77R10847 T
By Eiland, Janek, Jones of Bexar H.B. No. 1862
Substitute the following for H.B. No. 1862:
By Eiland C.S.H.B. No. 1862
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation and prompt payment of health care
1-3 providers under certain health benefit plans.
1-4 BE IT ENACTED BY THE LEGISLATURE OF STATE OF TEXAS:
1-5 SECTION 1. The Texas Health Maintenance Organization Act,
1-6 Chapter 20A, Insurance Code, Sec. 18B, Subsections (a), (b) and (d)
1-7 are amended as follows:
1-8 Sec. 18B. PROMPT PAYMENT OF PHYSICIANS AND PROVIDERS. (a)
1-9 DEFINITIONS.
1-10 (1) "CLEAN CLAIM FOR PHYSICIANS OR NON INSTITUTIONAL
1-11 PROVIDERS" means a Health Care Financing Administration Form 1500
1-12 in effect on the effective date of this Act, or a subsequent Health
1-13 Care Financing Form as adopted by the Commissioner, submitted for
1-14 payment, with required information in the following fields on the
1-15 form, when applicable:
1-16 (A) field 1a, subscriber/patient plan
1-17 identification number;
1-18 (B) field 2, patient's name;
1-19 (C) field 3, patient's date of birth and gender;
1-20 (D) field 4, subscriber's name;
1-21 (E) field 5, patient's address including street
1-22 or post office box, city, and zip code;
1-23 (F) field 6, patient's relationship to
1-24 subscriber;
2-1 (G) field 7, subscriber's address including
2-2 street or post office box, city, and zip code;
2-3 (H) field 10, whether patient's condition is
2-4 related to employment, auto accident, or other accident;
2-5 (I) field 11, subscriber's policy number;
2-6 (J) field 11a, subscriber's birth date and
2-7 gender;
2-8 (K) field 11c, health maintenance or preferred
2-9 provider carrier name; and
2-10 (L) field 11d, disclosure of any other health
2-11 benefit plans.
2-12 (i) If the information required in this
2-13 Subsection is yes, and known to the provider, then the following
2-14 data fields should be completed:
2-15 (I) field 9;
2-16 (II) field 9a;
2-17 (III) field 9b;
2-18 (IV) field 9c; and
2-19 (V) field 9d.
2-20 (ii) The data fields specified in
2-21 Subdivision (i) of this Subsection are required when submitting
2-22 claims to secondary payor health maintenance organizations or
2-23 preferred provider carriers.
2-24 (iii) If the information required in this
2-25 subsection is no, the data fields specified in Subdivision (i) of
2-26 this subsection are not required and the veracity of the statement
2-27 by the enrollee or the insured is not the responsibility of the
3-1 physician or the provider. Any further investigation to verify
3-2 other insurance is the responsibility of the health maintenance
3-3 organization and the enrollee or insured and does not extend the
3-4 statutory claims payment period.
3-5 (F) field 12, patient's or authorized person's
3-6 signature or notation that the signature is on file with the
3-7 physician or provider;
3-8 (G) field 13, subscriber's or authorized
3-9 person's signature or notation that the signature is on file with
3-10 the physician or provider;
3-11 (H) field 14, date of current illness, injury,
3-12 or pregnancy;
3-13 (I) field 15, first date of previous same or
3-14 similar illness; if unknown, enter same date as field 14;
3-15 (J) field 21, diagnosis codes or nature of
3-16 illness or injury;
3-17 (K) field 24A, date(s) of service;
3-18 (L) field 24B, place of service codes;
3-19 (M) field 24C, type of service code;
3-20 (N) field 24D, procedure/modifier code using
3-21 national recognized medical data code sets as adopted;
3-22 (O) field 24E, diagnosis code by specific
3-23 service by the Commissioner by rule;
3-24 (P) field 24F, charge of each listed service;
3-25 (Q) field 24G, number of days or units;
3-26 (R) field 25, physician's or provider's federal
3-27 tax ID number;
4-1 (S) field 28, total charge;
4-2 (T) field 31, signature of physician or provider
4-3 or notation that the signature is on file with the HMO or preferred
4-4 provider carrier;
4-5 (U) field 32, name and address of facility where
4-6 services rendered (if other than home or office; and
4-7 (V) field 33, physician's or provider's billing
4-8 name and address.
4-9 (2) "CLEAN CLAIM FOR INSTITUTION PROVIDERS" means a UB
4-10 form 92 in effect on the effective date of this Act, or a
4-11 subsequent UB form as adopted by the Commissioner, submitted for
4-12 payment, with the required information in the following fields on
4-13 the form, when applicable:
4-14 (A) field (1), provider's name, address and
4-15 telephone number;
4-16 (B) field (3), patient control number;
4-17 (C) field (4), type of bill code;
4-18 (D) field (5), provider's federal tax ID number;
4-19 (E) field (6), statement period (beginning and
4-20 ending date of claim period);
4-21 (F) field (12), patient's name (UB-92);
4-22 (G) field (13), patient's address;
4-23 (H) field (14), patient's date of birth;
4-24 (I) field (15), patient's gender;
4-25 (J) field (16), patient's marital status;
4-26 (K) field (17), date of admission;
4-27 (L) field (18), admission hour;
5-1 (M) field (19), type of admission (e.g.
5-2 emergency, urgent, elective, newborn);
5-3 (N) field (20), source of admission code;
5-4 (O) field (22), patient-status-at-discharge
5-5 code;
5-6 (P) field (39-41), value code and amounts;
5-7 (Q) field (42), revenue code;
5-8 (R) field (43), revenue description;
5-9 (S) field (46), units of service;
5-10 (T) field (47), total charge;
5-11 (U) field (50), HMO or preferred provider
5-12 carrier name;
5-13 (V) field (58), subscriber's name;
5-14 (W) field (59), patient's relationship to
5-15 subscriber;
5-16 (X) field (60), patient's/subscriber's
5-17 certificate number, health claim number, ID number;
5-18 (Y) field (63), treatment authorization code;
5-19 (Z) field (67), principal diagnosis code;
5-20 (AA) field (76), admitting diagnosis code;
5-21 (BB) field (82), attending physician ID;
5-22 (CC) field (85), signature of provider
5-23 representative or notation that the signature is on file with the
5-24 HMO or preferred provider carrier; and
5-25 (DD) field (86), date bill submitted.
5-26 [(a) In this Section, "clean claims" means a completed claim
5-27 as determined under Texas department of Insurance rules, submitted
6-1 by a physician or provider for medical care or health care services
6-2 under a health care plan.]
6-3 (b) A claim for medical care or health care services under a
6-4 health care plan will be presumed to have been received on the date
6-5 of mailing or electronic submission, as applicable, by the health
6-6 maintenance organization or the contracted clearinghouse of the
6-7 health maintenance organization if the physician or provider for
6-8 medical care or health care services:
6-9 (1) mails the claim by United States mail, first
6-10 class; or
6-11 (2) submits the claim electronically and maintains a
6-12 log of such submissions.
6-13 [A physician or provider for medical care or health care
6-14 services under a health care plan may obtain acknowledgement of
6-15 receipt of a claim for medical care or health care services under a
6-16 health care plan by submitting the claim by United States mail,
6-17 return receipt requested. A health maintenance organization or the
6-18 contracted clearinghouse of the health maintenance organization
6-19 that receives a claim electronically shall acknowledge receipt of
6-20 the claim by an electronic transmission to the physician or
6-21 provider and is not required to acknowledge receipt of the claim by
6-22 the health maintenance organization in writing.]
6-23 (d) Not later than the 21st day after the date that the
6-24 health maintenance organization, or their designated agent
6-25 affirmatively adjudicates a pharmacy benefit claim that is
6-26 electronically submitted, the health maintenance organization
6-27 shall:
7-1 (1) pay the total amount of the claim; or
7-2 (2) notify the provider the circumstances for denying
7-3 payment of the claim.
7-4 [If a prescription benefit claim is electronically
7-5 adjudicated and electronically paid, and the health maintenance
7-6 organization or it or its designated agent authorizes treatment,
7-7 the claim must be paid not later than the 21st day after the
7-8 treatment is authorized.]
7-9 SECTION 2. The Texas Health Maintenance Organization Act,
7-10 Chapter 20A, Insurance Code, Section 18B, Subsection (j) is amended
7-11 as follows:
7-12 (j)(1) unless otherwise provided by this subsection, a
7-13 health maintenance organization may, by contract with a physician
7-14 or provider, require:
7-15 (A) fewer data fields than required in
7-16 Subsection (a) of this article; or
7-17 (B) additional data fields than those required
7-18 in Subsection (a) of this article but not to exceed those fields
7-19 listed on the Health Care Financing Administration form 1500 or
7-20 UB-92 as developed by the National Uniform Billing Committee
7-21 required by this article.
7-22 (2) A health maintenance organization shall notify in
7-23 writing a physician or provider of the need for any attachments
7-24 desired in good faith for clarification of a clean claim. The
7-25 physician or provider must receive this notice not later than the
7-26 20th calendar day after the date of the health maintenance
7-27 organization receives the claim. To be valid, the written notice
8-1 requesting the attachment shall describe with specificity the
8-2 clinical information requested, provide a detailed description of
8-3 the reasons why the health maintenance organization is requesting
8-4 the information, and pertain only to information that the health
8-5 maintenance organization can demonstrate is not only within the
8-6 scope of the claim but also specific to the claim in question.
8-7 Upon receiving a valid request, the physician or provider shall
8-8 have 20 calendar days to provide the attachment without tolling the
8-9 45-day payment period as defined in this article. The 45-day
8-10 payment period will be extended by the number of days by which the
8-11 requested attachment is received by the health plan beyond the 20th
8-12 day. The provisions of Subsection (b) of this section shall apply
8-13 to all submissions by a physician or provider.
8-14 (3) A health maintenance organization may require any
8-15 data element that is required in an electronic transaction set
8-16 needed to comply with federal law.
8-17 [A health maintenance organization may, by contract with a
8-18 physician or provider, add or change the data elements that must be
8-19 submitted with the physician or provider claim.]
8-20 (4) The commissioner may not by rule add or create any
8-21 additional field or data elements and any rule concerning
8-22 attachments cannot provide for any additional requirements on the
8-23 physician or provider than those established in this article.
8-24 (5) A claim that is submitted by a physician or
8-25 provider that includes additional fields, data elements,
8-26 attachments or other information not required under this article is
8-27 to be construed as a clean claim for the purposes of this article.
9-1 SECTION 3. Article, 3.70-3C, Section 3A, Subsections (a), (b)
9-2 and (j), Insurance Code are amended and Subsection (o) is added to
9-3 read as follows: (a) DEFINITIONS.
9-4 (1) "CLEAN CLAIM FOR PHYSICIANS OR NON INSTITUTIONAL
9-5 PROVIDERS" means a Health Care Financing Administration Form 1500
9-6 in effect on the effective date of this Act, or a subsequent Health
9-7 Care Financing Form as adopted by the Commissioner, submitted for
9-8 payment, with required information in the following fields on the
9-9 form, when applicable:
9-10 (A) field 1a, subscriber/patient plan
9-11 identification number;
9-12 (B) field 2, patient's name;
9-13 (C) field 3, patient's date of birth and gender;
9-14 (D) field 4, subscriber's name;
9-15 (E) field 5, patient's address including street
9-16 or post office box, city, and zip code;
9-17 (F) field 6, patient's relationship to
9-18 subscriber;
9-19 (G) field 7, subscriber's address including
9-20 street or post office box, city, and zip code;
9-21 (H) field 10, whether patient's condition is
9-22 related to employment, auto accident, or other accident;
9-23 (I) field 11, subscriber's policy number;
9-24 (J) field 11a, subscriber's birth date and
9-25 gender;
9-26 (K) field 11c, health maintenance or preferred
9-27 provider carrier name; and
10-1 (L) field 11d, disclosure of any other health
10-2 benefit plans.
10-3 (i) If the information required in this
10-4 Subsection is yes, and known to the provider, then the following
10-5 data fields should be completed:
10-6 (I) field 9;
10-7 (II) field 9a;
10-8 (III) field 9b;
10-9 (IV) field 9c; and
10-10 (V) field 9d.
10-11 (ii) The data fields specified in
10-12 Subdivision (i) of this subsection are required when submitting
10-13 claims to secondary payor health maintenance organizations or
10-14 preferred provider carriers.
10-15 (iii) If the information required in this
10-16 subsection is no, the data fields specified in Subdivision (i) of
10-17 this subsection are not required and the veracity of the statement
10-18 by the enrollee or the insured is not the responsibility of the
10-19 physician or the provider. Any further investigation to verify
10-20 other insurance is the responsibility of the health maintenance
10-21 organization and the enrollee or insured and does not extend the
10-22 statutory claims payment period.
10-23 (F) field 12, patient's or authorized person's
10-24 signature or notation that the signature is on file with the
10-25 physician or provider;
10-26 (G) field 13, subscriber's or authorized
10-27 person's signature or notation that the signature is on file with
11-1 the physician or provider;
11-2 (H) field 14, date of current illness, injury,
11-3 or pregnancy;
11-4 (I) field 15, first date of previous same or
11-5 similar illness; if unknown, enter same date as field 14;
11-6 (J) field 21, diagnosis codes or nature of
11-7 illness or injury;
11-8 (K) field 24A, date (s) of service;
11-9 (L) field 24B, place of service codes;
11-10 (M) field 24C, type of service code;
11-11 (N) field 24D, procedure/modifier code;
11-12 (O) field 24E, diagnosis code by specific
11-13 service;
11-14 (P) field 24F, charge of each listed service;
11-15 (Q) field 24G, number of days or units;
11-16 (R) field 25, physician's or provider's federal
11-17 tax ID number;
11-18 (S) field 28, total charge;
11-19 (T) field 31, signature of physician or provider
11-20 or notation that the signature is on file with the HMO or preferred
11-21 provider carrier;
11-22 (U) field 32, name and address of facility where
11-23 services rendered (if other than home or office; and
11-24 (V) field 33, physician's or provider's billing
11-25 name and address.
11-26 (2) "CLEAN CLAIM FOR INSTITUTION PROVIDERS" means a UB
11-27 form 92 in effect on the effective date of this Act, or a
12-1 subsequent UB form as adopted by the Commissioner, submitted for
12-2 payment, with the required information in the following fields on
12-3 the form, when applicable:
12-4 (A) field (1), provider's name, address and
12-5 telephone number;
12-6 (B) field (3), patient control number;
12-7 (C) field (4), type of bill code;
12-8 (D) field (5), provider's federal tax ID number;
12-9 (E) field (6), statement period (beginning and
12-10 ending date of claim period);
12-11 (F) field (12), patient's name (UB-92);
12-12 (G) field (13), patient's address;
12-13 (H) field (14), patient's date of birth;
12-14 (I) field (15), patient's gender;
12-15 (J) field (16), patient's marital status;
12-16 (K) field (17), date of admission;
12-17 (L) field (18), admission hour;
12-18 (M) field (19), type of admission (e.g.
12-19 emergency, urgent, elective, newborn);
12-20 (N) field (20), source of admission code;
12-21 (O) field (22), patient-status-at-discharge
12-22 code;
12-23 (P) field (39-41), value code and amounts;
12-24 (Q) field (42), revenue code;
12-25 (R) field (43), revenue description;
12-26 (S) field (46), units of service;
12-27 (T) field (47), total charge;
13-1 (U) field (50), HMO or preferred provider
13-2 carrier name;
13-3 (V) field (58), subscriber's name;
13-4 (W) field (59), patient's relationship to
13-5 subscriber;
13-6 (X) field (60), patient's/subscriber's
13-7 certificate number, health claim number, ID number;
13-8 (Y) field (63), treatment authorization code;
13-9 (Z) field (67), principal diagnosis code;
13-10 (AA) field (76), admitting diagnosis code;
13-11 (BB) field (82), attending physician ID;
13-12 (CC) field (85), signature of provider
13-13 representative or notation that the signature is on file with the
13-14 HMO or preferred provider carrier; and
13-15 (AA) field (86), date bill submitted.
13-16 [In this Section, "clean claims" means a completed claim as
13-17 determined under department rules, submitted by a preferred
13-18 provider for medical care or health care services under a health
13-19 insurance policy.]
13-20 (b) A claim for medical care or health care services under a
13-21 health care plan will be presumed to have been received on the date
13-22 of mailing or electronic submission, as applicable, by the insurer
13-23 or the contracted clearinghouse of the insurer if the preferred
13-24 provider for medical care or health care services:
13-25 (1) mails the claim by United States mail, first
13-26 class; or
13-27 (2) submits the claim electronically and maintains a
14-1 log of such submissions.
14-2 [A preferred provider for medical care or health care
14-3 services under a health insurance policy may obtain acknowledgement
14-4 of receipt of a claim for medical care or health care services
14-5 under a health care plan by submitting the claim by United States
14-6 mail, return receipt requested. A insurer or the contracted
14-7 clearinghouse of the insurer that receives a claim electronically
14-8 shall acknowledge receipt of the claim by an electronic
14-9 transmission to the preferred provider and is not required to
14-10 acknowledge receipt of the claim by the insurer in writing.]
14-11 (j)(1) unless otherwise provided by this Subsection, an
14-12 insurer may, by contract with a physician or provider, require:
14-13 (A) fewer data fields than required in
14-14 Subsection (a) of this article; or
14-15 (B) additional data fields than required in
14-16 Subsection (a) of this article but not to exceed those fields
14-17 listed on the Health Care Financing Administration form 1500 or
14-18 UB-92 as developed by the National Uniform Billing Committee
14-19 required by this article.
14-20 (2) An insurer shall notify in writing a physician or
14-21 provider of the need for any attachments desired in good faith for
14-22 clarification of a clean claim. The physician or provider must
14-23 receive this notice not later than the 20th day after the date of
14-24 the insurer receives the claim. To be valid, the written notice
14-25 requesting the attachment shall describe with specificity the
14-26 clinical information requested, provide a detailed description of
14-27 the reasons why the insurer is requesting the information, and
15-1 pertain only to information that the insurer can demonstrate is not
15-2 only within the scope of the claim but also specific to the claim
15-3 in question. Upon receiving a valid request, the physician or
15-4 provider shall have 20 days to provide the attachment without
15-5 tolling the 45-day payment period as defined in this article. The
15-6 45-day payment period will be tolled by the number of business days
15-7 by which the attachment is delinquent. The provisions of
15-8 Subsection (b) of this Section shall apply to all submissions by a
15-9 physician or provider.
15-10 (3) An insurer may require any data element that is
15-11 required in an electronic transaction set needed to comply with
15-12 federal law.
15-13 (4) The commissioner may not by rule add or create any
15-14 additional field or data elements and any rule concerning
15-15 attachments cannot provide for any additional requirements on the
15-16 physician or provider than those established in this article.
15-17 (5) A claim that is submitted by a physician or
15-18 provider that includes additional fields, data elements,
15-19 attachments or other information not required under this article is
15-20 to be construed as a clean claim for the purposes of this article.
15-21 [An insurer may, by contract with a preferred provider, add
15-22 or change the data elements that must be submitted with the
15-23 preferred provider claim.]
15-24 (o) Not later than the 21st day after the date that the
15-25 preferred provider organization affirmatively adjudicates a
15-26 pharmacy benefit claim that is electronically submitted, the health
15-27 maintenance organization shall:
16-1 (1) pay the total amount of the claim; or
16-2 (2) notify the provider the circumstances for denying
16-3 payment of the claim.
16-4 SECTION 4. Article 3.70-3C, Insurance Code is amended by
16-5 adding Sections 3D, 3E, 3F and 3G to read as follows:
16-6 Sec. 3D. PRE-AUTHORIZATION OF MEDICAL AND HEALTH CARE
16-7 SERVICES. (a) An insurer that utilizes pre-authorization of
16-8 medical or health care services shall provide to each medical or
16-9 health care provider and each enrollee a complete listing of the
16-10 services requiring pre-certification and the procedures required to
16-11 precertify a medical or health care service or procedure.
16-12 (b) Upon receipt of a request for medical or health care
16-13 service or procedures that require pre-authorization, the insurer
16-14 shall review and issue a determination of coverage within the time
16-15 frames for utilization review required by Section 5, Article 21.58A
16-16 of this code.
16-17 (c) An insurer may deny pre certification of the service or
16-18 procedure if the insurer certifies in writing within the time
16-19 frames under this article that the enrollee was not a covered
16-20 enrollee of the health benefit plan and the insurer was notified
16-21 within 30 days of the disenrollment.
16-22 (d) This Section shall be construed to apply to
16-23 subcontractors, agents or delegatees of an insurer who performs pre
16-24 authorization of medical or health care services for the insurer
16-25 and such insurer remains responsible for the acts of its
16-26 subcontractors, agents and delegatees.
16-27 Sec. 13E. RETROSPECTIVE REVIEW OF CLAIMS. (a) When a
17-1 retrospective review of the medical necessity and appropriateness
17-2 of health care services is made by an insurer, such retrospective
17-3 review shall comply with the standards for utilization review
17-4 required by Subsections 4(b), (c), (d), (f), (h), (i), (l), and (m)
17-5 of article 21.58A, Insurance Code.
17-6 (b) When an adverse determination is made by an insurer
17-7 based on a retrospective review of the medical necessity and
17-8 appropriateness of health services, the insurer or utilization
17-9 review agent shall notify the enrollee and the enrollee's provider
17-10 of record of the determination not later than two working days
17-11 after the determination is made. An adverse determination based on
17-12 retrospective review of the medical necessity and appropriateness
17-13 of health care services must be made within 45 days of the date the
17-14 payor or utilization review agent has received a clean claim.
17-15 (c) A notice of adverse determination required by Subsection
17-16 (b) must include:
17-17 (1) the principal reason for the adverse
17-18 determination;
17-19 (2) the clinical basis for the adverse determination;
17-20 (3) a description or the source of the screening
17-21 criteria that were utilized as guidelines in making the
17-22 determination; and
17-23 (4) a description of the procedure for the complaint
17-24 and appeal process, including an appeal of an adverse determination
17-25 to an independent review organization.
17-26 (d) The procedures for appeals must be reasonable and must
17-27 comply with the provisions of Subsections (b), (1), (2), (3), (5),
18-1 (6) of Sections 6 and Section 6A of Article 21.58A, Insurance Code.
18-2 Sec. 13F. DENIAL OF PRE-CERTIFICATION OR PAYMENT OF CLAIM
18-3 BASED ON MEDICAL NECESSITY OR APPROPRIATENESS OF CARE. An insurer
18-4 may deny a medical or health care service request for
18-5 pre-certification or for payment of a medical or health care claim
18-6 if:
18-7 (1) the insurer proves by clear and convincing
18-8 evidence that the medical or health care service or procedure was
18-9 not medically necessary or appropriate;
18-10 (2) a physician licensed to practice medicine in Texas
18-11 and who practices in the same or similar specialty provides a
18-12 signed, written statement setting out the clinical reasons for such
18-13 a determination; and
18-14 (3) the insurer provides to the physician or health
18-15 care provider and to the enrollee the determinations and
18-16 documentation required by this section under the time frames for
18-17 utilization review required by Section 5, Article 21.58A of this
18-18 code or by Section 3A of Article 3.70-3C of this Code, as
18-19 appropriate.
18-20 Sec. 3G. PAYMENT FOR COVERED SERVICES OUT OF NETWORK. This
18-21 article shall govern payment for physicians and providers who:
18-22 (1) provide care for a covered service out of network,
18-23 including a health care service provided in an emergent situation
18-24 with its attendant episode of care; or
18-25 (2) are requested by the insurer or by an in-network
18-26 physician or provider to provide a covered service when a specialty
18-27 or service is not available or included in the network.
19-1 SECTION 5. The Texas Health Maintenance Organization Act,
19-2 Chapter 20A, is amended by adding Sections 18E, 18F, 18G and 18H to
19-3 read as follows:
19-4 Sec. 18E. PRE-AUTHORIZATION OF MEDICAL AND HEALTH CARE
19-5 SERVICES. (a) A health maintenance organization that utilizes
19-6 pre-authorization of medical or health care services shall provide
19-7 to each medical or health care provider and each enrollee a
19-8 complete listing of the services requiring pre-certification and
19-9 the procedures required to precertify a medical or health care
19-10 service or procedure.
19-11 (b) Upon receipt of a request for medical or health care
19-12 service or procedures that require pre-authorization, the health
19-13 maintenance organization shall review and issue a determination of
19-14 coverage within the time frames for utilization review required by
19-15 Section 5, Article 21.58A of this code.
19-16 (c) A health maintenance organization may deny
19-17 pre-certification of the service or procedure if the health
19-18 maintenance organization certifies in writing within the time
19-19 frames under this article that the enrollee was not a covered
19-20 enrollee of the health benefit plan and was notified within 30 days
19-21 of the disenrollment.
19-22 (d) This section shall be construed to apply to
19-23 subcontractors, agents or delegatees of a health maintenance
19-24 organization who performs pre-authorization of medical or health
19-25 care services for the health maintenance organization and such
19-26 health maintenance organization remains responsible for the acts of
19-27 its agents, subcontractors and delegatees.
20-1 Sec. 18F. RETROSPECTIVE REVIEW OF CLAIMS. (a) When a
20-2 retrospective review of the medical necessity and appropriateness
20-3 of health care service is made by an health maintenance
20-4 organization, such retrospective review shall comply with the
20-5 standards for utilization review required by Subsections 4(b), (c),
20-6 (d), (f), (h), (i), (l), and (m) of article 21.58A, Insurance Code.
20-7 (b) When an adverse determination is made by an health
20-8 maintenance organization based on a retrospective review of the
20-9 medical necessity and appropriateness of health services, the
20-10 health maintenance organization or utilization review agent shall
20-11 notify the enrollee and the enrollee's provider of record of the
20-12 determination not later than two working days after the
20-13 determination is made. An adverse determination based on
20-14 retrospective review of the medical necessity and appropriateness
20-15 of health care services must be made within 45 days of the date the
20-16 payor or utilization review agent has received a clean claim.
20-17 (c) A notice of adverse determination required by Subsection
20-18 (b) must include:
20-19 (5) the principal reason for the adverse
20-20 determination;
20-21 (6) the clinical basis for the adverse determination;
20-22 (7) a description or the source of the screening
20-23 criteria that were utilized as guidelines in making the
20-24 determination; and
20-25 (8) a description of the procedure for the complaint
20-26 and appeal process, including an appeal of an adverse determination
20-27 to an independent review organization.
21-1 (d) The procedures for appeals must be reasonable and must
21-2 comply with the provisions of Subsections (b), (1), (2), (3), (5),
21-3 (6) of Sections 6 and Section 6A of Article 21.58A, Insurance Code.
21-4 Sec. 18G. DENIAL OF PRE-CERTIFICATION OR PAYMENT OF CLAIM
21-5 BASED ON MEDICAL NECESSITY OR APPROPRIATENESS OF CARE. A health
21-6 maintenance organization may deny a medical or health care service
21-7 request for pre-certification or for payment of a medical or health
21-8 care claim if:
21-9 (9) the health maintenance organization proves by
21-10 clear and convincing evidence that the medical or health care
21-11 service or procedure was not medically necessary or appropriate;
21-12 (10) a physician licensed to practice medicine in
21-13 Texas and who practices in the same or similar specialty provides a
21-14 signed, written statement setting out the clinical reasons for such
21-15 a determination; and
21-16 (11) the health maintenance organization provides to
21-17 the physician or health care provider and to the enrollee the
21-18 determinations and documentation required by this section under the
21-19 time frames for utilization review required by Section 5, Article
21-20 21.58A of this code or by Section 18B of Chapter 20A of this Code,
21-21 as appropriate.
21-22 Sec. 18H. PAYMENT FOR COVERED SERVICES OUT OF NETWORK. This
21-23 article shall govern payment for physicians and providers who:
21-24 (1) provide care for a covered service out of network,
21-25 including a health care service provided in an emergent situation
21-26 with its attendant episode of care; or
21-27 (2) are requested by the health maintenance
22-1 organization or an in-network physician or provider to provide a
22-2 covered service when a specialty or service is not available or
22-3 included in the network.
22-4 SECTION 6. Section 3, Article 3.70-3C, Insurance Code, is
22-5 amended by adding Subsections (p) and (q) to read as follows:
22-6 (p) A preferred provider contract between an insurer and a
22-7 physician licensed by the Texas State Board of Medical Examiners or
22-8 a health care provider licensed to provide services in this state
22-9 must provide that:
22-10 (1) the physician or health care provider may request,
22-11 and the insurer shall provide not later than the 30th day after the
22-12 date of request, a copy of the coding guidelines, including any
22-13 underlying bundling, recoding or other payments logic, and payment
22-14 schedules applicable to the compensation that the physician or
22-15 health care provider will receive under the contract for services;
22-16 and
22-17 (2) the insurer may not unilaterally make material
22-18 revisions, including retroactive revisions, to the coding
22-19 guidelines and payment schedules.
22-20 (q) An insurer must maintain and provide access for
22-21 verification of coverage and benefits on a 24 hour, seven day a
22-22 week basis and must verify coverage and benefits for an insured to
22-23 a preferred provider who requests such information prior to
22-24 rendering covered services. The verification must be timely, in
22-25 good faith and without undue delay. An insurer cannot require a
22-26 provider to verify coverage and benefits. After the coverage and
22-27 benefits have been verified, the insurer may not deny payment for
23-1 services rendered unless either written notice of an error in
23-2 verification is received by the preferred provider before the
23-3 treatment or service is performed or is subject to the provisions
23-4 of Section 3D(c) of this article.
23-5 SECTION 7. Section 3A, Article 3.70-3C, Insurance Code, is
23-6 amended by adding Subsections (p) and (q) to read as follows:
23-7 (p) An insurer may not require the use of a dispute
23-8 resolution procedure with a preferred provider.
23-9 (q) The provisions of this Section may not be nullified or
23-10 waived by contract.
23-11 SECTION 8. Section 18A, Article 20A, Insurance Code, is
23-12 amended by adding Subsection (l) and (m) to read as follows:
23-13 (l) A contract between a health maintenance organization and
23-14 a physician licensed by the Texas State Board of Medical Examiners
23-15 or a health care provider licensed to provide services in this
23-16 state must provide that:
23-17 (1) the physician or health care provider may request,
23-18 and the health maintenance organization shall provide not later
23-19 than the 30th day after the date of request, a copy of the coding
23-20 guidelines, including any underlying bundling, recoding or other
23-21 payment logic, and payment schedules applicable to the compensation
23-22 that the physician or health care provider will receive under the
23-23 contract for services; and
23-24 (2) the health maintenance organization may not
23-25 unilaterally make material revisions, including retroactive
23-26 revisions, to the coding guidelines and payment schedules;
23-27 (m) A health maintenance organization must maintain and
24-1 provide access for verification of coverage and benefits on a 24
24-2 hour, seven day a week basis and verify coverage and benefits for
24-3 an insured to a physician or health care provider who requests such
24-4 information prior to rendering covered services. The verification
24-5 must be timely, in good faith and without undue delay. A health
24-6 maintenance organization cannot require a provider to verify
24-7 coverage and benefits. After the coverage and benefits have been
24-8 verified, the health maintenance organization may not deny payment
24-9 for services rendered unless either written notice of an error in
24-10 verification is received by the physician or health care provider
24-11 before the treatment or service is performed or is subject to the
24-12 provisions of Section 18E of this Chapter.
24-13 SECTION 9. Section 18B, Article 20A, Insurance Code, is
24-14 amended by adding Subsections (p) and (q) to read as follows:
24-15 (p) A health maintenance organization may not require the
24-16 use of a dispute resolution procedure with a physician or provider.
24-17 (q) The provisions of this Article may not be nullified or
24-18 waived by contract.
24-19 SECTION 10. Article 21.21, Insurance Code, is amended by
24-20 adding Section 4A to read as follows:
24-21 Sec. 4A. CLAIMS BY HEALTH CARE PROVIDERS. (a) In this
24-22 section:
24-23 (1) "Claim" means a demand for payment:
24-24 (A) under a contract under which the health care
24-25 provider provides health care services to insureds or enrollees in
24-26 a health benefit plan;
24-27 (C) under an assignment of benefits or other
25-1 similar agreement; or
25-2 (D) when health care services are provided to an
25-3 insured or enrollee by the health care provider for a covered
25-4 service, including a service provided in an emergent situation.
25-5 (2) "Health care provider" means a person who
25-6 furnishes health care services under a license, certificate,
25-7 registration, or other similar evidence of regulation issued by
25-8 this state or another state of the United States. The term
25-9 includes a physician.
25-10 (3) "Person" includes a health maintenance
25-11 organization.
25-12 (b) A person engages in an unfair method of competition or
25-13 unfair or deceptive act or practice in the business of insurance if
25-14 the person:
25-15 (1) misrepresents to a health care provider a material
25-16 fact or policy or contract provision relating to the claim;
25-17 (2) fails to make a payment or otherwise act in good
25-18 faith with respect to services for which coverage is reasonably
25-19 clear under the health benefit plan;
25-20 (3) fails to provide promptly to a health care
25-21 provider a reasonable explanation of the basis in the policy or
25-22 contract, in relation to the facts or applicable law for denial of
25-23 a claim under a health benefit plan;
25-24 (4) fails within a reasonable time to affirm or deny
25-25 coverage for a claim under the health benefit plan;
25-26 (5) refuses, fails to make, or unreasonably delays
25-27 payment of a claim on the basis that other coverage may be
26-1 available or that third parties are responsible for the payment; or
26-2 refuses to make payment under the health benefit plan without a
26-3 reasonable basis to do so.
26-4 (c) The commissioner may adopt rules as necessary to
26-5 implement this section.
26-6 (d) For purposes of enforcement, a person who engages in an
26-7 unfair method of competition or an unfair or deceptive act or
26-8 practice under Subsection (b) of this section is considered to be
26-9 engaging in an unfair method of competition or an unfair or
26-10 deceptive act or practice defined in Section 4 of this article.
26-11 (e) Notwithstanding any other provision of law, this section
26-12 is cumulative of any other right, remedy or relief available by law
26-13 or rule.
26-14 (f) The provisions of this Section may not be nullified or
26-15 waived by contract.
26-16 SECTION 11. Subsection 10, Section 4, Article 21.21,
26-17 Insurance Code is amended to read as follows:
26-18 (10) Unfair Settlement Practices. (a) engaging in
26-19 any of the following unfair settlement practices with respect to a
26-20 claim by an insured, [or] beneficiary, or health care provider.
26-21 (i) misrepresenting to a claimant a
26-22 material fact or policy provision relating to coverage at issue;
26-23 (ii) failing to attempt in good faith to
26-24 effectuate a prompt, fair, and equitable settlement of a claim with
26-25 respect to which the insurer's liability has become reasonably
26-26 clear;
26-27 (iii) failing to attempt, in good faith,
27-1 to effectuate a prompt, fair, and equitable settlement under one
27-2 portion of a policy of a claim with respect to which the insurer's
27-3 liability has become reasonably clear in order to influence the
27-4 claimant to settle an additional claim under another portion of the
27-5 coverage, provided that this prohibition does not apply if payment
27-6 under one portion of the coverage, constitutes evidence of
27-7 liability under another portion of the policy;
27-8 (iv) failing to provide promptly to a
27-9 policyholder a reasonable explanation of the basis in the policy,
27-10 in relation to the facts or applicable law, for the insurer's
27-11 denial of a claim or for the offer of a compromise settlement of a
27-12 claim;
27-13 (v) failing within a reasonable time to:
27-14 (A) affirm or deny coverage of a claim to a
27-15 policyholder; or
27-16 (B) submit a reservation of rights to a
27-17 policyholder;
27-18 (vi) refusing, failing or unreasonably
27-19 delaying an offer of settlement under applicable first-party
27-20 coverage on the basis that other coverage may be available or that
27-21 third parties are responsible for the damages suffered, except as
27-22 may be specifically provided in the policy;
27-23 (vii) undertaking to enforce a full and
27-24 final release of a claim from a policyholder when only a partial
27-25 payment has been made, provided that this prohibition does not
27-26 apply to a compromise settlement of a doubtful or disputed claim;
27-27 (viii) refusing to pay a claim without
28-1 conducting a reasonable investigation with respect to the claim;
28-2 (ix) with respect to a Texas personal auto
28-3 policy, delaying or refusing settlement of a claim solely because
28-4 there is other insurance of a different type available to satisfy
28-5 all or any part of the loss forming the basis of that claim; or
28-6 (x) requiring a claimant, as a condition
28-7 of settling a claim, to produce the claimant's federal income tax
28-8 returns for examination or investigation by the person unless:
28-9 (A) the claimant is ordered to produce those tax
28-10 returns by a court;
28-11 (B) the claim involves a fire loss; or
28-12 (C) the claim involves lost profits or income.
28-13 (b) Paragraph (a) of this clause does not provide a cause of
28-14 action to a third party asserting one or more claims against an
28-15 insured covered under a liability insurance policy.
28-16 (11) Misrepresentation of Insurance Policy.
28-17 Misrepresenting an insurance policy by:
28-18 (a) making an untrue statement of material fact;
28-19 (b) failing to state a material fact that is necessary to
28-20 make other statements made not misleading considering the
28-21 circumstances under which the statements were made;
28-22 (c) making a statement in such manner as to mislead a
28-23 reasonably prudent person to a false conclusion of a material fact;
28-24 (d) making a material misstatement of law; or
28-25 (e) failing to disclose any matter required by law to be
28-26 disclosed, including a failure to make disclosure in accordance
28-27 with another provision of this code.
29-1 SECTION 12. The Texas Health Maintenance Organization Act,
29-2 Chapter 20A, Insurance Code, Section 18B, subsection (e) is
29-3 removed:
29-4 [(e) If the health maintenance organization acknowledges
29-5 coverage of an enrollee under the health care plan but intends to
29-6 audit the physician or provider claim, the health maintenance
29-7 organization shall pay the charges submitted at 85 percent of the
29-8 contracted rate on the claim not later than the 45th day after the
29-9 date that the health maintenance organization receives the claim
29-10 from the physician or provider. Following completion of the audit,
29-11 any additional payment due a physician or provider or any refund
29-12 due the health maintenance organization shall be made not later
29-13 than the 30th day after the later of the date that:]
29-14 [(1) the physician or provider receives notice of the
29-15 audit results; or]
29-16 [(2) any appeal rights of the enrollee are exhausted.]
29-17 SECTION 13. The Texas Health Maintenance Organization Act,
29-18 Chapter 20A, Insurance Code, Section 18B, subsection (f) is amended
29-19 as follows:
29-20 (f) A health maintenance organization that violates
29-21 Subsection (c) [or (e)] of this section is liable to a physician or
29-22 provider for the full amount of billed charges submitted on the
29-23 claim, plus 18% interest per annum. [or the amount payable under
29-24 the contracted penalty rate, less any amount previously paid or any
29-25 charge for a service that is not covered by the health care plan]
29-26 SECTION 14. The Texas Health Maintenance Organization Act,
29-27 Chapter 20A, Insurance Code, Section 18B, subsection (g) is amended
30-1 as follows:
30-2 (g) A physician or provider may recover reasonable
30-3 attorney's fees plus court costs in an action to recover payment
30-4 under this section.
30-5 SECTION 15. The Texas Health Maintenance Organization Act,
30-6 Chapter 20A, Insurance Code, Section 18B, subsection (k) is
30-7 removed:
30-8 [(k) Not later than the 60th day before the date of an
30-9 addition or change in the data elements that must be submitted with
30-10 a claim or any other change in a health maintenance organization's
30-11 claim processing and payment procedures, the health maintenance
30-12 organization shall provide written notice of the addition or change
30-13 to each participating physician or provider.]
30-14 SECTION 16. Article, 3.70-3C, Section 3A, Subsection (e),
30-15 Insurance Code is removed:
30-16 [(e) If the insurer acknowledges coverage of an insured
30-17 under the health insurance policy but intends to audit the
30-18 preferred provider claim, the insurer shall pay the charges
30-19 submitted at 85 percent of the contracted rate on the claim not
30-20 later than the 45th day after the date that the insurer receives
30-21 the claim from the preferred provider. Following completion of the
30-22 audit, any additional payment due a preferred provider or any
30-23 refund due the insurer shall be made not later than the 30th day
30-24 after the later of the date that:]
30-25 [(1) the preferred provider receives notice of the
30-26 audit results; or]
30-27 [(2) any appeal rights of the insured are exhausted].
31-1 SECTION 17. Article, 3.70-3C, Section 3A, Subsection (f),
31-2 Insurance Code is amended as follows:
31-3 (f) An insurer that violates Subsection (c) [or (e)] of this
31-4 section is liable to a preferred provider for the full amount of
31-5 billed charges submitted on the claim, plus 18% interest per annum.
31-6 [or the amount payable under the contracted penalty rate, less any
31-7 amount previously paid or any charge for a service that is not
31-8 covered by the health insurance policy]
31-9 SECTION 18. Article, 3.70-3C, Section 3A, Subsection (g),
31-10 Insurance Code is amended as follows:
31-11 (g) A preferred provider may recover reasonable attorney's
31-12 fees plus court costs in an action to recover payment under this
31-13 section.
31-14 SECTION 19. Article, 3.70-3C, Section 3A, Subsection (k),
31-15 Insurance Code is removed:
31-16 [(k) Not later than the 60th day before the date of an
31-17 addition or change in the data elements that must be submitted with
31-18 a claim or any other change in an insurer's claim processing and
31-19 payment procedures, the insurer shall provide written notice of the
31-20 addition or change to each preferred provider].
31-21 SECTION 20. This Act takes effect September 1, 2001, for any
31-22 procedure or service provided or requested to be provided on or
31-23 after September 1, 2001.