1-1     By:  Van de Putte, Nelson                             S.B. No. 1284
 1-2           (In the Senate - Filed March 7, 2001; March 12, 2001, read
 1-3     first time and referred to Committee on Business and Commerce;
 1-4     April 24, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 7, Nays 0; April 24, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1284            By:  Van de Putte
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to payment by certain issuers of health benefit plans of
1-11     certain claims; providing penalties.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE 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 Subdivision (14) to read as
1-16     follows:
1-17                 (14)  "Preauthorization" means a reliable
1-18     representation by an insurer to a physician or health care provider
1-19     that the insurer will pay the physician or health care provider for
1-20     proposed medical or health care services if the physician or health
1-21     care provider renders those services to the patient for whom the
1-22     services are proposed. The term includes precertification,
1-23     certification, re-certification, or any other term that would be a
1-24     reliable representation by an insurer to a physician or health care
1-25     provider.
1-26           SECTION 2.  Section 3A, Article 3.70-3C, Insurance Code, as
1-27     added by Chapter 1024, Acts of the 75th Legislature, Regular
1-28     Session, 1997, is amended to read as follows:
1-29           Sec. 3A.  PROMPT PAYMENT OF PREFERRED PROVIDERS.  (a)  In
1-30     this section, "clean claim" means a [completed] claim that complies
1-31     with Section 3B of this article[, as determined under department
1-32     rules, submitted by a preferred provider for medical care or health
1-33     care services under a health insurance policy].
1-34           (b)  A physician or provider must submit a claim to an
1-35     insurer not later than the 95th day after the date the physician or
1-36     provider provides the medical care or health care services for
1-37     which the claim is made.  An insurer shall accept as proof of
1-38     timely filing a claim filed in compliance with Subsection (c) of
1-39     this section or information from another insurer showing that the
1-40     physician or provider submitted the claim to the insurer in
1-41     compliance with Subsection (c) of this section.  If a physician or
1-42     provider fails to submit a claim in compliance with this
1-43     subsection, the physician or provider forfeits the right to
1-44     payment.  The period for submitting a claim under this subsection
1-45     may be extended by contract.  A physician or provider may not
1-46     submit a duplicate claim for payment before the 46th day after the
1-47     date the original claim was submitted.  The commissioner shall
1-48     adopt rules under which an insurer may determine whether a claim is
1-49     a duplicate claim [A preferred provider for medical care or health
1-50     care services under a health insurance policy may obtain
1-51     acknowledgment of receipt of a claim for medical care or health
1-52     care services under a health care plan by submitting the claim by
1-53     United States mail, return receipt requested.  An insurer or the
1-54     contracted clearinghouse of an insurer that receives a claim
1-55     electronically shall acknowledge receipt of the claim by an
1-56     electronic transmission to the preferred provider and is not
1-57     required to acknowledge receipt of the claim by the insurer in
1-58     writing].
1-59           (c)  A physician or provider shall, as appropriate:
1-60                 (1)  mail a claim by United States mail, first class,
1-61     or by overnight delivery service, and maintain a log of mailed
1-62     claims and include a copy of the log with the relevant mailed
1-63     claim;
1-64                 (2)  submit the claim electronically and maintain a log
 2-1     of electronically submitted claims;
 2-2                 (3)  fax the claim and maintain a log of all faxed
 2-3     claims; or
 2-4                 (4)  hand deliver the claim and maintain a log of all
 2-5     hand-delivered claims.
 2-6           (d)  If a claim for medical care or health care services
 2-7     under a health care plan is mailed, the claim is presumed to have
 2-8     been received by the insurer on the third day after the date the
 2-9     claim is mailed or, if the claim is mailed using overnight service
2-10     or return receipt requested, on the date the delivery receipt is
2-11     signed.  If the claim is submitted electronically, the claim is
2-12     presumed to have been received on the date of the electronic
2-13     verification of receipt by the insurer or the insurer's
2-14     clearinghouse.  If the insurer or the insurer's clearinghouse fails
2-15     to provide a confirmation within 24 hours of submission by the
2-16     physician or provider, the physician's or provider's clearinghouse
2-17     shall provide the confirmation.  If the claim is faxed, the claim
2-18     is presumed to have been received on the date of the transmission
2-19     acknowledgment.  If the claim is hand delivered, the claim is
2-20     presumed to have been received on the date the delivery receipt is
2-21     signed.
2-22           (e)  Not later than the 45th day after the date that the
2-23     insurer receives a clean claim from a preferred provider, the
2-24     insurer shall make a determination of whether the claim is eligible
2-25     for payment and:
2-26                 (1)  if the insurer determines the entire claim is
2-27     eligible for payment, pay the total amount of the claim in
2-28     accordance with the contract between the preferred provider and the
2-29     insurer;
2-30                 (2)  if the insurer disputes a portion of the claim,
2-31     pay the portion of the claim that is not in dispute and notify the
2-32     preferred provider in writing why the remaining portion of the
2-33     claim will not be paid; or
2-34                 (3)  if the insurer determines that the claim is not
2-35     eligible for payment, notify the preferred provider in writing why
2-36     the claim will not be paid.
2-37           (f)  Not later than the 21st day after the date an insurer
2-38     affirmatively adjudicates a pharmacy benefit claim that is
2-39     electronically submitted, the insurer shall:
2-40                 (1)  pay the total amount of the claim; or
2-41                 (2)  notify the benefit provider of the reasons for
2-42     denying payment of the claim.
2-43           (g)  An insurer that makes a determination that a claim is
2-44     eligible for payment under Subsection (e) of this section and does
2-45     not pay the claim on or before the 45th day after the date the
2-46     insurer receives a clean claim:
2-47                 (1)  shall pay the physician or provider making the
2-48     claim the full amount of billed charges submitted on the claim,
2-49     based on the physician's or provider's charges for medical or
2-50     health care services at the time the services are provided and
2-51     interest on the billed charges at a rate of 15 percent annually;
2-52                 (2)  commits an unfair claim settlement practice in
2-53     violation of Article 21.21-2 of this code; and
2-54                 (3)  is subject to an administrative penalty under
2-55     Chapter 84 of this code.
2-56           (h)  The investigation and determination of eligibility or
2-57     coverage, including any limitations or exclusions, and coordination
2-58     of other health benefit plan coverage does not extend the period
2-59     for determining whether a claim is eligible for payment under
2-60     Subsection (e) of this section [(d) If a prescription benefit claim
2-61     is electronically adjudicated and electronically paid, and the
2-62     preferred provider or its designated agent authorizes treatment,
2-63     the claim must be paid not later than the 21st day after the
2-64     treatment is authorized].
2-65           (i)  Except as provided by Subsections (j), (k), (l), and (m)
2-66     of this section, if [(e)  If] the insurer acknowledges coverage of
2-67     an insured under the health insurance policy but intends to audit
2-68     the preferred provider claim, the insurer shall pay the charges
2-69     submitted at 85 percent of the contracted rate on the claim not
 3-1     later than the 45th day after the date that the insurer receives
 3-2     the claim from the preferred provider.  The insurer must complete
 3-3     [Following completion of] the audit and make[,] any additional
 3-4     payment due a preferred provider or any refund due the insurer
 3-5     [shall be made] not later than the 90th [30th] day after the [later
 3-6     of the] date the claim is received by the insurer [that:]
 3-7                 [(1)  the preferred provider receives notice of the
 3-8     audit results; or]
 3-9                 [(2)  any appeal rights of the insured are exhausted].
3-10           (j)  If an insurer needs additional information from a
3-11     treating preferred provider to determine benefits payable under the
3-12     policy, the insurer, not later than the 30th calendar day after the
3-13     date the insurer receives a clean claim, shall request in writing
3-14     that the preferred provider provide any attachment to the claim the
3-15     insurer desires in good faith for clarification of the claim.  The
3-16     request must describe with specificity the clinical information
3-17     requested, provide a detailed description of the reasons for the
3-18     request, and relate only to information the insurer can demonstrate
3-19     is within the scope of the claim and specific to the claim.  An
3-20     insurer may not make more than one request under this subsection in
3-21     connection with a claim.
3-22           (k)  On or before the 20th day after the date a treating
3-23     preferred provider receives a request that complies with Subsection
3-24     (j) of this section, the preferred provider shall provide the
3-25     requested attachment.  The period for determining whether a claim
3-26     is eligible for payment under Subsection (e) of this section is
3-27     tolled until the attachment is provided.  Subsections (c) and (d)
3-28     of this section apply to an attachment provided by a preferred
3-29     provider under this subsection.
3-30           (l)  If an insurer needs additional information from the
3-31     insured or a physician or provider other than the physician or
3-32     provider who submitted the claim to determine benefits payable
3-33     under the policy, the insurer shall notify the treating preferred
3-34     provider and the person from whom the information is needed not
3-35     later than the 30th calendar day after the date the insurer
3-36     receives the claim.  The notice shall describe with specificity the
3-37     information requested and, if applicable, provide the name of the
3-38     physician or provider from whom the information is needed, if the
3-39     name is available to the insurer.
3-40           (m)  A person from whom the information is requested under
3-41     Subsection (l) of this section shall furnish the requested
3-42     information on or before the 15th day after the date the person
3-43     receives the request.  The period for determining whether a claim
3-44     is eligible for payment under Subsection (e) of this section is
3-45     tolled by the number of days, not to exceed 30 days, by which the
3-46     requested information is delinquent.  An insurer that does not
3-47     receive information requested under Subsection (l) of this section
3-48     shall send a reminder notice to the treating preferred provider and
3-49     to the person from whom the information is needed every 10th day
3-50     after the date the information becomes delinquent.  A treating
3-51     preferred provider may send a reminder notice to an insured or
3-52     other person from whom information is requested under Subsection
3-53     (l) of this section as the preferred provider considers necessary
3-54     to ensure a prompt response.
3-55           (n)  The commissioner shall adopt rules under which an
3-56     insurer can easily identify attachments submitted by a physician or
3-57     health care provider under Subsection (k) or (m) of this section
3-58     [(f)  An insurer that violates Subsection (c) or (e) of this
3-59     section is liable to a preferred provider for the full amount of
3-60     billed charges submitted on the claim or the amount payable under
3-61     the contracted penalty rate, less any amount previously paid or any
3-62     charge for a service that is not covered by the health insurance
3-63     policy].
3-64           (o) [(g)]  A preferred provider may recover reasonable
3-65     attorney's fees and court costs in an action to recover payment
3-66     under this section.
3-67           (p) [(h)  In addition to any other penalty or remedy
3-68     authorized by this code or another insurance law of this state, an
3-69     insurer that violates Subsection (c) or (e) of this section is
 4-1     subject to an administrative penalty under Article 1.10E of this
 4-2     code.  The administrative penalty imposed under that article may
 4-3     not exceed $1,000 for each day the claim remains unpaid in
 4-4     violation of Subsection (c) or (e) of this section.]
 4-5           [(i)]  The insurer shall provide a preferred provider with
 4-6     copies of all applicable utilization review policies and claim
 4-7     processing policies or procedures, including required data elements
 4-8     and claim formats.
 4-9           (q) [(j)  An insurer may, by contract with a preferred
4-10     provider, add or change the data elements that must be submitted
4-11     with the preferred provider claim.]
4-12           [(k)  Not later than the 60th day before the date of an
4-13     addition or change in the data elements that must be submitted with
4-14     a claim or any other change in an insurer's claim processing and
4-15     payment procedures, the insurer shall provide written notice of the
4-16     addition or change to each preferred provider.]
4-17           [(l)  This section does not apply to a claim made by a
4-18     preferred provider who is a member of the legislature.]
4-19           [(m)]  This section applies to a person with whom an insurer
4-20     contracts to process claims or to obtain the services of preferred
4-21     providers to provide medical care or health care to insureds under
4-22     a health insurance policy.
4-23           (r) [(n)]  The commissioner of insurance may adopt rules as
4-24     necessary to implement this section.
4-25           SECTION 3.  Article 3.70-3C, Insurance Code, as added by
4-26     Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
4-27     is amended by adding Sections 3B through 3J, 10, 11, and 12 to read
4-28     as follows:
4-29           Sec. 3B.  ELEMENTS OF CLEAN CLAIM.  (a)  A claim by a
4-30     provider, other than an institutional provider, is a "clean claim"
4-31     if the claim is submitted using Health Care Financing
4-32     Administration Form 1500 or another Health Care Financing
4-33     Administration form adopted by the commissioner by rule for the
4-34     purposes of this subsection that is submitted to an insurer for
4-35     payment and that contains the information required by the
4-36     commissioner by rule for the purposes of this subsection entered
4-37     into the appropriate fields on the form.
4-38           (b)  A claim by an institutional provider is a "clean claim"
4-39     if the claim is submitted using Health Care Financing
4-40     Administration Form UB-92 or another Health Care Financing
4-41     Administration form adopted by the commissioner by rule for the
4-42     purposes of this subsection that is submitted to an insurer for
4-43     payment and that contains the information required by the
4-44     commissioner by rule for the purposes of this subsection entered
4-45     into the appropriate fields on the form.
4-46           (c)  An insurer may require any data element that is required
4-47     in an electronic transaction set needed to comply with federal law.
4-48     An insurer may not require a provider to provide information other
4-49     than information for a data field included on the form used for a
4-50     clean claim under Subsection (a) or (b) of this section, as
4-51     applicable.
4-52           (d)  A claim submitted by a physician or provider that
4-53     includes additional fields, data elements, attachments, or other
4-54     information not required under this section is considered to be a
4-55     clean claim for the purposes of this article.
4-56           Sec. 3C.  OVERPAYMENT.  An insurer may recover an overpayment
4-57     to a physician or provider if:
4-58                 (1)  not later than the 180th day after the date the
4-59     physician or provider receives the payment, the insurer provides
4-60     written notice of the overpayment to the physician or provider that
4-61     includes the basis and specific reasons for the request for
4-62     recovery of funds; and
4-63                 (2)  the physician or provider does not make
4-64     arrangements for repayment of the requested funds on or before the
4-65     45th day after the date the physician or provider receives the
4-66     notice.
4-67           Sec. 3D.  VERIFICATION OF COVERAGE.  (a)  On the request of a
4-68     physician or provider for verification of the eligibility for
4-69     payment of a particular medical care or health care service the
 5-1     physician or provider proposes to provide to a particular patient,
 5-2     the insurer shall inform the physician or provider whether the
 5-3     service, if provided to that patient, is eligible for payment from
 5-4     the insurer to the physician or provider.
 5-5           (b)  An insurer shall provide verification under this section
 5-6     between 6 a.m. and 6 p.m. central standard time each day.
 5-7           (c)  Verification under this section shall be made in good
 5-8     faith and without delay.
 5-9           Sec. 3E.  COORDINATION OF BENEFITS.  (a)  An insurer may
5-10     require a physician or provider to retain in the physician's or
5-11     provider's records updated information concerning other health
5-12     benefit plan coverage and to provide the information to the
5-13     insurer on the applicable form described by Section 3B of this
5-14     article.  Except as provided in this subsection, an insurer may not
5-15     require a physician or provider to investigate coordination of
5-16     other health benefit plan coverage. This provision may not be
5-17     waived, voided, or nullified by contract.
5-18           (b)  Coordination of other health benefit plan coverage does
5-19     not extend the period for determining whether a claim is eligible
5-20     for payment under Section 3A(e) of this article.
5-21           (c)  A physician or provider who submits a claim for
5-22     particular medical or health care services to more than one health
5-23     maintenance organization or insurer shall  provide written notice
5-24     on the claim submitted to each health maintenance organization or
5-25     insurer of the identity of each other health maintenance
5-26     organization or insurer with which the same claim is being filed.
5-27           (d)  On receipt of notice under Subsection (c) of this
5-28     section, an insurer shall coordinate and determine the appropriate
5-29     payment for each health maintenance organization or insurer to make
5-30     to the physician or provider.
5-31           (e)  If an insurer is a secondary payor and pays more than
5-32     the amount for which the insurer is legally obligated, the insurer
5-33     may recover the amount of the overpayment from the health
5-34     maintenance organization or insurer that is primarily responsible
5-35     for that amount.
5-36           (f)  If the portion of the claim overpaid by the secondary
5-37     insurer was also paid by the primary health maintenance
5-38     organization or insurer, the secondary insurer may recover the
5-39     amount of overpayment under Section 3C of this article from the
5-40     physician or provider who received the payment.
5-41           (g)  An insurer may share information with another health
5-42     maintenance organization or insurer to the extent necessary to
5-43     coordinate appropriate payment obligations on a specific claim.
5-44           Sec. 3F.  PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
5-45     SERVICES.  (a)  An insurer that uses a preauthorization process for
5-46     medical and health care services shall provide each participating
5-47     physician or health care provider, not later than the 10th working
5-48     day after the date a request is made, a list of medical and health
5-49     care services that require preauthorization and information
5-50     concerning the preauthorization process.
5-51           (b)  If proposed medical or health care services require
5-52     preauthorization as a condition of the insurer's payment to a
5-53     physician or health care provider under a health insurance policy
5-54     or a physician or health care provider requests preauthorization of
5-55     proposed medical or health care services, the insurer shall
5-56     determine whether the medical or health care services proposed to
5-57     be provided to the insured are medically necessary and appropriate
5-58     in a manner consistent with Article 21.58A of this code.
5-59           (c)  On receipt of a request from a physician or health care
5-60     provider for preauthorization of proposed medical or health care
5-61     services, the insurer shall review and issue a determination
5-62     indicating whether the proposed services are preauthorized.  If the
5-63     determination requires a determination of medical necessity and
5-64     appropriateness of the proposed medical or health care services,
5-65     the determination must be made within the time frame for a
5-66     utilization review required by Section 5, Article 21.58A of this
5-67     code.
5-68           (d)  If the proposed medical or health care services involve
5-69     inpatient care, the determination issued by the insurer must
 6-1     specify an approved length of stay for admission into a health care
 6-2     facility based on the recommendation of the patient's physician or
 6-3     health care provider and the insurer's written medically acceptable
 6-4     screening criteria and review procedures. The criteria and
 6-5     procedures must be established, periodically evaluated, and updated
 6-6     as required by Section 4(i), Article 21.58A of this code.
 6-7           (e)  If an insurer has preauthorized medical or health care
 6-8     services, the insurer may not deny or reduce payment to the
 6-9     physician or health care provider for those services unless the
6-10     physician or health care provider has materially misrepresented the
6-11     proposed medical or health care services or has substantially
6-12     failed to perform the proposed medical or health care services.
6-13           (f)  This section applies to an agent or other person with
6-14     whom an insurer contracts to perform, or to whom the insurer
6-15     delegates the performance of, preauthorization of proposed medical
6-16     or health care services.
6-17           Sec.  3G.  RETROSPECTIVE REVIEW.  (a)  An insurer that makes
6-18     an adverse determination to deny or reduce payment to a physician
6-19     or health care provider who provided medical or health care
6-20     services with a retrospective review of the medical necessity and
6-21     appropriateness of those services must conduct the retrospective
6-22     review in compliance with the standards for a utilization review
6-23     required by Sections 4(b), (c), (d), (f), (h), (i), (l), and (m),
6-24     Article 21.58A of this code.
6-25           (b)  An insurer that makes an adverse determination to deny
6-26     or reduce payment to a physician or health care provider based on a
6-27     retrospective review of the medical necessity and appropriateness
6-28     of the medical or health care services shall notify the physician
6-29     or provider of the determination not later than the 45th day after
6-30     the date the insurer receives a clean claim, as defined by Section
6-31     3A of this article, from the physician or health care provider.
6-32           (c)  A notice of adverse determination required by Subsection
6-33     (b) of this section must include:
6-34                 (1)  the principal reasons for the adverse
6-35     determination;
6-36                 (2)  the clinical basis for the adverse determination;
6-37                 (3)  a description or the source of the screening
6-38     criteria used as a guideline in making the determination; and
6-39                 (4)  a description of the procedure for the complaint
6-40     and appeal process, including an appeal of an adverse determination
6-41     to an independent review organization.
6-42           (d)  The procedure for appeal must be reasonable and must
6-43     comply with Sections 6(b)(1), (2), (3), (5), and (6), Article
6-44     21.58A of this code.
6-45           (e)  An adverse determination described by this section is
6-46     eligible for review under Section 6A,  Article 21.58A of this code,
6-47     if the determination relates to:
6-48                 (1)  a single submitted charge of more than $650; or
6-49                 (2)  two or more submitted charges for the same or
6-50     similar services with a cumulative amount of more than $650.
6-51           (f)  This section applies to an agent or other person with
6-52     whom an insurer contracts to perform, or to whom the insurer
6-53     delegates the performance of, a retrospective review of medical or
6-54     health care services.
6-55           Sec. 3H.  AVAILABILITY OF CODING GUIDELINES.  (a)  A
6-56     preferred provider contract between an insurer and a physician or
6-57     provider must provide that:
6-58                 (1)  the physician or provider may request a copy of
6-59     the coding guidelines, including any underlying bundling, recoding,
6-60     or other payment process and fee schedules applicable to specific
6-61     procedures that the physician or provider will receive under the
6-62     contract;
6-63                 (2)  the insurer or the insurer's agent will provide
6-64     the guidelines not later than the 30th day after the date the
6-65     insurer receives the request;
6-66                 (3)  the insurer will provide notice of material
6-67     changes to the coding guidelines and fee schedules not later than
6-68     the 90th day before the date the changes take effect and will not
6-69     make retroactive revisions to the coding guidelines and fee
 7-1     schedules; and
 7-2                 (4)  the contract may be terminated by the physician or
 7-3     provider on or before the 30th day after the date the physician or
 7-4     provider receives information requested under this subsection
 7-5     without penalty or discrimination in participation in other health
 7-6     care products or plans.
 7-7           (b)  A physician or provider who receives information under
 7-8     Subsection (a) of this section may use or disclose the information
 7-9     only for the purpose of practice management, billing activities, or
7-10     other business operations.  The commissioner may impose and collect
7-11     a penalty of $1,000 for each use or disclosure of the information
7-12     that violates this subsection.
7-13           Sec. 3I.  DISPUTE RESOLUTION.  (a)  An agreement or contract
7-14     provision that requires the use of binding arbitration to resolve
7-15     future disputes in a preferred provider contract is not enforceable
7-16     if the agreement or provision is unconscionable at the time the
7-17     agreement is made.  This subsection does not prohibit an insurer
7-18     from offering a dispute resolution procedure or binding arbitration
7-19     to resolve a dispute if the insurer and the physician or provider
7-20     consent to the process after the dispute arises.  This subsection
7-21     may not be construed to conflict with any applicable appeal
7-22     mechanisms required by law.
7-23           (b)  The provisions of this section may not be waived or
7-24     nullified by contract.
7-25           Sec. 3J.  AUTHORITY OF ATTORNEY GENERAL.  In addition to any
7-26     other remedy available for a violation of this article, the
7-27     attorney general may take action and seek remedies available under
7-28     Section 15, Article 21.21 of this code, and Sections 17.58, 17.60,
7-29     17.61, and 17.62, Business & Commerce Code, for a violation of
7-30     Section 3A or 7 of this article.
7-31           Sec. 10.  SERVICES PROVIDED BY CERTAIN PHYSICIANS AND HEALTH
7-32     CARE PROVIDERS.  The provisions of this article relating to prompt
7-33     payment by an insurer of a physician or health care provider and to
7-34     preauthorization and retrospective review of medical or health care
7-35     services apply to a physician  or health care provider who:
7-36                 (1)  is not a preferred provider under a preferred
7-37     provider benefit plan; and
7-38                 (2)  provides to an insured:
7-39                       (A)  emergency care; or
7-40                       (B)  specialty or other medical or health care
7-41     services at the request of the insurer or a preferred provider
7-42     because the services are not reasonably available from a preferred
7-43     provider.
7-44           Sec. 11.  CONFLICT WITH OTHER LAW.  To the extent of any
7-45     conflict between this article and Article 21.52C of this code, this
7-46     article controls.
7-47           Sec. 12.  APPLICATION OF CERTAIN PROVISIONS UNDER MEDICAID.
7-48     A provision of this article may not be interpreted as requiring an
7-49     insurer, physician, or health care provider, in providing benefits
7-50     or services under the state Medicaid program, to:
7-51                 (1)  use billing forms or codes that are inconsistent
7-52     with those required under the state Medicaid program; or
7-53                 (2)  make determinations relating to medical necessity
7-54     or appropriateness or eligibility for coverage in a manner
7-55     different than that required under the state Medicaid program.
7-56           SECTION 4.  Section 2, Texas Health Maintenance Organization
7-57     Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
7-58     adding Subsection (ff) to read as follows:
7-59                 (ff)  "Preauthorization" means a reliable
7-60     representation by a health maintenance organization to a physician
7-61     or health care provider that the health maintenance organization
7-62     will pay the physician or health care provider for proposed medical
7-63     or health care services if the physician or health care provider
7-64     renders those services to the patient for whom the services are
7-65     proposed.  The term includes precertification, certification,
7-66     re-certification, or any other term that would be a reliable
7-67     representation by a health maintenance organization to a physician
7-68     or health care provider.
7-69           SECTION 5.  Section 18B, Texas Health Maintenance
 8-1     Organization Act (Article 20A.18B, Vernon's Texas Insurance Code),
 8-2     is amended to read as follows:
 8-3           Sec. 18B.  PROMPT PAYMENT OF PHYSICIAN AND PROVIDERS.
 8-4     (a)  In this section, "clean claim" means a [completed] claim that
 8-5     complies with Section 18D of this Act[, as determined under Texas
 8-6     Department of Insurance rules, submitted by a physician or provider
 8-7     for medical care or health care services under a health care plan].
 8-8           (b)  A physician or provider must submit a claim under this
 8-9     section to a health maintenance organization not later than the
8-10     95th day after the date the physician or provider provides the
8-11     medical care or health care services for which the claim is made.
8-12     A health maintenance organization shall accept as proof of timely
8-13     filing a claim filed in compliance with Subsection (c) of this
8-14     section or information from another health maintenance organization
8-15     showing that the physician or provider submitted the claim to the
8-16     health maintenance organization in compliance with Subsection (c)
8-17     of this section.  If a physician or provider fails to submit a
8-18     claim in compliance with this subsection, the physician or provider
8-19     forfeits the right to payment.  The period for submitting a claim
8-20     under this subsection may be extended by contract.  A physician or
8-21     provider may not submit a duplicate claim for payment before the
8-22     46th day after the date the original claim was submitted.  The
8-23     commissioner shall adopt rules under which a health maintenance
8-24     organization may determine whether a claim is a duplicate claim [A
8-25     physician or provider for medical care or health care services
8-26     under a health care plan may obtain acknowledgment of receipt of a
8-27     claim for medical care or health care services under a health care
8-28     plan by submitting the claim by United States mail, return receipt
8-29     requested.  A health maintenance organization or the contracted
8-30     clearinghouse of the health maintenance organization that receives
8-31     a claim electronically shall acknowledge receipt of the claim by an
8-32     electronic transmission to the physician or provider and is not
8-33     required to acknowledge receipt of the claim by the health
8-34     maintenance organization in writing].
8-35           (c)  A physician or provider shall, as appropriate:
8-36                 (1)  mail a claim by United States mail, first class,
8-37     or by overnight delivery service, and maintain a log of mailed
8-38     claims and include a copy of the log with the claim;
8-39                 (2)  submit the claim electronically and maintain a log
8-40     of electronically submitted claims;
8-41                 (3)  fax the claim and maintain a log of all faxed
8-42     claims; or
8-43                 (4)  hand deliver the claim and maintain a log of all
8-44     hand-delivered claims.
8-45           (d)  If a claim for medical care or health care services
8-46     under a health care plan is mailed, the claim is presumed to have
8-47     been received by the health maintenance organization on the third
8-48     day after the date the claim is mailed or, if the claim is mailed
8-49     using overnight service or return receipt requested, on the date
8-50     the delivery receipt is signed.  If the claim is submitted
8-51     electronically, the claim is presumed to have been received on the
8-52     date of the electronic verification of receipt by the health
8-53     maintenance organization or the health maintenance organization's
8-54     clearinghouse.  If the health maintenance organization or the
8-55     health maintenance organization's clearinghouse does not provide a
8-56     confirmation within 24 hours of submission by the physician or
8-57     provider, then the physician's or provider's clearinghouse shall
8-58     provide the confirmation.  If the claim is faxed, the claim is
8-59     presumed to have been received on the date of the transmission
8-60     acknowledgment.  If the claim is hand delivered, the claim is
8-61     presumed to have been received on the date the delivery receipt is
8-62     signed.
8-63           (e)  Not later than the 45th day after the date that the
8-64     health maintenance organization receives a clean claim from a
8-65     physician or provider, the health maintenance organization shall
8-66     make a determination of whether the claim is eligible for payment
8-67     and:
8-68                 (1)  if the health maintenance organization determines
8-69     the entire claim is eligible for payment, pay the total amount of
 9-1     the claim in accordance with the contract between the physician or
 9-2     provider and the health maintenance organization;
 9-3                 (2)  if the health maintenance organization disputes a
 9-4     portion of the claim, pay the portion of the claim that is not in
 9-5     dispute and notify the physician or provider in writing why the
 9-6     remaining portion of the claim will not be paid; or
 9-7                 (3)  if the health maintenance organization determines
 9-8     that the claim is not eligible for payment, notify the physician or
 9-9     provider in writing why the claim will not be paid.
9-10           (f)  Not later than the 21st day after the date a health
9-11     maintenance organization or the health maintenance organization's
9-12     designated agent affirmatively adjudicates a pharmacy benefit claim
9-13     that is electronically submitted, the health maintenance
9-14     organization shall:
9-15                 (1)  pay the total amount of the claim; or
9-16                 (2)  notify the benefit provider of the reasons for
9-17     denying payment of the claim.
9-18           (g)  A health maintenance organization that determines under
9-19     Subsection (e) of this section that a claim is eligible for payment
9-20     and does not pay the claim on or before the 45th day after the date
9-21     the health maintenance organization receives a clean claim:
9-22                 (1)  shall pay the physician or provider making the
9-23     claim the full amount of billed charges submitted on the claim,
9-24     based on the physician's or provider's charges for medical or
9-25     health care services at the time the services are provided and
9-26     interest on the billed charges at a rate of 15 percent annually;
9-27                 (2)  commits an unfair claim settlement practice in
9-28     violation of Article 21.21, Insurance Code; and
9-29                 (3)  is subject to an administrative penalty under
9-30     Chapter 84, Insurance Code.
9-31           (h)  The investigation and determination of eligibility or
9-32     coverage, including any limitations or exclusions, and coordination
9-33     of other health benefit plan coverage does not extend the period
9-34     for determining whether a claim is eligible for payment under
9-35     Subsection (e) of this section [(d)  If a prescription benefit
9-36     claim is electronically adjudicated and electronically paid, and
9-37     the health maintenance organization or its designated agent
9-38     authorizes treatment, the claim must be paid not later than the
9-39     21st day after the treatment is authorized].
9-40           (i)  Except as provided by Subsections (j) and (k) of this
9-41     section, if [(e)  If] the health maintenance organization
9-42     acknowledges coverage of an enrollee under the health care plan but
9-43     intends to audit the physician or provider claim, the health
9-44     maintenance organization shall pay the charges submitted at 85
9-45     percent of the contracted rate on the claim not later than the 45th
9-46     day after the date that the health maintenance organization
9-47     receives the claim from the physician or provider.  The health
9-48     maintenance organization shall complete [Following completion of]
9-49     the audit and make [,] any additional payment due a physician or
9-50     provider or any refund due the health maintenance organization
9-51     [shall be made] not later than the 90th [30th] day after the [later
9-52     of the] date the claim is received by the health maintenance
9-53     organization [that:]
9-54                 [(1)  the physician or provider receives notice of the
9-55     audit results; or]
9-56                 [(2)  any appeal rights of the enrollee are exhausted].
9-57           (j)  A health maintenance organization may make one request
9-58     for attachments necessary for clarification of a clean claim.  The
9-59     request must be in writing and sent to the physician or provider
9-60     that submitted the claim on or before the 30th calendar day after
9-61     the date the health maintenance organization receives the claim.
9-62     The request must describe with specificity the clinical information
9-63     the health maintenance organization can demonstrate is directly
9-64     related to the claim in question or the claim's related episode of
9-65     care.  On receipt of all requested attachments, the health
9-66     maintenance organization shall determine whether the claim is
9-67     eligible for payment.  Subsections (c) and (d) of this section
9-68     apply to a request for and submission of an attachment under this
9-69     subsection.
 10-1          (k)  If a health maintenance organization requests an
 10-2    attachment from a person other than the physician or provider that
 10-3    submits the clean claim, the health maintenance organization must
 10-4    provide a copy of the request to the physician or provider who
 10-5    submitted the claim.  The health maintenance organization may not
 10-6    withhold payment pending receipt of information requested from a
 10-7    person other than the physician or provider who submitted the
 10-8    claim.  If on receiving information requested from that person the
 10-9    health maintenance organization determines an error in payment of
10-10    the claim, the health maintenance organization may recover under
10-11    Section 18E of this Act.
10-12          (l)  The commissioner shall adopt rules under which a health
10-13    maintenance organization can easily identify attachments submitted
10-14    by a physician or health care provider.  Rules adopted under this
10-15    subsection may not require the use of additional forms or
10-16    attachments [(f)  A health maintenance organization that violates
10-17    Subsection (c) or (e) of this section is liable to a physician or
10-18    provider for the full amount of billed charges submitted on the
10-19    claim or the amount payable under the contracted penalty rate, less
10-20    any amount previously paid or any charge for a service that is not
10-21    covered by the health care plan].
10-22          (m) [(g)]  A physician or provider may recover reasonable
10-23    attorney's fees and court costs in an action to recover payment
10-24    under this section.
10-25          (n) [(h)  In addition to any other penalty or remedy
10-26    authorized by the Insurance Code or another insurance law of this
10-27    state, a health maintenance organization that violates Subsection
10-28    (c) or (e) of this section is subject to an administrative penalty
10-29    under Article 1.10E, Insurance Code.  The administrative penalty
10-30    imposed under that article may not exceed $1,000 for each day the
10-31    claim remains unpaid in violation of Subsection (c) or (e) of this
10-32    section.]
10-33          [(i)]  The health maintenance organization shall provide a
10-34    participating physician or provider with copies of all applicable
10-35    utilization review policies and claim processing policies or
10-36    procedures, including required data elements and claim formats.
10-37          (o) [(j)  A health maintenance organization may, by contract
10-38    with a physician or provider, add or change the data elements that
10-39    must be submitted with the physician or provider claim.]
10-40          [(k)  Not later than the 60th day before the date of an
10-41    addition or change in the data elements that must be submitted with
10-42    a claim or any other change in a health maintenance organization's
10-43    claim processing and payment procedures, the health maintenance
10-44    organization shall provide written notice of the addition or change
10-45    to each participating physician or provider.]
10-46          [(l)  This section does not apply to a claim made by a
10-47    physician or provider who is a member of the legislature.]
10-48          [(m)]  This section does not apply to a capitation payment
10-49    required to be made to a physician or provider under an agreement
10-50    to provide medical care or health care services under a health care
10-51    plan.
10-52          (p) [(n)]  This section applies to a person with whom a
10-53    health maintenance organization contracts to process claims or to
10-54    obtain the services of physicians and providers to provide health
10-55    care services to health care plan enrollees.
10-56          (q) [(o)]  The commissioner may adopt rules as necessary to
10-57    implement this section.
10-58          SECTION 6.  The Texas Health Maintenance Organization Act
10-59    (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
10-60    Sections 18D through 18M, 40, and 41 to read as follows:
10-61          Sec. 18D.  ELEMENTS OF CLEAN CLAIM.  (a)  A claim by a
10-62    provider, other than an institutional provider, is a "clean claim"
10-63    if the claim is submitted using Health Care Financing
10-64    Administration Form 1500 or another Health Care Financing
10-65    Administration form adopted by the commissioner by rule for the
10-66    purposes of this subsection that is submitted to a health
10-67    maintenance organization for payment and that contains the
10-68    information required by the commissioner by rule for the purposes
10-69    of this subsection entered into the appropriate fields on the form.
 11-1          (b)  A claim by an institutional provider is a "clean claim"
 11-2    if the claim is submitted using Health Care Financing
 11-3    Administration Form UB-92 or another Health Care Financing
 11-4    Administration form adopted by the commissioner by rule for the
 11-5    purposes of this subsection that is submitted to a health
 11-6    maintenance organization for payment and that contains the
 11-7    information required by the commissioner by rule for the purposes
 11-8    of this subsection entered into the appropriate fields on the form.
 11-9          (c)  A health maintenance organization may require any data
11-10    element that is required in an electronic transaction set needed to
11-11    comply with federal law.  A health maintenance organization may not
11-12    require a provider to provide information other than information
11-13    for a data field included on the form used for a clean claim under
11-14    Subsection (a)  or (b) of this section, as applicable.
11-15          (d)  A claim submitted by a physician or provider that
11-16    includes additional fields, data elements, attachments, or other
11-17    information not required under this section is considered to be a
11-18    clean claim for the purposes of this section.
11-19          Sec. 18E.  OVERPAYMENT.  A health maintenance organization
11-20    may recover an overpayment to a physician or provider if:
11-21                (1)  not later than the 180th day after the date the
11-22    physician or provider receives the payment, the health maintenance
11-23    organization provides written notice of the overpayment to the
11-24    physician or provider that includes the basis and specific reasons
11-25    for the request for recovery of funds; and
11-26                (2)  the physician or provider does not make
11-27    arrangements for repayment of the requested funds on or before the
11-28    45th day after the date the physician or provider receives the
11-29    notice.
11-30          Sec. 18F.  VERIFICATION OF COVERAGE.  (a)  On the request of
11-31    a physician or provider for verification of the payment eligibility
11-32    of a particular medical care or health care service the physician
11-33    or provider proposes to provide to a particular patient, the health
11-34    maintenance organization shall inform the physician or provider
11-35    whether the service, if provided to that patient, is eligible for
11-36    payment from the health maintenance organization to the physician
11-37    or provider.
11-38          (b)  A health maintenance organization shall provide
11-39    verification under this section between 6 a.m. and 6 p.m. central
11-40    standard time each day.
11-41          (c)  Verification under this section shall be made in good
11-42    faith and without delay.
11-43          Sec. 18G.  COORDINATION OF BENEFITS.  (a)  A health
11-44    maintenance organization may require a physician or provider to
11-45    retain in the physician's or provider's records updated information
11-46    concerning other health benefit plan coverage and to provide the
11-47    information to the  health maintenance organization on the
11-48    applicable form described by Section 18D of this Act. Except as
11-49    provided by this subsection, a health maintenance organization may
11-50    not require a physician or provider to investigate coordination of
11-51    other health benefit plan coverage. This provision may not be
11-52    waived, voided, or nullified by contract.
11-53          (b)  Coordination of other health benefit plan coverage does
11-54    not extend the period for determining whether a claim is eligible
11-55    for payment under Section 18B(e) of this Act.
11-56          (c)  A physician or provider who submits a claim for
11-57    particular medical or health care services to more than one health
11-58    maintenance organization or insurer shall  provide written notice
11-59    on the claim submitted to each health maintenance organization or
11-60    insurer of the identity of each other health maintenance
11-61    organization or insurer with which the same claim is being filed.
11-62          (d)  On receipt of notice under Subsection (c) of this
11-63    section, a health maintenance organization shall coordinate and
11-64    determine the appropriate payment for each health maintenance
11-65    organization or insurer to make to the physician or provider.
11-66          (e)  If a health maintenance organization is a secondary
11-67    payor and pays more than the amount for which the health
11-68    maintenance organization is legally obligated, the overpayment may
11-69    be recovered from the health maintenance organization or insurer
 12-1    that is primarily responsible for the amount overpaid by the
 12-2    secondary health maintenance organization.
 12-3          (f)  If the portion of the claim overpaid by the secondary
 12-4    health maintenance organization was also paid by the primary health
 12-5    maintenance organization or insurer, the secondary health
 12-6    maintenance organization may recover the amount of the overpayment
 12-7    under Section 18E of this Act from the physician or provider who
 12-8    received the payment.
 12-9          (g)  A health maintenance organization may share information
12-10    with another health maintenance organization or insurer to the
12-11    extent necessary to coordinate payment of benefits on a specific
12-12    claim to the limited extent necessary to coordinate appropriate
12-13    payment obligations.
12-14          Sec. 18H.  PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
12-15    SERVICES.  (a)  A health maintenance organization that uses a
12-16    preauthorization process for medical and health care services shall
12-17    provide each participating physician or provider, not later than
12-18    the 10th working day after the date a request is made, a list of
12-19    the medical and health care services that do not require
12-20    preauthorization and information concerning the preauthorization
12-21    process.
12-22          (b)  If proposed medical or health care services require
12-23    preauthorization by a health maintenance organization as a
12-24    condition of the health maintenance organization's payment to a
12-25    physician or provider or a physician or provider requests
12-26    preauthorization of proposed medical or health care services, the
12-27    health maintenance organization shall determine whether the medical
12-28    or health care services proposed to be provided to the enrollee are
12-29    medically necessary and appropriate in a manner consistent with
12-30    Article 21.58A, Insurance Code.
12-31          (c)  On receipt of a request from a physician or provider for
12-32    preauthorization of proposed medical or health care services, the
12-33    health maintenance organization shall review and issue a
12-34    determination indicating whether the services are preauthorized.
12-35    If the determination requires a determination of medical necessity
12-36    and appropriateness of the proposed medical or health care
12-37    services, the determination must be made within the time frame for
12-38    a utilization review required by Section 5, Article 21.58A,
12-39    Insurance Code.
12-40          (d)  If the proposed medical or health care services involve
12-41    inpatient care, the determination issued by the health maintenance
12-42    organization must specify an approved length of stay for admission
12-43    into a health care facility based on the recommendation of the
12-44    patient's physician or provider and the health maintenance
12-45    organization's written medically acceptable screening criteria and
12-46    review procedures.  The criteria and procedures must be
12-47    established, periodically evaluated, and updated as required by
12-48    Section 4(i), Article 21.58A, Insurance Code.
12-49          (e)  If the health maintenance organization has preauthorized
12-50    medical or health care services, the health maintenance
12-51    organization may not deny or reduce payment to the physician or
12-52    provider for those services unless the physician or provider has
12-53    materially misrepresented the proposed medical or health care
12-54    services or has substantially failed to perform the proposed
12-55    medical or health care services.
12-56          (f)  This section applies to an agent or other person with
12-57    whom a health maintenance organization contracts to perform, or to
12-58    whom the health maintenance organization delegates the performance
12-59    of, preauthorization of proposed medical or health care services.
12-60          Sec. 18I.  RETROSPECTIVE REVIEW.  (a)  A health maintenance
12-61    organization that makes an adverse determination to deny or reduce
12-62    payment to a physician or provider who provided medical or health
12-63    care services with a retrospective review of the medical necessity
12-64    and appropriateness of those services must conduct the
12-65    retrospective review in compliance with the standards for a
12-66    utilization review required by Sections 4(b), (c), (d), (f), (h),
12-67    (i), (l), and (m), Article 21.58A, Insurance Code.
12-68          (b)  A health maintenance organization that makes an adverse
12-69    determination to deny or reduce payment to a physician or provider
 13-1    based on a retrospective review of the medical necessity and
 13-2    appropriateness of the medical or health care services shall notify
 13-3    the physician or provider of the determination not later than the
 13-4    45th day after the date the health maintenance organization
 13-5    receives a clean claim, as defined by Section 18B of this Act, from
 13-6    the physician or provider.
 13-7          (c)  A notice of adverse determination required by Subsection
 13-8    (b) of this section must include:
 13-9                (1)  the principal reasons for the adverse
13-10    determination;
13-11                (2)  the clinical basis for the adverse determination;
13-12                (3)  a description or the source of the screening
13-13    criteria used as a guideline in making the determination; and
13-14                (4)  a description of the procedure for the complaint
13-15    and appeal process, including an appeal of an adverse determination
13-16    to an independent review organization.
13-17          (d)  The procedure for appeal must be reasonable and must
13-18    comply with Sections 6(b)(1), (2), (3), (5), and (6), and Section
13-19    6A, Article 21.58A, Insurance Code.
13-20          (e)  An adverse determination described by this section is
13-21    eligible for review under Section 6A, Article 21.58A, Insurance
13-22    Code, if the determination relates to:
13-23                (1)  a single submitted charge of more than $650; or
13-24                (2)  two or more submitted charges for the same or
13-25    similar services with a cumulative amount of more than $650.
13-26          (f)  This section applies to an agent or other person with
13-27    whom a health maintenance organization contracts to perform, or to
13-28    whom the health maintenance organization delegates the performance
13-29    of, retrospective review of medical or health care services.
13-30          Sec. 18J.  SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
13-31    PROVIDERS.  The provisions of this Act relating to prompt payment
13-32    by a health maintenance organization of a physician or provider and
13-33    to preauthorization and retrospective review of medical or health
13-34    care services apply to a physician  or health care provider who:
13-35                (1)  is not included in the health maintenance
13-36    organization delivery network; and
13-37                (2)  provides to an enrollee:
13-38                      (A)  emergency care; or
13-39                      (B)  specialty or other medical or health care
13-40    services at the request of the health maintenance organization or a
13-41    physician or provider who is included in the health maintenance
13-42    organization delivery network because the services are not
13-43    reasonably available within the network.
13-44          Sec. 18K.  AVAILABILITY OF CODING GUIDELINES.  (a)  A
13-45    contract between a health maintenance organization and a physician
13-46    or provider must provide that:
13-47                (1)  the physician or provider may request a copy of
13-48    the coding guidelines, including any underlying bundling, recoding,
13-49    or other payment process and fee schedules applicable to specific
13-50    procedures that the physician or provider will receive under the
13-51    contract;
13-52                (2)  the health maintenance organization will provide
13-53    the guidelines not later than the 30th day after the date the
13-54    health maintenance organization receives the request;
13-55                (3)  the health maintenance organization will provide
13-56    notice of material changes to the coding guidelines and fee
13-57    schedules not later than the 90th day before the date the changes
13-58    take effect and will not make retroactive revisions to the coding
13-59    guidelines and fee schedules; and
13-60                (4)  the contract may be terminated by the physician or
13-61    provider on or before the 30th day after the date the physician or
13-62    provider receives information requested under this subsection
13-63    without penalty or discrimination in participation in other health
13-64    care products or plans.
13-65          (b)  A physician or provider who receives information under
13-66    Subsection (a)  of this section may use or disclose the information
13-67    only for the purpose of practice management, billing activities, or
13-68    other business operations.  The commissioner may impose and collect
13-69    a penalty of $1,000 for each use or disclosure of the information
 14-1    that violates this subsection.
 14-2          Sec. 18L.  DISPUTE RESOLUTION.  (a)  An agreement or contract
 14-3    provision that requires the use of binding arbitration to resolve
 14-4    future disputes in a contract between a health maintenance
 14-5    organization and a physician or provider is not enforceable if the
 14-6    agreement or provision is unconscionable at the time the agreement
 14-7    is made.  This subsection does not prohibit a health maintenance
 14-8    organization from offering a dispute resolution procedure or
 14-9    binding arbitration to resolve a dispute if the health maintenance
14-10    organization and the physician or provider consent to the process
14-11    after the dispute arises.  This subsection may not be construed to
14-12    conflict with any applicable appeal mechanisms required by law.
14-13          (b)  The provisions of this section may not be waived or
14-14    nullified by contract.
14-15          Sec. 18M.  AUTHORITY OF ATTORNEY GENERAL.  In addition to any
14-16    other remedy available for a violation of this Act, the attorney
14-17    general may take action and seek remedies available under Section
14-18    15, Article 21.21, Insurance Code, and Sections 17.58, 17.60,
14-19    17.61, and 17.62, Business & Commerce Code, for a violation of
14-20    Section 14 or 18B of this Act.
14-21          Sec. 40.  CONFLICT WITH OTHER LAW.  To the extent of any
14-22    conflict between this Act and Article 21.52C, Insurance Code, this
14-23    Act controls.
14-24          Sec. 41.  APPLICATION OF CERTAIN PROVISIONS UNDER MEDICAID.
14-25    A provision of this Act may not be interpreted as requiring a
14-26    health maintenance organization, physician, or provider, in
14-27    providing benefits or services under the state Medicaid program,
14-28    to:
14-29                (1)  use billing forms or codes that are inconsistent
14-30    with those required under the state Medicaid program; or
14-31                (2)  make determinations relating to medical necessity
14-32    or appropriateness or eligibility for coverage in a manner
14-33    different than that required under the state Medicaid program.
14-34          SECTION 7.  Subsection (d), Section 5, Article 21.58A,
14-35    Insurance Code, is amended to read as follows:
14-36          (d)  The notification of adverse determination required by
14-37    this section shall be provided by the utilization review agent:
14-38                (1)  within one calendar [working] day by telephone or
14-39    electronic transmission to the provider of record in the case of a
14-40    patient who is hospitalized at the time of the adverse
14-41    determination, to be followed within three working days by written
14-42    notification to [a letter notifying] the enrollee or a person
14-43    acting on behalf of the enrollee [patient] and, if the original
14-44    notification to the provider was not in writing, to the provider of
14-45    record of an adverse determination [within three working days];
14-46                (2)  within three working days by written notification
14-47    [in writing] to the provider of record and the patient if the
14-48    patient is not hospitalized at the time of the adverse
14-49    determination; or
14-50                (3)  within the time appropriate to the circumstances
14-51    relating to the delivery of the services and the condition of the
14-52    patient, but in no case to exceed one hour from notification when
14-53    denying poststabilization care subsequent to emergency treatment as
14-54    requested by a treating physician or provider. In such
14-55    circumstances, notification of an adverse determination shall be
14-56    provided to the treating physician or health care provider to be
14-57    followed within three working days by written notification to the
14-58    enrollee or a person acting on behalf of the enrollee and, if the
14-59    original notification to the provider was not in writing, the
14-60    provider of record.
14-61          SECTION 8.  Subsections (a) and (b), Section 7, Article
14-62    21.58A, Insurance Code, are amended to read as follows:
14-63          (a)  A utilization review agent shall have appropriate
14-64    licensed clinical personnel, including physician reviewers,
14-65    reasonably available each day by toll-free telephone from 6 a.m. to
14-66    6 p.m. central standard time [at least 40 hours per week during
14-67    normal business hours in Texas] to discuss patients' care, [and]
14-68    allow response to telephone review requests, and provide the
14-69    notification required by Section 5 of this article.
 15-1          (b)  A utilization review agent must have a telephone system
 15-2    capable of accepting or recording or providing instructions to
 15-3    incoming phone calls, supported by on-call licensed personnel,
 15-4    between 6 p.m. and 6 a.m. central standard time each day [during
 15-5    other than normal business hours] and shall respond to such calls
 15-6    not later than one day after [two working days of the later of] the
 15-7    date on which the call was received or within one hour of the time
 15-8    a request for poststabilization care is received [the date the
 15-9    details necessary to respond have been received from the caller].
15-10          SECTION 9.  (a)  The changes in law made by this Act relating
15-11    to payment of a physician or health care provider for medical or
15-12    health care services apply only to payment for services provided on
15-13    or after the effective date of this Act.
15-14          (b)  The changes in law made by this Act relating to a
15-15    contract between a physician or health care provider and an insurer
15-16    or health maintenance organization apply only to a contract entered
15-17    into on or after the effective date of this Act.
15-18          SECTION 10.  This Act takes effect September 1, 2001.
15-19                                 * * * * *