By Averitt H.B. No. 1609
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the scheduled benefit review and utilization review.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1, Article 3.70-3C, Insurance Code, as
1-5 added by Chapter 1024, Acts of the 75th Legislature, Regular
1-6 Session, 1997, is amended by adding Subdivision (14) to read as
1-7 follows:
1-8 (14) "Preauthorization" means a reliable
1-9 representation or determination by an insurer to a physician or
1-10 health care provider that the insurer will pay the physician or
1-11 health care provider for proposed medical or health care services
1-12 if the physician or health care provider renders those services to
1-13 the patient for whom the services are proposed. The term includes
1-14 precertification.
1-15 SECTION 2. Article 3.70-3C, Insurance Code, as added by
1-16 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
1-17 is amended by adding Sections 3B and 3C to read as follows:
1-18 Sec. 3B. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
1-19 SERVICES. (a) An insurer that uses a preauthorization process for
1-20 medical and health care services shall make available to each
1-21 insured, on issuance of the certificate of insurance, general
1-22 information concerning the preauthorization process. The insurer
1-23 shall provide each participating physician or health care provider,
1-24 not later than the 10th working day after the date a request is
2-1 made, a list of medical and health care services that require
2-2 preauthorization and information concerning the preauthorization
2-3 process.
2-4 (b) If proposed medical or health care services require
2-5 preauthorization under a health insurance policy or a physician or
2-6 health care provider requests preauthorization of proposed medical
2-7 or health care services, the insurer shall determine whether the
2-8 medical or health care services to be provided to the insured are
2-9 medically necessary and appropriate in a manner consistent with
2-10 Article 21.58A of this code.
2-11 (c) On receipt of a request for preauthorization of medical
2-12 or health care services, the insurer shall review and issue a
2-13 determination of medical necessity and appropriateness of the
2-14 proposed medical or health care services, including any limitation
2-15 on eligibility for payment of those services, within the time frame
2-16 for a utilization review required by Section 5, Article 21.58A, of
2-17 this code.
2-18 (d) If the proposed medical or health care services involve
2-19 inpatient care, the determination issued by the insurer must
2-20 specify an approved length of stay for admission into a health care
2-21 facility based on the recommendation of the patient's physician or
2-22 health care provider and the insurer's written medically acceptable
2-23 screening criteria and review procedures. The criteria and
2-24 procedures must be established, periodically evaluated, and updated
2-25 as required by Section 4(i), Article 21.58A, of this code.
2-26 (e) If an insurer has preauthorized medical or health care
2-27 services as medically necessary and appropriate under Subsection
3-1 (c) or (d) of this section, the insurer shall provide verification
3-2 to the physician or health care provider that the medical or health
3-3 care services are eligible for payment from the insurer to the
3-4 physician or health care provider for those services unless the
3-5 physician or health care provider has intentionally or negligently
3-6 materially misrepresented the medical necessity or appropriateness
3-7 of the proposed medical or health care services or has
3-8 substantially failed to perform the proposed medical or health care
3-9 services.
3-10 (f) This section applies to an agent or other person with
3-11 whom an insurer contracts to perform preauthorization of proposed
3-12 medical or health care services.
3-13 Sec. 3C. RETROSPECTIVE REVIEW. (a) A retrospective review
3-14 of medical necessity and appropriateness of medical or health care
3-15 services conducted by an insurer must comply with the standards for
3-16 a utilization review required by Sections 4(b), (c), (d), (f), (h),
3-17 (i), (l), and (m), Article 21.58A, of this code.
3-18 (b) An insurer that makes an adverse determination based on
3-19 a retrospective review of the medical necessity and appropriateness
3-20 of the medical or health care services shall notify the insured and
3-21 the insured's provider of record of the determination not later
3-22 than the 45th day after the date the insurer receives a clean
3-23 claim, as defined by Section 3A of this article, from a physician
3-24 or health care provider.
3-25 (c) A notice of adverse determination required by Subsection
3-26 (b) must include:
3-27 (1) the principal reasons for the adverse
4-1 determination;
4-2 (2) the clinical basis for the adverse determination;
4-3 (3) a description or the source of the screening
4-4 criteria used as a guideline in making the determination; and
4-5 (4) a description of the procedure for the complaint
4-6 and appeal process, including an appeal of an adverse determination
4-7 to an independent review organization.
4-8 (d) The procedure for appeal must be reasonable and must
4-9 comply with Sections 6(b)(1), (2), (3), (5), and (6), and Section
4-10 6A, Article 21.58A, of this code.
4-11 (e) This section applies to an agent or other person with
4-12 whom an insurer contracts to perform a retrospective review of
4-13 medical or health care services.
4-14 SECTION 3. Article 3.70-3C, Insurance Code, as added by
4-15 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
4-16 is amended by amending Section 9 and adding Section 10 to read as
4-17 follows:
4-18 Sec. 9. SCHEDULED BENEFIT REVIEW. (a) An insurer shall, on
4-19 written request of an insured or a physician or health care
4-20 provider acting on behalf of an insured, conduct a scheduled
4-21 benefit review. The written request shall be mailed or transmitted
4-22 by facsimile or electronic transmission to the insurer.
4-23 (b) For purposes of this article, a physician or health care
4-24 provider is considered to be acting on behalf of an insured if:
4-25 (1) the insured has provided written consent that:
4-26 (A) authorizes that specific physician or health
4-27 care provider to obtain on behalf of the insured a scheduled
5-1 benefit review; and
5-2 (B) identifies the services, treatment, or
5-3 supplies for which a scheduled benefit review is being requested;
5-4 (2) the physician or health care provider is a
5-5 preferred provider for the insured's preferred provider plan; or
5-6 (3) the insured, physician, or health care provider is
5-7 requesting a review as part of a utilization review.
5-8 (c) An insurer that conducts a scheduled benefit review
5-9 shall provide written notification to the insured and, if the
5-10 request for the review was made by a physician or health care
5-11 provider acting on behalf of the insured, to the requesting
5-12 physician or health care provider of a determination made in the
5-13 scheduled benefit review. The written notification shall be mailed
5-14 or otherwise transmitted by facsimile or electronic transmission
5-15 not later than three business days after the request for the review
5-16 under this section was received by the insurer.
5-17 (d) The written notification must contain:
5-18 (1) a statement as to whether the insured is currently
5-19 enrolled under the preferred provider plan;
5-20 (2) a statement as to whether the services, treatment,
5-21 or supplies being requested are a scheduled benefit under the
5-22 insured's preferred provider plan; and
5-23 (3) if the services, treatment, or supplies are
5-24 determined to be a scheduled benefit:
5-25 (A) a statement regarding, if applicable, any
5-26 annual, lifetime, or benefit maximum and whether any applicable
5-27 deductible has been met based on claims adjudicated as of the date
6-1 of the scheduled benefit review; and
6-2 (B) a disclosure explaining that a scheduled
6-3 benefit review does not guarantee payment and that the insured may
6-4 be financially responsible for payment of the services, treatment,
6-5 or supplies if it is determined that the insured was not enrolled
6-6 in the preferred provider plan when the services, treatment, or
6-7 supplies were provided.
6-8 (e) An insurer may delegate to its third party administrator
6-9 or utilization review agent the performance of a scheduled benefit
6-10 review required by this section.
6-11 (f) Rules adopted under Section 10 of this article to
6-12 implement this section may address:
6-13 (1) the manner in which an insured, physician, or
6-14 health care provider acting on an insured's behalf may request a
6-15 scheduled benefit review; and
6-16 (2) limitations on the amount and type of information
6-17 an insurer can require an insured, physician, or health care
6-18 provider acting on an insured's behalf to provide in support of a
6-19 request.
6-20 Sec. 10. RULEMAKING AUTHORITY. The commissioner shall adopt
6-21 rules as necessary to implement the provisions of this article and
6-22 to ensure reasonable accessibility and availability of preferred
6-23 provider and basic level benefits to Texas citizens.
6-24 SECTION 4. Section 2, Texas Health Maintenance Organization
6-25 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
6-26 adding Subdivision (ff) to read as follows:
6-27 (ff) "Preauthorization" means a reliable
7-1 representation or determination by a health maintenance
7-2 organization to a physician or health care provider that the health
7-3 maintenance organization will pay the physician or health care
7-4 provider for proposed medical or health care services if the
7-5 physician or health care provider renders those services to the
7-6 patient for whom the services are proposed. The term includes
7-7 precertification.
7-8 SECTION 5. The Texas Health Maintenance Organization Act
7-9 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
7-10 Section 15 to read as follows:
7-11 Sec. 15. SCHEDULED BENEFIT REVIEW. (a) A health maintenance
7-12 organization shall, on written request of an enrollee or a
7-13 physician or provider acting on behalf of an enrollee, conduct a
7-14 scheduled benefit review. The written request shall be mailed or
7-15 transmitted by facsimile or electronic transmission to the health
7-16 maintenance organization.
7-17 (b) For purposes of this article, a physician or provider is
7-18 considered to be acting on behalf of an enrollee if:
7-19 (1) the enrollee has provided written consent that:
7-20 (A) authorizes that specific physician or
7-21 provider to obtain on behalf of the enrollee a scheduled benefit
7-22 review; and
7-23 (B) identifies the services, treatment, or
7-24 supplies for which a scheduled benefit review is being requested;
7-25 (2) the physician or provider is part of a health
7-26 maintenance organization delivery network that has contracted
7-27 directly or indirectly to provide health care services for the
8-1 enrollee's health care plan; or
8-2 (3) the enrollee, physician, or provider is requesting
8-3 a review as part of a utilization review.
8-4 (c) A health maintenance organization that conducts a
8-5 scheduled benefit review shall provide written notification to the
8-6 enrollee and, if the request for the review was made by a physician
8-7 or provider acting on behalf of the enrollee, to the requesting
8-8 physician or provider of a determination made in the scheduled
8-9 benefit review. The written notification shall be mailed or
8-10 otherwise transmitted by facsimile or electronic transmission not
8-11 later than three business days after the request for the review
8-12 under this section was received by the health maintenance
8-13 organization.
8-14 (d) The written notification must contain:
8-15 (1) a statement as to whether the enrollee is
8-16 currently enrolled in the health care plan;
8-17 (2) a statement as to whether the services, treatment,
8-18 or supplies being requested are a scheduled benefit under the
8-19 enrollee's health care plan; and
8-20 (3) if the services, treatment, or supplies are
8-21 determined to be a scheduled benefit:
8-22 (A) a statement regarding, if applicable, any
8-23 annual, lifetime, or benefit maximum and whether any applicable
8-24 deductible has been met based on claims adjudicated as of the date
8-25 of the scheduled benefit review; and
8-26 (B) a disclosure explaining that a scheduled
8-27 benefit review does not guarantee payment and that the enrollee may
9-1 be financially responsible for payment of the services, treatment,
9-2 or supplies if it is determined that the enrollee was not enrolled
9-3 in the health care plan when the services, treatment, or supplies
9-4 were provided.
9-5 (e) A health maintenance organization may delegate to its
9-6 third party administrator or utilization review agent the
9-7 performance of a scheduled benefit review required by this section.
9-8 (f) The rules adopted under Section 22 of this Act to
9-9 implement this section may address:
9-10 (1) the manner in which an enrollee, physician, or
9-11 provider acting on an enrollee's behalf may request a scheduled
9-12 benefit review; and
9-13 (2) limitations on the amount and type of information
9-14 a health maintenance organization can require an enrollee or a
9-15 provider acting on an enrollee's behalf to provide in support of a
9-16 request.
9-17 SECTION 6. The Texas Health Maintenance Organization Act
9-18 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
9-19 Sections 18D and 18E to read as follows:
9-20 Sec. 18D. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
9-21 SERVICES. (a) A health maintenance organization that uses a
9-22 preauthorization process for medical and health care services shall
9-23 provide enrollees, on issuance of the evidence of coverage, general
9-24 information concerning the preauthorization process. A health
9-25 maintenance organization shall provide each participating physician
9-26 or provider, not later than the 10th working day after the date a
9-27 request is made, a list of the medical and health care services
10-1 that do not require preauthorization and information concerning the
10-2 preauthorization process.
10-3 (b) If proposed medical or health care services require
10-4 preauthorization by a health maintenance organization or a
10-5 physician or provider requests preauthorization of proposed medical
10-6 or health care services, the health maintenance organization shall
10-7 determine whether the medical or health care services to be
10-8 provided to the enrollee are medically necessary and appropriate in
10-9 a manner consistent with Article 21.58A, Insurance Code.
10-10 (c) On receipt of a request for preauthorization of medical
10-11 or health care services, the health maintenance organization shall
10-12 review and issue a determination of medical necessity and
10-13 appropriateness of the proposed medical or health care services,
10-14 including any limitation on eligibility for payment of those
10-15 services, within the time frame for a utilization review required
10-16 by Section 5, Article 21.58A, Insurance Code.
10-17 (d) If the proposed medical or health care services involve
10-18 inpatient care, the determination issued by the health maintenance
10-19 organization must specify an approved length of stay for admission
10-20 into a health care facility based on the recommendation of the
10-21 patient's physician or provider and the health maintenance
10-22 organization's written medically acceptable screening criteria and
10-23 review procedures. The criteria and procedures must be established,
10-24 periodically evaluated, and updated as required by Section 4(i),
10-25 Article 21.58A, Insurance Code.
10-26 (e) If the health maintenance organization has preauthorized
10-27 medical or health care services as medically necessary and
11-1 appropriate under Subsection (c) or (d) of this section, the health
11-2 maintenance organization shall provide verification to the
11-3 physician or provider that the medical or health care services are
11-4 eligible for payment from the health maintenance organization to
11-5 the physician or provider for those services unless the physician
11-6 or provider has intentionally or negligently materially
11-7 misrepresented the medical necessity or appropriateness of the
11-8 proposed medical or health care services or has substantially
11-9 failed to perform the proposed medical or health care services.
11-10 (f) This section applies to an agent or other person with
11-11 whom a health maintenance organization contracts to perform
11-12 preauthorization of proposed medical or health care services.
11-13 Sec. 18E. RETROSPECTIVE REVIEW. (a) A retrospective review
11-14 of medical necessity and appropriateness of medical or health care
11-15 services conducted by a health maintenance organization must comply
11-16 with the standards for a utilization review required by Sections
11-17 4(b), (c), (d), (f), (h), (i), (l), and (m), Article 21.58A,
11-18 Insurance Code.
11-19 (b) A health maintenance organization that makes an adverse
11-20 determination based on a retrospective review of the medical
11-21 necessity and appropriateness of the medical or health care
11-22 services, the health maintenance organization shall notify the
11-23 enrollee or the enrollee's provider of record of the determination
11-24 not later than the 45th day after the date the health maintenance
11-25 organization receives a clean claim, as defined by Section 18B, of
11-26 this Act, from a physician or provider.
11-27 (c) A notice of adverse determination required by Subsection
12-1 (b) must include:
12-2 (1) the principal reasons for the adverse
12-3 determination;
12-4 (2) the clinical basis for the adverse determination;
12-5 (3) a description or the source of the screening
12-6 criteria used as a guideline in making the determination; and
12-7 (4) a description of the procedure for the complaint
12-8 and appeal process, including an appeal of an adverse determination
12-9 to an independent review organization.
12-10 (d) The procedure for appeal must be reasonable and must
12-11 comply with Sections 6(b)(1), (2), (3), (5), and (6), and Section
12-12 6A, Article 21.58A, Insurance Code.
12-13 (e) This section applies to an agent or other person with
12-14 whom a health maintenance organization contracts to perform
12-15 retrospective review of medical or health care services.
12-16 SECTION 7. Section 5(d), Article 21.58A, Insurance Code, is
12-17 amended to read as follows:
12-18 (d) The notification of adverse determination required by
12-19 this section shall be provided by the utilization review agent:
12-20 (1) within one calendar [working] day by telephone or
12-21 electronic transmission to the provider of record in the case of a
12-22 patient who is hospitalized at the time of the adverse
12-23 determination, to be followed within three working days by written
12-24 notification to [a letter notifying] the enrollee or a person
12-25 acting on behalf of the enrollee [patient] and, if the original
12-26 notification to the provider was not in writing, to the provider of
12-27 record of an adverse determination [within three working days];
13-1 (2) within three working days by written notification
13-2 [in writing] to the provider of record and the patient if the
13-3 patient is not hospitalized at the time of the adverse
13-4 determination; or
13-5 (3) within the time appropriate to the circumstances
13-6 relating to the delivery of the services and the condition of the
13-7 patient, but in no case to exceed one hour from notification when
13-8 denying poststabilization care subsequent to emergency treatment as
13-9 requested by a treating physician or provider. In such
13-10 circumstances, notification shall be provided to the treating
13-11 physician or health care provider to be followed within three
13-12 working days by written notification to the enrollee or a person
13-13 acting on behalf of the enrollee and, if the original notification
13-14 to the provider was not in writing, the provider of record.
13-15 SECTION 8. Sections 7(a) and (b), Article 21.58A, Insurance
13-16 Code, are amended to read as follows:
13-17 (a) A utilization review agent shall have appropriate
13-18 licensed clinical personnel, including physician reviewers,
13-19 reasonably available each day by toll-free telephone from 6 a.m. to
13-20 6 p.m. central standard time [at least 40 hours per week during
13-21 normal business hours in Texas] to discuss patients' care, [and]
13-22 allow response to telephone review requests, and provide the
13-23 notification required by Section 5 of this article.
13-24 (b) A utilization review agent must have a telephone system
13-25 capable of accepting or recording or providing instructions to
13-26 incoming phone calls, supported by on-call licensed personnel,
13-27 between 6 p.m. and 6 a.m. central standard time each day [during
14-1 other than normal business hours] and shall respond to such calls
14-2 not later than one day from [two working days of the later of] the
14-3 date on which the call was received or within one hour of the time
14-4 a request for poststabilization care is received [the date the
14-5 details necessary to respond have been received from the caller].
14-6 SECTION 9. Section 11, Article 21.58A, Insurance Code, is
14-7 amended to read as follows:
14-8 Sec. 11. CLAIMS REVIEWS OF MEDICAL NECESSITY. (a) When a
14-9 retrospective review of the medical necessity and appropriateness
14-10 of health care service is made under a health insurance policy or
14-11 plan, [: (1)] such retrospective review shall comply with the
14-12 standards for utilization review required by Sections 4(b), (c),
14-13 (d), (f), (h), (i), (l), and (m) of this article [be based on
14-14 written screening criteria established and periodically updated
14-15 with appropriate involvement from physicians, including practicing
14-16 physicians, and other health care providers; and (2) the payor's
14-17 system for such retrospective review of medical necessity and
14-18 appropriateness shall be under the direction of a physician].
14-19 (b) When an adverse determination is made under a health
14-20 insurance policy or plan based on a retrospective review of the
14-21 medical necessity and appropriateness of the allocation of health
14-22 care resources and services, the payor or utilization review agent
14-23 shall notify the enrollee and the enrollee's provider of record of
14-24 the determination not later than two working days after the
14-25 determination is made. An adverse determination based on
14-26 retrospective review of the medical necessity and appropriateness
14-27 of health care resources and services must be made not later than
15-1 the 60th day after the date the payor or utilization review agent
15-2 receives a clean claim, as defined by Section 3A, Article 3.70-3C,
15-3 Insurance Code, as added by Chapter 1024, Acts of the 75th
15-4 Legislature, Regular Session, 1997, and Section 18B, Texas Health
15-5 Maintenance Organization Act (Article 20A.18B, Vernon's Texas
15-6 Insurance Code), from a health care provider [afford the health
15-7 care providers the opportunity to appeal the determination in the
15-8 same manner afforded the enrollee, with the enrollee's consent to
15-9 act on his or her behalf, but in no event shall health care
15-10 providers be precluded from appeal if the enrollee is not
15-11 reasonably available or competent to consent. Such appeal shall not
15-12 be construed to imply or confer on such health care providers any
15-13 contract rights with respect to the enrollee's health insurance
15-14 policy or plan that the health care provider does not otherwise
15-15 have].
15-16 (c) A notice of adverse determination required by Subsection
15-17 (b) must include:
15-18 (1) the principal reasons for the adverse
15-19 determination;
15-20 (2) the clinical basis for the adverse determination;
15-21 (3) a description or the source of the screening
15-22 criteria used as a guideline in making the determination; and
15-23 (4) a description of the procedure for the complaint
15-24 and appeal process, including an appeal of an adverse determination
15-25 to an independent review organization.
15-26 (d) The procedure for appeal must be reasonable and must
15-27 comply with Sections 6(b)(1), (2), (3), (5), and (6), and Section
16-1 6A, of this article.
16-2 SECTION 10. (a) An insurer or health maintenance
16-3 organization is not required to provide a scheduled benefit review
16-4 as required by Sections 3 and 5 of this Act before January 1, 2002.
16-5 (b) This Act applies only to the preauthorization of medical
16-6 or health care services and utilization review of medical and
16-7 health care services occurring on or after January 1, 2002.
16-8 Preauthorization of medical or health care services and utilization
16-9 review of medical and health care services that occur before
16-10 January 1, 2002, are governed by the law as it exists immediately
16-11 before the effective date of this Act, and that law is continued in
16-12 effect for this purpose.
16-13 SECTION 11. This Act takes effect September 1, 2001.