1-1 AN ACT
1-2 relating to the regulation and prompt payment of health care
1-3 providers under certain health benefit plans; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF STATE OF TEXAS:
1-5 SECTION 1. Section 1, Article 3.70-3C, Insurance Code, as
1-6 added by Chapter 1024, Acts of the 75th Legislature, Regular
1-7 Session, 1997, is amended by adding Subdivisions (14) and (15) to
1-8 read as follows:
1-9 (14) "Preauthorization" means a determination by the
1-10 insurer that the medical care or health care services proposed to
1-11 be provided to a patient are medically necessary and appropriate.
1-12 (15) "Verification" means a reliable representation by
1-13 an insurer to a physician or health care provider that the insurer
1-14 will pay the physician or provider for proposed medical care or
1-15 health care services if the physician or provider renders those
1-16 services to the patient for whom the services are proposed. The
1-17 term includes precertification, certification, recertification, or
1-18 any other term that would be a reliable representation by an
1-19 insurer to a physician or provider.
1-20 SECTION 2. Section 3A, Article 3.70-3C, Insurance Code, as
1-21 added by Chapter 1024, Acts of the 75th Legislature, Regular
1-22 Session, 1997, is amended to read as follows:
1-23 Sec. 3A. PROMPT PAYMENT OF PREFERRED PROVIDERS. (a) In this
1-24 section, "clean claim" means a [completed] claim that complies with
2-1 Section 3B of this article[, as determined under department rules,
2-2 submitted by a preferred provider for medical care or health care
2-3 services under a health insurance policy].
2-4 (b) A physician or [preferred] provider must submit a claim
2-5 to an insurer not later than the 95th day after the date the
2-6 physician or provider provides the medical care or health care
2-7 services for which the claim is made. An insurer shall accept as
2-8 proof of timely filing a claim filed in compliance with Subsection
2-9 (c) of this section or information from another insurer showing
2-10 that the physician or provider submitted the claim to the insurer
2-11 in compliance with Subsection (c) of this section. If a physician
2-12 or provider fails to submit a claim in compliance with this
2-13 subsection, the physician or provider forfeits the right to payment
2-14 unless the failure to submit the claim in compliance with this
2-15 subsection is a result of a catastrophic event that substantially
2-16 interferes with the normal business operations of the physician or
2-17 provider. The period for submitting a claim under this subsection
2-18 may be extended by contract. A physician or provider may not
2-19 submit a duplicate claim for payment before the 46th day after the
2-20 date the original claim was submitted. The commissioner shall
2-21 adopt rules under which an insurer may determine whether a claim is
2-22 a duplicate claim [for medical care or health care services under a
2-23 health insurance policy may obtain acknowledgment of receipt of a
2-24 claim for medical care or health care services under a health care
2-25 plan by submitting the claim by United States mail, return receipt
2-26 requested. An insurer or the contracted clearinghouse of an
2-27 insurer that receives a claim electronically shall acknowledge
3-1 receipt of the claim by an electronic transmission to the preferred
3-2 provider and is not required to acknowledge receipt of the claim by
3-3 the insurer in writing].
3-4 (c) A physician or provider shall, as appropriate:
3-5 (1) mail a claim by United States mail, first class,
3-6 or by overnight delivery service, and maintain a log of mailed
3-7 claims and include a copy of the log with the relevant mailed
3-8 claim, and fax a copy of the log to the insurer and maintain a copy
3-9 of the fax verification;
3-10 (2) submit the claim electronically and maintain a log
3-11 of electronically submitted claims;
3-12 (3) fax the claim and maintain a log of all faxed
3-13 claims; or
3-14 (4) hand deliver the claim and maintain a log of all
3-15 hand-delivered claims.
3-16 (d) If a claim for medical care or health care services
3-17 provided to a patient is mailed, the claim is presumed to have been
3-18 received by the insurer on the third day after the date the claim
3-19 is mailed or, if the claim is mailed using overnight service or
3-20 return receipt requested, on the date the delivery receipt is
3-21 signed. If the claim is submitted electronically, the claim is
3-22 presumed to have been received on the date of the electronic
3-23 verification of receipt by the insurer or the insurer's
3-24 clearinghouse. If the insurer or the insurer's clearinghouse does
3-25 not provide a confirmation within 24 hours of submission by the
3-26 physician or provider, the physician's or provider's clearinghouse
3-27 shall provide the confirmation. The physician's or provider's
4-1 clearinghouse must be able to verify that the filing contained the
4-2 correct payor identification of the entity to receive the filing.
4-3 If the claim is faxed, the claim is presumed to have been received
4-4 on the date of the transmission acknowledgment. If the claim is
4-5 hand delivered, the claim is presumed to have been received on the
4-6 date the delivery receipt is signed. The commissioner shall
4-7 promulgate a form to be submitted by the physician or provider that
4-8 easily identifies all claims included in each filing and that can
4-9 be used by a physician or provider as the physician's or provider's
4-10 log.
4-11 (e) Not later than the 45th day after the date that the
4-12 insurer receives a clean claim from a preferred provider, the
4-13 insurer shall make a determination of whether the claim is eligible
4-14 for payment and:
4-15 (1) if the insurer determines the entire claim is
4-16 eligible for payment, pay the total amount of the claim in
4-17 accordance with the contract between the preferred provider and the
4-18 insurer;
4-19 (2) if the insurer determines a portion of the claim
4-20 is eligible for payment, pay the portion of the claim that is not
4-21 in dispute and notify the preferred provider in writing why the
4-22 remaining portion of the claim will not be paid; or
4-23 (3) if the insurer determines that the claim is not
4-24 eligible for payment, notify the preferred provider in writing why
4-25 the claim will not be paid.
4-26 (f) Not later than the 21st day after the date an insurer
4-27 affirmatively adjudicates a pharmacy claim that is electronically
5-1 submitted, the insurer shall:
5-2 (1) pay the total amount of the claim; or
5-3 (2) notify the pharmacy provider of the reasons for
5-4 denying payment of the claim.
5-5 (g) An insurer that determines under Subsection (e) of this
5-6 section that a claim is eligible for payment and does not pay the
5-7 claim on or before the 45th day after the date the insurer receives
5-8 a clean claim shall pay the physician or provider making the claim
5-9 the lesser of the full amount of billed charges submitted on the
5-10 claim and interest on the billed charges at a rate of 15 percent
5-11 annually or two times the contracted rate and interest on that
5-12 amount at a rate of 15 percent annually. If the provider submits
5-13 the claim using a form described by Section 3B(a) of this article,
5-14 billed charges shall be established under a fee schedule provided
5-15 by the preferred provider to the insurer on or before the 30th day
5-16 after the date the physician or provider enters into a preferred
5-17 provider contract with the insurer. The preferred provider may
5-18 modify the fee schedule if the provider notifies the insurer of the
5-19 modification on or before the 90th day before the date the
5-20 modification takes effect.
5-21 (h) The investigation and determination of eligibility for
5-22 payment, including any coordination of other payments, does not
5-23 extend the period for determining whether a claim is eligible for
5-24 payment under Subsection (e) of this section [(d) If a prescription
5-25 benefit claim is electronically adjudicated and electronically
5-26 paid, and the preferred provider or its designated agent authorizes
5-27 treatment, the claim must be paid not later than the 21st day after
6-1 the treatment is authorized].
6-2 (i) Except as provided by Subsection (j) of this section, if
6-3 [(e) If] the insurer [acknowledges coverage of an insured under
6-4 the health insurance policy but] intends to audit the preferred
6-5 provider claim, the insurer shall pay the charges submitted at 85
6-6 percent of the contracted rate on the claim not later than the 45th
6-7 day after the date that the insurer receives the claim from the
6-8 preferred provider. The insurer must complete [Following
6-9 completion of] the audit, and any additional payment due a
6-10 preferred provider or any refund due the insurer shall be made not
6-11 later than the 90th [30th] day after the receipt of a claim or 45
6-12 days after receipt of a requested attachment from the preferred
6-13 provider, whichever is later [of the date that:]
6-14 [(1) the preferred provider receives notice of the
6-15 audit results; or]
6-16 [(2) any appeal rights of the insured are exhausted].
6-17 (j) If an insurer needs additional information from a
6-18 treating preferred provider to determine eligibility for payment,
6-19 the insurer, not later than the 30th calendar day after the date
6-20 the insurer receives a clean claim, shall request in writing that
6-21 the preferred provider provide any attachment to the claim the
6-22 insurer desires in good faith for clarification of the claim. The
6-23 request must describe with specificity the clinical information
6-24 requested and relate only to information the insurer can
6-25 demonstrate is specific to the claim or the claim's related episode
6-26 of care. An insurer that requests an attachment under this
6-27 subsection shall determine whether the claim is eligible for
7-1 payment on or before the later of the 15th day after the date the
7-2 insurer receives the requested attachment or the latest date for
7-3 determining whether the claim is eligible for payment under
7-4 Subsection (e) of this section. An insurer may not make more than
7-5 one request under this subsection in connection with a claim.
7-6 Subsections (c) and (d) of this section apply to a request for and
7-7 submission of an attachment under this subsection.
7-8 (k) If an insurer requests an attachment or other
7-9 information from a person other than the preferred provider who
7-10 submitted the claim, the insurer shall provide a copy of the
7-11 request to the preferred provider who submitted the claim. The
7-12 insurer may not withhold payment pending receipt of an attachment
7-13 or information requested under this subsection. If on receiving an
7-14 attachment or information requested under this subsection the
7-15 insurer determines an error in payment of the claim, the insurer
7-16 may recover under Section 3C of this article.
7-17 (l) The commissioner shall adopt rules under which an
7-18 insurer can easily identify attachments or information submitted by
7-19 a physician or provider under Subsection (j) or (k) of this
7-20 section.
7-21 (m) The insurer's claims payment processes shall:
7-22 (1) use nationally recognized, generally accepted
7-23 Current Procedural Terminology codes, notes, and guidelines
7-24 including all relevant modifiers; and
7-25 (2) be consistent with nationally recognized,
7-26 generally accepted bundling logic and edits [(f) An insurer that
7-27 violates Subsection (c) or (e) of this section is liable to a
8-1 preferred provider for the full amount of billed charges submitted
8-2 on the claim or the amount payable under the contracted penalty
8-3 rate, less any amount previously paid or any charge for a service
8-4 that is not covered by the health insurance policy].
8-5 (n) [(g)] A preferred provider may recover reasonable
8-6 attorney's fees and court costs in an action to recover payment
8-7 under this section.
8-8 (o) [(h)] In addition to any other penalty or remedy
8-9 authorized by this code or another insurance law of this state, an
8-10 insurer that violates Subsection (e) [(c)] or (i) [(e)] of this
8-11 section is subject to an administrative penalty under Article 1.10E
8-12 of this code. The administrative penalty imposed under that
8-13 article may not exceed $1,000 for each day the claim remains unpaid
8-14 in violation of Subsection (e) [(c)] or (i) [(e)] of this section.
8-15 (p) [(i)] The insurer shall provide a preferred provider
8-16 with copies of all applicable utilization review policies and claim
8-17 processing policies or procedures[, including required data
8-18 elements and claim formats].
8-19 (q) [(j) An insurer may, by contract with a preferred
8-20 provider, add or change the data elements that must be submitted
8-21 with the preferred provider claim.]
8-22 [(k) Not later than the 60th day before the date of an
8-23 addition or change in the data elements that must be submitted with
8-24 a claim or any other change in an insurer's claim processing and
8-25 payment procedures, the insurer shall provide written notice of the
8-26 addition or change to each preferred provider.]
8-27 [(l) This section does not apply to a claim made by a
9-1 preferred provider who is a member of the legislature.]
9-2 [(m)] This section applies to a person with whom an insurer
9-3 contracts to process claims or to obtain the services of preferred
9-4 providers to provide medical care or health care to insureds under
9-5 a health insurance policy.
9-6 (r) [(n)] The commissioner of insurance may adopt rules as
9-7 necessary to implement this section.
9-8 (s) Except as provided by Subsection (b) of this section,
9-9 the provisions of this section may not be waived, voided, or
9-10 nullified by contract.
9-11 SECTION 3. Article 3.70-3C, Insurance Code, as added by
9-12 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
9-13 is amended by adding Sections 3B-3I, 10, 11, and 12 to read as
9-14 follows:
9-15 Sec. 3B. ELEMENTS OF CLEAN CLAIM. (a) A claim by a
9-16 physician or provider, other than an institutional provider, is a
9-17 "clean claim" if the claim is submitted using Health Care Financing
9-18 Administration Form 1500 or a successor to that form developed by
9-19 the National Uniform Billing Committee or its successor and adopted
9-20 by the commissioner by rule for the purposes of this subsection
9-21 that is submitted to an insurer for payment and that contains the
9-22 information required by the commissioner by rule for the purposes
9-23 of this subsection entered into the appropriate fields on the form
9-24 in the manner prescribed.
9-25 (b) A claim by an institutional provider is a "clean claim"
9-26 if the claim is submitted using Health Care Financing
9-27 Administration Form UB-92 or a successor to that form developed by
10-1 the National Uniform Billing Committee or its successor and adopted
10-2 by the commissioner by rule for the purposes of this subsection
10-3 that is submitted to an insurer for payment and that contains the
10-4 information required by the commissioner by rule for the purposes
10-5 of this subsection entered into the appropriate fields on the form.
10-6 (c) An insurer may require any data element that is required
10-7 in an electronic transaction set needed to comply with federal law.
10-8 An insurer may not require a physician or provider to provide
10-9 information other than information for a data field included on the
10-10 form used for a clean claim under Subsection (a) or (b) of this
10-11 section, as applicable.
10-12 (d) A claim submitted by a physician or provider that
10-13 includes additional fields, data elements, attachments, or other
10-14 information not required under this section is considered to be a
10-15 clean claim for the purposes of this article.
10-16 (e) Except as provided by this section, the provisions of
10-17 this section may not be waived, voided, or nullified by contract.
10-18 Sec. 3C. OVERPAYMENT. An insurer may recover an overpayment
10-19 to a physician or provider if:
10-20 (1) not later than the 180th day after the date the
10-21 physician or provider receives the payment, the insurer provides
10-22 written notice of the overpayment to the physician or provider that
10-23 includes the basis and specific reasons for the request for
10-24 recovery of funds; and
10-25 (2) the physician or provider does not make
10-26 arrangements for repayment of the requested funds on or before the
10-27 45th day after the date the physician or provider receives the
11-1 notice.
11-2 Sec. 3D. VERIFICATION OF ELIGIBILITY FOR PAYMENT. (a) On
11-3 the request of a preferred provider for verification of the
11-4 eligibility for payment of a particular medical care or health care
11-5 service the preferred provider proposes to provide to a particular
11-6 patient, the insurer shall inform the preferred provider whether
11-7 the service, if provided to that patient, is eligible for payment
11-8 from the insurer to the preferred provider.
11-9 (b) An insurer shall provide verification under this section
11-10 between 6 a.m. and 6 p.m. central standard time Monday through
11-11 Friday on each day that is not a legal holiday and between 9 a.m.
11-12 and 12 p.m. on Saturday, Sunday, and legal holidays.
11-13 (c) Verification under this section shall be made in good
11-14 faith and without delay.
11-15 (d) In this section, "verification" includes
11-16 preauthorization only when preauthorization is a condition for the
11-17 determination of eligibility for payment.
11-18 (e) An insurer that declines to provide a verification of
11-19 eligibility for payment shall notify the physician or provider who
11-20 requested the verification of the specific reason the verification
11-21 was not provided.
11-22 (f) An insurer may establish a time certain for the validity
11-23 of verification.
11-24 (g) If an insurer has verified medical care or health care
11-25 services, the insurer may not deny or reduce payment to a physician
11-26 or health care provider for those services unless:
11-27 (1) the physician or provider has materially
12-1 misrepresented the proposed medical or health care services or has
12-2 substantially failed to perform the proposed medical or health care
12-3 services; or
12-4 (2) the insurer certifies in writing:
12-5 (A) that the physician or provider is not
12-6 contractually obligated to provide the services to the patient
12-7 because the patient's enrollment in the health plan was terminated;
12-8 (B) the insurer was notified on or before the
12-9 30th day after the date the patient's enrollment ended; and
12-10 (C) the physician or provider was notified that
12-11 the patient's enrollment ended on or before the 30th day after the
12-12 date of verification under this section.
12-13 (h) The provisions of this section may not be waived,
12-14 voided, or nullified by contract.
12-15 Sec. 3E. COORDINATION OF PAYMENT. (a) An insurer may
12-16 require a physician or provider to retain in the physician's or
12-17 provider's records updated information concerning other health
12-18 benefit plan coverage and to provide the information to the
12-19 insurer on the applicable form described by Section 3B of this
12-20 article. Except as provided in this subsection, an insurer may not
12-21 require a physician or provider to investigate coordination of
12-22 other health benefit plan coverage.
12-23 (b) Coordination of payment under this section does not
12-24 extend the period for determining whether a service is eligible for
12-25 payment under Section 3A(e) of this article.
12-26 (c) A physician or provider who submits a claim for
12-27 particular medical care or health care services to more than one
13-1 health maintenance organization or insurer shall provide written
13-2 notice on the claim submitted to each health maintenance
13-3 organization or insurer of the identity of each other health
13-4 maintenance organization or insurer with which the same claim is
13-5 being filed.
13-6 (d) On receipt of notice under Subsection (c) of this
13-7 section, an insurer shall coordinate and determine the appropriate
13-8 payment for each health maintenance organization or insurer to make
13-9 to the physician or provider.
13-10 (e) If an insurer is a secondary payor and pays a portion of
13-11 a claim that should have been paid by the insurer or health
13-12 maintenance organization that is the primary payor, the overpayment
13-13 may only be recovered from the health maintenance organization or
13-14 insurer that is primarily responsible for that amount.
13-15 (f) If the portion of the claim overpaid by the secondary
13-16 insurer was also paid by the primary health maintenance
13-17 organization or insurer, the secondary insurer may recover the
13-18 amount of overpayment under Section 3C of this article from the
13-19 physician or provider who received the payment.
13-20 (g) An insurer may share information with another health
13-21 maintenance organization or insurer to the extent necessary to
13-22 coordinate appropriate payment obligations on a specific claim.
13-23 (h) The provisions of this section may not be waived,
13-24 voided, or nullified by contract.
13-25 Sec. 3F. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
13-26 SERVICES. (a) An insurer that uses a preauthorization process for
13-27 medical care and health care services shall provide to each
14-1 preferred provider, not later than the 10th working day after the
14-2 date a request is made, a list of medical care and health care
14-3 services that require preauthorization and information concerning
14-4 the preauthorization process.
14-5 (b) If proposed medical care or health care services require
14-6 preauthorization as a condition of the insurer's payment to a
14-7 preferred provider under a health insurance policy, the insurer
14-8 shall determine whether the medical care or health care services
14-9 proposed to be provided to the insured are medically necessary and
14-10 appropriate.
14-11 (c) On receipt of a request from a preferred provider for
14-12 preauthorization, the insurer shall review and issue a
14-13 determination indicating whether the proposed services are
14-14 preauthorized. The determination must be mailed or otherwise
14-15 transmitted not later than the third calendar day after the date
14-16 the request is received by the insurer.
14-17 (d) If the proposed medical care or health care services
14-18 involve inpatient care and the insurer requires preauthorization as
14-19 a condition of payment, the insurer shall review and issue a length
14-20 of stay for the admission into a health care facility based on the
14-21 recommendation of the patient's physician or health care provider
14-22 and the insurer's written medically accepted screening criteria and
14-23 review procedures. If the proposed medical or health care services
14-24 are to be provided to a patient who is an inpatient in a health
14-25 care facility at the time the services are proposed, the insurer
14-26 shall review and issue a determination indicating whether proposed
14-27 services are preauthorized within one calendar day of the request
15-1 by the physician or health care provider.
15-2 (e) If an insurer has preauthorized medical care or health
15-3 care services, the insurer may not deny or reduce payment to the
15-4 physician or provider for those services based on medical necessity
15-5 or appropriateness of care unless the physician or provider has
15-6 materially misrepresented the proposed medical or health care
15-7 services or has substantially failed to perform the proposed
15-8 medical or health care services.
15-9 (f) This section applies to an agent or other person with
15-10 whom an insurer contracts to perform, or to whom the insurer
15-11 delegates the performance of, preauthorization of proposed medical
15-12 or health care services.
15-13 (g) The provisions of this section may not be waived,
15-14 voided, or nullified by contract.
15-15 Sec. 3G. AVAILABILITY OF CODING GUIDELINES. (a) A preferred
15-16 provider contract between an insurer and a physician or provider
15-17 must provide that:
15-18 (1) the physician or provider may request a
15-19 description of the coding guidelines, including any underlying
15-20 bundling, recoding, or other payment process and fee schedules
15-21 applicable to specific procedures that the physician or provider
15-22 will receive under the contract;
15-23 (2) the insurer or the insurer's agent will provide
15-24 the coding guidelines and fee schedules not later than the 30th day
15-25 after the date the insurer receives the request;
15-26 (3) the insurer will provide notice of material
15-27 changes to the coding guidelines and fee schedules not later than
16-1 the 90th day before the date the changes take effect and will not
16-2 make retroactive revisions to the coding guidelines and fee
16-3 schedules; and
16-4 (4) the contract may be terminated by the physician or
16-5 provider on or before the 30th day after the date the physician or
16-6 provider receives information requested under this subsection
16-7 without penalty or discrimination in participation in other health
16-8 care products or plans.
16-9 (b) A physician or provider who receives information under
16-10 Subsection (a) of this section may use or disclose the information
16-11 only for the purpose of practice management, billing activities, or
16-12 other business operations.
16-13 (c) Nothing in this section shall be interpreted to require
16-14 an insurer to violate copyright or other law by disclosing
16-15 proprietary software that the insurer has licensed. In addition to
16-16 the above, the insurer shall, on request of a physician or
16-17 provider, provide the name, edition, and model version of the
16-18 software that the insurer uses to determine bundling and unbundling
16-19 of claims.
16-20 (d) The provisions of this section may not be waived,
16-21 voided, or nullified by contract.
16-22 Sec. 3H. DISPUTE RESOLUTION. (a) An insurer may not require
16-23 by contract or otherwise the use of a dispute resolution procedure
16-24 or binding arbitration with a physician or health care provider.
16-25 This subsection does not prohibit an insurer from offering a
16-26 dispute resolution procedure or binding arbitration to resolve a
16-27 dispute if the insurer and the physician or provider consent to the
17-1 process after the dispute arises. This subsection may not be
17-2 construed to conflict with any applicable appeal mechanisms
17-3 required by law.
17-4 (b) The provisions of this section may not be waived,
17-5 voided, or nullified by contract.
17-6 Sec. 3I. AUTHORITY OF ATTORNEY GENERAL. (a) In addition to
17-7 any other remedy available for a violation of this article, the
17-8 attorney general may take action and seek remedies available under
17-9 Section 15, Article 21.21 of this code, and Sections 17.58, 17.60,
17-10 17.61, and 17.62, Business & Commerce Code, for a violation of
17-11 Section 3A or 7 of this article.
17-12 (b) If the attorney general has good cause to believe that a
17-13 physician or provider has failed in good faith to repay an insurer
17-14 under Section 3C of this article, the attorney general may:
17-15 (1) bring an action to compel the physician or
17-16 provider to repay the insurer;
17-17 (2) on the finding of a court that the physician or
17-18 provider has violated Section 3C, impose a civil penalty of not
17-19 more than the greater of $1,000 or two times the amount in dispute
17-20 for each violation; and
17-21 (3) recover court costs and attorney's fees.
17-22 (c) If the attorney general has good cause to believe that a
17-23 physician or provider is or has improperly used or disclosed
17-24 information received by the physician or provider under Section 3G
17-25 of this article, the attorney general may:
17-26 (1) bring an action seeking an injunction against the
17-27 physician or provider to restrain the improper use or disclosure of
18-1 information;
18-2 (2) on the finding of a court that the physician or
18-3 provider has violated Section 3G, impose a civil penalty of not
18-4 more than $1,000 for each negligent violation or $10,000 for each
18-5 intentional violation; and
18-6 (3) recover court costs and attorney's fees.
18-7 Sec. 10. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND HEALTH
18-8 CARE PROVIDERS. The provisions of this article relating to prompt
18-9 payment by an insurer of a physician or health care provider and to
18-10 verification of medical care or health care services apply to a
18-11 physician or health care provider who:
18-12 (1) is not a preferred provider under a preferred
18-13 provider benefit plan; and
18-14 (2) provides to an insured:
18-15 (A) care related to an emergency or its
18-16 attendant episode of care as required by state or federal law; or
18-17 (B) specialty or other medical care or health
18-18 care services at the request of the insurer or a preferred provider
18-19 because the services are not reasonably available from a preferred
18-20 provider who is included in the preferred delivery network.
18-21 Sec. 11. CONFLICT WITH OTHER LAW. To the extent of any
18-22 conflict between this article and Article 21.52C of this code, this
18-23 article controls.
18-24 Sec. 12. APPLICATION OF CERTAIN PROVISIONS UNDER MEDICAID. A
18-25 provision of this article may not be interpreted as requiring an
18-26 insurer, physician, or health care provider, in providing benefits
18-27 or services under the state Medicaid program, to:
19-1 (1) use billing forms or codes that are inconsistent
19-2 with those required under the state Medicaid program; or
19-3 (2) make determinations relating to medical necessity
19-4 or appropriateness or eligibility for coverage in a manner
19-5 different than that required under the state Medicaid program.
19-6 SECTION 4. Section 2, Texas Health Maintenance Organization
19-7 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
19-8 adding Subdivisions (ff) and (gg) to read as follows:
19-9 (ff) "Preauthorization" means a determination by the
19-10 health maintenance organization that the medical care or health
19-11 care services proposed to be provided to a patient are medically
19-12 necessary and appropriate.
19-13 (gg) "Verification" means a reliable representation by
19-14 a health maintenance organization to a physician or provider that
19-15 the health maintenance organization will pay the physician or
19-16 provider for proposed medical care or health care services if the
19-17 physician or provider renders those services to the patient for
19-18 whom the services are proposed. The term includes
19-19 precertification, certification, recertification, or any other term
19-20 that would be a reliable representation by a health maintenance
19-21 organization to a physician or provider.
19-22 SECTION 5. Section 18B, Texas Health Maintenance
19-23 Organization Act (Section 20A.18B, Vernon's Texas Insurance Code),
19-24 is amended to read as follows:
19-25 Sec. 18B. PROMPT PAYMENT OF PHYSICIAN AND PROVIDERS. (a) In
19-26 this section, "clean claim" means a [completed] claim that complies
19-27 with Section 18D of this Act[, as determined under Texas Department
20-1 of Insurance rules, submitted by a physician or provider for
20-2 medical care or health care services under a health care plan].
20-3 (b) A physician or provider must submit a claim under this
20-4 section to a health maintenance organization not later than the
20-5 95th day after the date the physician or provider provides the
20-6 medical care or health care services for which the claim is made.
20-7 A health maintenance organization shall accept as proof of timely
20-8 filing a claim filed in compliance with Subsection (c) of this
20-9 section or information from another health maintenance organization
20-10 showing that the physician or provider submitted the claim to the
20-11 health maintenance organization in compliance with Subsection (c)
20-12 of this section. If a physician or provider fails to submit a
20-13 claim in compliance with this subsection, the physician or provider
20-14 forfeits the right to payment unless the failure to submit the
20-15 claim in compliance with this subsection is a result of a
20-16 catastrophic event that substantially interferes with the normal
20-17 business operations of the physician or provider. The period for
20-18 submitting a claim under this subsection may be extended by
20-19 contract. A physician or provider may not submit a duplicate claim
20-20 for payment before the 46th day after the date the original claim
20-21 was submitted. The commissioner shall adopt rules under which a
20-22 health maintenance organization may determine whether a claim is a
20-23 duplicate claim. [A physician or provider for medical care or
20-24 health care services under a health care plan may obtain
20-25 acknowledgment of receipt of a claim for medical care or health
20-26 care services under a health care plan by submitting the claim by
20-27 United States mail, return receipt requested. A health maintenance
21-1 organization or the contracted clearinghouse of the health
21-2 maintenance organization that receives a claim electronically shall
21-3 acknowledge receipt of the claim by an electronic transmission to
21-4 the physician or provider and is not required to acknowledge
21-5 receipt of the claim by the health maintenance organization in
21-6 writing.]
21-7 (c) A physician or provider shall, as appropriate:
21-8 (1) mail a claim by United States mail, first class,
21-9 or by overnight delivery service, and maintain a log of mailed
21-10 claims and include a copy of the log with the relevant mailed
21-11 claim, and fax a copy of the log to the health maintenance
21-12 organization and maintain a copy of the fax verification;
21-13 (2) submit the claim electronically and maintain a log
21-14 of electronically submitted claims;
21-15 (3) fax the claim and maintain a log of all faxed
21-16 claims; or
21-17 (4) hand deliver the claim and maintain a log of all
21-18 hand-delivered claims.
21-19 (d) If a claim for medical care or health care services
21-20 provided to a patient is mailed, the claim is presumed to have been
21-21 received by the health maintenance organization on the third day
21-22 after the date the claim is mailed or, if the claim is mailed using
21-23 overnight service or return receipt requested, on the date the
21-24 delivery receipt is signed. If the claim is submitted
21-25 electronically, the claim is presumed to have been received on the
21-26 date of the electronic verification of receipt by the health
21-27 maintenance organization or the health maintenance organization's
22-1 clearinghouse. If the health maintenance organization or the
22-2 health maintenance organization's clearinghouse does not provide a
22-3 confirmation within 24 hours of submission by the physician or
22-4 provider, the physician's or provider's clearinghouse shall provide
22-5 the confirmation. The physician's or provider's clearinghouse must
22-6 be able to verify that the filing contained the correct payor
22-7 identification of the entity to receive the filing. If the claim
22-8 is faxed, the claim is presumed to have been received on the date
22-9 of the transmission acknowledgment. If the claim is hand
22-10 delivered, the claim is presumed to have been received on the date
22-11 the delivery receipt is signed. The commissioner shall promulgate
22-12 a form to be submitted by the physician or provider which easily
22-13 identifies all claims included in each filing which can be utilized
22-14 by the physician or provider as their log.
22-15 (e) Not later than the 45th day after the date that the
22-16 health maintenance organization receives a clean claim from a
22-17 physician or provider, the health maintenance organization shall
22-18 make a determination of whether the claim is eligible for payment
22-19 and:
22-20 (1) if the health maintenance organization determines
22-21 the entire claim is eligible for payment, pay the total amount of
22-22 the claim in accordance with the contract between the physician or
22-23 provider and the health maintenance organization;
22-24 (2) if the health maintenance organization determines
22-25 a portion of the claim is eligible for payment, pay the portion of
22-26 the claim that is not in dispute and notify the physician or
22-27 provider in writing why the remaining portion of the claim will not
23-1 be paid; or
23-2 (3) if the health maintenance organization determines
23-3 that the claim is not eligible for payment, notify the physician or
23-4 provider in writing why the claim will not be paid.
23-5 (f) Not later than the 21st day after the date a health
23-6 maintenance organization or the health maintenance organization's
23-7 designated agent affirmatively adjudicates a pharmacy claim that is
23-8 electronically submitted, the health maintenance organization
23-9 shall:
23-10 (1) pay the total amount of the claim; or
23-11 (2) notify the pharmacy provider of the reasons for
23-12 denying payment of the claim.
23-13 (g) A health maintenance organization that determines under
23-14 Subsection (e) of this section that a claim is eligible for payment
23-15 and does not pay the claim on or before the 45th day after the date
23-16 the health maintenance organization receives a clean claim shall
23-17 pay the physician or provider making the claim the lesser of the
23-18 full amount of billed charges submitted on the claim and interest
23-19 on the billed charges at a rate of 15 percent annually or two times
23-20 the contracted rate and interest on that amount at a rate of 15
23-21 percent annually. If the physician or provider submits the claim
23-22 using a form described by Section 18D(a) of this Act, billed
23-23 charges shall be established under a fee schedule provided by the
23-24 physician or provider to the health maintenance organization on or
23-25 before the 30th day after the date the physician or provider enters
23-26 into the contract with the health maintenance organization. The
23-27 physician or provider may modify the fee schedule if the physician
24-1 or provider notifies the health maintenance organization of the
24-2 modification on or before the 90th day before the date the
24-3 modification takes effect.
24-4 (h) The investigation and determination of eligibility for
24-5 payment, including any coordination of other payments, does not
24-6 extend the period for determining whether a claim is eligible for
24-7 payment under Subsection (e) of this section [(d) If a
24-8 prescription benefit claim is electronically adjudicated and
24-9 electronically paid, and the health maintenance organization or its
24-10 designated agent authorizes treatment, the claim must be paid not
24-11 later than the 21st day after the treatment is authorized].
24-12 (i) Except as provided by Subsection (j) of this section, if
24-13 [(e) If] the health maintenance organization [acknowledges
24-14 coverage of an enrollee under the health care plan but] intends to
24-15 audit the physician or provider claim, the health maintenance
24-16 organization shall pay the charges submitted at 85 percent of the
24-17 contracted rate on the claim not later than the 45th day after the
24-18 date that the health maintenance organization receives the claim
24-19 from the physician or provider. The health maintenance
24-20 organization shall complete [Following completion of] the audit,
24-21 and any additional payment due a physician or provider or any
24-22 refund due the health maintenance organization shall be made not
24-23 later than the 90th [30th] day after the receipt of a claim or 45
24-24 days after receipt of a requested attachment from the physician or
24-25 provider, whichever is later [later of the date that:]
24-26 [(1) the physician or provider receives notice of the
24-27 audit results; or]
25-1 [(2) any appeal rights of the enrollee are exhausted].
25-2 (j) If a health maintenance organization needs additional
25-3 information from a treating physician or provider to determine
25-4 eligibility for payment, the health maintenance organization, not
25-5 later than the 30th calendar day after the date the health
25-6 maintenance organization receives a clean claim, shall request in
25-7 writing that the physician or provider provide any attachment to
25-8 the claim the health maintenance organization desires in good faith
25-9 for clarification of the claim. The request must describe with
25-10 specificity the clinical information requested and relate only to
25-11 information the health maintenance organization can demonstrate is
25-12 specific to the claim or the claim's related episode of care. A
25-13 health maintenance organization that requests an attachment under
25-14 this subsection shall determine whether the claim is eligible for
25-15 payment on or before the later of the 15th day after the date the
25-16 health maintenance organization receives the requested attachment
25-17 or the latest date for determining whether the claim is eligible
25-18 for payment under Subsection (e) of this section. A health
25-19 maintenance organization may not make more than one request under
25-20 this subsection in connection with a claim. Subsections (c) and (d)
25-21 of this section apply to a request for and submission of an
25-22 attachment under this subsection.
25-23 (k) If a health maintenance organization requests an
25-24 attachment or other information from a person other than the
25-25 physician or provider who submitted the claim, the health
25-26 maintenance organization shall provide a copy of the request to the
25-27 physician or provider who submitted the claim. The health
26-1 maintenance organization may not withhold payment pending receipt
26-2 of an attachment or information requested under this subsection.
26-3 If on receiving an attachment or information requested under this
26-4 subsection the health maintenance organization determines an error
26-5 in payment of the claim, the health maintenance organization may
26-6 recover under Section 18E of this Act.
26-7 (l) The commissioner shall adopt rules under which a health
26-8 maintenance organization can easily identify attachments or
26-9 information submitted by a physician or provider.
26-10 (m) A health maintenance organization's claims payment
26-11 processes must:
26-12 (1) use nationally recognized, generally accepted
26-13 Current Procedural Terminology codes, notes, and guidelines,
26-14 including all relevant modifiers; and
26-15 (2) be consistent with nationally recognized,
26-16 generally accepted bundling logic and edits [(f) A health
26-17 maintenance organization that violates Subsection (c) or (e) of
26-18 this section is liable to a physician or provider for the full
26-19 amount of billed charges submitted on the claim or the amount
26-20 payable under the contracted penalty rate, less any amount
26-21 previously paid or any charge for a service that is not covered by
26-22 the health care plan].
26-23 (n) [(g)] A physician or provider may recover reasonable
26-24 attorney's fees and court costs in an action to recover payment
26-25 under this section.
26-26 (o) [(h)] In addition to any other penalty or remedy
26-27 authorized by the Insurance Code or another insurance law of this
27-1 state, a health maintenance organization that violates Subsection
27-2 (e) [(c)] or (i) [(e)] of this section is subject to an
27-3 administrative penalty under Article 1.10E, Insurance Code. The
27-4 administrative penalty imposed under that article may not exceed
27-5 $1,000 for each day the claim remains unpaid in violation of
27-6 Subsection (e) [(c)] or (i) [(e)] of this section.
27-7 (p) [(i)] The health maintenance organization shall provide
27-8 a participating physician or provider with copies of all applicable
27-9 utilization review policies and claim processing policies or
27-10 procedures[, including required data elements and claim formats].
27-11 (q) [(j) A health maintenance organization may, by contract
27-12 with a physician or provider, add or change the data elements that
27-13 must be submitted with the physician or provider claim.]
27-14 [(k) Not later than the 60th day before the date of an
27-15 addition or change in the data elements that must be submitted with
27-16 a claim or any other change in a health maintenance organization's
27-17 claim processing and payment procedures, the health maintenance
27-18 organization shall provide written notice of the addition or change
27-19 to each participating physician or provider.]
27-20 [(l) This section does not apply to a claim made by a
27-21 physician or provider who is a member of the legislature.]
27-22 [(m)] This section does not apply to a capitation payment
27-23 required to be made to a physician or provider under an agreement
27-24 to provide medical care or health care services under a health care
27-25 plan.
27-26 (r) [(n)] This section applies to a person with whom a
27-27 health maintenance organization contracts to process claims or to
28-1 obtain the services of physicians and providers to provide health
28-2 care services to health care plan enrollees.
28-3 (s) [(o)] The commissioner may adopt rules as necessary to
28-4 implement this section.
28-5 (t) Except as provided by Subsection (b) of this section,
28-6 the provisions of this section may not be waived, voided, or
28-7 nullified by contract.
28-8 SECTION 6. The Texas Health Maintenance Organization Act
28-9 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
28-10 Sections 18D-18L, 40, and 41 to read as follows:
28-11 Sec. 18D. ELEMENTS OF CLEAN CLAIM. (a) A claim by a
28-12 physician or provider, other than an institutional provider, is a
28-13 "clean claim" if the claim is submitted using Health Care Financing
28-14 Administration Form 1500 or a successor to that form developed by
28-15 the National Uniform Billing Committee or its successor and adopted
28-16 by the commissioner by rule for the purposes of this subsection
28-17 that is submitted to a health maintenance organization for payment
28-18 and that contains the information required by the commissioner by
28-19 rule for the purposes of this subsection entered into the
28-20 appropriate fields on the form in the manner prescribed.
28-21 (b) A claim by an institutional provider is a "clean claim"
28-22 if the claim is submitted using Health Care Financing
28-23 Administration Form UB-92 or a successor to that form developed by
28-24 the National Uniform Billing Committee or its successor and adopted
28-25 by the commissioner by rule for the purposes of this subsection
28-26 that is submitted to a health maintenance organization for payment
28-27 and that contains the information required by the commissioner by
29-1 rule for the purposes of this subsection entered into the
29-2 appropriate fields on the form.
29-3 (c) A health maintenance organization may require any data
29-4 element that is required in an electronic transaction set needed to
29-5 comply with federal law. A health maintenance organization may not
29-6 require a physician or provider to provide information other than
29-7 information for a data field included on the form used for a clean
29-8 claim under Subsection (a) or (b) of this section, as applicable.
29-9 (d) A claim submitted by a physician or provider that
29-10 includes additional fields, data elements, attachments, or other
29-11 information not required under this section is considered to be a
29-12 clean claim for the purposes of this section.
29-13 (e) Except as provided by this section, the provisions of
29-14 this section may not be waived, voided, or nullified by contract.
29-15 Sec. 18E. OVERPAYMENT. A health maintenance organization
29-16 may recover an overpayment to a physician or provider if:
29-17 (1) not later than the 180th day after the date the
29-18 physician or provider receives the payment, the health maintenance
29-19 organization provides written notice of the overpayment to the
29-20 physician or provider that includes the basis and specific reasons
29-21 for the request for recovery of funds; and
29-22 (2) the physician or provider does not make
29-23 arrangements for repayment of the requested funds on or before the
29-24 45th day after the date the physician or provider receives the
29-25 notice.
29-26 Sec. 18F. VERIFICATION OF ELIGIBILITY FOR PAYMENT. (a) On
29-27 the request of a physician or provider for verification of the
30-1 payment eligibility of a particular medical care or health care
30-2 service the physician or provider proposes to provide to a
30-3 particular patient, the health maintenance organization shall
30-4 inform the physician or provider whether the service, if provided
30-5 to that patient, is eligible for payment from the health
30-6 maintenance organization to the physician or provider.
30-7 (b) A health maintenance organization shall provide
30-8 verification under this section between 6 a.m. and 6 p.m. central
30-9 standard time Monday through Friday on each day that is not a legal
30-10 holiday and between 9 a.m. and 12 p.m. on Saturday, Sunday, and
30-11 legal holidays.
30-12 (c) Verification under this section shall be made in good
30-13 faith and without delay.
30-14 (d) In this section, "verification" includes
30-15 preauthorization only when preauthorization is a condition for the
30-16 determination of eligibility for payment.
30-17 (e) A health maintenance organization that declines to
30-18 provide a verification of eligibility for payment shall notify the
30-19 physician or provider who requested the verification of the
30-20 specific reason the verification was not provided.
30-21 (f) A health maintenance organization may establish a time
30-22 certain for the validity of verification.
30-23 (g) If a health maintenance organization has verified
30-24 medical care or health care services, the health maintenance
30-25 organization may not deny or reduce payment to a physician or
30-26 health care provider for those services unless:
30-27 (1) the physician or provider has materially
31-1 misrepresented the proposed medical or health care services or has
31-2 substantially failed to perform the proposed medical or health care
31-3 services; or
31-4 (2) the health maintenance organization certifies in
31-5 writing:
31-6 (A) that the physician or provider is not
31-7 contractually obligated to provide services to the patient because
31-8 the patient's enrollment in the health plan was terminated;
31-9 (B) the health maintenance organization was
31-10 notified on or before the 30th day after the date the patient's
31-11 enrollment ended; and
31-12 (C) the physician or provider was notified that
31-13 the patient's enrollment ended on or before the 30th day after the
31-14 date of verification under this section.
31-15 (h) The provisions of this section may not be waived,
31-16 voided, or nullified by contract.
31-17 Sec. 18G. COORDINATION OF PAYMENT BENEFITS. (a) A health
31-18 maintenance organization may require a physician or provider to
31-19 retain in the physician's or provider's records updated information
31-20 concerning other health benefit plan coverage and to provide the
31-21 information to the health maintenance organization on the
31-22 applicable form described by Section 18D of this Act. Except as
31-23 provided by this subsection, a health maintenance organization may
31-24 not require a physician or provider to investigate coordination of
31-25 other health benefit plan coverage.
31-26 (b) Coordination of other payment under this section does
31-27 not extend the period for determining whether a service is eligible
32-1 for payment under Section 18B(e) of this Act.
32-2 (c) A physician or provider who submits a claim for
32-3 particular medical care or health care services to more than one
32-4 health maintenance organization or insurer shall provide written
32-5 notice on the claim submitted to each health maintenance
32-6 organization or insurer of the identity of each other health
32-7 maintenance organization or insurer with which the same claim is
32-8 being filed.
32-9 (d) On receipt of notice under Subsection (c) of this
32-10 section, a health maintenance organization shall coordinate and
32-11 determine the appropriate payment for each health maintenance
32-12 organization or insurer to make to the physician or provider.
32-13 (e) If a health maintenance organization is a secondary
32-14 payor and pays a portion of a claim that should have been paid by
32-15 the health maintenance organization or insurer that is the primary
32-16 payor, the overpayment may only be recovered from the health
32-17 maintenance organization or insurer that is primarily responsible
32-18 for that amount.
32-19 (f) If the portion of the claim overpaid by the secondary
32-20 health maintenance organization was also paid by the primary health
32-21 maintenance organization or insurer, the secondary health
32-22 maintenance organization may recover the amount of the overpayment
32-23 under Section 18E of this Act from the physician or provider who
32-24 received the payment.
32-25 (g) A health maintenance organization may share information
32-26 with another health maintenance organization or insurer to the
32-27 extent necessary to coordinate appropriate payment obligations on a
33-1 specific claim.
33-2 (h) The provisions of this section may not be waived,
33-3 voided, or nullified by contract.
33-4 Sec. 18H. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
33-5 SERVICES. (a) A health maintenance organization that uses a
33-6 preauthorization process for medical care and health care services
33-7 shall provide each participating physician or provider, not later
33-8 than the 10th working day after the date a request is made, a list
33-9 of the medical care and health care services that do not require
33-10 preauthorization and information concerning the preauthorization
33-11 process.
33-12 (b) If proposed medical care or health care services require
33-13 preauthorization by a health maintenance organization as a
33-14 condition of the health maintenance organization's payment to a
33-15 physician or provider, the health maintenance organization shall
33-16 determine whether the medical care or health care services proposed
33-17 to be provided to the enrollee are medically necessary and
33-18 appropriate.
33-19 (c) On receipt of a request from a physician or provider for
33-20 preauthorization, the health maintenance organization shall review
33-21 and issue a determination indicating whether the services are
33-22 preauthorized. The determination must be mailed or otherwise
33-23 transmitted not later than the third calendar day after the date
33-24 the request is received by the health maintenance organization.
33-25 (d) If the proposed medical care or health care services
33-26 involve inpatient care and the health maintenance organization
33-27 requires preauthorization as a condition of payment, the health
34-1 maintenance organization shall review and issue a length of stay
34-2 for the admission into a health care facility based on the
34-3 recommendation of the patient's physician or health care provider
34-4 and the health maintenance organization's written medically
34-5 accepted screening criteria and review procedures. If the proposed
34-6 medical or health care services are to be provided to a patient who
34-7 is an inpatient in a health care facility at the time the services
34-8 are proposed, the health maintenance organization shall review and
34-9 issue a determination indicating whether proposed services are
34-10 preauthorized within one calendar day of the request by the
34-11 physician or health care provider.
34-12 (e) If the health maintenance organization has preauthorized
34-13 medical care or health care services, the health maintenance
34-14 organization may not deny or reduce payment to the physician or
34-15 provider for those services based on medical necessity or
34-16 appropriateness of care unless the physician or provider has
34-17 materially misrepresented the proposed medical or health care
34-18 services or has substantially failed to perform the proposed
34-19 medical or health care services.
34-20 (f) This section applies to an agent or other person with
34-21 whom a health maintenance organization contracts to perform, or to
34-22 whom the health maintenance organization delegates the performance
34-23 of, preauthorization of proposed medical care or health care
34-24 services.
34-25 (g) The provisions of this section may not be waived,
34-26 voided, or nullified by contract.
34-27 Sec. 18I. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
35-1 PROVIDERS. The provisions of this Act relating to prompt payment by
35-2 a health maintenance organization of a physician or provider and to
35-3 verification of medical care or health care services apply to a
35-4 physician or provider who:
35-5 (1) is not included in the health maintenance
35-6 organization delivery network; and
35-7 (2) provides to an enrollee:
35-8 (A) care related to an emergency or its
35-9 attendant episode of care as required by state or federal law; or
35-10 (B) specialty or other medical care or health
35-11 care services at the request of the health maintenance organization
35-12 or a physician or provider who is included in the health
35-13 maintenance organization delivery network because the services are
35-14 not reasonably available within the network.
35-15 Sec. 18J. AVAILABILITY OF CODING GUIDELINES. (a) A contract
35-16 between a health maintenance organization and a physician or
35-17 provider must provide that:
35-18 (1) the physician or provider may request a
35-19 description of the coding guidelines, including any underlying
35-20 bundling, recoding, or other payment process and fee schedules
35-21 applicable to specific procedures that the physician or provider
35-22 will receive under the contract;
35-23 (2) the health maintenance organization will provide
35-24 the coding guidelines and fee schedules not later than the 30th day
35-25 after the date the health maintenance organization receives the
35-26 request;
35-27 (3) the health maintenance organization will provide
36-1 notice of material changes to the coding guidelines and fee
36-2 schedules not later than the 90th day before the date the changes
36-3 take effect and will not make retroactive revisions to the coding
36-4 guidelines and fee schedules; and
36-5 (4) the contract may be terminated by the physician or
36-6 provider on or before the 30th day after the date the physician or
36-7 provider receives information requested under this subsection
36-8 without penalty or discrimination in participation in other health
36-9 care products or plans.
36-10 (b) A physician or provider who receives information under
36-11 Subsection (a) of this section may use or disclose the information
36-12 only for the purpose of practice management, billing activities, or
36-13 other business operations.
36-14 (c) Nothing in this section shall be interpreted to require
36-15 a health maintenance organization to violate copyright or other law
36-16 by disclosing proprietary software that the health maintenance
36-17 organization has licensed. In addition to the above, the health
36-18 maintenance organization shall, on request of the physician or
36-19 provider, provide the name, edition, and model version of the
36-20 software that the health maintenance organization uses to determine
36-21 bundling and unbundling of claims.
36-22 (d) The provisions of this section may not be waived,
36-23 voided, or nullified by contract.
36-24 Sec. 18K. DISPUTE RESOLUTION. (a) A health maintenance
36-25 organization may not require by contract or otherwise the use of a
36-26 dispute resolution procedure or binding arbitration with a
36-27 physician or provider. This subsection does not prohibit a health
37-1 maintenance organization from offering a dispute resolution
37-2 procedure or binding arbitration to resolve a dispute if the health
37-3 maintenance organization and the physician or provider consent to
37-4 the process after the dispute arises. This subsection may not be
37-5 construed to conflict with any applicable appeal mechanisms
37-6 required by law.
37-7 (b) The provisions of this section may not be waived,
37-8 voided, or nullified by contract.
37-9 Sec. 18L. AUTHORITY OF ATTORNEY GENERAL. (a) In addition
37-10 to any other remedy available for a violation of this Act, the
37-11 attorney general may take action and seek remedies available under
37-12 Section 15, Article 21.21, Insurance Code, and Sections 17.58,
37-13 17.60, 17.61, and 17.62, Business & Commerce Code, for a violation
37-14 of Section 14 or 18B of this Act.
37-15 (b) If the attorney general has good cause to believe that a
37-16 physician or provider has failed in good faith to repay a health
37-17 maintenance organization under Section 18E of this Act, the
37-18 attorney general may:
37-19 (1) bring an action to compel the physician or
37-20 provider to repay the health maintenance organization;
37-21 (2) on the finding of a court that the physician or
37-22 provider has violated Section 18E, impose a civil penalty of not
37-23 more than the greater of $1,000 or two times the amount in dispute
37-24 for each violation; and
37-25 (3) recover court costs and attorney's fees.
37-26 (c) If the attorney general has good cause to believe that a
37-27 physician or provider is or has improperly used or disclosed
38-1 information received by the physician or provider under Section 18J
38-2 of this Act, the attorney general may:
38-3 (1) bring an action seeking an injunction against the
38-4 physician or provider to restrain the improper use or disclosure of
38-5 information;
38-6 (2) on the finding of a court that the physician or
38-7 provider has violated Section 18J, impose a civil penalty of not
38-8 more than $1,000 for each negligent violation or $10,000 for each
38-9 intentional violation; and
38-10 (3) recover court costs and attorney's fees.
38-11 Sec. 40. CONFLICT WITH OTHER LAW. To the extent of any
38-12 conflict between this Act and Article 21.52C, Insurance Code, this
38-13 Act controls.
38-14 Sec. 41. APPLICATION OF CERTAIN PROVISIONS UNDER MEDICAID.
38-15 A provision of this Act may not be interpreted as requiring a
38-16 health maintenance organization, physician, or provider, in
38-17 providing benefits or services under the state Medicaid program,
38-18 to:
38-19 (1) use billing forms or codes that are inconsistent
38-20 with those required under the state Medicaid program;
38-21 (2) make determinations relating to medical necessity
38-22 or appropriateness or eligibility for coverage in a manner
38-23 different than that required under the state Medicaid program; or
38-24 (3) reimburse physicians or providers for services
38-25 rendered to a person who was not eligible to receive benefits for
38-26 such services under the state Medicaid program.
38-27 SECTION 7. Subchapter E, Chapter 21, Insurance Code, is
39-1 amended by adding Article 21.52K to read as follows:
39-2 Art. 21.52K. ELECTRONIC HEALTH CARE TRANSACTIONS
39-3 Sec. 1. HEALTH BENEFIT PLAN DEFINED. (a) In this article,
39-4 "health benefit plan" means a plan that provides benefits for
39-5 medical, surgical, or other treatment expenses incurred as a result
39-6 of a health condition, a mental health condition, an accident,
39-7 sickness, or substance abuse, including an individual, group,
39-8 blanket, or franchise insurance policy or insurance agreement, a
39-9 group hospital service contract, or an individual or group evidence
39-10 of coverage or similar coverage document that is offered by:
39-11 (1) an insurance company;
39-12 (2) a group hospital service corporation operating
39-13 under Chapter 20 of this code;
39-14 (3) a fraternal benefit society operating under
39-15 Chapter 10 of this code;
39-16 (4) a stipulated premium insurance company operating
39-17 under Chapter 22 of this code;
39-18 (5) a reciprocal exchange operating under Chapter 19
39-19 of this code;
39-20 (6) a health maintenance organization operating under
39-21 the Texas Health Maintenance Organization Act (Chapter 20A,
39-22 Vernon's Texas Insurance Code);
39-23 (7) a multiple employer welfare arrangement that holds
39-24 a certificate of authority under Article 3.95-2 of this code; or
39-25 (8) an approved nonprofit health corporation that
39-26 holds a certificate of authority under Article 21.52F of this code.
39-27 (b) The term includes:
40-1 (1) a small employer health benefit plan written under
40-2 Chapter 26 of this code; and
40-3 (2) a health benefit plan offered under the Texas
40-4 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
40-5 Vernon's Texas Insurance Code), the Texas State College and
40-6 University Employees Uniform Insurance Benefits Act (Article
40-7 3.50-3, Vernon's Texas Insurance Code), or Article 3.50-4 of this
40-8 code.
40-9 Sec. 2. ELECTRONIC SUBMISSION OF CLAIMS. The issuer of a
40-10 health benefit plan by contract may require that a health care
40-11 professional licensed under the Occupations Code or a health care
40-12 facility licensed under the Health and Safety Code submit a health
40-13 care claim or equivalent encounter information, a referral
40-14 certification, or an authorization or eligibility transaction
40-15 electronically. The health benefit plan issuer shall comply with
40-16 the standards for electronic transactions required by this article
40-17 and established by the commissioner by rule.
40-18 Sec. 3. TIME FOR IMPLEMENTATION OF ELECTRONIC TRANSACTION
40-19 REQUIREMENTS. The department shall establish a timetable for
40-20 compliance with Section 2 of this article.
40-21 Sec. 4. WAIVER. (a) Any contract between a health benefit
40-22 plan defined by this article and a health care professional or
40-23 health care facility must provide for a waiver of any requirement
40-24 for electronic submission established under Section 2 of this
40-25 article.
40-26 (b) The commissioner shall establish circumstances under
40-27 which a waiver is required that include:
41-1 (1) undue hardship;
41-2 (2) health care professionals in rural areas; or
41-3 (3) any other special circumstance that would justify
41-4 a waiver.
41-5 (c) Any health professional or health care facility that is
41-6 denied a waiver by a health benefit plan may appeal the denial to
41-7 the commissioner. The commissioner shall determine whether or not
41-8 a waiver must be included in the contract.
41-9 (d) A health benefit plan may not refuse to contract or
41-10 renew a contract with a health care professional or a health care
41-11 facility based in whole or in part on the health care professional
41-12 or health care facility requesting, appealing, or obtaining a
41-13 waiver under this section.
41-14 Sec. 5. CERTAIN CHARGES PROHIBITED. A health benefit plan
41-15 may not directly or indirectly charge or hold a health care
41-16 professional, health care facility, or person enrolled in a health
41-17 benefit plan responsible for a fee for the adjudication of a claim.
41-18 SECTION 8. (a) Section 3, Article 21.53Q, Insurance Code,
41-19 as added by House Bill 1676, Acts of the 77th Legislature, Regular
41-20 Session, 2001, is amended to read as follows:
41-21 Sec. 3. TRAINING FOR CERTAIN PERSONNEL REQUIRED. (a) In
41-22 this section, "preauthorization" means a determination by [the
41-23 provision of a reliable representation to a physician or health
41-24 care provider of whether] the issuer of a health benefit plan that
41-25 the [will pay the physician or provider for proposed] medical or
41-26 health care services proposed to be provided [if the physician or
41-27 provider renders those services] to a [the] patient are medically
42-1 necessary and appropriate [for whom the services are proposed].
42-2 The term includes precertification, certification, recertification,
42-3 or any other activity that involves providing a reliable
42-4 representation by the issuer of a health benefit plan to a
42-5 physician or health care provider.
42-6 (b) The commissioner by rule shall require the issuer of a
42-7 health benefit plan to provide adequate training to appropriate
42-8 personnel responsible for preauthorization of coverage, if required
42-9 under the plan, or utilization review under the plan to prevent
42-10 wrongful denial of coverage required under this article and to
42-11 avoid confusion of medical benefits with mental health benefits.
42-12 (b) This section takes effect only if House Bill 1676, Acts
42-13 of the 77th Legislature, Regular Session, 2001, becomes law. If
42-14 House Bill 1676 does not become law, this section has no effect.
42-15 SECTION 9. (a) The changes in law made by this Act relating
42-16 to payment of a physician or health care provider for medical or
42-17 health care services apply only to payment for services provided on
42-18 or after the effective date of this Act.
42-19 (b) The changes in law made by this Act relating to a
42-20 contract between a physician or health care provider and an insurer
42-21 or health maintenance organization apply only to a contract entered
42-22 into or renewed on or after January 1, 2002.
42-23 SECTION 10. This Act takes effect September 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1862 was passed by the House on
April 25, 2001, by a non-record vote; that the House refused to
concur in Senate amendments to H.B. No. 1862 on May 23, 2001, and
requested the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 1862 on May 27, 2001, by a
non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1862 was passed by the Senate, with
amendments, on May 21, 2001, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 1862 on May 27, 2001,
by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: __________________________
Date
__________________________
Governor