provider submitted the claim to the HMO or PPO in compliance with this bill. If a provider fails to submit a claim in compliance with prompt payment provisions, the provider forfeits the right to payment unless the failure to submit the claim is a result of a catastrophic event that substantially interferes with the normal business operations of the provider. The bill authorizes the period for submitting a claim to be extended by contract. A provider may not submit a duplicate claim for payment before the 46th day after the date the original claim was submitted. The bill requires the commissioner of insurance (commissioner) to adopt rules under which an HMO or PPO may determine whether a claim is a duplicate claim. The bill requires the commissioner to promulgate a form to be submitted by a provider that easily identifies all claims included in each filing and that can be used by a physician or provider as the provider's log (Sec. 18B, Art. 20A and Sec. 3A, Art. 3.70-3C). The bill requires an HMO or PPO to request in writing that a provider, within a specified time period, provide any attachment desired in good faith for clarification of a clean claim. The written notice requesting the attachment must describe the information requested and pertain only to information that the HMO or PPO can demonstrate is within the scope of the claim. The bill sets forth provisions regarding an HMO or PPO's claims payment process (Sec. 18B, Art. 20A and Sec. 3A, Art. 3.70-3C). On the request of a provider for verification of the eligibility for payment of a particular medical care or health care service the HMO or PPO proposes to provide to a particular patient, the bill requires the HMO or PPO to inform the provider whether the service, if provided to that patient, is eligible for payment from the HMO or PPO to the provider. The bill establishes a verification process to be used by the HMO or PPO (Sec. 3D, Art. 3.70-3C and Sec. 18F, Art. 20A). The bill authorizes an HMO or PPO to require a provider to retain in the provider's records updated information concerning other health benefit plan coverage and to provide the information to the HMO or PPO on the applicable form. The bill prohibits an HMO or PPO from requiring a provider to investigate coordination of other health benefit plan coverage (Sec. 3E, Art. 3.70-3C and Sec. 18G, Art. 20A). The bill establishes a process for preauthorization of medical care and health care services and prohibits an HMO or PPO from denying or reducing payment to a physician or provider for preauthorized services (Sec. 3F, Art. 3.70-3C and Sec. 18H, Art. 20A). The bill provides standards for a contractual agreement between an HMO or PPO and a provider relating to the use of availability of coding guidelines and dispute resolution (Secs. 3G and 3H, Art. 3.70-3 and Secs. 18J and 18K, Art. 20A). The bill establishes the authority of the attorney general to take action and seek remedies for a violation of prompt payment law (Sec. 3I, Art. 3.70-3C and Sec. 18L, Art. 20A). The bill creates a timeline for an HMO ro PPO to recover an overpayment to a provider and sets forth provisions for the recovery of an overpayment(Sec. 3C, Art. 3.70-3C and Sec 18E, Art. 20A). The bill sets forth provisions governing electronic healthcare transactions (Art. 21.52K). The bill specifies to whom these provisions apply (Sec. 10, Art. 3.70-3C and Sec. 18I, Art. 20A). EFFECTIVE DATE Vetoed.