SRC-CTC S.B. 440 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 440
2001S0247/1By: Madla
Business & Commerce
4/9/2001
As Filed


DIGEST AND PURPOSE 

Currently, insurance companies and health maintenance organizations (HMOs)
often verify coverage or benefits for an insured to a preferred provider
who requests such information prior to rendering covered services.  Then,
after the treatment has been provided, the insurer discovers an error and
refuses payment to the provider.  Also, some insurers and HMOs avoid the
prompt payment requirements of state law by requiring preferred providers
to agree to utilize a dispute resolution procedure which delays the payment
process well beyond the 45-day time limit for the payment of "clean
claims."  As proposed, S.B. 440 requires insurance companies and HMOs to
reimburse participating podiatrists for physical therapy services that are
covered by the policy, and reimburse preferred providers who in good faith
provide covered services after obtaining verification of coverage and
benefits from the insurer and within the time period mandated by current
law. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 3, Article 3.70-3C, Insurance Code, as added by
Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, by
amending Subsection (n) and add Subsection (o), as follows: 

(n)  Authorizes a podiatrist to furnish physical therapy under a preferred
provider contract between an insurer and a podiatrist licensed by the Texas
State Board of Podiatric Medical Examiners.   

(o)  Requires an insurer to verify coverage and benefits for an insured to
a preferred provider who requests such information prior to rendering
covered services.  Prohibits the insurer from denying payment for the
services rendered after coverage and benefits have been verified unless
written notice of an error in verification is received by the preferred
provider before treatment is performed. 

SECTION 2.  Amends Section 3A, Article 3.70-3C, Insurance Code, as added by
Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, by
adding Subsection (o), to prohibit an insurer from requiring the use of a
dispute resolution procedure with a preferred provider that violates
certain parts of this section. 

SECTION 3.  Amends Article 20A.18A, V.T.I.C., as added by Chapter 1026,
Acts of the 75th Legislature, Regular Session, 1997, by amending Subsection
(j) and adding Subsection (k), as follows: 

 (j) Makes a conforming change.

(k) Requires a health maintenance organization to verify coverage and
benefits for an enrollee to  a physician or provider who requests such
information prior to rendering covered services. Prohibits the insurer from
denying payment for the services rendered after coverage and benefits have
been verified unless written notice of an error in verification is received
by the physician or provider before treatment is performed. 

SECTION 4.  Amends Article 20A.18B, V.T.I.C., by adding Subsection (p), to
prohibit a health maintenance organization from requiring the use of a
dispute resolution procedure with a physician or provider that violates
certain parts of this section 

SECTION 5.  Effective date: September 1, 2001.
  Makes application of this Act prospective.