1-1 By: Thompson (Senate Sponsor - Moncrief) H.B. No. 1562
1-2 (In the Senate - Received from the House April 23, 2001;
1-3 April 24, 2001, read first time and referred to Committee on
1-4 Business and Commerce; May 10, 2001, reported favorably by the
1-5 following vote: Yeas 7, Nays 0; May 10, 2001, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the control of health insurance fraud; providing
1-9 administrative penalties.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Article 1.10D, Insurance Code, is amended by
1-12 adding Section 3A to read as follows:
1-13 Sec. 3A. INSURER ANTIFRAUD INVESTIGATIVE REPORTS. (a) The
1-14 insurance fraud unit may receive, review, and investigate in a
1-15 timely manner insurer antifraud reports submitted under Subchapter
1-16 K, Chapter 3, of this code.
1-17 (b) The insurance fraud unit shall report annually in
1-18 writing to the commissioner the number of cases completed and any
1-19 recommendations for new regulatory and statutory responses to the
1-20 types of fraudulent activities encountered by the insurance fraud
1-21 unit.
1-22 SECTION 2. Section 6, Article 1.10D, Insurance Code, is
1-23 amended by amending Subsection (a) and adding Subsection (e) to
1-24 read as follows:
1-25 (a) A person acting without malice, fraudulent intent, or
1-26 bad faith is not subject to liability based on filing reports or
1-27 furnishing, orally or in writing, other information concerning
1-28 suspected, anticipated, or completed fraudulent insurance acts if
1-29 the reports or information are provided to:
1-30 (1) a law enforcement officer or an agent or employee
1-31 of a law enforcement officer;
1-32 (2) the National Association of Insurance
1-33 Commissioners, a state or federal governmental agency established
1-34 to detect and prevent fraudulent insurance acts or to regulate the
1-35 business of insurance, or an employee of that association or
1-36 governmental agency; [or]
1-37 (3) an authorized governmental agency or the
1-38 department; or
1-39 (4) a special investigative unit of an insurer,
1-40 including a person contracting to provide special investigative
1-41 unit services, or an employee of an insurer who is responsible for
1-42 the investigation of suspected fraudulent insurance acts.
1-43 (e) Information provided herein by an insurer to the
1-44 insurance fraud unit and/or an authorized governmental agency shall
1-45 not be subject to public disclosure. The information may be used
1-46 by the insurance fraud unit and/or governmental agency only for the
1-47 performance of its duties as described herein. An insurer must
1-48 exercise reasonable care concerning the accuracy of the information
1-49 conveyed to the insurance fraud unit, an authorized governmental
1-50 agency, other insurers, or other persons or entities.
1-51 SECTION 3. Chapter 3, Insurance Code, is amended by adding
1-52 Subchapter K to read as follows:
1-53 SUBCHAPTER K. INSURER ANTIFRAUD PROGRAMS
1-54 Art. 3.97-1. DEFINITIONS. In this subchapter:
1-55 (1) "Health care provider" means a person who
1-56 furnishes services under a license, certificate, registration, or
1-57 other authority issued by this state or another state to diagnose,
1-58 prevent, alleviate, or cure a human illness or injury.
1-59 (2) "Insurer" means:
1-60 (A) a health insurer, including a life, health,
1-61 and accident insurer, a health and accident insurer, a health
1-62 maintenance organization, or any other person operating under the
1-63 Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
1-64 Texas Insurance Code) or under Chapter 3, 10, 20, 22, or 26 of this
2-1 code who is authorized to issue, issue for delivery, or deliver
2-2 policies, certificates, or contracts of insurance in this state;
2-3 (B) an approved nonprofit health corporation
2-4 that:
2-5 (i) is certified under Section 162.001(b),
2-6 Occupations Code; and
2-7 (ii) holds a certificate of authority
2-8 issued by the commissioner under Article 21.52F of this code; or
2-9 (C) an insurer authorized by the department to
2-10 write workers' compensation insurance in this state.
2-11 Art. 3.97-2. NOTICE OF PENALTY FOR FALSE OR FRAUDULENT
2-12 CLAIMS; DISPLAY ON FORMS. (a) If an insurer provides a form for a
2-13 person to use to make a claim against a policy issued by the
2-14 insurer or to give notice of a person's intent to make a claim
2-15 against a policy issued by the insurer, the insurer shall provide
2-16 on that form, in comparative prominence with the other content on
2-17 the form, a statement as follows: "Any person who knowingly
2-18 presents a false or fraudulent claim for the payment of a loss is
2-19 guilty of a crime and may be subject to fines and confinement in
2-20 state prison."
2-21 (b) This section does not apply to a claim made against a
2-22 policy issued by a reinsurer.
2-23 Art. 3.97-3. INSURER ANTIFRAUD PLANS. (a) An insurer shall
2-24 adopt an antifraud plan under this article. The insurer may
2-25 annually file that plan with the insurance fraud unit. The plan
2-26 must include:
2-27 (1) a description of the insurer's procedures for
2-28 detecting and investigating possible fraudulent insurance acts; and
2-29 (2) a description of the insurer's procedures for
2-30 reporting possible fraudulent insurance acts to the insurance fraud
2-31 unit.
2-32 (b) If an insurer participating in the STAR or STAR + Plus
2-33 Medicaid program, or the state child health plan under Chapter 62,
2-34 Health and Safety Code, has in place a fraud and abuse plan
2-35 approved by a health and human services agency, such plan shall be
2-36 deemed to meet the requirements of this subchapter. If such
2-37 insurer is required by law to report possible fraudulent insurance
2-38 acts to a health and human services agency and/or the Office of
2-39 Attorney General, such insurer shall not be required to also report
2-40 such acts to the insurance fraud unit.
2-41 (c) The health and human services agencies, the Office of
2-42 Attorney General, and the insurance fraud unit shall coordinate
2-43 enforcement efforts relating to acts covered by this subchapter
2-44 that occur in relation to the state Medicaid program or state child
2-45 health plan program.
2-46 SECTION 4. Subtitle A, Title 3, Occupations Code, is amended
2-47 by adding Chapter 105 to read as follows:
2-48 CHAPTER 105. UNPROFESSIONAL CONDUCT BY HEALTH CARE PROVIDER
2-49 Sec. 105.001. DEFINITION. In this chapter, "health care
2-50 provider" means a person who furnishes services under a license,
2-51 certificate, registration, or other authority issued by this state
2-52 or another state to diagnose, prevent, alleviate, or cure a human
2-53 illness or injury.
2-54 Sec. 105.002. UNPROFESSIONAL CONDUCT. (a) A health care
2-55 provider commits unprofessional conduct if the health care
2-56 provider, in connection with the provider's professional
2-57 activities:
2-58 (1) knowingly presents or causes to be presented a
2-59 false or fraudulent claim for the payment of a loss under an
2-60 insurance policy; or
2-61 (2) knowingly prepares, makes, or subscribes to any
2-62 writing, with intent to present or use the writing, or to allow it
2-63 to be presented or used, in support of a false or fraudulent claim
2-64 under an insurance policy.
2-65 (b) In addition to other provisions of civil or criminal
2-66 law, commission of unprofessional conduct under Subsection (a)
2-67 constitutes cause for the revocation or suspension of a provider's
2-68 license, permit, registration, certificate, or other authority or
2-69 other disciplinary action.
3-1 SECTION 5. (a) This Act takes effect September 1, 2001.
3-2 (b) The insurance fraud unit shall make the initial report
3-3 to the commissioner of insurance required under Section 3A(b),
3-4 Article 1.10D, Insurance Code, as added by this Act, not later than
3-5 January 1, 2003.
3-6 * * * * *