1-1 By: Eiland, et al. (Senate Sponsor - Van de Putte) H.B. No. 1862
1-2 (In the Senate - Received from the House April 26, 2001;
1-3 April 27, 2001, read first time and referred to Committee on
1-4 Business and Commerce; May 11, 2001, reported adversely, with
1-5 favorable Committee Substitute by the following vote: Yeas 7, Nays
1-6 0; May 11, 2001, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 1862 By: Van de Putte
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the regulation and prompt payment of health care
1-11 providers under certain health benefit plans; providing penalties.
1-12 BE IT ENACTED BY THE LEGISLATURE OF STATE OF TEXAS:
1-13 SECTION 1. Section 1, Article 3.70-3C, Insurance Code, as
1-14 added by Chapter 1024, Acts of the 75th Legislature, Regular
1-15 Session, 1997, is amended by adding Subdivisions (14) and (15) to
1-16 read as follows:
1-17 (14) "Preauthorization" means a determination by the
1-18 insurer that the medical care or health care services proposed to
1-19 be provided to a patient are medically necessary and appropriate.
1-20 The term includes precertification, certification, recertification,
1-21 or any other term that would be a reliable representation by an
1-22 insurer to a preferred provider.
1-23 (15) "Verification" means a reliable representation by
1-24 an insurer to a preferred provider that the insurer will pay the
1-25 provider for proposed medical care or health care services if the
1-26 preferred provider renders those services to the patient for whom
1-27 the services are proposed.
1-28 SECTION 2. Section 3A, Article 3.70-3C, Insurance Code, as
1-29 added by Chapter 1024, Acts of the 75th Legislature, Regular
1-30 Session, 1997, is amended to read as follows:
1-31 Sec. 3A. PROMPT PAYMENT OF PREFERRED PROVIDERS. (a) In this
1-32 section, "clean claim" means a [completed] claim that complies with
1-33 Section 3B of this article[, as determined under department rules,]
1-34 submitted by a preferred provider for medical care or health care
1-35 services under a health insurance policy.
1-36 (b) A preferred provider must submit a claim to an insurer
1-37 not later than the 95th day after the date the provider provides
1-38 the medical care or health care services for which the claim is
1-39 made. An insurer shall accept as proof of timely filing a claim
1-40 filed in compliance with Subsection (c) of this section or
1-41 information from another insurer showing that the preferred
1-42 provider submitted the claim to the insurer in compliance with
1-43 Subsection (c) of this section. If a preferred provider fails to
1-44 submit a claim in compliance with this subsection, the preferred
1-45 provider forfeits the right to payment. The period for submitting a
1-46 claim under this subsection may be extended by contract. A
1-47 preferred provider may not submit a duplicate claim for payment
1-48 before the 46th day after the date the original claim was
1-49 submitted. The commissioner shall adopt rules under which an
1-50 insurer may determine whether a claim is a duplicate claim [for
1-51 medical care or health care services under a health insurance
1-52 policy may obtain acknowledgment of receipt of a claim for medical
1-53 care or health care services under a health care plan by submitting
1-54 the claim by United States mail, return receipt requested. An
1-55 insurer or the contracted clearinghouse of an insurer that receives
1-56 a claim electronically shall acknowledge receipt of the claim by an
1-57 electronic transmission to the preferred provider and is not
1-58 required to acknowledge receipt of the claim by the insurer in
1-59 writing].
1-60 (c) A preferred provider shall, as appropriate:
1-61 (1) mail a claim to the insurer identified in the
1-62 verification by United States mail, first class, or by overnight
1-63 delivery service, and maintain a log of mailed claims that includes
1-64 the provider's I.D. and the address of the insurer and include a
2-1 copy of the log with the relevant mailed claim;
2-2 (2) submit the claim electronically and maintain a log
2-3 of electronically submitted claims;
2-4 (3) fax the claim and maintain a log of all faxed
2-5 claims; or
2-6 (4) hand deliver the claim and maintain a log of all
2-7 hand-delivered claims.
2-8 (d) If a claim for medical care or health care services
2-9 provided to a patient is mailed, the claim is presumed to have been
2-10 received by the insurer on the third day after the date the claim
2-11 is mailed or, if the claim is mailed using overnight service or
2-12 return receipt requested, on the date the delivery receipt is
2-13 signed. If the claim is submitted electronically, the claim is
2-14 presumed to have been received on the date of the electronic
2-15 verification of receipt by the insurer or the insurer's
2-16 clearinghouse. If the insurer or the insurer's clearinghouse does
2-17 not provide a confirmation within 24 hours of submission by the
2-18 preferred provider, the preferred provider's clearinghouse shall
2-19 provide the confirmation. The preferred provider's clearinghouse
2-20 must be able to verify that the filing contained the correct
2-21 information needed for the electronic submission to be processed by
2-22 the insurer or the insurer's clearinghouse, including the correct
2-23 address of the entity to receive the filing. If the claim is
2-24 faxed, the claim is presumed to have been received on the date of
2-25 the transmission acknowledgment. If the claim is hand delivered,
2-26 the claim is presumed to have been received on the date the
2-27 delivery receipt is signed. The commissioner shall promulgate a
2-28 form to be submitted by the preferred provider that easily
2-29 identifies all claims included in each filing and that can be used
2-30 by a preferred provider as the preferred provider's log.
2-31 (e) Not later than the 45th day after the date that the
2-32 insurer receives a clean claim from a preferred provider, the
2-33 insurer shall make a determination of whether the claim is eligible
2-34 for payment and:
2-35 (1) if the insurer determines the entire claim is
2-36 eligible for payment, pay the total amount of the claim in
2-37 accordance with the contract between the preferred provider and the
2-38 insurer;
2-39 (2) if the insurer determines a portion of the claim
2-40 is eligible for payment, pay the portion of the claim that is not
2-41 in dispute and notify the preferred provider in writing why the
2-42 remaining portion of the claim will not be paid; or
2-43 (3) if the insurer determines that the claim is not
2-44 eligible for payment, notify the preferred provider in writing why
2-45 the claim will not be paid.
2-46 (f) Not later than the 21st day after the date an insurer
2-47 affirmatively adjudicates a pharmacy claim that is electronically
2-48 submitted, the insurer shall:
2-49 (1) pay the total amount of the claim; or
2-50 (2) notify the pharmacy provider of the reasons for
2-51 denying payment of the claim.
2-52 (g) An insurer that determines that a claim is eligible for
2-53 payment and does not pay the claim on or before the 45th day after
2-54 the date the insurer receives a clean claim under Subsection (e) of
2-55 this section or the 15th day after the date the insurer receives a
2-56 requested attachment in accordance with Subsection (j) of this
2-57 section commits an unfair claim settlement practice in violation of
2-58 Article 21.21-2 of this code and is subject to an administrative
2-59 penalty under Chapter 84 of this code. The insurer shall pay the
2-60 preferred provider making the claim the lesser of the full amount
2-61 of billed charges submitted on the claim and interest on the billed
2-62 charges at a rate of 15 percent annually or two times the
2-63 contracted rate and interest on that amount at a rate of 15 percent
2-64 annually. If the provider submits the claim using a form described
2-65 by Section 3B(a) of this article, billed charges shall be
2-66 established under a fee schedule provided by the preferred provider
2-67 to the insurer on or before the 30th day after the date the
2-68 preferred provider enters into a preferred provider contract with
2-69 the insurer. The preferred provider may modify the fee schedule if
3-1 the provider notifies the insurer of the modification on or before
3-2 the 90th day before the date the modification takes effect.
3-3 (h) The investigation and determination of eligibility for
3-4 payment, including any coordination of other payments, does not
3-5 extend the period for determining whether a claim is eligible for
3-6 payment under Subsection (e) of this section [(d) If a prescription
3-7 benefit claim is electronically adjudicated and electronically
3-8 paid, and the preferred provider or its designated agent authorizes
3-9 treatment, the claim must be paid not later than the 21st day after
3-10 the treatment is authorized].
3-11 (i) Except as provided by Subsection (j) of this section, if
3-12 [(e) If] the insurer [acknowledges coverage of an insured under
3-13 the health insurance policy but] intends to audit the preferred
3-14 provider claim, the insurer shall pay the charges submitted at 85
3-15 percent of the contracted rate on the claim not later than the 45th
3-16 day after the date that the insurer receives the claim from the
3-17 preferred provider. The insurer must complete [Following
3-18 completion of] the audit, and any additional payment due a
3-19 preferred provider or any refund due the insurer shall be made not
3-20 later than the 90th [30th] day after the receipt of a claim or 45
3-21 days after receipt of a requested attachment from the preferred
3-22 provider, whichever is later [of the date that:]
3-23 [(1) the preferred provider receives notice of the
3-24 audit results; or]
3-25 [(2) any appeal rights of the insured are exhausted].
3-26 (j) If an insurer needs additional information from a
3-27 treating preferred provider to determine eligibility for payment,
3-28 the insurer, not later than the 30th calendar day after the date
3-29 the insurer receives a clean claim, shall request in writing that
3-30 the preferred provider provide any attachment to the claim the
3-31 insurer desires in good faith for clarification of the claim. The
3-32 request must describe with specificity the clinical information
3-33 requested and relate only to information the insurer can
3-34 demonstrate is specific to the claim or the claim's related episode
3-35 of care. An insurer that requests an attachment under this
3-36 subsection shall determine whether the claim is eligible for
3-37 payment on or before the later of the 15th day after the date the
3-38 insurer receives the requested attachment or the latest date for
3-39 determining whether the claim is eligible for payment under
3-40 Subsection (e) of this section. An insurer may not make more than
3-41 one request under this subsection in connection with a claim.
3-42 Subsections (c) and (d) of this section apply to a request for and
3-43 submission of an attachment under this subsection.
3-44 (k) If an insurer requests an attachment or other
3-45 information from a person other than the preferred provider who
3-46 submitted the claim, the insurer shall provide a copy of the
3-47 request to the preferred provider who submitted the claim. The
3-48 insurer may not withhold payment pending receipt of an attachment
3-49 or information requested under this subsection. If on receiving an
3-50 attachment or information requested under this subsection the
3-51 insurer determines an error in payment of the claim, the insurer
3-52 may recover under Section 3C of this article.
3-53 (l) The commissioner shall adopt rules under which an
3-54 insurer can easily identify attachments or information submitted by
3-55 a physician or provider under Subsection (j) or (k) of this
3-56 section.
3-57 (m) [(f) An insurer that violates Subsection (c) or (e) of
3-58 this section is liable to a preferred provider for the full amount
3-59 of billed charges submitted on the claim or the amount payable
3-60 under the contracted penalty rate, less any amount previously paid
3-61 or any charge for a service that is not covered by the health
3-62 insurance policy.]
3-63 [(g)] A preferred provider may recover reasonable attorney's
3-64 fees and court costs in an action to recover payment under this
3-65 section.
3-66 (n) [(h)] In addition to any other penalty or remedy
3-67 authorized by this code or another insurance law of this state, an
3-68 insurer that violates Subsection (e) [(c)] or (i) [(e)] of this
3-69 section is subject to an administrative penalty under Article 1.10E
4-1 of this code. The administrative penalty imposed under that
4-2 article may not exceed $1,000 for each day the claim remains unpaid
4-3 in violation of Subsection (e) [(c)] or (i) [(e)] of this section.
4-4 (o) [(i)] The insurer shall provide a preferred provider
4-5 with copies of all applicable utilization review policies and claim
4-6 processing policies or procedures[, including required data
4-7 elements and claim formats].
4-8 (p) [(j) An insurer may, by contract with a preferred
4-9 provider, add or change the data elements that must be submitted
4-10 with the preferred provider claim.]
4-11 [(k) Not later than the 60th day before the date of an
4-12 addition or change in the data elements that must be submitted with
4-13 a claim or any other change in an insurer's claim processing and
4-14 payment procedures, the insurer shall provide written notice of the
4-15 addition or change to each preferred provider.]
4-16 [(l) This section does not apply to a claim made by a
4-17 preferred provider who is a member of the legislature.]
4-18 [(m)] This section applies to a person with whom an insurer
4-19 contracts to process claims or to obtain the services of preferred
4-20 providers to provide medical care or health care to insureds under
4-21 a health insurance policy.
4-22 (q) [(n)] The commissioner of insurance may adopt rules as
4-23 necessary to implement this section.
4-24 (r) Except as provided by Subsection (b) of this section,
4-25 the provisions of this section may not be waived, voided, or
4-26 nullified by contract.
4-27 SECTION 3. Article 3.70-3C, Insurance Code, as added by
4-28 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
4-29 is amended by adding Sections 3B-3I, 10, 11, and 12 to read as
4-30 follows:
4-31 Sec. 3B. ELEMENTS OF CLEAN CLAIM. (a) A claim by a
4-32 physician or provider, other than an institutional provider, is a
4-33 "clean claim" if the claim is submitted using Health Care Financing
4-34 Administration Form 1500 or a successor to that form developed by
4-35 the National Uniform Billing Committee or its successor and adopted
4-36 by the commissioner by rule for the purposes of this subsection
4-37 that is submitted to an insurer for payment and that contains the
4-38 information required by the commissioner by rule for the purposes
4-39 of this subsection entered into the appropriate fields on the form.
4-40 (b) A claim by an institutional provider is a "clean claim"
4-41 if the claim is submitted using Health Care Financing
4-42 Administration Form UB-92 or a successor to that form developed by
4-43 the National Uniform Billing Committee or its successor and adopted
4-44 by the commissioner by rule for the purposes of this subsection
4-45 that is submitted to an insurer for payment and that contains the
4-46 information required by the commissioner by rule for the purposes
4-47 of this subsection entered into the appropriate fields on the form.
4-48 (c) An insurer may require any data element that is required
4-49 in an electronic transaction set needed to comply with federal law.
4-50 An insurer may not require a physician or provider to provide
4-51 information other than information for a data field included on the
4-52 form used for a clean claim under Subsection (a) or (b) of this
4-53 section, as applicable.
4-54 (d) A claim submitted by a physician or provider that
4-55 includes additional fields, data elements, attachments, or other
4-56 information not required under this section is considered to be a
4-57 clean claim for the purposes of this article.
4-58 (e) Except as provided by this section, the provisions of
4-59 this section may not be waived, voided, or nullified by contract.
4-60 Sec. 3C. OVERPAYMENT. An insurer may recover an overpayment
4-61 to a physician or provider if:
4-62 (1) not later than the 180th day after the date the
4-63 physician or provider receives the payment, the insurer provides
4-64 written notice of the overpayment to the physician or provider that
4-65 includes the basis and specific reasons for the request for
4-66 recovery of funds; and
4-67 (2) the physician or provider does not make
4-68 arrangements for repayment of the requested funds on or before the
4-69 45th day after the date the physician or provider receives the
5-1 notice.
5-2 Sec. 3D. VERIFICATION OF ELIGIBILITY FOR PAYMENT. (a) On
5-3 the request of a preferred provider for verification of the
5-4 eligibility for payment of a particular medical care or health care
5-5 service the preferred provider proposes to provide to a particular
5-6 patient, the insurer shall inform the preferred provider whether
5-7 the service, if provided to that patient, is eligible for payment
5-8 from the insurer to the preferred provider.
5-9 (b) An insurer shall provide verification under this section
5-10 between 6 a.m. and 6 p.m. central standard time on each day that is
5-11 not a legal holiday.
5-12 (c) Verification under this section shall be made in good
5-13 faith and without delay.
5-14 (d) An insurer that declines to provide a verification of
5-15 eligibility for payment shall notify the physician or provider who
5-16 requested the verification of the specific reason the verification
5-17 was not provided.
5-18 (e) An insurer may establish a time certain for the validity
5-19 of verification.
5-20 (f) If an insurer has verified medical care or health care
5-21 services, the insurer may not deny or reduce payment to a physician
5-22 or health care provider for those services unless:
5-23 (1) the physician or provider has materially
5-24 misrepresented the proposed medical or health care services or has
5-25 substantially failed to perform the proposed medical or health care
5-26 services;
5-27 (2) the insurer provides a disclaimer stating that
5-28 benefits are subject to policy limitations and exclusions and that
5-29 verification does not constitute a guarantee of payment; or
5-30 (3) the insurer certifies in writing:
5-31 (A) that the physician or provider is not
5-32 contractually obligated to provide the services to the patient
5-33 because the patient's enrollment in the health plan was terminated;
5-34 (B) the insurer was notified on or before the
5-35 30th day after the date the patient's enrollment ended; and
5-36 (C) the physician or provider was notified that
5-37 the patient's enrollment was terminated on or before the 30th day
5-38 after the date of verification under this section.
5-39 (g) The provisions of this section may not be waived,
5-40 voided, or nullified by contract.
5-41 Sec. 3E. COORDINATION OF PAYMENT. (a) An insurer may
5-42 require a physician or provider to retain in the physician's or
5-43 provider's records updated information concerning other health
5-44 benefit plan coverage and to provide the information to the
5-45 insurer on the applicable form described by Section 3B of this
5-46 article. Except as provided in this subsection, an insurer may not
5-47 require a physician or provider to investigate coordination of
5-48 other health benefit plan coverage.
5-49 (b) Coordination of payment under this section does not
5-50 extend the period for determining whether a service is eligible for
5-51 payment under Section 3A(e) of this article.
5-52 (c) A physician or provider who submits a claim for
5-53 particular medical care or health care services to more than one
5-54 health maintenance organization or insurer shall provide written
5-55 notice on the claim submitted to each health maintenance
5-56 organization or insurer of the identity of each other health
5-57 maintenance organization or insurer with which the same claim is
5-58 being filed.
5-59 (d) On receipt of notice under Subsection (c) of this
5-60 section, an insurer shall coordinate and determine the appropriate
5-61 payment for each health maintenance organization or insurer to make
5-62 to the physician or provider.
5-63 (e) If an insurer is a secondary payor and pays a portion of
5-64 a claim that should have been paid by the insurer or health
5-65 maintenance organization that is the primary payor, the insurer may
5-66 recover the amount of the overpayment from the health maintenance
5-67 organization or insurer that is primarily responsible for that
5-68 amount.
5-69 (f) If the portion of the claim overpaid by the secondary
6-1 insurer was also paid by the primary health maintenance
6-2 organization or insurer, the secondary insurer may recover the
6-3 amount of overpayment under Section 3C of this article from the
6-4 physician or provider who received the payment.
6-5 (g) An insurer may share information with another health
6-6 maintenance organization or insurer to the extent necessary to
6-7 coordinate appropriate payment obligations on a specific claim.
6-8 (h) The provisions of this section may not be waived,
6-9 voided, or nullified by contract.
6-10 Sec. 3F. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
6-11 SERVICES. (a) An insurer that uses a preauthorization process for
6-12 medical care and health care services shall provide to each
6-13 preferred provider, not later than the 10th working day after the
6-14 date a request is made, a list of medical care and health care
6-15 services that require preauthorization and information concerning
6-16 the preauthorization process.
6-17 (b) If proposed medical care or health care services require
6-18 preauthorization as a condition of the insurer's payment to a
6-19 preferred provider under a health insurance policy, the insurer
6-20 shall determine whether the medical care or health care services
6-21 proposed to be provided to the insured are medically necessary and
6-22 appropriate.
6-23 (c) On receipt of a request from a preferred provider for
6-24 preauthorization required by the insurer, the insurer shall review
6-25 and issue a determination indicating whether the proposed services
6-26 are preauthorized. The determination must be mailed or otherwise
6-27 transmitted not later than the third calendar day after the date
6-28 the request is received by the insurer.
6-29 (d) If the proposed medical care or health care services
6-30 involve inpatient care, the determination issued by the insurer
6-31 must be provided within one calendar day of the request by
6-32 telephone or electronic transmission to the preferred provider of
6-33 record and followed by written notice to the provider on or before
6-34 the third day after the date of the request and must specify an
6-35 approved length of stay for admission into a health care facility.
6-36 (e) If an insurer has preauthorized medical care or health
6-37 care services, the insurer may not deny or reduce payment to the
6-38 preferred provider for those services unless:
6-39 (1) the preferred provider has misrepresented the
6-40 proposed medical or health care services or has substantially
6-41 failed to perform the proposed medical or health care services;
6-42 (2) the patient was no longer eligible for coverage at
6-43 the time the services were provided; or
6-44 (3) the services were subject to a policy exclusion or
6-45 limitation that the insurer could not determine before the insurer
6-46 received the claim.
6-47 (f) This section applies to an agent or other person with
6-48 whom an insurer contracts to perform, or to whom the insurer
6-49 delegates the performance of, preauthorization of proposed medical
6-50 or health care services.
6-51 (g) The provisions of this section may not be waived,
6-52 voided, or nullified by contract.
6-53 Sec. 3G. AVAILABILITY OF CODING GUIDELINES. (a) A preferred
6-54 provider contract between an insurer and a physician or provider
6-55 must provide that:
6-56 (1) the physician or provider may request a
6-57 description of the coding guidelines, including any underlying
6-58 bundling, recoding, or other payment process and fee schedules
6-59 applicable to specific procedures that the physician or provider
6-60 will receive under the contract;
6-61 (2) the insurer or the insurer's agent will provide
6-62 the coding guidelines and fee schedules not later than the 30th day
6-63 after the date the insurer receives the request;
6-64 (3) the insurer will provide notice of material
6-65 changes to the coding guidelines and fee schedules not later than
6-66 the 90th day before the date the changes take effect and will not
6-67 make retroactive revisions to the coding guidelines and fee
6-68 schedules; and
6-69 (4) the contract may be terminated by the physician or
7-1 provider on or before the 30th day after the date the physician or
7-2 provider receives information requested under this subsection
7-3 without penalty or discrimination in participation in other health
7-4 care products or plans.
7-5 (b) A physician or provider who receives information under
7-6 Subsection (a) of this section may use or disclose the information
7-7 only for the purpose of practice management, billing activities, or
7-8 other business operations.
7-9 (c) Nothing in this section shall be interpreted to require
7-10 an insurer to violate copyright or other law by disclosing
7-11 proprietary software that the insurer has licensed. In addition to
7-12 the above, the insurer shall, on request of a physician or
7-13 provider, provide the name, edition, and model version of the
7-14 software that the insurer uses to determine bundling and unbundling
7-15 of claims.
7-16 (d) The provisions of this section may not be waived,
7-17 voided, or nullified by contract.
7-18 Sec. 3H. DISPUTE RESOLUTION. (a) An insurer may not require
7-19 by contract or otherwise the use of a dispute resolution procedure
7-20 or binding arbitration with a physician or health care provider.
7-21 This subsection does not prohibit an insurer from offering a
7-22 dispute resolution procedure or binding arbitration to resolve a
7-23 dispute if the insurer and the physician or provider consent to the
7-24 process after the dispute arises. This subsection may not be
7-25 construed to conflict with any applicable appeal mechanisms
7-26 required by law or any right of an insurer or physician or provider
7-27 under the Federal Arbitration Act (9 U.S.C. Section 1 et seq.).
7-28 (b) The provisions of this section may not be waived,
7-29 voided, or nullified by contract.
7-30 Sec. 3I. AUTHORITY OF ATTORNEY GENERAL. (a) In addition to
7-31 any other remedy available for a violation of this article, the
7-32 attorney general may take action and seek remedies available under
7-33 Section 15, Article 21.21 of this code, and Sections 17.58, 17.60,
7-34 17.61, and 17.62, Business & Commerce Code, for a violation of
7-35 Section 3A or 7 of this article.
7-36 (b) If the attorney general has good cause to believe that a
7-37 physician or provider has failed in good faith to repay an insurer
7-38 under Section 3C of this article, the attorney general may:
7-39 (1) bring an action to compel the physician or
7-40 provider to repay the insurer;
7-41 (2) on the finding of a court that the physician or
7-42 provider has violated Section 3C, impose a civil penalty of not
7-43 more than $10,000 for each violation; and
7-44 (3) recover court costs and attorney's fees.
7-45 (c) If the attorney general has good cause to believe that a
7-46 physician or provider is or has improperly used or disclosed
7-47 information received by the physician or provider under Section 3G
7-48 of this article, the attorney general may:
7-49 (1) bring an action seeking an injunction against the
7-50 physician or provider to restrain the improper use or disclosure of
7-51 information;
7-52 (2) on the finding of a court that the physician or
7-53 provider has violated Section 3G, impose a civil penalty of not
7-54 more than $10,000 for each violation; and
7-55 (3) recover court costs and attorney's fees.
7-56 Sec. 10. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND HEALTH
7-57 CARE PROVIDERS. The provisions of this article relating to prompt
7-58 payment by an insurer of a physician or health care provider and to
7-59 verification of medical care or health care services apply to a
7-60 physician or health care provider who:
7-61 (1) is not a preferred provider under a preferred
7-62 provider benefit plan; and
7-63 (2) provides to an insured:
7-64 (A) care related to an emergency or its
7-65 attendant episode of care as required by state or federal law; or
7-66 (B) specialty or other medical care or health
7-67 care services at the request of the insurer or a preferred provider
7-68 because the services are not reasonably available from a preferred
7-69 provider.
8-1 Sec. 11. CONFLICT WITH OTHER LAW. To the extent of any
8-2 conflict between this article and Article 21.52C of this code, this
8-3 article controls.
8-4 Sec. 12. APPLICATION OF CERTAIN PROVISIONS UNDER MEDICAID. A
8-5 provision of this article may not be interpreted as requiring an
8-6 insurer, physician, or health care provider, in providing benefits
8-7 or services under the state Medicaid program, to:
8-8 (1) use billing forms or codes that are inconsistent
8-9 with those required under the state Medicaid program; or
8-10 (2) make determinations relating to medical necessity
8-11 or appropriateness or eligibility for coverage in a manner
8-12 different than that required under the state Medicaid program.
8-13 SECTION 4. Section 2, Texas Health Maintenance Organization
8-14 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
8-15 adding Subdivisions (ff) and (gg) to read as follows:
8-16 (ff) "Preauthorization" means a determination by the
8-17 health maintenance organization that the medical care or health
8-18 care services proposed to be provided to a patient are medically
8-19 necessary and appropriate. The term includes precertification,
8-20 certification, recertification, or any other term that would be a
8-21 reliable representation by a health maintenance organization to a
8-22 physician or provider.
8-23 (gg) "Verification" means a reliable representation by
8-24 a health maintenance organization to a physician or provider that
8-25 the health maintenance organization will pay the physician or
8-26 provider for proposed medical care or health care services if the
8-27 physician or provider renders those services to the patient for
8-28 whom the services are proposed.
8-29 SECTION 5. Section 18B, Texas Health Maintenance
8-30 Organization Act (Section 20A.18B, Vernon's Texas Insurance Code),
8-31 is amended to read as follows:
8-32 Sec. 18B. PROMPT PAYMENT OF PHYSICIAN AND PROVIDERS. (a) In
8-33 this section, "clean claim" means a [completed] claim that complies
8-34 with Section 18D of this Act[, as determined under Texas Department
8-35 of Insurance rules, submitted by a physician or provider for
8-36 medical care or health care services under a health care plan].
8-37 (b) A physician or provider must submit a claim under this
8-38 section to a health maintenance organization not later than the
8-39 95th day after the date the physician or provider provides the
8-40 medical care or health care services for which the claim is made.
8-41 A health maintenance organization shall accept as proof of timely
8-42 filing a claim filed in compliance with Subsection (c) of this
8-43 section or information from another health maintenance organization
8-44 showing that the physician or provider submitted the claim to the
8-45 health maintenance organization in compliance with Subsection (c)
8-46 of this section. If a physician or provider fails to submit a
8-47 claim in compliance with this subsection, the physician or provider
8-48 forfeits the right to payment. The period for submitting a claim
8-49 under this subsection may be extended by contract. A physician or
8-50 provider may not submit a duplicate claim for payment before the
8-51 46th day after the date the original claim was submitted. The
8-52 commissioner shall adopt rules under which a health maintenance
8-53 organization may determine whether a claim is a duplicate claim. [A
8-54 physician or provider for medical care or health care services
8-55 under a health care plan may obtain acknowledgment of receipt of a
8-56 claim for medical care or health care services under a health care
8-57 plan by submitting the claim by United States mail, return receipt
8-58 requested. A health maintenance organization or the contracted
8-59 clearinghouse of the health maintenance organization that receives
8-60 a claim electronically shall acknowledge receipt of the claim by an
8-61 electronic transmission to the physician or provider and is not
8-62 required to acknowledge receipt of the claim by the health
8-63 maintenance organization in writing.]
8-64 (c) A physician or provider shall, as appropriate:
8-65 (1) mail a claim to the health maintenance
8-66 organization identified in the verification by United States mail,
8-67 first class, or by overnight delivery service, and maintain a log
8-68 of mailed claims that includes the provider's I.D. and the address
8-69 of the health maintenance organization and include a copy of the
9-1 log with the claim;
9-2 (2) submit the claim electronically and maintain a log
9-3 of electronically submitted claims;
9-4 (3) fax the claim and maintain a log of all faxed
9-5 claims; or
9-6 (4) hand deliver the claim and maintain a log of all
9-7 hand-delivered claims.
9-8 (d) If a claim for medical care or health care services
9-9 provided to a patient is mailed, the claim is presumed to have been
9-10 received by the health maintenance organization on the third day
9-11 after the date the claim is mailed or, if the claim is mailed using
9-12 overnight service or return receipt requested, on the date the
9-13 delivery receipt is signed. If the claim is submitted
9-14 electronically, the claim is presumed to have been received on the
9-15 date of the electronic verification of receipt by the health
9-16 maintenance organization or the health maintenance organization's
9-17 clearinghouse. If the health maintenance organization or the
9-18 health maintenance organization's clearinghouse does not provide a
9-19 confirmation within 24 hours of submission by the physician or
9-20 provider, the physician's or provider's clearinghouse shall provide
9-21 the confirmation. The physician's or provider's clearinghouse must
9-22 be able to verify that the filing contained the correct information
9-23 needed for the electronic submission to be processed by the health
9-24 maintenance organization or the health maintenance organization's
9-25 clearinghouse, including the correct address of the entity to
9-26 receive the filing. If the claim is faxed, the claim is presumed
9-27 to have been received on the date of the transmission
9-28 acknowledgment. If the claim is hand delivered, the claim is
9-29 presumed to have been received on the date the delivery receipt is
9-30 signed. The commissioner shall promulgate a form to be submitted
9-31 by the physician or provider which easily identifies all claims
9-32 included in each filing which can be utilized by the physician or
9-33 provider as their log.
9-34 (e) Not later than the 45th day after the date that the
9-35 health maintenance organization receives a clean claim from a
9-36 physician or provider, the health maintenance organization shall
9-37 make a determination of whether the claim is eligible for payment
9-38 and:
9-39 (1) if the health maintenance organization determines
9-40 the entire claim is eligible for payment, pay the total amount of
9-41 the claim in accordance with the contract between the physician or
9-42 provider and the health maintenance organization;
9-43 (2) if the health maintenance organization determines
9-44 a portion of the claim is eligible for payment, pay the portion of
9-45 the claim that is not in dispute and notify the physician or
9-46 provider in writing why the remaining portion of the claim will not
9-47 be paid; or
9-48 (3) if the health maintenance organization determines
9-49 that the claim is not eligible for payment, notify the physician or
9-50 provider in writing why the claim will not be paid.
9-51 (f) Not later than the 21st day after the date a health
9-52 maintenance organization or the health maintenance organization's
9-53 designated agent affirmatively adjudicates a pharmacy claim that is
9-54 electronically submitted, the health maintenance organization
9-55 shall:
9-56 (1) pay the total amount of the claim; or
9-57 (2) notify the pharmacy provider of the reasons for
9-58 denying payment of the claim.
9-59 (g) A health maintenance organization that determines that a
9-60 claim is eligible for payment and does not pay the claim on or
9-61 before the 45th day after the date the health maintenance
9-62 organization receives a clean claim under Subsection (e) of this
9-63 section or the 15th day after the date the insurer receives a
9-64 requested attachment in accordance with Subsection (j) of this
9-65 section commits an unfair claim settlement practice in violation of
9-66 Article 21.21-2, Insurance Code, and is subject to an
9-67 administrative penalty under Chapter 84, Insurance Code. The
9-68 health maintenance organization shall pay the physician or provider
9-69 making the claim the full amount of billed charges submitted on the
10-1 claim and interest on the billed charges at a rate of 15 percent
10-2 annually, except that the health maintenance organization is not
10-3 required to pay a physician or provider with whom the health
10-4 maintenance organization has a contract and who submits the claim
10-5 using a form described by Section 18D(a) of this Act an amount of
10-6 billed charges that exceeds the amount billable under a fee
10-7 schedule provided by the physician or provider to the health
10-8 maintenance organization on or before the 30th day after the date
10-9 the physician or provider enters into the contract with the health
10-10 maintenance organization. The physician or provider may modify the
10-11 fee schedule if the physician or provider notifies the health
10-12 maintenance organization of the modification on or before the 90th
10-13 day before the date the modification takes effect.
10-14 (h) The investigation and determination of eligibility for
10-15 payment, including any coordination of other payments, does not
10-16 extend the period for determining whether a claim is eligible for
10-17 payment under Subsection (e) of this section [(d) If a
10-18 prescription benefit claim is electronically adjudicated and
10-19 electronically paid, and the health maintenance organization or its
10-20 designated agent authorizes treatment, the claim must be paid not
10-21 later than the 21st day after the treatment is authorized].
10-22 (i) Except as provided by Subsection (j) of this section, if
10-23 [(e) If] the health maintenance organization [acknowledges
10-24 coverage of an enrollee under the health care plan but] intends to
10-25 audit the physician or provider claim, the health maintenance
10-26 organization shall pay the charges submitted at 85 percent of the
10-27 contracted rate on the claim not later than the 45th day after the
10-28 date that the health maintenance organization receives the claim
10-29 from the physician or provider. The health maintenance
10-30 organization shall complete [Following completion of] the audit,
10-31 and any additional payment due a physician or provider or any
10-32 refund due the health maintenance organization shall be made not
10-33 later than the 90th [30th] day after the receipt of a claim or 45
10-34 days after receipt of a requested attachment from the physician or
10-35 provider, whichever is later [later of the date that:]
10-36 [(1) the physician or provider receives notice of the
10-37 audit results; or]
10-38 [(2) any appeal rights of the enrollee are exhausted].
10-39 (j) If a health maintenance organization needs additional
10-40 information from a treating physician or provider to determine
10-41 eligibility for payment, the health maintenance organization, not
10-42 later than the 30th calendar day after the date the health
10-43 maintenance organization receives a clean claim, shall request in
10-44 writing that the physician or provider provide any attachment to
10-45 the claim the health maintenance organization desires in good faith
10-46 for clarification of the claim. The request must describe with
10-47 specificity the clinical information requested and relate only to
10-48 information the health maintenance organization can demonstrate is
10-49 specific to the claim or the claim's related episode of care. A
10-50 health maintenance organization that requests an attachment under
10-51 this subsection shall determine whether the claim is eligible for
10-52 payment on or before the later of the 15th day after the date the
10-53 health maintenance organization receives the requested attachment
10-54 or the latest date for determining whether the claim is eligible
10-55 for payment under Subsection (e) of this section. A health
10-56 maintenance organization may not make more than one request under
10-57 this subsection in connection with a claim. Subsections (c) and (d)
10-58 of this section apply to a request for and submission of an
10-59 attachment under this subsection.
10-60 (k) If a health maintenance organization requests an
10-61 attachment or other information from a person other than the
10-62 physician or provider who submitted the claim, the health
10-63 maintenance organization shall provide a copy of the request to the
10-64 physician or provider who submitted the claim. The health
10-65 maintenance organization may not withhold payment pending receipt
10-66 of an attachment or information requested under this subsection.
10-67 If on receiving an attachment or information requested under this
10-68 subsection the health maintenance organization determines an error
10-69 in payment of the claim, the health maintenance organization may
11-1 recover under Section 18E of this Act.
11-2 (l) The commissioner shall adopt rules under which a health
11-3 maintenance organization can easily identify attachments or
11-4 information submitted by a physician or provider.
11-5 (m) [(f) A health maintenance organization that violates
11-6 Subsection (c) or (e) of this section is liable to a physician or
11-7 provider for the full amount of billed charges submitted on the
11-8 claim or the amount payable under the contracted penalty rate, less
11-9 any amount previously paid or any charge for a service that is not
11-10 covered by the health care plan.]
11-11 [(g)] A physician or provider may recover reasonable
11-12 attorney's fees and court costs in an action to recover payment
11-13 under this section.
11-14 (n) [(h)] In addition to any other penalty or remedy
11-15 authorized by the Insurance Code or another insurance law of this
11-16 state, a health maintenance organization that violates Subsection
11-17 (e) [(c)] or (i) [(e)] of this section is subject to an
11-18 administrative penalty under Article 1.10E, Insurance Code. The
11-19 administrative penalty imposed under that article may not exceed
11-20 $1,000 for each day the claim remains unpaid in violation of
11-21 Subsection (e) [(c)] or (i) [(e)] of this section.
11-22 (o) [(i)] The health maintenance organization shall provide
11-23 a participating physician or provider with copies of all applicable
11-24 utilization review policies and claim processing policies or
11-25 procedures[, including required data elements and claim formats].
11-26 (p) [(j) A health maintenance organization may, by contract
11-27 with a physician or provider, add or change the data elements that
11-28 must be submitted with the physician or provider claim.]
11-29 [(k) Not later than the 60th day before the date of an
11-30 addition or change in the data elements that must be submitted with
11-31 a claim or any other change in a health maintenance organization's
11-32 claim processing and payment procedures, the health maintenance
11-33 organization shall provide written notice of the addition or change
11-34 to each participating physician or provider.]
11-35 [(l) This section does not apply to a claim made by a
11-36 physician or provider who is a member of the legislature.]
11-37 [(m)] This section does not apply to a capitation payment
11-38 required to be made to a physician or provider under an agreement
11-39 to provide medical care or health care services under a health care
11-40 plan.
11-41 (q) [(n)] This section applies to a person with whom a
11-42 health maintenance organization contracts to process claims or to
11-43 obtain the services of physicians and providers to provide health
11-44 care services to health care plan enrollees.
11-45 (r) [(o)] The commissioner may adopt rules as necessary to
11-46 implement this section.
11-47 (s) Except as provided by Subsection (b) of this section,
11-48 the provisions of this section may not be waived, voided, or
11-49 nullified by contract.
11-50 SECTION 6. The Texas Health Maintenance Organization Act
11-51 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
11-52 Sections 18D-18L, 40, and 41 to read as follows:
11-53 Sec. 18D. ELEMENTS OF CLEAN CLAIM. (a) A claim by a
11-54 physician or provider, other than an institutional provider, is a
11-55 "clean claim" if the claim is submitted using Health Care Financing
11-56 Administration Form 1500 or a successor to that form developed by
11-57 the National Uniform Billing Committee or its successor and adopted
11-58 by the commissioner by rule for the purposes of this subsection
11-59 that is submitted to a health maintenance organization for payment
11-60 and that contains the information required by the commissioner by
11-61 rule for the purposes of this subsection entered into the
11-62 appropriate fields on the form.
11-63 (b) A claim by an institutional provider is a "clean claim"
11-64 if the claim is submitted using Health Care Financing
11-65 Administration Form UB-92 or a successor to that form developed by
11-66 the National Uniform Billing Committee or its successor and adopted
11-67 by the commissioner by rule for the purposes of this subsection
11-68 that is submitted to a health maintenance organization for payment
11-69 and that contains the information required by the commissioner by
12-1 rule for the purposes of this subsection entered into the
12-2 appropriate fields on the form.
12-3 (c) A health maintenance organization may require any data
12-4 element that is required in an electronic transaction set needed to
12-5 comply with federal law. A health maintenance organization may not
12-6 require a physician or provider to provide information other than
12-7 information for a data field included on the form used for a clean
12-8 claim under Subsection (a) or (b) of this section, as applicable.
12-9 (d) A claim submitted by a physician or provider that
12-10 includes additional fields, data elements, attachments, or other
12-11 information not required under this section is considered to be a
12-12 clean claim for the purposes of this section.
12-13 (e) Except as provided by this section, the provisions of
12-14 this section may not be waived, voided, or nullified by contract.
12-15 Sec. 18E. OVERPAYMENT. A health maintenance organization
12-16 may recover an overpayment to a physician or provider if:
12-17 (1) not later than the 180th day after the date the
12-18 physician or provider receives the payment, the health maintenance
12-19 organization provides written notice of the overpayment to the
12-20 physician or provider that includes the basis and specific reasons
12-21 for the request for recovery of funds; and
12-22 (2) the physician or provider does not make
12-23 arrangements for repayment of the requested funds on or before the
12-24 45th day after the date the physician or provider receives the
12-25 notice.
12-26 Sec. 18F. VERIFICATION OF ELIGIBILITY FOR PAYMENT. (a) On
12-27 the request of a physician or provider for verification of the
12-28 payment eligibility of a particular medical care or health care
12-29 service the physician or provider proposes to provide to a
12-30 particular patient, the health maintenance organization shall
12-31 inform the physician or provider whether the service, if provided
12-32 to that patient, is eligible for payment from the health
12-33 maintenance organization to the physician or provider.
12-34 (b) A health maintenance organization shall provide
12-35 verification under this section between 6 a.m. and 6 p.m. central
12-36 standard time on each day that is not a legal holiday.
12-37 (c) Verification under this section shall be made in good
12-38 faith and without delay.
12-39 (d) A health maintenance organization that declines to
12-40 provide a verification of eligibility for payment shall notify the
12-41 physician or provider who requested the verification of the
12-42 specific reason the verification was not provided.
12-43 (e) A health maintenance organization may establish a time
12-44 certain for the validity of verification.
12-45 (f) If a health maintenance organization has verified
12-46 medical care or health care services, the health maintenance
12-47 organization may not deny or reduce payment to a physician or
12-48 health care provider for those services unless:
12-49 (1) the physician or provider has materially
12-50 misrepresented the proposed medical or health care services or has
12-51 substantially failed to perform the proposed medical or health care
12-52 services;
12-53 (2) the health maintenance organization provides a
12-54 disclaimer stating that benefits are subject to contract
12-55 limitations and exclusions and that verification does not
12-56 constitute a guarantee of payment; or
12-57 (3) the health maintenance organization certifies in
12-58 writing:
12-59 (A) that the physician or provider is not
12-60 contractually obligated to provide services to the patient because
12-61 the patient's enrollment in the health plan was terminated;
12-62 (B) the health maintenance organization was
12-63 notified on or before the 30th day after the date the patient's
12-64 enrollment ended; and
12-65 (C) the physician or provider was notified that
12-66 the patient's enrollment was terminated on or before the 30th day
12-67 after the date of verification under this section.
12-68 (g) The provisions of this section may not be waived,
12-69 voided, or nullified by contract.
13-1 Sec. 18G. COORDINATION OF PAYMENT BENEFITS. (a) A health
13-2 maintenance organization may require a physician or provider to
13-3 retain in the physician's or provider's records updated information
13-4 concerning other health benefit plan coverage and to provide the
13-5 information to the health maintenance organization on the
13-6 applicable form described by Section 18D of this Act. Except as
13-7 provided by this subsection, a health maintenance organization may
13-8 not require a physician or provider to investigate coordination of
13-9 other health benefit plan coverage.
13-10 (b) Coordination of other payment under this section does
13-11 not extend the period for determining whether a service is eligible
13-12 for payment under Section 18B(e) of this Act.
13-13 (c) A physician or provider who submits a claim for
13-14 particular medical care or health care services to more than one
13-15 health maintenance organization or insurer shall provide written
13-16 notice on the claim submitted to each health maintenance
13-17 organization or insurer of the identity of each other health
13-18 maintenance organization or insurer with which the same claim is
13-19 being filed.
13-20 (d) On receipt of notice under Subsection (c) of this
13-21 section, a health maintenance organization shall coordinate and
13-22 determine the appropriate payment for each health maintenance
13-23 organization or insurer to make to the physician or provider.
13-24 (e) If a health maintenance organization is a secondary
13-25 payor and pays a portion of a claim that should have been paid by
13-26 the health maintenance organization or insurer that is the primary
13-27 payor, the overpayment may be recovered from the health maintenance
13-28 organization or insurer that is primarily responsible for that
13-29 amount.
13-30 (f) If the portion of the claim overpaid by the secondary
13-31 health maintenance organization was also paid by the primary health
13-32 maintenance organization or insurer, the secondary health
13-33 maintenance organization may recover the amount of the overpayment
13-34 under Section 18E of this Act from the physician or provider who
13-35 received the payment.
13-36 (g) A health maintenance organization may share information
13-37 with another health maintenance organization or insurer to the
13-38 extent necessary to coordinate appropriate payment obligations on a
13-39 specific claim.
13-40 (h) The provisions of this section may not be waived,
13-41 voided, or nullified by contract.
13-42 Sec. 18H. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
13-43 SERVICES. (a) A health maintenance organization that uses a
13-44 preauthorization process for medical care and health care services
13-45 shall provide each participating physician or provider, not later
13-46 than the 10th working day after the date a request is made, a list
13-47 of the medical care and health care services that do not require
13-48 preauthorization and information concerning the preauthorization
13-49 process.
13-50 (b) If proposed medical care or health care services require
13-51 preauthorization by a health maintenance organization as a
13-52 condition of the health maintenance organization's payment to a
13-53 physician or provider, the health maintenance organization shall
13-54 determine whether the medical care or health care services proposed
13-55 to be provided to the enrollee are medically necessary and
13-56 appropriate.
13-57 (c) On receipt of a request from a physician or provider for
13-58 preauthorization required by the health maintenance organization,
13-59 the health maintenance organization shall review and issue a
13-60 determination indicating whether the services are preauthorized.
13-61 The determination must be mailed or otherwise transmitted not later
13-62 than the third calendar day after the date the request is received
13-63 by the insurer.
13-64 (d) If the proposed medical care or health care services
13-65 involve inpatient care, the determination issued by the health
13-66 maintenance organization must be provided within one calendar day
13-67 of the request by telephone or electronic transmission to the
13-68 physician or provider of record and followed by written notice to
13-69 the physician or provider on or before the third day after the date
14-1 of the request and must specify an approved length of stay for
14-2 admission into a health care facility.
14-3 (e) If the health maintenance organization has preauthorized
14-4 medical care or health care services, the health maintenance
14-5 organization may not deny or reduce payment to the physician or
14-6 provider for those services unless:
14-7 (1) the physician or provider has misrepresented the
14-8 proposed medical or health care services or has substantially
14-9 failed to perform the proposed medical or health care services;
14-10 (2) the patient was no longer eligible for coverage at
14-11 the time the services were provided; or
14-12 (3) the services were subject to a contractual
14-13 exclusion or limitation that the health maintenance organization
14-14 could not determine before the health maintenance organization
14-15 received the claim.
14-16 (f) This section applies to an agent or other person with
14-17 whom a health maintenance organization contracts to perform, or to
14-18 whom the health maintenance organization delegates the performance
14-19 of, preauthorization of proposed medical care or health care
14-20 services.
14-21 (g) The provisions of this section may not be waived,
14-22 voided, or nullified by contract.
14-23 Sec. 18I. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
14-24 PROVIDERS. The provisions of this Act relating to prompt payment by
14-25 a health maintenance organization of a physician or provider and to
14-26 preauthorization of medical care or health care services apply to a
14-27 physician or provider who:
14-28 (1) is not included in the health maintenance
14-29 organization delivery network; and
14-30 (2) provides to an enrollee:
14-31 (A) care related to an emergency or its
14-32 attendant episode of care as required by state or federal law; or
14-33 (B) specialty or other medical care or health
14-34 care services at the request of the health maintenance organization
14-35 or a physician or provider who is included in the health
14-36 maintenance organization delivery network because the services are
14-37 not reasonably available within the network.
14-38 Sec. 18J. AVAILABILITY OF CODING GUIDELINES. (a) A contract
14-39 between a health maintenance organization and a physician or
14-40 provider must provide that:
14-41 (1) the physician or provider may request a
14-42 description of the coding guidelines, including any underlying
14-43 bundling, recoding, or other payment process and fee schedules
14-44 applicable to specific procedures that the physician or provider
14-45 will receive under the contract;
14-46 (2) the health maintenance organization will provide
14-47 the coding guidelines and fee schedules not later than the 30th day
14-48 after the date the health maintenance organization receives the
14-49 request;
14-50 (3) the health maintenance organization will provide
14-51 notice of material changes to the coding guidelines and fee
14-52 schedules not later than the 90th day before the date the changes
14-53 take effect and will not make retroactive revisions to the coding
14-54 guidelines and fee schedules; and
14-55 (4) the contract may be terminated by the physician or
14-56 provider on or before the 30th day after the date the physician or
14-57 provider receives information requested under this subsection
14-58 without penalty or discrimination in participation in other health
14-59 care products or plans.
14-60 (b) A physician or provider who receives information under
14-61 Subsection (a) of this section may use or disclose the information
14-62 only for the purpose of practice management, billing activities, or
14-63 other business operations.
14-64 (c) Nothing in this section shall be interpreted to require
14-65 a health maintenance organization to violate copyright or other law
14-66 by disclosing proprietary software that the health maintenance
14-67 organization has licensed. In addition to the above, the health
14-68 maintenance organization shall, on request of the physician or
14-69 provider, provide the name, edition, and model version of the
15-1 software that the health maintenance organization uses to determine
15-2 bundling and unbundling of claims.
15-3 (d) The provisions of this section may not be waived,
15-4 voided, or nullified by contract.
15-5 Sec. 18K. DISPUTE RESOLUTION. (a) A health maintenance
15-6 organization may not require by contract or otherwise the use of a
15-7 dispute resolution procedure or binding arbitration with a
15-8 physician or provider. This subsection does not prohibit a health
15-9 maintenance organization from offering a dispute resolution
15-10 procedure or binding arbitration to resolve a dispute if the health
15-11 maintenance organization and the physician or provider consent to
15-12 the process after the dispute arises. This subsection may not be
15-13 construed to conflict with any applicable appeal mechanisms
15-14 required by law or any rights of a health maintenance organization
15-15 or physician or provider under the Federal Arbitration Act (9
15-16 U.S.C. Section 1 et seq.).
15-17 (b) The provisions of this section may not be waived,
15-18 voided, or nullified by contract.
15-19 Sec. 18L. AUTHORITY OF ATTORNEY GENERAL. (a) In addition
15-20 to any other remedy available for a violation of this Act, the
15-21 attorney general may take action and seek remedies available under
15-22 Section 15, Article 21.21, Insurance Code, and Sections 17.58,
15-23 17.60, 17.61, and 17.62, Business & Commerce Code, for a violation
15-24 of Section 14 or 18B of this Act.
15-25 (b) If the attorney general has good cause to believe that a
15-26 physician or provider has failed in good faith to repay a health
15-27 maintenance organization under Section 18E of this Act, the
15-28 attorney general may:
15-29 (1) bring an action to compel the physician or
15-30 provider to repay the health maintenance organization;
15-31 (2) on the finding of a court that the physician or
15-32 provider has violated Section 18E, impose a civil penalty of not
15-33 more than $10,000 for each violation; and
15-34 (3) recover court costs and attorney's fees.
15-35 (c) If the attorney general has good cause to believe that a
15-36 physician or provider is or has improperly used or disclosed
15-37 information received by the physician or provider under Section 18J
15-38 of this Act, the attorney general may:
15-39 (1) bring an action seeking an injunction against the
15-40 physician or provider to restrain the improper use or disclosure of
15-41 information;
15-42 (2) on the finding of a court that the physician or
15-43 provider has violated Section 18J, impose a civil penalty of not
15-44 more than $10,000 for each violation; and
15-45 (3) recover court costs and attorney's fees.
15-46 Sec. 40. CONFLICT WITH OTHER LAW. To the extent of any
15-47 conflict between this Act and Article 21.52C, Insurance Code, this
15-48 Act controls.
15-49 Sec. 41. APPLICATION OF CERTAIN PROVISIONS UNDER MEDICAID.
15-50 A provision of this Act may not be interpreted as requiring a
15-51 health maintenance organization, physician, or provider, in
15-52 providing benefits or services under the state Medicaid program,
15-53 to:
15-54 (1) use billing forms or codes that are inconsistent
15-55 with those required under the state Medicaid program;
15-56 (2) make determinations relating to medical necessity
15-57 or appropriateness or eligibility for coverage in a manner
15-58 different than that required under the state Medicaid program; or
15-59 (3) reimburse physicians or providers for services
15-60 rendered to a person who was not eligible to receive benefits for
15-61 such services under the state Medicaid program.
15-62 SECTION 7. Subchapter E, Chapter 21, Insurance Code, is
15-63 amended by adding Article 21.52K to read as follows:
15-64 Art. 21.52K. ELECTRONIC HEALTH CARE TRANSACTIONS
15-65 Sec. 1. HEALTH BENEFIT PLAN DEFINED. (a) In this article,
15-66 "health benefit plan" means a plan that provides benefits for
15-67 medical, surgical, or other treatment expenses incurred as a result
15-68 of a health condition, a mental health condition, an accident,
15-69 sickness, or substance abuse, including an individual, group,
16-1 blanket, or franchise insurance policy or insurance agreement, a
16-2 group hospital service contract, or an individual or group evidence
16-3 of coverage or similar coverage document that is offered by:
16-4 (1) an insurance company;
16-5 (2) a group hospital service corporation operating
16-6 under Chapter 20 of this code;
16-7 (3) a fraternal benefit society operating under
16-8 Chapter 10 of this code;
16-9 (4) a stipulated premium insurance company operating
16-10 under Chapter 22 of this code;
16-11 (5) a reciprocal exchange operating under Chapter 19
16-12 of this code;
16-13 (6) a health maintenance organization operating under
16-14 the Texas Health Maintenance Organization Act (Chapter 20A,
16-15 Vernon's Texas Insurance Code);
16-16 (7) a multiple employer welfare arrangement that holds
16-17 a certificate of authority under Article 3.95-2 of this code; or
16-18 (8) an approved nonprofit health corporation that
16-19 holds a certificate of authority under Article 21.52F of this code.
16-20 (b) The term includes:
16-21 (1) a small employer health benefit plan written under
16-22 Chapter 26 of this code; and
16-23 (2) a health benefit plan offered under the Texas
16-24 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
16-25 Vernon's Texas Insurance Code), the Texas State College and
16-26 University Employees Uniform Insurance Benefits Act (Article
16-27 3.50-3, Vernon's Texas Insurance Code), or Article 3.50-4 of this
16-28 code.
16-29 Sec. 2. ELECTRONIC SUBMISSION OF CLAIMS AND ENCOUNTER
16-30 INFORMATION REQUIRED. If a health care professional licensed under
16-31 the Occupations Code or a health care facility licensed under the
16-32 Health and Safety Code accepts a patient enrolled in a health
16-33 benefit plan, the health care professional or facility shall submit
16-34 a health claim or equivalent encounter information, a referral
16-35 certification, or an authorization or eligibility transaction
16-36 electronically using standards for electronic transactions
16-37 established by the United States Department of Health and Human
16-38 Services under Subtitle F, Title II, Health Insurance Portability
16-39 and Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.),
16-40 as amended.
16-41 Sec. 3. TIME FOR IMPLEMENTATION OF ELECTRONIC TRANSACTION
16-42 REQUIREMENTS; WAIVER. (a) The department shall establish a
16-43 timetable for compliance with Section 2 of this article. The
16-44 timetable may not require compliance before a compliance date
16-45 established by the United States Department of Health and Human
16-46 Services or any other federal law or regulation for the use of
16-47 standards for electronic transactions established by the United
16-48 States Department of Health and Human Services under Subtitle F,
16-49 Title II, Health Insurance Portability and Accountability Act of
16-50 1996 (42 U.S.C. Section 1320d et seq.), as amended.
16-51 (b) The timetable for implementation established under this
16-52 section shall provide for extensions or temporary waivers for
16-53 identified health care professionals if the commissioner determines
16-54 that compliance with the timetable will result in an undue hardship
16-55 on health care professionals in rural areas or with other special
16-56 circumstances that justify an extension or waiver.
16-57 (c) Not later than six months before the compliance date
16-58 established under Subsection (a) of this section, the commissioner
16-59 shall adopt an application and review process for obtaining an
16-60 extension or waiver under Subsection (b) of this section.
16-61 (d) The department shall submit a report to the governor and
16-62 the legislature on or before the first anniversary of the
16-63 compliance date established under Subsection (a) of this section
16-64 and at least annually afterward on the number of extensions or
16-65 temporary waivers granted under Subsection (b) of this section, the
16-66 reasons for those extensions or temporary waivers, and the
16-67 timetable established by the commissioner for compliance by the
16-68 recipients of those extensions or temporary waivers.
16-69 Sec. 4. CERTAIN CHARGES TO ENROLLEE PROHIBITED. A health
17-1 care professional or facility may not hold a person enrolled in a
17-2 health benefit plan responsible for a service fee paid by the
17-3 professional or facility for adjudication of a paper claim.
17-4 SECTION 8. (a) The changes in law made by this Act relating
17-5 to payment of a physician or health care provider for medical or
17-6 health care services apply only to payment for services provided on
17-7 or after the effective date of this Act.
17-8 (b) The changes in law made by this Act relating to a
17-9 contract between a physician or health care provider and an insurer
17-10 or health maintenance organization apply only to a contract entered
17-11 into or renewed on or after the effective date of this Act.
17-12 SECTION 9. This Act takes effect January 1, 2002.
17-13 * * * * *