HBA-DMH C.S.H.B. 1862 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1862 By: Eiland Insurance 4/2/2001 Committee Report (Substituted) 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. C.S.H.B. 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 1 (Section 18B, Article 20A, Insurance Code) and SECTION 10 (Section 4A, Article 21.21, Insurance Code) of this bill. ANALYSIS C.S.H.B. 1862 amends the Insurance Code to prescribe a clean claim form for physicians and institutional and noninstitutional providers. The bill provides that institutional providers use the current UB form 92 (form UB-92) or a subsequent UB form as adopted by the commissioner of insurance (commissioner) and that physicians and noninstitutional providers use the current Health Care Financing Administration Form 1500 (form 1500) or a subsequent Health Care Financing Administration Form as adopted by the commissioner to be submitted for payment. The bill prescribes the contents of each form (Sec. 18B, Art. 20A and Sec. 3A, Art. 3.70-3C). The bill authorizes a health maintenance organization (HMO) or a preferred provider organization (PPO), by contract with a physician or provider, to require fewer or additional data fields on the form than required by this bill but not to exceed those listed on form 1500 or form UB-92. The bill requires an HMO or PPO to notify in writing a physician or provider within a specified time period of the need for any attachments desired in good faith for clarification of a clean claim. The bill requires the written notice requesting the attachment to describe the information requested, provide a detailed description of the reason the information is being requested, and pertain only to information that the HMO or PPO is able demonstrate is within the scope of the claim. Upon receiving a valid request, the bill requires the physician or provider to provide the attachment within a specified time period and establishes payment requirements for a delay due to a clarification request. The bill authorizes an HMO or PPO to require any data element that is required in an electronic transaction set needed to comply with federal law. The bill modifies provisions pertaining to the receipt of a claim for medical care or health care services under a health care plan and pertaining to the affirmative adjudication of a pharmacy benefit claim. The bill prohibits the commissioner by rule from adding or creating any additional field or data elements and provides that any rule concerning attachments cannot provide for any additional requirements on the physician or provider. The bill provides that a claim that is submitted with additional data fields, data elements, attachments, or other information not required by this bill is to be construed as a clean claim (Sec. 18B, Art. 20A and Sec. 3A, Art. 3.703C). The bill requires an HMO or PPO that utilizes preauthorization of medical or health care services to provide to each medical or health care provider and each enrollee a complete listing of the services requiring precertification and the procedures required to precertify a medical or health care service or procedure. Upon receipt of a request, the bill requires the HMO or PPO to review and issue a determination of coverage within the time frames required for a utilization review. The bill authorizes an HMO or PPO to deny precertification of the service or procedure if the HMO or PPO certifies in writing within the specified time frames that the enrollee was not a covered enrollee of the health benefit plan and the HMO or PPO was notified within 30 days of the disenrollment. The bill requires that these provisions be construed to apply to specified agents of an insurer and provides that the insurer remain responsible for the acts of its agents (Sec. 3D, Art. 3.70-3C and Sec. 18E, Art. 20A). The bill requires a retrospective review of certain medical services by an HMO or PPO to comply with specified utilization review standards, and sets forth procedures for an adverse determination and appeals (Sec. 13E, Art. 3.70-3C and Sec. 18F, Art. 20A). The bill authorizes an HMO or PPO to deny a medical or health care service request for precertification or for payment of a medical or health care claim under certain conditions (Sec. 13F, Art. 3.70-3C and Sec. 18G, Art. 20A). The bill requires the provisions of the bill to govern payment for physicians and providers that provide care or services out of network (Sec. 3G, Art. 3.70-3C and Sec. 18H, Art. 20A). The bill sets forth provisions for a contract between an HMO or PPO and a physician licensed by the Texas State Board of Medical Examiners or a licensed health care provider and establishes requirements for an HMO or PPO to provide continuous access for verification of coverage and benefits (Sec. 3C, Art. 3.70-3C and Sec 18A, Art. 20A). The bill prohibits an HMO or PPO from requiring the use of a dispute resolution procedure with a preferred provider or physician or provider, as appropriate, that violates certain prompt payment provisions and prohibits this stipulation from being nullified or waived by contract (Sec. 3A, Art. 3.70-3C and Sec. 18B, Art. 20A). The bill specifies that a person engages in an unfair method of competition or unfair or deceptive act or practice in the business of insurance if the person: _misrepresents to a health care provider a material fact or policy or contract provision relating to the claim; _fails to make a payment or otherwise act in good faith with respect to services for which coverage is reasonably clear under the health benefit plan; _fails to provide promptly to a health care provider a reasonable explanation of the basis in the policy or contract, in relation to the facts or applicable law for denial of a claim under a health benefit plan; _fails within a reasonable time to affirm or deny coverage for a claim under the health benefit plan; _refuses, fails to make, or unreasonably delays payment of a claim on the basis that other coverage may be available or that third parties are responsible for the payment; or _refuses to make payment under the health benefit plan without a reasonable basis to do so. The bill authorizes the commissioner to adopt rules as necessary to implement these provisions and prohibits these provisions from being nullified or waived by contract (Sec. 4A, Art. 21.21). EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1862 differs from the original bill by requiring additional fields of information on the clean claim forms. The substitute provides that the veracity of the statement by the enrollee or the insured in the fields relating to the disclosure of any other health benefit plans is not the responsibility of the physician or provider, and establishes that responsibility for the investigation and verification of other insurance belongs to the health maintenance organization and the enrollee or insured. The substitute provides that a claim for medical care or health care services under a health care plan will be presumed received on the date of mailing or electronic submission under certain conditions and removes provisions in current law authorizing a physician or specified provider under a health care plan to obtain an acknowledgment of receipt of the claim. The substitute modifies provisions related to the payment of electronically processed pharmacy benefit claims The substitute prohibits the commissioner by rule from adding or creating any additional field or data elements and provides that any rule concerning attachments cannot provide for any additional requirements on the physician or provider (Sec. 18B, Art. 20A and Sec. 3A, Art. 3.70-3C). The substitute provides that a claim that includes additional information not required is to be construed as a clean claim (Sec. 3A, Art. 3.70-3C and Sec. 18B, Art. 20A). The substitute requires that provisions related to preauthorization of a service be construed to apply to specified agents of an insurer and provides that the insurer remains responsible for the acts of its agents (Sec. 3D, Art. 3.70-3C and Sec. 18E, Art. 20A). The substitute requires a retrospective review for certain medical services by an HMO or PPO, to comply with utilization review standards and sets forth procedures for an adverse determination and appeals. (Sec. 13E, Art. 3.70-3C and Sec. 18F, Art. 20A). The substitute includes payment provisions for out of network services (Sec. 3G, Art. 3.70-3C and Sec. 18H, Art. 20A). The substitute sets forth provisions for a contract between an HMO or PPO and a licensed health care provider other than a physician (Sec. 3C, Art. 3.70-3C and Sec 18A, Art. 20A). The substitute provides that additional data fields are not to exceed those fields listed on form UB-92 (Sec. 18B, Art. 20A and Sec. 3A, Art. 3.70-3C).