By Smithee H.B. No. 3014 77R7902 PB-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to prohibited practices regarding determinations of 1-3 eligibility for coverage and authorizations for certain services 1-4 provided by health maintenance organizations or preferred provider 1-5 plans. 1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-7 SECTION 1. The Texas Health Maintenance Organization Act 1-8 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding 1-9 Section 14A to read as follows: 1-10 Sec. 14A. PROHIBITED PRACTICES REGARDING DETERMINATIONS OF 1-11 ELIGIBILITY OR AUTHORIZATION. (a) In this section, "authorization" 1-12 includes certification, precertification, recertification, or any 1-13 other term indicating approval by a health maintenance organization 1-14 for a physician or provider to provide medical care or other health 1-15 care services to an enrollee. 1-16 (b) A health maintenance organization may not deny payment 1-17 to a physician or provider for medical care or other health care 1-18 services provided to an enrollee based on the enrollee's 1-19 ineligibility to receive the care or services, or the lack of 1-20 authorization for the physician or provider to provide the care or 1-21 services to the enrollee, if the health maintenance organization: 1-22 (1) failed to respond to the request for verification 1-23 of eligibility or authorization made by the physician, the 1-24 provider, or an employee of the physician or provider, within 24 2-1 hours after the initial request or, in the case of an 2-2 authorization, a shorter or longer period required or permitted by 2-3 this Act or the Insurance Code; 2-4 (2) verified the enrollee's eligibility in any manner 2-5 but later determined the eligibility to be invalid; or 2-6 (3) informed the physician, the provider, or an 2-7 employee of the physician or provider that the care or services 2-8 were authorized but later determined the authorization to be 2-9 invalid. 2-10 (c) Subsection (b) of this section applies to a health 2-11 maintenance organization that contracts with any person to make 2-12 eligibility or authorization decisions or to communicate 2-13 eligibility or authorization decisions to physicians or providers 2-14 if that person: 2-15 (1) failed to respond to the request for verification 2-16 of eligibility or authorization in a timely manner as required by 2-17 Subsection (b)(1) of this section; or 2-18 (2) verified eligibility in any manner or communicated 2-19 to the physician, provider, or employee that medical care or health 2-20 care services were authorized, but that eligibility or 2-21 authorization was later determined to be invalid by the health 2-22 maintenance organization. 2-23 SECTION 2. Article 3.70-3C, Insurance Code, as added by 2-24 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, 2-25 is amended by adding Section 7B to read as follows: 2-26 Sec. 7B. PROHIBITED PRACTICES REGARDING DETERMINATIONS OF 2-27 ELIGIBILITY OR AUTHORIZATION. (a) In this section, "authorization" 3-1 includes certification, precertification, recertification, or any 3-2 other term indicating approval by an insurer for a physician or 3-3 provider to provide services covered by a health insurance policy 3-4 to an insured. 3-5 (b) An insurer may not deny payment to a physician or 3-6 provider for services covered by a health insurance policy and 3-7 provided to an insured based on the insured's ineligibility to 3-8 receive the services, or the lack of authorization for the 3-9 physician or provider to provide the services to the insured, if 3-10 the insurer: 3-11 (1) failed to respond to the request for verification 3-12 of eligibility or authorization made by the physician, the 3-13 provider, or an employee of the physician or provider within 24 3-14 hours after the initial request or, in the case of an 3-15 authorization, a shorter or longer period required or permitted by 3-16 this code; 3-17 (2) verified the insured's eligibility in any manner 3-18 but later determined the eligibility to be invalid; or 3-19 (3) informed the physician, the provider, or an 3-20 employee of the physician or provider that the services were 3-21 authorized but later determined the authorization to be invalid. 3-22 (c) Subsection (b) of this section applies to an insurer 3-23 that contracts with any person or entity to make eligibility or 3-24 authorization decisions or to communicate eligibility or 3-25 authorization decisions to physicians or providers if that person: 3-26 (1) failed to respond to the request for verification 3-27 of eligibility or authorization in a timely manner as required by 4-1 Subsection (b)(1) of this section; or 4-2 (2) verified eligibility in any manner or communicated 4-3 to the physician, provider, or employee that medical care or health 4-4 care services were authorized, but that eligibility or 4-5 authorization was later determined to be invalid by the insurer. 4-6 SECTION 3. This Act applies only to an insurance policy, 4-7 contract, or evidence of coverage delivered, issued for delivery, 4-8 or renewed on or after January 1, 2002. A policy, contract, or 4-9 evidence of coverage delivered, issued for delivery, or renewed 4-10 before January 1, 2002, is governed by the law as it existed 4-11 immediately before the effective date of this Act, and that law is 4-12 continued in effect for that purpose. 4-13 SECTION 4. This Act takes effect September 1, 2001.