By Turner of Harris                                   H.B. No. 1903
         77R4401 AJA-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to verification of coverage by a preferred provider
 1-3     benefit plan or a health maintenance organization.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Article 3.70-3C, Insurance Code, as added by
 1-6     Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
 1-7     is amended by adding Section 3C to read as follows:
 1-8           Sec. 3C.  VERIFICATION OF COVERAGE.  An insurer shall inform
 1-9     a preferred provider of whether or not an insured is covered for a
1-10     service or benefit if the preferred provider requests the
1-11     information before providing the service or benefit to the insured.
1-12     If an insurer verifies that an insured is covered for a service or
1-13     benefit, the insurer may not deny payment for the service or
1-14     benefit unless a written notice of an error in the verification is
1-15     received by the preferred provider before the service or benefit is
1-16     provided.
1-17           SECTION 2. The Texas Health Maintenance Organization Act
1-18     (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
1-19     Section 18E to read as follows:
1-20           Sec. 18E.  VERIFICATION OF COVERAGE.  A health maintenance
1-21     organization shall inform a physician or provider of whether or not
1-22     an enrollee is covered for a service or benefit if the physician or
1-23     provider requests the information before providing the service or
1-24     benefit to the enrollee.  If a health maintenance organization
 2-1     verifies that an enrollee is covered for a service or benefit, the
 2-2     health maintenance organization may not deny payment for the
 2-3     service or benefit unless a written notice of an error in the
 2-4     verification is received by the physician or provider before the
 2-5     service or benefit is provided.
 2-6           SECTION 3. This Act takes effect September 1, 2001.